Document:

EXHIBIT 10.19
                                                                   -------------

                                LICENSE AGREEMENT

                                     BETWEEN

                               BEBE STORES, INC.,

                            A CALIFORNIA CORPORATION

                                       AND

                             SIGNATURE EYEWEAR, INC.

                            A CALIFORNIA CORPORATION

Portions marked with [***] have been omitted pursuant to a Request for
Confidential Treatment and were filed separately with the Commission.
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                                TABLE OF CONTENTS
                                -----------------

1.       LICENSE                                                             1
1.1.     GRANT AND TERRITORY                                                 1
1.2.     SUBLICENSES                                                         2
1.3.     USE OF LICENSED RIGHTS                                              2
1.4.     ACTIVITIES OUTSIDE THE TERRITORY                                    2
1.5.     RELATIONSHIP OF PARTIES                                             3

2.       TERM                                                                3
2.1.     INITIAL TERM                                                        3
2.2.     RENEWAL TERMS                                                       3
2.3.     NONEXCLUSIVE LICENSE                                                3

3.       MANUFACTURING                                                       4
3.1.     ACKNOWLEDGMENT OF STANDARDS AND GOODWILL                            4
3.2.     MANUFACTURING STANDARDS                                             4
3.3.     LICENSEE PRODUCT DEVELOPMENT CALENDAR                               4
3.4.     LICENSEE PRODUCT DEVELOPMENT TEAM                                   4
3.5.     PREPRODUCTION SAMPLES                                               4
3.6.     PRODUCTION SAMPLES                                                  5

4.       DUTIES OF LICENSEE                                                  5
4.1.     BEST EFFORTS                                                        5
4.2.     CUSTOMERS OF LICENSEE                                               6
4.3.     HANDLING OF ORDERS                                                  6
4.4.     STANDARD OF PERFORMANCE IN ACTIVITIES                               6
4.5.     PRODUCT WARRANTY AND SERVICE                                        6
4.6.     RETURNS FOR EXCHANGE OF LICENSED PRODUCT                            6
4.7.     CLOSE-OUTS                                                          6
4.8.     RE-BRANDING                                                         7
4.9.     SIGNS, PACKAGING, ETC                                               7
4.10.    INVENTORY                                                           7
4.11.    FACILITIES AND PERSONNEL                                            7
4.12.    INSPECTIONS                                                         7
4.13.    INSURANCE                                                           7
4.14.    COMPLIANCE WITH LAW                                                 8
4.15.    CONSULTATION                                                        8
4.16.    OTHER REQUIREMENTS                                                  8

5.       ROYALTIES AND LICENSE FEES
5.1.     ROYALTIES AND OTHER FEES                                            8
5.2.     MINIMUM PAYMENT AND QUARTERLY PAYMENTS                              8
5.3.     PAYMENTS                                                            9
5.4.     MONTHLY SALES REPORT                                                9
5.5.     LICENSE FEE                                                         9

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6.       COVENANTS REGARDING ORGANIZATION AND OPERATION OF LICENSEE         10
6.1.     CUSTOMER RELATIONS                                                 10
6.2.     NOTICE OF PROCEEDINGS                                              10
6.3.     RECORDS                                                            10
6.4.     AUDITS                                                             10
6.5      EXCLUSIVITY OF BEBE STYLES                                         10

7.       OWNERSHIP OF THE LICENSED RIGHTS                                   11
7.1.     OWNERSHIP                                                          11
7.2.     CONSISTENCY OF BEBE LINES                                          11
7.3.     PROPERTY                                                           11
7.4.     NO USE OF NAME                                                     11
7.5.     REGISTRATION                                                       11
7.6.     NO CHALLENGE                                                       12
7.7.     INFRINGEMENT SUITS                                                 12
7.8.     QUITCLAIM OF RIGHTS                                                12
7.9.     COPYRIGHTS                                                         12
7.10.    CONFIDENTIAL INFORMATION                                           13
7.11.    DISCLAIMER OF VALIDITY                                             13
7.12.    SURVIVAL                                                           14
7.13.    YEAR 2000 COMPLIANCE                                               14

8.       USE AND DISPLAY OF THE MARKS                                       14
8.1.     USE OF THE MARKS                                                   14
8.2.     NOTICE OF OWNERSHIP OF MARKS AND COPYRIGHTS                        14
8.3.     LEGAL NOTICES                                                      14
8.4.     LABELS                                                             15
8.5.     USE OF OTHER TRADEMARKS, SERVICE MARKS AND NAMES                   15

9.       ADVERTISING                                                        15
9.1.     BEBE ADVERTISING                                                   15
9.2.     CONTRACT YEAR PLAN                                                 15
9.3.     LICENSEE PARTICIPATION IN TRADE SHOWS                              15
9.4.     PRIOR APPROVAL                                                     16
9.5.     WEBSITE                                                            16
9.6.     MINIMUM ADVERTISING EXPENDITURES                                   16

10.      TERMINATION                                                        16
10.1.    BEBE TERMINATION FOR CAUSE                                         16
10.2.    GROUNDS FOR TERMINATION FOR CAUSE                                  17
10.3.    LICENSEE TERMINATION FOR CAUSE                                     17
10.4.    FAILURE TO SHIP MINIMUMS                                           18
10.5.    BANKRUPTCY, INSOLVENCY OR DISSOLUTION                              18

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10.6.    SUBSTANTIAL CHANGE IN OWNERSHIP, MANAGEMENT OR CONTROL
         OF LICENSEE OR COMMISSION OF CRIME                                 18
10.7.    MUTUAL RIGHT TO TERMINATION                                        18
10.8.    LIABILITY AFTER TERMINATION                                        19
10.9.    EFFECTS OF TERMINATION                                             19

11.      INDEMNIFICATION AND LIMITATION ON LIABILITY                        20
11.1.    INDEMNIFICATION BY LICENSEE                                        20
11.2.    LIMITATION OF BEBE'S LIABILITY                                     21
11.3.    INDEMNIFICATION BY BEBE                                            21

12.      GENERAL                                                            21
12.1.    EQUITABLE RELIEF                                                   21
12.2.    ASSIGNMENTS, SUCCESSORS AND ASSIGNS                                21
12.3.    NOTICES                                                            22
12.4.    NUMBER AND GENDER. HEADINGS                                        22
12.5.    SEVERABILITY                                                       23
12.6.    AMENDMENT AND MODIFICATION                                         23
12.7.    GOVERNING LAW AND CHOICE OF FORUM                                  23
12.8     TAXES                                                              23
12.9.    ENTIRE AGREEMENT                                                   23
12.10.   GOVERNMENT APPROVALS AND REMITTANCES                               23
12.11.   AFFILIATES OF LICENSEE                                             23
12.12.   AUTHORITY TO MAKE AGREEMENT                                        23
12.13.   NO WAIVER                                                          24
12.14.   REMEDIES NOT EXCLUSIVE                                             24
12.15.   DEFINITIONS                                                        25

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                                LICENSE AGREEMENT
                                -----------------

          This LICENSE AGREEMENT ("Agreement") is made and entered into
effective as of September 23, 1999 between bebe stores, inc., a California
corporation having its principal business office at 380 Valley Drive, Brisbane,
California 94005 ("bebe"), and Signature Eyewear, Inc., a California
corporation, having its principal place of business at 498 North Oak Street,
Inglewood, California 90302 ("LICENSEE").

                                    RECITALS
                                    --------

     1.   A glossary of terms used with initial capital letters and other terms
defined for purposes of this Agreement is set forth in Exhibit "A" at the end of
this Agreement.

     2.   bebe is the owner and exclusive licensor of the Marks and Property.

     3.   LICENSEE desires to secure the right and license to use the Marks and
Property in connection with the design, manufacture, advertisement, promotion,
distribution and sale of Licensed Products.

     4.   bebe is willing to grant LICENSEE a license on the terms and
conditions of this Agreement.

          NOW, THEREFORE, in consideration of the recitals, premises and mutual
covenants contained in this Agreement, the parties agree as follows:

                                    AGREEMENT
                                    ---------

1.   License.

     1.1. Grant and Territory. For the Term and subject to the other terms and
conditions of this Agreement, bebe hereby grants to LICENSEE a limited,
exclusive, right and license to use the Licensed Rights solely on or in
connection with (i) the design of Licensed Products, (ii) the manufacture of
Licensed Products, directly or through other Persons anywhere in the world for
distribution in the Territory, (iii) the distribution of Licensed Products only
in the Territory and (iv) the marketing, advertisement and promotion of Licensed
Products in the Territory. The Licensed Rights may not be used in connection
with the design, manufacture, advertisement, promotion, distribution or sale of
any other product or service. Nothing herein shall entitle LICENSEE to design,
advertise, promote or distribute Licensed Products outside the Territory.

          1.1.1. bebe agrees not: (i) to Transfer to any other Person the right
to Exploit the Licensed Rights in connection with Eyewear in the Territory; and
(ii) to Exploit the Licensed Rights in connection with Eyewear in the Territory;
provided, however that bebe may market and sell through bebe channels in the
Territory Licensed Products purchased from LICENSEE in accordance with this
Agreement.

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          1.1.2. Right of First Refusal. bebe agrees that it will not Transfer
to any Person the right to Exploit the Marks in any jurisdiction outside the
Territory without first offering to LICENSEE the right to Exploit the Marks in
such jurisdiction. Such offer shall be in writing (the "Offer Notice ") and
shall set forth the principal economic terms upon which bebe is willing to grant
such rights. LICENSEE shall have 30 days from receipt of the Offer Notice to
accept or reject the offer; the failure of LICENSEE to accept the offer by
written notice of acceptance within such 30-day period shall be deemed a
rejection of such offer. If LICENSEE accepts such offer, the parties shall
promptly negotiate and complete the license agreement for such rights (which may
be an amendment to this Agreement, it being understood that the non-economic
terms of such license agreement shall be consistent with the non-economic terms
of this Agreement). If LICENSEE does not accept such offer, bebe shall have the
right for one (1) year after delivery of the Offer Notice to enter into a
license agreement with another Person pursuant to which bebe grants to such
other Person the right to Exploit the Marks in such other jurisdiction on the
same economic terms as those offered to LICENSEE. Any such license agreement
shall expressly provide that such licensee may not, directly or indirectly
through others, advertise, market, sell, promote or distribute Eyewear
containing the Marks in the Territory. bebe agrees to terminate such license if
there is any material violation of such covenant. Promptly following the grant
of any such license, bebe shall notify LICENSEE of the grant of the license, the
name of the licensee and the territory covered by the license. If bebe does not
enter a licensee agreement within such one-year period, any further grant of
rights by bebe shall be again subject to LICENSEE's right of first refusal under
this Agreement.

     1.2. Sublicenses. This Agreement does not confer upon LICENSEE a right to
sublicense the Licensed Rights, except the right to have other Persons
manufacture Licensed Products. The right to sublicense may be granted at bebe's
sole discretion and only in writing from bebe to LICENSEE.

     1.3. Use of Licensed Rights. bebe represents that it has filed an
application to register the Marks under the category "eyewear" in the United
States. bebe agrees to use commercially reasonable efforts to cause the Marks to
be registered in the United States as promptly as practicable. bebe further
represents that to its knowledge (i) the Exploitation of the Marks in the United
States in connection with Eyewear will not infringe upon or otherwise violate
the intellectual property rights of any Person; and (ii) it has not Transferred
to any Person any right to Exploit the Marks in connection with Eyewear anywhere
in the world, except to those Persons who have been granted licenses by bebe to
use the Marks in connection with the operation of retail stores in certain
foreign countries (the "International Licensees"). bebe represents that all
International Licensee's right to Exploit the Marks in connection with Eyewear
is limited to selling Licensed Products manufactured by LICENSEE pursuant to an
agreement between LICENSEE and such International Licensee.

     1.4. Activities Outside the Territory. LICENSEE shall not, directly or
indirectly, solicit sales of the Licensed Products outside the Territory or
establish a place of business for the sale of the Licensed Products outside the
Territory without the prior written consent of bebe. LICENSEE shall not sell or
cause to be sold, directly or indirectly, any Licensed

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Products to any Person that LICENSEE knows, or has reason to know, is likely to
resell or distribute such Licensed Products outside the Territory.

     1.5. Relationship of Parties. The relationship between bebe and LICENSEE is
that of licensor and licensee of intellectual property rights. In its capacity
as licensee, LICENSEE shall be acting only as an independent contractor, and not
as a partner, co-venturer, agent, employee or representative of bebe.
Accordingly, LICENSEE shall have no authority, either express or implied, to
make any commitment or representation on behalf of bebe or incur any debt or
obligation on behalf of bebe. The parties acknowledge that this Agreement does
not constitute a franchise under United States federal or state law and does not
create a fiduciary relationship between the parties.

2.   Term.

     2.1. Initial Term. The term of this Agreement shall commence on the date of
this Agreement and shall continue until March 31, 2003 unless sooner terminated
in accordance with this Agreement ("Initial Term").

     2.2. Renewal Terms. By written notice (a "Renewal Notice") to bebe at least
180 days but not more than 270 days prior to the end of the Initial or any
Renewal Terms, LICENSEE may renew this Agreement for an additional three-year
term; provided, however, that if LICENSEE shall have failed to make the Minimum
Shipments or the Minimum Payments during any Contract Year of the Initial Term
or the then current Renewal Term, as applicable, bebe may, by written notice to
LICENSEE given within thirty (30) days of receipt of the Renewal Notice, elect
to terminate the License as of the end of the Initial Term or then current
Renewal Term, as applicable, in which event this Agreement will not be renewed.
In addition, if, at the time LICENSEE exercises this Renewal Option, LICENSEE
has not make the Minimum Shipments and/or Minimum Payments for the then current
Contract Year, and thereafter does not make the Minimum Shipments or Minimum
Payments by the end of such Contract Year, unless previously waived in writing
by bebe, bebe shall have the right to terminate the License notwithstanding
exercise at any time prior to 60 days following the end of such Contract Year.
Licensee expressly waives any rights it may have under state, federal, or other
law to be compensated in any way, including for goodwill, if this Agreement
terminates either at the end of the Initial Term or the Renewal Terms.

     2.3. Nonexclusive License. If LICENSEE does not exercise the Renewal Option
or if the Renewal Option lapses or if the Agreement otherwise will expire at the
end of the Term, then during the three months prior to the expiration of this
Agreement, bebe may directly or through a new licensee begin designing,
manufacturing, promoting, distributing and taking orders for Licensed Products
for the Eyewear retailing seasons that will occur after the expiration or
termination of the Term.

3.   Manufacturing.

     3.1. Acknowledgment of Standards and Goodwill. LICENSEE acknowledges that
bebe has made a substantial investment in developing and manufacturing high
quality, well-

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designed products incorporating the Licensed Rights and developing and fostering
an image and reputation of high quality, design, prestige and integrity
associated with the Licensed Rights, and that the consuming public and industry
now associate the Licensed Rights with products of consistently high quality and
design. LICENSEE further acknowledges that the terms and conditions of this
Agreement are reasonable and necessary to assure that all Licensed Products sold
under this Agreement consistently conform to these high quality and design
standards.

     3.2. Manufacturing Standards. LICENSEE shall manufacture all of the
Licensed Products in accordance with the high quality and design standards
prescribed by bebe. LICENSEE agrees that the standards, features and quality
bebe shall prescribe and LICENSEE shall follow and apply to the Licensed
Products shall be commensurate with the standards, features and quality for
other designer eyewear offered for sale with retail price points ranging between
$65 and $75 for sunglasses and between $90 and $140 for opticals. In this
regard, LICENSEE shall exercise its best efforts to cooperate with bebe at all
times in the coordination of Licensed Products manufactured by LICENSEE so that
they are consistent with the style, image, design and quality of other products
sold under the Licensed Rights. If any Licensed Products manufactured by
LICENSEE fail to conform to such standards, then bebe, in its sole discretion,
may prohibit LICENSEE from using any Licensed Rights in connection with such
non-conforming Licensed Products. Upon notice to LICENSEE, LICENSEE shall
immediately discontinue any and all manufacturing, advertising, promotion,
offerings for sale, sales, shipment and distribution of such non-conforming
Licensed Products. LICENSEE shall not sell any damaged, imperfect, substandard
quality or defective goods under the Marks.

     3.3. Licensee Product Development Calendar. Within thirty (30) days after
the date of this Agreement, and thereafter no later than the first day of each
Contract Year, LICENSEE shall submit to bebe a Licensee Product Development
Calendar containing the information required by Exhibit "C" hereto.

     3.4. Licensee Product Development Team. LICENSEE shall establish a product
development and management team who shall be responsible for the day-to-day
product development, design efforts, sales and service efforts and operations of
the Licensed Products business (the "Licensed Products Team"). Licensee shall
appoint one manager level employee who will be the primary contact for bebe
regarding the Licensed Products business. The Licensed Products Team shall work
closely with bebe to create the Licensed Products.

     3.5. Preproduction Samples. As early as possible, and in any event two
months prior to the introduction of each Licensed Product, LICENSEE shall
furnish to bebe, at no expense to bebe, one preproduction sample of each
Licensed Product that LICENSEE intends to manufacture or have manufactured under
the Licensed Rights, together with a completed Licensed Product Approval Form
and Material and/or Color Approval Form and completed line sheets for each
season in the forms required by Exhibit "D" hereto. bebe shall have the right to
exercise quality control and line content over the Licensed Products
manufactured for and sold by LICENSEE by making any changes or corrections in
such samples as may be

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required, in bebe's sole determination, to maintain the high quality and design
standards prescribed by bebe, and LICENSEE shall make and incorporate such
changes or corrections at LICENSEE's sole cost and expense. LICENSEE shall not
make any changes to any sample after approval by bebe without resubmitting the
sample for approval.

     3.6. Production Samples. As soon as possible after completion of the first
production run of a Licensed Product (and in any event less than two weeks after
completion of such production run), LICENSEE shall furnish to bebe, at no
expense to bebe, two production samples of the complete line taken from the
first production run of such Licensed Product. bebe shall have the absolute
right, in its sole discretion, to approve or disapprove of such production
samples based on unsatisfactory conformity to the preproduction sample. bebe is
aware that subtle variations in color and materials are not unusual between
preproduction samples and production samples. LICENSEE shall not make any
changes to any sample after approval by bebe without resubmitting the sample for
approval pursuant to Section 3.5. If bebe rejects any sample, LICENSEE shall
discontinue the production of the Licensed Product and shall coordinate with
bebe, at LICENSEE's expense, to make changes and corrections to conform the
Licensed Product to the high quality and design standards prescribed by bebe and
shall resubmit a sample for approval pursuant to Section 3.5. In addition, to
ensure consistent quality of production runs, LICENSEE shall furnish to bebe, at
no expense to bebe, two additional production samples of Licensed Products in
any given season as bebe may, from time to time, request for the purpose of
comparison with earlier samples. If bebe requires more than two such additional
samples in any given season, LICENSEE shall provide such excess additional
samples to bebe at eighty-five percent (85%) of the published FRAMES Price Book.

4.   Duties of LICENSEE.

     4.1. Best Efforts. LICENSEE shall exercise commercially reasonable efforts
to market, promote and sell the Licensed Products within the Territory and to
fill completely the demand for the Licensed Products within the Territory.
Without limitation, LICENSEE shall have preproduction samples of the Licensed
Products for its initial season ready to show bebe by the dates set forth in its
Licensee Product Development Calendar, shall begin taking orders from customers
for all items included in the Licensed Products by the Marketing Date and shall
have all items included in the Licensed Products ready to ship to customers in
substantial quantities by the Shipping Date. Thereafter, LICENSEE shall adhere
to the schedule set forth in its Licensee Product Development Calendar for the
applicable Contract Year.

     4.2. Customers of LICENSEE. In order to protect and foster the value, image
and reputation of the Licensed Products and Licensed Rights, LICENSEE shall only
sell the Licensed Products outright and only to retail outlets in the Territory
whose location, merchandising and overall operations are, in the good faith
belief of LICENSEE, consistent with the high quality of the Licensed Products
and the reputation, prestige and image of the Marks (collectively, the
"Authorized Retailers"). LICENSEE shall submit a current list of LICENSEE's
customers with each Licensee Product Development Calendar. If bebe believes that
any retail outlet does not meet the standards required by this paragraph or such
retail

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outlet does not sell Eyewear of comparable or better quality than the Licensed
Products, bebe may, by written notice to LICENSEE, request that LICENSEE cease
selling Licensed Products to such retail outlet (and such retail outlet shall no
longer to deemed to be an "Authorized Reseller"), and LICENSEE shall not sell
additional Licensed Products to such retail outlet except pursuant to existing
commitments. Notwithstanding the foregoing, LICENSEE may sell Licensed Products
to: (i) distributors who have been approved by bebe; and (ii) optical
laboratories.

     4.3. Handling of Orders. LICENSEE shall manufacture and ship all confirmed
orders for Licensed Products within a reasonable period of time after receipt of
the order. LICENSEE shall not withhold acceptance of any reasonable orders or
refuse orders for Licensed Products from bebe or from Authorized Retailers with
credit approval, without prior notice to bebe.

     4.4. Standard of Performance in Activities. LICENSEE shall at all times act
in a manner consistent with high standards of fair trade, fair competition and
business ethics.

     4.5. Product Warranty and Service. LICENSEE shall cause a warranty card to
accompany each Licensed Product, in substantially the form and containing the
representations set forth in Exhibit "R" hereto. LICENSEE, at its sole cost and
expense, shall repair or replace damaged Licensed Product at LICENSEE's (or
LICENSEE's manufacturer's) warranty center for one (1) year from the date of
purchase by the retail consumer. LICENSEE shall, at no cost to bebe, provide
additional warranty cards, in an amount equal to five percent (5%) of the number
of units of Licensed Product bebe purchases in each Contract Year, for
distribution to bebe-owned retail outlets.

     4.6. Returns for Exchange of Licensed Product. Throughout the term of this
Agreement and for one (1) month after the date of its termination, LICENSEE
shall accept from bebe within six (6) months of the date of purchase returns of
Licensed Product in unlimited quantities in exchange, within one (1) month of
the return of the item, for equal quantities of different Licensed Product of
the same type of item as returned Licensed Product.

     4.7. Close-outs. Before otherwise disposing of its close-out inventory
pursuant to the terms of this subsection, LICENSEE shall first offer such
close-outs to bebe at the price and on the terms and conditions as it would
offer non-Licensed Product to discounters. bebe, in its sole discretion, shall
accept or reject said close-outs in such styles and quantities as it shall
determine. LICENSEE may thereafter sell the close-out items bebe has rejected
but only to Authorized Retailers and the discounters T.J. Max and Marshall's,
unless otherwise preapproved by bebe in writing. All close-out sales shall be
final.

     4.8. Re-Branding. If LICENSEE has Licensed Product inventory left over
after LICENSEE has first offered such Licensed Product to discounters pursuant
to Section 4.7, LICENSEE may remove the Marks from such styles of Licensed
Products and rebrand the Licensed Product, and thereafter sell or dispose of
such re-branded items as LICENSEE chooses.

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     4.9. Signs, Packaging, Etc. LICENSEE shall submit to bebe for prior written
approval all interior and exterior display signs, hang tags, shopping bags, gift
boxes, and similar items using the Licensed Rights Approval Form (Exhibit "K").

     4.10. Inventory. LICENSEE shall maintain a sufficient inventory of the
Licensed Products to enable it to promote the Licensed Products and to service
the anticipated needs and demands of its customers within the Territory.

     4.11. Facilities and Personnel. LICENSEE, at its own expense, shall
maintain facilities and personnel adequate to market, promote, sell and deliver
the Licensed Products to its customers within the Territory.

     4.12. Inspections. Upon reasonable prior notice LICENSEE shall permit bebe
and its employees, agents or other representatives to visit LICENSEE's
facilities during normal business hours, for the purposes of inspecting the
Licensed Products, inspecting the facilities and any display of products,
inspecting promotional materials and advertising for the Licensed Products and
otherwise determining whether LICENSEE is complying with the terms and
conditions of this Agreement. LICENSEE shall cooperate fully with bebe's
representatives during such visits by rendering such assistance as they may
reasonably request.

     4.13. Insurance. Upon execution of this Agreement and throughout the Term,
LICENSEE, at its sole cost and expense, shall obtain and maintain in full force
and effect a policy of insurance insuring against those risks customarily
insured under commercial general liability policies, including without
limitation, "product liability" and "completed operations." Such policies of
insurance shall have endorsements or coverage with per occurrence limits of Two
Million Dollars ($2,000,000) and shall name bebe as an additional insured
thereunder. Such insurance policy shall provide that it cannot be canceled,
modified or not renewed without 30 days' prior written notice to bebe. The
insurance under such policy shall be primary to and non-contributing with any
and all other insurance purchased by or for the benefit of bebe. The policy
shall provide that the insurer waives its right of subrogation in favor of bebe.
Within 30 days of the date of execution of this Agreement, LICENSEE shall
furnish to bebe current certificates of insurance issued by the insurer and
showing bebe as an additional insured.

     4.14. Compliance With Law. In connection with its Exploitation of the
Licensed Rights, LICENSEE shall comply with all applicable non-waivable laws and
regulations in the Territory, including labeling and advertising laws, and shall
obtain and maintain any and all permits, certificates or licenses necessary for
the proper conduct of LICENSEE's duties and obligations under this Agreement.

     4.15. Consultation. LICENSEE agrees to consult with bebe, on a regular
basis or whenever bebe, in its sole discretion, deems necessary, regarding all
new styles and designs, manufacturing schedules, distribution schedules or any
other substantive changes, new developments or other matters which would
materially affect the rights, obligations and benefits of either party to this
Agreement.

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     4.16. Other Requirements. LICENSEE shall comply with all other requirements
set forth in this Agreement.

5.   Royalties and License Fees.

     5.1. Royalties and Other Fees. LICENSEE shall pay to bebe, during each
Contract Year of this Agreement, a royalty ("Royalty") equal to [***]. For
purposes of this Section 5.1, Net Sales shall not include those Licensed
Products sold to bebe.

     5.2. Minimum Payment and Quarterly Payments.

          5.2.1. The Minimum Payment for each Contract Year shall be equal to
[***].

          5.2.2. In order to ensure that the Minimum Payment is met during each
Contract Year, LICENSEE shall pay to bebe each calendar quarter during a
Contract Year a "Minimum Quarterly Payment" in the amount of one-fourth of the
Minimum Payment for such Contract Year. Where the actual Royalty Payment for a
particular quarter is less than the Minimum Quarterly Payment, LICENSEE shall
pay to bebe the Minimum Quarterly Payment. Where the actual Royalty Payment for
a particular quarter exceeds the Minimum Quarterly Payment, the actual Royalty
Payment shall be paid to bebe, and the excess of the actual Royalty Payment over
the Minimum Quarterly Payment shall be credited toward the Minimum Quarterly
Payment for any remaining months in that Contract Year. Such excess shall not be
credited toward the Minimum Quarterly Payment in any subsequent Contract Year.
For the first Contract Year, the last twelve months of such Contract Year shall
be used to determined the Minimum Quarterly Payments owed for such Contract Year
shall be paid over the last twelve months of such Contract Year.

     5.3. Payment.

          5.3.1. The greater of the Royalty for all sales of Licensed Products
during the quarter or the Minimum Quarterly Payment shall be due and payable to
bebe by LICENSEE by the end of the month following the end of each calendar
quarter.

          5.3.2. Concurrent with each such payment, LICENSEE shall provide to
bebe a written statement illustrating the calculation of the Royalty, regardless
of whether the Royalty is less than the Minimum Quarterly Payment. The statement
shall set forth a detailed accounting of the calculation of the Royalty,
including, without limitation, the aggregate number of units sold and Net Sales
of all Licensed Products during the quarter, broken down by style category and
by purchaser, including the identity of each Authorized Retailer. LICENSEE shall
report such information requested on a Statement of Royalties (Domestic) Form in
the form of Exhibit "H" hereto, as reasonably modified by bebe from time to
time.

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          5.3.3. All payments required under this Agreement shall be in U.S.
dollars and immediately available funds and made payable to the order of "bebe
stores, inc."

          5.3.4. If LICENSEE fails to pay (by direct deposit for bebe's account,
duly delivered check or confirmed wire delivery of funds) any payment due under
this Agreement on or before or within 10 days of the due date thereof, then the
delinquent amount shall bear interest at a rate of one and one-half percent
(1.5%) per month from the due date until paid. If this rate exceeds the maximum
rate allowable by law, then interest shall accrue at the maximum rate allowable
by law.

          5.3.5. Acceptance by bebe of any payments under this Agreement shall
not prevent bebe at any later date (but not more than two years later) from
disputing the amount owed or from demanding more information from LICENSEE
regarding payments finally due, and such acceptance of any payment by bebe shall
not constitute a waiver of any breach of any term or provision of this Agreement
by LICENSEE if any such breach shall have occurred.

     5.4. Monthly Sales Report. By no later than 20 days after the end of each
of the first two months in each calendar quarter, LICENSEE shall submit to bebe
a report that contains all of the information required by bebe's Monthly Sales
Report Form in the form of Exhibit "P" hereto, as reasonably modified by bebe
from time to time.

     5.5. License Fee. Upon execution of this Agreement, LICENSEE shall pay bebe
a non-refundable one-time License Fee of [ * * * ] ("License Fee"). The License
Fee shall be an advance against the first Royalties due under this Agreement.

6.   Covenants Regarding Organization and Operation of LICENSEE.

     6.1. Customer Relations. LICENSEE shall maintain good customer relations in
accordance with prudent and reasonable business practices.

     6.2. Notice of Proceedings. LICENSEE shall notify bebe in writing within
five (5) days of the commencement or threat of any action, suit, proceeding or
investigation or the issuance of any order, writ, injunction, award, judgment or
decree before or of any court, tribunal, arbitration panel, agency or
governmental instrumentality that may adversely affect the Licensed Products.

     6.3. Records. LICENSEE shall maintain in reasonable detail and, where
applicable, in accordance with generally accepted accounting principles,
consistently applied, records of all Licensed Products manufactured under the
Licensed Rights, records of all sales of the Licensed Products, including the
identity of all purchasers; records of advertising and promotional campaigns
with respect to the Licensed Products; records of all inventory of the Licensed
Products; orders, inquiries, complaints, requests for service and other
correspondence with respect to the Licensed Products. These records shall be
open for inspection, copying, extracting and audit by bebe or its employees,
agents or representatives during normal business hours during the Term and for
three years following termination or

                                        9
<PAGE>
expiration of this Agreement. LICENSEE shall maintain all such records from any
Contract Year for three years following the end of such Contract Year.

     6.4. Audits. Notwithstanding any other provision of this Agreement to the
contrary, bebe and its employees, agents or representatives shall have the
right, at reasonable times and without undue disruption of LICENSEE's normal
business, to conduct audits with respect to the books, records, and all other
documents and material in the possession or under the control of LICENSEE
relating to this Agreement. bebe shall bear the cost of all audits. If any such
audit, however, discloses that payments due to bebe under this Agreement within
the prior three years exceed the amount of payments actually made to bebe by an
amount greater than the greater of $10,000 or five percent (5%) of the payments
made, LICENSEE shall immediately pay the reasonable cost of the audit and each
unpaid payment discovered in the audit plus interest at the rate of ten percent
(10%) per annum calculated from the date such payment was actually due until the
date such payment is, in fact, actually made.

     6.5. Exclusivity of bebe Styles. LICENSEE acknowledges that, during the
Term, new designs, styles or other items of the Licensed Products may be
developed jointly by LICENSEE and others or solely by LICENSEE. LICENSEE further
acknowledges that:

          (i)   such designs and styles will most likely be based upon the
image, style and look bebe has created and will become associated with and not
be distinctive of the Marks,

          (ii)  significant design input will most likely be received from bebe
in creating the Licensed Products,

          (iii) it is often difficult to identify precisely the creator or
inventor of such Licensed Products, and

          (iv)  in order to maintain the distinctiveness of all products sold
under the Marks, it is important that bebe coordinate and control the use of
such designs and styles.

          Accordingly, LICENSEE agrees that during the Term of this Agreement
and for the three year period after the termination or expiration of this
Agreement, it will not Exploit any Eyewear, under its own name or any name other
than the Marks, which is identical to a Licensed Product, except to the extent
allowed pursuant to Sections 4.8 and 10.9.6 of this Agreement. bebe acknowledges
that after such three-year period, LICENSEE may Exploit Eyewear identical to
Licensed Products (but without the Marks).

7.   Ownership of the Licensed Rights.

     7.1. Ownership. LICENSEE acknowledges that (i) it has no ownership interest
in the Licensed Rights, (ii) nothing contained in this Agreement shall give to
LICENSEE any ownership interest in the Licensed Rights, and (iii) LICENSEE's use
of the Licensed Rights shall inure only to the benefit of bebe.

                                       10
<PAGE>
     7.2. Consistency of bebe Lines. LICENSEE will cooperate with other bebe
licensees in other territories in order to ensure consistency in the bebe lines.

     7.3. Property. LICENSEE shall not use any Licensed Rights except for the
purpose of fulfilling its rights and duties under this Agreement or in a manner
authorized in writing by bebe.

     7.4. No Use of Name. LICENSEE shall not use any of the Licensed Rights as a
trade name, service mark, business name, trade style, fictitious business name,
domain or website name or d.b.a. Any unauthorized use shall inure solely to the
benefit of bebe, and such unauthorized use by LICENSEE shall not confer on
LICENSEE any right, title or interest in the Licensed Rights.

     7.5. Registration. LICENSEE shall not seek or obtain any registration of
the Marks (including any colorable imitations, translations or transliterations
thereof) in any name or participate directly or indirectly in such registration
anywhere in the world without bebe's prior written consent. If LICENSEE has
obtained or obtains in the future, in any country, any right, title or interest
in the Marks (including any colorable imitations, translations or
transliterations thereof) or in any marks which are confusingly similar to the
Marks (including any colorable imitations, translations or transliterations
thereof) or in any other trademark or service mark owned by bebe, LICENSEE has
so acted or will act as an agent and for the benefit of bebe for the limited
purpose of obtaining such registrations and assigning them to bebe. LICENSEE
shall execute any and all instruments deemed by bebe, or its respective
attorneys or representatives, to be necessary to transfer such right, title or
interest to bebe. If the laws of the Territory require or permit the
registration of any Marks, LICENSEE shall assist bebe in obtaining such
registration in a timely and effective manner; provided, however, that the
failure to obtain such registrations shall not affect the validity of this
Agreement.

     7.6. No Challenge. During the Term, LICENSEE shall not, directly or
indirectly, take any action challenging or opposing bebe ownership interest in
the Marks.

     7.7. Infringement Suits. bebe and LICENSEE each agree to promptly notify
the other if it becomes aware that any Person is Exploiting or has Exploited any
of the Marks (or any substantially similar Marks) in connection with Eyewear
anywhere in the Territory.

          7.7.1. If such Exploitation occurred or is occurring in the United
States, bebe shall determine, after consultation with LICENSEE, whether or not
such Exploitation infringes or has infringed upon the rights of bebe with
respect to the Marks and shall inform LICENSEE of its determination. If bebe
reasonably determines in good faith that such Exploitation infringes or has
infringed the rights of bebe in connection with Eyewear and that such
infringement has or would have a materially adverse affect on LICENSEE's
Exploitation of the Licensed Rights, including Net Sales therefrom, bebe shall
take commercially reasonable actions to stop the infringement, which actions may
include instituting legal action. LICENSEE shall cooperate with and assist bebe
to the extent reasonably necessary to protect the Licensed Rights in connection
with Eyewear, including, without limitation, being joined as a necessary or
desirable party to any legal proceeding.

                                       11
<PAGE>
          7.7.2. LICENSEE shall have no claim against bebe for damages if bebe
determines, in its sole discretion, that it is not in the best interest of bebe
and LICENSEE to initiate any legal proceedings on account of any such
infringement, claim or action, or if bebe settles or resolves any such
proceedings which may be initiated.

     7.8. Quitclaim of Rights. LICENSEE hereby quitclaims to bebe any right,
title or interest it has or may acquire with respect to the Licensed Rights,
including without limitation any right, title or interest it may acquire through
the unauthorized use of the Licensed Rights as a trade name, service mark,
business name, trade style, fictitious business name or d.b.a.

     7.9. Copyrights. If LICENSEE, alone or with others, develops any written
material specifically for and pertaining to the marketing and promotion of the
Licensed Products or bebe which contains the Marks and may be copyrighted, it
shall assign all right to obtain such copyrights to bebe. Such material shall be
deemed "made for hire" under U.S. law, thereby vesting ownership in bebe. The
foregoing shall not include written materials which may contain trademarks of
other Persons or LICENSEE (for example, materials which describe all of
LICENSEE's lines of Eyewear).

     7.10. Confidential Information. Before or during the Term, LICENSEE and
bebe may or will be made aware of each party's Confidential Information relating
to the Licensed Products, the Licensed Rights, the license and arrangement
created under this Agreement, Authorized Retailers, present or anticipated
products, processes, know-how, customers, sales, business affairs, contractual
arrangements, identities of employees, agents or representatives or similar
information. Information shall be considered Confidential Information by both
LICENSEE and bebe if each party so informs the other or LICENSEE or bebe knew or
reasonably should have known that the information was confidential. LICENSEE and
bebe shall not consider information as confidential if the information is in the
public domain or if LICENSEE or bebe can demonstrate that the information was
acquired from another source without the source, LICENSEE or bebe breaching a
confidentiality agreement or other confidentiality obligation. During and after
the Term, LICENSEE and bebe shall maintain in strict confidence and shall not
disclose, except to either party's employees, agents or representatives who must
have access to it in order to exercise its rights and license under this
Agreement or as expressly permitted by any written agreement between LICENSEE
and bebe, any Confidential Information of either party. LICENSEE and bebe shall
take every reasonable precaution to protect the confidentiality of each party's
Confidential Information, consistent with the higher of the standard of care
that LICENSEE and bebe exercise with respect to their own confidential
information or the standard of care that an ordinarily prudent business would
exercise to protect its own confidential information.

     bebe and LICENSEE each acknowledge that: (1) the other is a "reporting
company" under the Securities Exchange Act of 1934, as amended; (2) as a
"reporting company," the other has certain public disclosure obligations with
respect to its business and operations, which may include disclosure of this
Agreement and its terms and conditions (including filing a copy of this
Agreement with the Securities and Exchange Commission); and (3) the making of
such public disclosures and filings shall not be considered a breach of this
confidentiality

                                       12
<PAGE>
obligation under this Section 7.10; provided, however, that there shall be no
disclosure of the royalty rate, the Minimum Payment or the Minimum Net Sales
unless required by the Securities and Exchange Commission (and each party shall
use commercially reasonable efforts to avoid making these disclosures, including
making a request for confidential treatment) or appropriate legal process.

     7.11. Disclaimer of Validity. Except for those set forth herein, bebe makes
no representation or warranty as to the validity or enforceability of the
Licensed Rights as to Eyewear nor as to whether any Licensed Right infringes
upon or interferes with any property rights of other Persons. bebe is not
certain if it will be successful in obtaining or maintaining registration of the
Marks in the Territory. If it is determined at any time that bebe does not have
the right to use the Licensed Rights, or any portion thereof, within a certain
country within the Territory, LICENSEE shall immediately refrain from using the
Licensed Rights and selling the Products in such country and shall have no
claims against bebe for damages caused by such cessation or termination or
otherwise caused.

     7.12. Survival. Notwithstanding anything in this Agreement to the contrary,
this Section 7 shall survive termination of this Agreement.

     7.13. Year 2000 Compliance. LICENSEE represents, warrants and undertakes to
bebe as follows: That it will continue to record, store, process, calculate and
present calendar dates falling on or after (and if applicable, spans of time
including) January 1, 2000 in the same manner, and with the same functionality
as it has in years prior to 2000.

8.   Use and Display of the Marks.

     8.1. Use of Marks. The presentation and image of the Marks shall be uniform
and consistent in all material respects to all Licensed Products bearing the
Marks. All Licensed Products, packaging, business advertising and promotional
material used in connection with the Licensed Products shall be of the standard
and quality and of such style, appearance and distinctiveness as to protect and
enhance the prestige, image, reputation and goodwill of bebe and the Licensed
Rights. Accordingly, LICENSEE shall use the Marks (i) solely for the purpose of
identifying the Licensed Products and identifying LICENSEE as an authorized
licensee of bebe and (ii) solely in the manner that bebe, in its sole
discretion, shall specify from time to time and in compliance with all
applicable laws.

     8.2. Notice of Ownership of Marks and Copyrights. All Licensed Products
distributed or sold by LICENSEE and all advertising and promotional materials
shall state that the Marks are owned by bebe. LICENSEE shall use the following
form of such notice for all Licensed Products, which bebe may change from time
to time, in its sole discretion:

                              (C) bebe stores, inc.
                              All Rights Reserved.
                           bebe and __________________
                   are trademarks of bebe stores, inc., U.S.A.

                                       13
<PAGE>
     A. LICENSEE shall use the following form of such notice for all advertising
and promotional materials, which bebe may change from time to time, in its sole
discretion:

                              All Rights Reserved.
                             (C) bebe stores, inc.,
                            California, U.S.A., 19__.

     8.3. Legal Notices. LICENSEE shall use the proper trademark and copyright
notices in connection with the Licensed Rights and any associated copyrightable
works, which notices bebe shall, from time to time, in its sole discretion,
specify.

     8.4. Forms of Identification. LICENSEE shall use, in connection with the
Licensed Products, only forms of identification which are provided by or
approved in writing by bebe, including without limitation, tags, signs, banners,
stationery, other forms and business cards. In connection with obtaining
required approvals, LICENSEE shall inform bebe of the countries in which labels
or other forms of identification are being manufactured. All requests for
approvals shall be submitted on a Licensed Rights Approval Form in the form of
Exhibit "K" hereto.

     8.5. Use of Other Trademarks, Service Marks and Names. LICENSEE shall
submit to bebe for its prior written approval any trademark, service mark or
name that it plans to use in connection with the marketing and promotion of the
Licensed Rights, and bebe shall have the right, in its sole discretion, to
refuse to permit the use of any such marks or names.

9.   Advertising.

     9.1. bebe Advertising. bebe may as it deems appropriate advertise and
promote the Licensed Products both within and outside the Territory; however,
bebe undertakes no obligation to ensure that LICENSEE benefits directly from any
promotion or placement of any advertising by bebe. bebe will pay for all costs
of advertising and promotion that bebe does for the Licensed Products (except
that bebe will not reimburse LICENSEE for any expenses it incurs in connection
with any such advertising or promotion and shall not pay for LICENSEE's
participation in trade shows).

     9.2. Contract Year Plan. LICENSEE shall prepare an annual operating plan
setting forth the information described below (hereinafter referred to as the
"Annual Operating Plan") and present to bebe for review, feedback and approval
by no later than 30 days following the date of the Agreement, and thereafter by
no later than six (6) months prior to the commencement of each Contract Year
during the Term. The Annual Operating Plan shall set forth in reasonable detail
LICENSEE's plans for conducting the Licensed Products business during the next
Contract Year and during the next three Contract Years, with particular emphasis
on the marketing, promotion and sales of the Licensed Products. The Plan shall
include, without limitation, (a) sales volume projections by price point range
in units and dollars; (b) price marketing strategies, including wholesale and
suggested retail pricing by price point and market; (c) assessment of customer
base and customers; (d) distribution, including door roll-out and breakdown by
chain, channel, store and geographic area; (e) advertising and media plans and
budget, including breakdown by geographic area; (f)

                                       14
<PAGE>
packaging, point of sale and trade exhibitions; and (g) the results of market
research relating to the Licensed Products and similar products, and market
trends, and a detailed sales forecast by category, product group and market for
the Licensed Products, it being understood, however, that bebe is not empowered
to fix or regulate the prices at which the Licensed Products are to be sold.

     9.3. LICENSEE Participation in Trade Shows. LICENSEE, at its expense, shall
promote Licensed Products in appropriate trade shows as reasonably requested by
bebe from time to time. LICENSEE shall not promote Licensed Products in any
trade shows for retail seasons that will occur after the expiration of the Term.

     9.4. Prior Approval. LICENSEE shall submit to bebe, for its prior approval,
samples of all advertising and other promotional plans and materials that
LICENSEE desires to use to promote the Licensed Products that have not been
prepared or previously approved by bebe, including without limitation, press
releases and interviews for publication in any media. All requests for approval
shall be submitted on an Advertising Expenditure Form in the form of Exhibit "L"
hereto, as modified by bebe from time to time.

     9.5. Website. Licensee shall not include bebe or the Licensed Products in
any website or other electronic media without bebe's prior written approval of
the content and design of such inclusion in accordance with Section 9.4.

     9.6. Minimum Advertising Expenditures. During the first Contract Year,
LICENSEE shall spend on advertising, public relations for the Licensed Products
and brand name promotion [***]. For the second Contract Year, the LICENSEE shall
spend on advertising, public relations for the bebe Marks and brand name
promotion [***] During each subsequent Contract Year, LICENSEE shall spend on
advertising, public relations for the bebe Marks and brand name promotion [***].
During each Contract Year, [***] of the amounts spent on advertising, public
relations for the Marks and brand name promotion shall be directed to the
trade/optical market and the balance shall be directed to the consumer market.
For purposes of this provision, costs associated with furnishing and operating a
showroom, store window displays, product packaging, and costs associated with
advertising and promoting the Licensed Products at trade shows are not
advertising expenditures. Not later than thirty (30) days after the end of each
calendar quarter, LICENSEE shall submit a report (using bebe's Advertising
Expenditure Form, as modified from time to time, in the form of Exhibit "N")
showing LICENSEE's actual advertising expenditures during the preceding calendar
quarter, together with advertising tear sheets for such quarter. If LICENSEE's
actual advertising expenditures during any Contract Year are less than the
Minimum Advertising Expenditure, then LICENSEE shall expend the difference on
advertising within the first six months of the next Contract Year in such manner
as is directed by bebe.

                                       15
<PAGE>
10.  Termination.

     10.1. bebe Termination for Cause. In the event LICENSEE breaches this
Agreement in any material respect, bebe may give written notice of the nature of
the breach to LICENSEE and specify a reasonable period of time within which
LICENSEE is to cure the breach. As used in the preceding sentence, a "reasonable
period of time" for curing a breach shall be not more than five (5) days in the
case of a payment default and shall be not more than 45 days for any other
breach and shall be determined based upon commercial circumstances existing at
the time of the breach and the commercially reasonable time necessary to cure
such breach. If such material breach is not cured within the specified period,
bebe may terminate this Agreement effective upon written notice to LICENSEE.

     10.2. Grounds for Termination for Cause. Set forth below is a nonexhaustive
list of breaches by LICENSEE that would entitle bebe to terminate this Agreement
and the rights and licenses granted to LICENSEE if the breaches were not cured
during the applicable cure period:

          10.2.1. Failure of LICENSEE to manufacture the Licensed Products in in
all material respects accordance with Section 4 of the Agreement, including,
without limitation, the failure to provide any samples or obtain any approvals
required by Section 3;

          10.2.2. Failure of LICENSEE to use commercially reasonable to market,
promote and sell the Licensed Products within the Territory;

          10.2.3. Commission by LICENSEE of a material violation of any
applicable laws in the Territory in the manufacture, promotion, marketing, sale
or distribution of the Licensed Products where such violation has an adverse
affect on bebe or its reputation;

          10.2.4. Failure of LICENSEE to pay any License Fee, Royalty, Minimum
Quarterly Payments, Minimum Payments or other payments within 10 days of being
due under this Agreement;

          10.2.5. The making by LICENSEE of any warranties or representations on
behalf of bebe that have not been specifically authorized in writing by bebe;

          10.2.6. Failure by LICENSEE to obtain approvals for any advertising as
required by this Agreement or the failure to make the Minimum Advertising
Expenditures;

          10.2.7. Sales in excess of $2,500 by LICENSEE of Licensed Products to
Persons other than Authorized Retailers, excluding sales pursuant to existing
legally binding commitments to such Persons after bebe has notified LICENSEE
that such Person is not an Authorized Retailer;

          10.2.8. Abandonment by LICENSEE of its business or the activities
required under this Agreement;

                                       16
<PAGE>
          10.2.9. Failure of LICENSEE to cooperate in any legal proceedings at
the reasonable request of bebe.

     10.3. LICENSEE Termination for Cause. In the event bebe breaches this
Agreement, LICENSEE may give written notice of the nature of the breach to bebe
and specify a reasonable period of time within which bebe is to cure the breach.
As used in the preceding sentence, a reasonable period of time for curing a
breach shall be not more than 45 days for any other breach and shall be
determined based upon commercial circumstances existing at the time of the
breach and the commercially reasonable time necessary to cure such breach. If
the breach is not cured within the specified period, LICENSEE may terminate this
Agreement effective upon written notice to bebe.

     10.4. Failure to Ship Minimums. If, during any Contract Year, LICENSEE
fails to make the Minimum Shipments, bebe may terminate this Agreement by giving
written notice to LICENSEE no later than ninety (90) days following the end of
such Contract Year.

     10.5. Bankruptcy, Insolvency or Dissolution. In the event of insolvency,
bankruptcy or dissolution of LICENSEE, bebe shall have the option to terminate
immediately this Agreement effective upon written notice to LICENSEE.

     10.6. Substantial Change in Ownership, Management or Control of LICENSEE.
If any Person (other than any director or officer of LICENSEE or other Person
who is or is controlled by a director or officer of LICENSEE as of the date of
this Agreement) acquires more than 50% of the outstanding voting stock of
LICENSEE or all or substantially all of LICENSEE's Eyewear business, unless bebe
has previously approved such acquisition, bebe may terminate this Agreement by
written notice to LICENSEE within 30 days of receiving notice of such
acquisition (or proposed acquisition) if either (i) bebe reasonably and in good
faith determines that as a result of such acquisition, the financial and
operational condition of LICENSEE has been impaired to the extent that LICENSEE
(or such Person in the event of an asset sale) would be unable to design, market
and promote Licensed Products in a manner comparable to the LICENSEE's manner of
designing, marketing and promotion of the Licensed Products at such time, or
(ii) such Person makes or intends to make any material changes in the existing
key management personnel of LICENSEE primarily responsible for the design,
marketing and promotion of Licensed Products unless, if such changes shall be
contemplated, bebe reasonably and in good faith determines that the replacement
personnel would have the qualifications and experience reasonably necessary to
implement and perform those functions for which they would be responsible
sufficient to enable LICENSEE to continue to design, market and promote Licensed
Products as contemplated by this Agreement. Notwithstanding the foregoing, bebe
shall have the right to terminate this Agreement in the event that any women's
apparel company is the intended acquirer of LICENSEE. bebe acknowledges and
agrees that it is not the purpose of this right of termination to enable bebe to
negotiate any change in the economic terms of this Agreement (for example, an
increase in the royalty rate or the payment of a license or transfer fee) as a
condition for not terminating this Agreement upon a change of control of
LICENSEE.

                                       17
<PAGE>
     10.7. Mutual Right to Termination. Either party may terminate this
Agreement by written notice to the other in the event that bebe does not have
the right to Exploit the Licensed Rights in connection with Eyewear in the
United States and the parties hereto reasonably conclude that the lack of such
right would have a material adverse affect on Net Sales.

     10.8. Liability After Termination. Termination of this Agreement for any
reason shall not, unless otherwise expressly provided in this Agreement, affect:

          10.8.1. Obligations accrued (including Minimum Quarterly Payments
accruing on a daily basis) prior to the effective date of termination; or

          10.8.2. Any obligations which, either expressly or from the context of
this Agreement, are intended to survive termination of this Agreement.

     10.9. Effects of Termination. Upon any termination of this Agreement:

          10.9.1. Any indebtedness of LICENSEE to bebe shall become immediately
due and payable and bebe may retain as security or apply as payment against any
such indebtedness any Licensed Products of LICENSEE in the possession of bebe.

          10.9.2. bebe shall not be liable to LICENSEE, either for compensation
or for damages of any kind, whether on account of loss by LICENSEE or any other
person, of present or prospective profits on present or prospective sales,
investments or goodwill, and LICENSEE hereby waives any rights which may be
granted to it by sovereign entities or any political subdivision in the
Territory or otherwise which are not granted to it by this Agreement.

          10.9.3. Following the expiration or termination of this Agreement,
LICENSEE shall have the right for six months following such expiration or
termination: (a) to manufacture Licensed Products pursuant to binding purchase
orders which LICENSEE shall have received prior to such expiration or
termination; and (b) to market, sell, promote, advertise and distribute Licensed
Products which are: (i) on hand as inventory as of the date of expiration or
termination; (ii) are returned, repurchased or otherwise acquired from customers
FOLLOWING expiration or termination; or (iii) are in process of being
manufactured as of expiration or termination or are manufactured pursuant to
binding purchase orders which LICENSEE has received prior to such expiration or
termination.

          10.9.4. Within thirty (30) days following expiration or termination,
LICENSEE shall furnish to bebe a statement setting forth: (i) its inventory of
Licensed Products; (ii) the status of Licensed Products in the process of being
manufactured, including the wholesale price thereof; (iii) the number of orders
received, accepted and approved; (iv) production and distribution schedules; and
(v) advertising and promotional schedules. bebe shall have the option, for
thirty (30) days following receipt of that statement, to purchase all or part of
LICENSEE's inventory of Licensed Products not committed to sale to customers for
a purchase equal to LICENSEE's actual manufacturing costs for such Licensed
Products. bebe

                                       18
<PAGE>
shall pay the purchase price within 30 days of receipt of such Licensed
Products. LICENSEE may continue to sell such unallocated inventory before bebe
notifies LICENSEE of any option exercise.

          10.9.5. LICENSEE shall continue to maintain in confidence any and all
Confidential Information, and, within fifteen (15) days after the expiration of
the sell-off period contemplated by Section 10.8.3, will return to bebe, at
LICENSEE's expense, all exterior and interiors signs and displays bearing the
Marks or other Licensed Rights, all packaging, labels, tags, promotional or
advertising materials or other materials and documents relating to the Licensed
Products, Licensed Rights or any Confidential Information or, at the election of
bebe, destroy or otherwise dispose of such material as bebe may direct.

          10.9.6. If LICENSEE has Licensed Product inventory following the six
month sell-off period contemplated by Section 10.9.3 which is not purchased by
bebe, LICENSEE may remove the Marks from such inventory and rebrand the
inventory, and thereafter sell or dispose of such rebranded items as LICENSEE
chooses.

11.  Indemnification and Limitation on Liability. Each of LICENSEE and bebe
shall inform the other party within five (5) days of receiving notice of pending
or threatened litigation related to the terms of this Agreement, the Licensed
Products or the Marks with respect to Eyewear in the Territory.

     11.1. Indemnification by LICENSEE. LICENSEE shall indemnify, hold bebe and
its officers, directors, shareholders, employees, agents, independent
contractors, representatives, and affiliates, harmless, and defend bebe and its
officers, directors, shareholders, employees, agents, independent contractors,
representatives, and affiliates, from and against any loss, damage, liability,
or expense, including reasonable attorneys' fees and disbursements, whether or
not LICENSEE's conduct was tortious and whether or not bebe's conduct
contributed to the claim, arising in connection with:

          11.1.1. Any activities of LICENSEE or its employees, agents,
representatives or affiliates, under or in connection with this Agreement.

          11.1.2. Any breach by LICENSEE of this Agreement;

          11.1.3. Claims or demands for injury to property or persons, including
payments made under any workers' compensation or under any other plan for
employees' disability or death benefits, made by any person in connection with
the manufacture of Licensed Products or the advertising, promotion,
distribution, sale or use of Licensed Products by LICENSEE or by its employees,
agents, representatives or affiliates; or

          11.1.4. Claims or demands of any customer of LICENSEE arising out of
any sale or use of the Licensed Products.

                                       19
<PAGE>
Notwithstanding the foregoing, such indemnification shall not extend to third
party claims or allegations of trademark infringement based solely on LICENSEE's
use of the Marks pursuant to and in compliance with the terms of this Agreement.

     11.2. Limitation of bebe's Liability. UNDER NO CIRCUMSTANCES, INCLUDING ANY
BREACH OR ALLEGED BREACH OF THIS AGREEMENT BY bebe OR ANY OTHER PERSON AND THE
FAILURE OF THE ESSENTIAL PURPOSE OF ANY REMEDY INTENDED TO BENEFIT LICENSEE,
SHALL bebe OR ANY OF ITS OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, AGENTS,
INDEPENDENT CONTRACTORS, REPRESENTATIVES, OR AFFILIATES, HAVE ANY LIABILITY OR
OBLIGATION TO ANY CUSTOMER OF LICENSED PRODUCTS, OR TO LICENSEE OR TO ANY OF ITS
OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, AGENTS, INDEPENDENT CONTRACTORS,
REPRESENTATIVES, AUTHORIZED RETAILERS OR AFFILIATES FOR ANY CONSEQUENTIAL OR
INCIDENTAL DAMAGES, LOST PROFITS, ANTICIPATED INCOME OR PROFITS, OR OTHER
SIMILAR DAMAGES. IN THE EVENT OF ANY BREACH BY bebe OF THIS AGREEMENT, UNDER NO
CIRCUMSTANCES SHALL THE LIABILITY OF bebe EXCEED THE TOTAL AMOUNT OF ROYALTY
PAYMENTS ACTUALLY PAID BY LICENSEE TO bebe.

     11.3. Indemnification by bebe. bebe shall indemnify, hold LICENSEE and its
officers, directors, shareholders, employees, agents, independent contractors,
representatives, and affiliates, harmless, and defend LICENSEE and its officers,
directors, shareholders, employees, agents, independent contractors,
representatives, and affiliates, from and against. any loss, damage, liability,
or expense, including reasonable attorneys' fees and disbursements, arising in
connection with (i) any third party claims alleging trademark infringement based
on LICENSEE's use of the Marks in the United States pursuant to and in
compliance with the terms of this Agreement or (ii) any breach by bebe of this
Agreement.

12.  General.

     12.1. Equitable Relief. LICENSEE acknowledges that there will be no
adequate remedy at law for its failure to comply with certain terms of this
Agreement, including its obligation to cease the manufacture, sale,
advertisement, promotion or distribution of the Licensed Products upon
termination, its obligations with respect to the Licensed Rights and the
obligation to maintain the confidentiality of Confidential Information.
Accordingly, if LICENSEE fails to comply with the terms of this Agreement, bebe
shall have the right to have any breach of this Agreement remedied by equitable
relief by way of a temporary restraining order, preliminary injunction,
permanent injunction, and such other alternative relief as may be appropriate
without the necessity of bebe posting any bond or proving any damages.

     12.2. Assignments, Successors and Assigns. bebe shall be entitled to assign
any or all of its rights or delegate any or all of its duties under this
Agreement. Except as otherwise permitted by this Agreement, LICENSEE shall not
assign (by operation of law or otherwise) any of its rights or delegate any of
its duties under this Agreement without the prior consent of bebe provided,
however, that notwithstanding anything to the contrary contained in this

                                       20
<PAGE>
Agreement, LICENSEE shall have the right to: (a) have Licensed Products
manufactured by one or more other Persons; and (b) assign all of its rights and
duties: (i) to any other entity which either controls or is controlled directly
by LICENSEE; provided that such assignment shall not relieve LICENSEE of its
obligations under this Agreement; (ii) to a Person which acquires all or
substantially all of LICENSEE's Eyewear business; and (iii) by operation of law
in connection with the merger of LICENSEE and another Person. The right to
assign does not preclude bebe from terminating this Agreement if otherwise
permitted by Section 10.6 of this Agreement in the event of a merger or sale of
assets.. All representations, warranties, covenants and agreements of the
parties shall bind their respective successors and assignees and shall inure to
the benefit of their respective successors and permitted assignees.

     12.3. Notices. Any notice, request, demand, or other communication required
or permitted under this Agreement, shall be deemed to be properly given by the
sender and received by the addressee (i) if personally delivered; (ii) fourteen
(14) days after deposit in the mails if mailed by certified or registered air
mail, postage prepaid; (iii) twenty-four (24) hours after being sent by
facsimile with confirmation sent as provided in (ii) above; or (iv) seventy-two
(72) hours after being sent by commercial overnight mail, addressed as follows,
and in the case of facsimile transmission, to the appropriate facsimile number
shown below:

          To bebe:            bebe stores, inc.
                              380 Valley Drive
                              Brisbane California 94005
                              Phone No.: (415) 715-3900, E. 502
                              Facsimile No.: (415) 715-3939
                              Attention: Vice President - Licensing

          To LICENSEE:        Signature Eyewear, Inc.
                              498 North Oak St.
                              Inglewood, California 90302
                              Phone No.: (310) 330-2700
                              Facsimile No.: (310) 330-2770
                              Attention: President or CFO

or to such other address or facsimile number as from time to time may be given
in the manner permitted above.

     12.4. Number and Gender; Headings. Each number and gender used in this
Agreement shall be deemed to include each other number and gender as the context
may require. The headings and captions contained in this Agreement shall not
constitute a part thereof and shall not be used in its construction or
interpretation.

     12.5. Severability. If any provision of this Agreement is found by any
court of competent jurisdiction to be invalid or unenforceable, such provision
shall be deemed to be modified to the minimum extent necessary to cause it to be
valid and enforceable and the invalidity or unenforceability of such provision
prior to such modification shall not affect the

                                       21
<PAGE>
other provisions of this Agreement and all provisions not affected by the
invalidity or unenforceability shall remain in full force and effect.

     12.6. Amendment and Modification. This Agreement may be amended or modified
only by a writing executed by all parties.

     12.7. Governing Law and Choice of Forum. This Agreement shall be construed
and governed in accordance with the internal laws of the State of California.
The parties agree that this Agreement is executed and delivered in the State of
California. In the event any legal action becomes necessary to enforce or
interpret the terms of this Agreement, the parties agree that such action will
be brought in the San Francisco County Superior Court or in the U.S. District
Court for the Northern District of California, San Francisco County Division,
and the parties hereby submit to the exclusive jurisdiction of said courts.

     12.8. Taxes. LICENSEE shall be responsible for collection, remittance and
payment of any and all taxes, charges, withholding obligations, levies,
assessments or other fees of any kind imposed by any governmental authority with
respect to the manufacture, sale, importation or other disposition of the
Licensed Products (other than taxes on the income or gross receipts of bebe).
LICENSEE shall provide certified proof of payment to bebe within ten (10) days
of payment thereof.

     12.9. Entire Agreement. This Agreement covers all contracts and agreements
between the parties relating to the subject matter of this Agreement. All other
contracts and agreements between the parties which relate thereto are hereby
terminated effective as of the effective date of this Agreement.

     12.10. Government Approvals and Remittances. In the event that any approval
with respect to this Agreement or any registration thereof will be required,
initially or at any time during the Term, in order to give the Agreement legal
effect, LICENSEE agrees immediately to take whatever steps may be necessary in
this respect; and any charges incurred in connection therewith shall be borne by
LICENSEE.

     12.11. Affiliates of LICENSEE. In the event that any affiliate of LICENSEE
participates in any respect in the enjoyment of rights or the performance of any
duties of LICENSEE hereunder, such affiliate shall be fully obligated under this
Agreement to the same extent as LICENSEE.

     12.12. Authority to Make Agreement. Each party warrants and represents that
it has the power to enter into this Agreement and perform in accordance with the
provisions hereof and that the execution and performance of the Agreement has
been duly and validly authorized in accordance with all applicable laws and
governing instruments.

     12.13. No Waiver. No waiver of any breach of any of the provisions of this
Agreement shall be construed to be a waiver of any succeeding breach of the same
or any other provision.

                                       22
<PAGE>
     12.14. Remedies Not Exclusive. No remedy conferred by any of the specific
provisions of this Agreement is intended to be exclusive of any other remedy,
except as expressly provided in this Agreement or any Exhibit thereto, and each
and every remedy shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing in law or in equity or by
statute or otherwise. The election of any one or more remedies shall not
constitute a waiver of the right to pursue other available remedies.

                                       23
<PAGE>
     NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, THE REMEDIES OF
LICENSEE SHALL BE LIMITED AS PROVIDED IN SECTION 11.2.

     12.15. Definitions. The definitions set forth in Exhibit "A" are
incorporated herein and made a part of this Agreement.

     12.16. bebe Approvals. This Agreement requires LICENSEE to obtain bebe's
approval at various stages in connection with the design, manufacture, marketing
and sale of Licensed Products. bebe acknowledges and agrees that time is of the
essence in connection with each of these approvals. In particular, in order for
LICENSEE to meet deadlines contemplated by the Product Development Calendars
submitted pursuant to Section 3.3 of this Agreement and the goals set forth in
the Operating Plans delivered pursuant to Section 9.2 of this Agreement, bebe
will need to advise LICENSEE promptly of its approval or disapproval (and
provide detailed reasons for any disapproval to permit LICENSEE to make
satisfactory modifications). The failure of bebe to act promptly and to
cooperate would not only impede LICENSEE'S ability to meet applicable deadlines
and goals, but would adversely affect LICENSEE's ability to realize the full
benefits of this license.

     In general, bebe acknowledges that generally: (i) in connection with early
stage approvals required regarding styles of Licensed Products (such as concepts
and hand samples) and marketing and advertising (such marketing concepts),
bebe's approval will be needed no later than fifteen days after the initial
submission, and (ii) in connection with latter stage approvals regarding styles
(such as preproduction and production samples) and advertising, bebe's approval
will be needed within several days of the request. In order to meet these
timeframes in the early stages, bebe will need to communicate any disapproval
prior to the end of the timeframe in order to permit LICENSEE to make
appropriate modifications.

     LICENSEE understands that the failure of bebe to approve or disapprove any
item within these periods shall not be deemed to constitute bebe's approval.

                                  [END OF PAGE]

                                       24
<PAGE>
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                               "bebe":
                               bebe stores, inc., a California corporation
                               By: /s/ Manny Mashent
                               Name: Manny Mashent
                               Title: President

                               "LICENSEE":
                               Signature Eyewear, Inc. a California corporation
                               By: /s/ Julie Heldman
                               Name: Julie Heldman
                               Title: President

                                       25
<PAGE>
bebe

                                LIST OF EXHIBITS

Exhibit "A"     Glossary
-----------

Exhibit "B"     Foreign Distribution Approval Form
-----------

Exhibit "C"     Licensee Product Development Calendar
-----------

Exhibit "D"     Licensed Product Approval Form
-----------

Exhibit "E"     Materials and/or Color Approval Form
-----------

Exhibit "F"     Customer Profile Sheet
-----------

Exhibit "G"     Minimum Shipments
-----------

Exhibit "H"     Statement of Royalties (Domestic) Form
-----------

Exhibit "I"     Statement of Royalties (Foreign)
-----------

Exhibit "J"     [INTENTIONALLY OMITTED]
-----------

Exhibit "K"     Marks Approval Form
-----------

Exhibit "L"     Advertising Budget Form
-----------

Exhibit "M"     Advertising Approval Form
-----------

Exhibit "N"     Advertising Expenditure Summary Form
-----------

Exhibit "O"     [INTENTIONALLY OMITTED]
-----------

Exhibit "P"     Territory
-----------

Exhibit "Q"     Monthly Sales Report
-----------

Exhibit "R"     Warranty Card
-----------

                                       26
<PAGE>
bebe

                                   EXHIBIT "A"
                                   -----------
                                GLOSSARY OF TERMS

"Allowances and Markdowns" means any written credit given by LICENSEE to its
customers after the delivery of Licensed Products sold to any such customer.

"Authorized Retailers" has the meaning ascribed to it in Section 4.2 of this
Agreement.

"Bebe Style" has the meaning ascribed to it in Section 6.5. "Confidential
Information" has the meaning ascribed to it in Section 7.10.

"Contract Year" means the period beginning at the date of this Agreement through
March 31 2001 and thereafter each twelve (12) month period beginning on April 1.
Said Contract Year shall define the periods in which LICENSEE shall be obligated
to pay to bebe Royalty Payments, Minimum Payments, Minimum Quarterly Payments
and other payments, as defined herein.

"Exploit" means design, manufacture, produce, advertise, market, promote,
merchandise, publicize, use, sell and/or distribute, and "Exploitation" and
"Exploiting" shall have correlative meanings.

"Eyewear" means eyeglass frames, cases, chains and cords, manufactured for use
with prescription lenses, including prescription sunglass lenses, and Sunwear.

"Initial Term" has the meaning ascribed to it in Section 2.1.

"License Fee" has the meaning ascribed to it in Section 5.5.

"Licensed Products" means Eyewear containing the Marks.

"Licensed Rights" means the Marks.

"Marketing Date" means March 1, 2000, which is the date by which LICENSEE agrees
to start taking orders from customers for all items defined as Licensed
Products.

"Marks" means "bebe," provided, however, that the appearance and/or style of the
Marks may vary from time to time as specified by bebe in its sole discretion
without affecting this Agreement.

"Minimum Payment" has the meaning ascribed to it in Section 5.2.1 of this
Agreement.

"Minimum Quarterly Payment" has the meaning ascribed to in Section 5.2.2.
<PAGE>
bebe

                                   EXHIBIT "A"
                                   -----------

"Minimum Shipments" means the minimum net sales required of LICENSEE for each
Contract Year, as specified in Exhibit "G".

"Net Sales" in any period means the total of the amounts invoiced or billed by
LICENSEE for Licensed Products sold in such period, less (i) returns in such
period; (ii) sales taxes from the sales of Licensed Products sold in such
period; and (3) freight, transportation and insurance costs related to sales of
Licensed Products in such period, but only if invoiced separately to LICENSEE's
customers. It is acknowledged and agreed that the amounts invoiced or billed by
LICENSEE for Licensed Products sold in a period shall not be reduced by amounts
credited to customers as advertising allowances, selling expenses, co-op
advertising or similar matters.

"Person" means any corporation, partnership, limited liability company, trust,
association or other entity, or any individual.

"Property" means the intellectual property rights of bebe relating to the
Licensed Products that bebe determines, in its sole discretion, to be desirable
or necessary for LICENSEE to exercise the rights and license granted in this
Agreement. Such Property shall include, without limitation, certain product
styles, designs, samples, patterns, colors, materials, fabrics, titles,
trademarks, names, logos, symbols, copyrights, art work, inventions, trade
secrets (registerable and unregisterable), patents and pending patent
applications.

"Renewal Option" has the meaning ascribed to it in Section 2.2. "Renewal Term"
has the meaning ascribed to it in Section 2.2. "Royalty" has the meaning
ascribed to it in Section 5.1.

"Royalty Payment" has the meaning ascribed to it in Section 5.2.2.

"Shipping Date" means April 1, 2000, the date by which LICENSEE shall begin
shipping Licensed Products.

"Sunwear" means ready-to-wear sunglasses and cases, chains and cords for
ready-to-wear sunglasses.

"Term" means the Initial Term together with the Renewal Term(s), if applicable.

"Territory" means solely the geographic area designated specifically on Exhibit
"P" attached hereto and incorporated herein by reference, as amended from time
to time pursuant to this Agreement.

"Trade Discounts" means all reductions in the wholesale list price of Licensed
Products that are customary in the trade and are given by LICENSEE in writing
prior to the delivery of specific Licensed Products.

"Transfer" means sell, assign, transfer or license, with or without
consideration.
<PAGE>
bebe
                                   EXHIBIT "B"
                                   -----------

                       FOREIGN DISTRIBUTION APPROVAL FORM

Form must be submitted complete and sent to:

Bebe                                                            Page ___ of ___
380 Valley Drive                                                Date____________
Brisbane, Ca 94005
Attn: VP-Licensing

Name of Licensee_____________________

Licensed Product_____________________

Country you are interested in distributing in/shipping to: _____________________

                     (PLEASE USE ONE FORM FOR EACH COUNTRY)

Describe the distribution method you plan to use:

You will ship directly to a bebe                      You are proposing to
licensee/distributor only                             assign a distributor

Please continue only if you are assigning a non-bebe distributor to ship
throughout the territory. If not, please skip to #6.

Please give us the name of the distributor, the various products/labels they
currently distribute as well as the volume they shipped last year for each
brand.

Name: _________________________

Brand           Year 1               Year 2               Year 3

                U.S. $               U.S. $               U.S. $
----------------      ---------------      ---------------      ---------------

                U.S. $               U.S. $               U.S. $
----------------      ---------------      ---------------      ---------------

                U.S. $               U.S. $               U.S. $
----------------      ---------------      ---------------      ---------------

If your distributor is planning to distribute full-scale throughout the country,
please tell us the amount they are guaranteeing to purchase from you for the
next 3 years.

                 Units                                   Dollars
                 -----                                   -------

Year 1                                  U.S. $
      -----------------------------           -----------------------------

Year 2                                  U.S. $
      -----------------------------           -----------------------------

Year 3                                  U.S. $
      -----------------------------           -----------------------------

<PAGE>
bebe
                                   EXHIBIT "B"
                                   -----------

                 FOREIGN DISTRIBUTION APPROVAL FORM (CONTINUED)

Have you reviewed the proposed distributor's financials?

3a. Are they acceptable?

Yes      No                        Yes      No

COMMENTS: _________________________________________________________________

The following items must accompany this form if you are seeking to assign a
distributor to sell throughout the territory:

o    Brochure of distributor (if available)

o    Background information/history (i.e. how long they have been in business,
     levels of distribution, experience in the marketplace, references, etc.)

o    Pictures of the distributor's showroom (if applicable)

Please list the full address, fax number and a contact name of the proposed
distributor.

Address:

Fax number:

Contact name:

Please describe the price at which you will sell the items to the
licensee/distributor and who will pay bebe's royalty.

SIGNATURE OF LICENSEE                  SIGNATURE OF LICENSOR - bebe stores, inc.

                                       Approved

                                       Disapproved
<PAGE>
bebe

                                   EXHIBIT "C"
                                   -----------

                      LICENSEE PRODUCT DEVELOPMENT CALENDAR

Date:

Form must be submitted complete to the attention of: bebe, 380 Valley Drive,
Brisbane, CA 94005, Attn: VP-Licensing

Name of Licensee

Address

Licensed Territory

Licensed Products(s)
<TABLE><CAPTION>
<S>                                 <C>                               <C>                             <C>
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
     Sketch/Boards                  Sketch/Boards                     Sketch/Boards                   Sketch/Boards
------------------------------------------------------------------------------------------------------------------------------------
     1st Samples                    1st Samples                       1st Samples                     1st Samples
------------------------------------------------------------------------------------------------------------------------------------
     PreNail It Sample              PreNail It Sample                 PreNail It Sample               PreNail It Sample
------------------------------------------------------------------------------------------------------------------------------------
     Start Ship                     Start Ship                        Start Ship                      Start Ship
------------------------------------------------------------------------------------------------------------------------------------
     End Ship                       End Ship                          End Ship                        End Ship
</TABLE>

SIGNATURE OF LICENSEE ___________________  SIGNATURE OF bebe ___________________
<PAGE>
bebe

                                   EXHIBIT "D"
                                   -----------

                         LICENSED PRODUCT APPROVAL FORM

                            (FOR STYLE APPROVAL ONLY!

          SEE MATERIAL/COLOR APPROVAL FORM FOR MATERIAL/COLOR APPROVAL)

Name of Licensee

Licensed Product(s)

Licensee's Address

Please attach line sheets (which set out wholesale prices) and concept
broads/sketches (if applicable)

Season

Start taking orders for this line

End taking orders for this line

Start ship date for this line

End ship date for this line

SIGNATURE OF LICENSEE                  SIGNATURE OF LICENSOR - bebe stores, inc.

                                       Approved

                                       Disapproved

Date returned to licensee _____________________________________________________

A letter detailing any changes, modifications or specific disapproval of styles
will accompany this form when it is returned to the licensee
<PAGE>
bebe

                                   EXHIBIT "E"
                                   -----------

                      MATERIALS AND/OR COLOR APPROVAL FORM

                       (MATERIALS AND COLOR APPROVAL ONLY!

                  SEE LICENSED PRODUCT APPROVAL FORM FOR STYLE)

Name of licensee

Licensed product(s)

Licensee's address

Season

Please attach 1 set of materials

Beside each material please provide the names of the colors of each material
along with what style or groups will be of each material.

[_] Approved                                           [_] Disapproved

Comments

  SIGNATURE OF LICENSEE                SIGNATURE OF LICENSOR - bebe stores, inc.

Date returned to licensee
<PAGE>
bebe

                                   EXHIBIT "F"
                                   -----------

                             CUSTOMER PROFILE SHEET

Date

Corporate name                              DBA Name

Owners name                                 Buyer's Name

Address                                     State

City                                        Zip

Phone                                       Fax

Type of store                               Specialty department      Other

Year business established                   Present location since

Are you currently doing business with bebe?   Yes [_]         No [_]

If answer to No. 3 is yes, which bebe division?

Key manufacturers you are currently doing business with (including bebe
licensees):

A.___________________   B.___________________   C.___________________

D.___________________   E.___________________   F.___________________

Please check the merchandise you currently carry in your store:

Men's Products [_]        Women's Products [_]               Optics [_]

Shoes [_]                 Timekeeping Devices [_]            Other [_]

Number of stores you operate:________________     List the store locations below
                                                  (attach sheet if necessary)

A.___________________   B.___________________   C.___________________

D.___________________   E.___________________   F.___________________

[_] bebe Approved                                [_] Disapproved

Form must be submitted complete to the attention of: bebe, 380 Valley Drive,
Brisbane, CA 94005, Attn: VP-Licensing

PLEASE SUBMIT INTERIOR AND EXTERIOR STORE PICTURES WITH EACH CUSTOMER PROFILE
SHEET
<PAGE>
bebe

                                   EXHIBIT "G"
                                   -----------

                                MINIMUM SHIPMENTS

   **Excludes sales to bebe stores. Refers to sales in the United States only.

Initial Term:
----------  ---------------------  ---------------------  ---------------------
   YEAR       MINIMUM NET SALES      MINIMUM NET SALES      MINIMUM ROYALTIES
                (SUNGLASSES)             (OPTICAL)
----------  ---------------------  ---------------------  ---------------------
  Year 1
----------  ---------------------  ---------------------  ---------------------
  Year 2
----------  ---------------------  ---------------------  ---------------------
  Year 3
----------  ---------------------  ---------------------  ---------------------
  Year 4
----------  ---------------------  ---------------------  ---------------------

Renewal Term (if applicable)
----------  ---------------------  ---------------------  ---------------------
   YEAR       MINIMUM NET SALES      MINIMUM NET SALES      MINIMUM ROYALTIES
                (SUNGLASSES)             (OPTICAL)
----------  ---------------------  ---------------------  ---------------------
  Year 5
----------  ---------------------  ---------------------  ---------------------
  Year 6
----------  ---------------------  ---------------------  ---------------------
  Year 7
----------  ---------------------  ---------------------  ---------------------

Renewal Term (if applicable)
----------  ---------------------  ---------------------  ---------------------
    YEAR      MINIMUM NET SALES      MINIMUM NET SALES      MINIMUM ROYALTIES
                (SUNGLASSES)             (OPTICAL)
----------  ---------------------  ---------------------  ---------------------
  Year 8*
----------  ---------------------  ---------------------  ---------------------
  Year 9*
----------  ---------------------  ---------------------  ---------------------
  Year 10*
----------  ---------------------  ---------------------  ---------------------

*** All minimum shipments figures redacted.
<PAGE>
bebe
                                   EXHIBIT "H"
                                   -----------

                        STATEMENT OF ROYALTIES (DOMESTIC)

PLEASE MAKE CHECKS PAYABLE TO: BEBE STORES, INC. Send statement to:
bebe, 380 Valley Drive, Brisbane, CA, 94005, Attn: VP-Licensing

Statement of royalties (domestic) for ______________ to ______________, 19____

Licensee's name _____________________ Licensed Product(s) ____________________

Royalty % ______________

Licensee's address __________________ Territory ______________________________

<TABLE><CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
ITEM/       NUMBER     NUMBER OF   NUMBER     UNIT        GROSS   LESS        LESS        LESS        LESS      NET SALES   ROYALTY
STYLE NO.   OF UNITS   CLOSE-OUT   OF UNITS   WHOLESALE   SALES   ALLOWANCE   MARKDOWNS   TRADE       RETURNS   DOLLARS     AMT.
            SOLD       SOLD        RETURNED   PRICE                                       DISCOUNTS                         DOLLARS
-----------------------------------------------------------------------------------------------------------------------------------
<S>         <C>        <C>         <C>        <C>         <C>     <C>         <C>         <C>         <C>       <C>         <C>

-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
I certify that the above is accurate.

By: _____________________________           ____________________________________
    Signature                               Name

_________________________________           ____________________________________
Date                                        Title
<PAGE>
bebe
                                   EXHIBIT "I"
                                   -----------

                        STATEMENT OF ROYALTIES (FOREIGN)

PLEASE MAKE CHECKS PAYABLE TO: BEBE STORES, INC. Send statement to:
bebe, 380 Valley Drive, Brisbane, CA, 94005, Attn: VP-Licensing

Statement of royalties (foreign) for _______________ to ______________, 19______

Licensee's name _____________________ Licensed Product(s) ______________________

Royalty % ______________

Licensee's address __________________ Territory ________________________________

Conversion rate: _____ to _____ U.S. dollars.   Date of conversion rate: _______

<TABLE><CAPTION>
------------------------------------------------------------------------------------------
ITEM/       NO.        NO. OF      NO. OF     LISTED      GROSS   **LESS      LESS
STYLE       OF         CLOSE-      UNITS      WHOLESALE   SALES   ALLOWANCES  PAYMENT
NO.         UNITS      OUTS        RETURNED   PRICE                           TERM
            SOLD*      SOLD                                                   DISCOUNT
------------------------------------------------------------------------------------------
<S>         <C>        <C>         <C>        <C>         <C>     <C>         <C>

------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------
**LESS      CLOSE-     **LESS      NET SALES  NET         GROSS       TAXES
TRADE       OUT        RETURNS     LOCAL      SALES       U.S.        PAID
DISCOUNT    DISCOUNT               CURRENCY   U.S.        DOLLARS     U.S.
                                              DOLLARS                 DOLLARS
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
</TABLE>

*  Units sold include close-outs.
** Please see the license agreement for amount of permissible deductions.

I certify that the above is accurate.

By: _____________________________           ____________________________________
    Signature                               Name

_________________________________           ____________________________________
Date                                        Title
<PAGE>
                                   EXHIBIT "J"
                                   -----------

                             [INTENTIONALLY OMITTED]

<PAGE>
bebe
                                   EXHIBIT "K"

================================================================================
                               MARKS APPROVAL FORM
================================================================================

                                     ALL USES OF BEBE TRADEMARKS THAT ARE NOT
                                     ADVERTISING, E.G. TRIM, LABELS, STATIONERY,
                                     PACKAGING, DISPLAYS, ETC.

Name of Licensee:_______________________________________________________________

Licensed Products: _____________________________________________________________

Description of Use: ____________________________________________________________

________________________________________________________________________________

[_] Concept Design  [_] Color Indication  [_] Finished Art [_] Production Sample
[_] Final Sample
[_] Approved ___________________________  [_] Disapproved ______________________

Comments/Suggestions: __________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

If submission is a label or a hangtag, name and address of supplier:

________________________________________________________________________________

________________________________________________________________________________

Attach a sample of use in this space or affix to a separate page.

_____________________________________      _____________________________________
Signature of Licensee                      Signature of bebe
<PAGE>
bebe
                                   EXHIBIT "L"
                                   -----------

================================================================================
                               ADVERTISING BUDGET
================================================================================

Prepared By ______________________________

Name of Licensee _________________________

Licensed Product _________________________

Territory/Country ________________________   Required Advertising % ____________

Contact Year      ___/__/__ to __/__/_____   Projected Sales ___________________

<TABLE><CAPTION>
                                JAN.-MAR.    APR.-JUN.   JULY-SEPT.   OCT.-DEC.   DOLLAR AMT.
                                Q1           Q2          Q3           Q4          TOTAL
-----------------------------   ----------   ---------   ----------   ---------   -----------
<S>                             <C>          <C>         <C>          <C>         <C>
CONSUMER ADVERTISING
-----------------------------   ----------   ---------   ----------   ---------   -----------
Magazines (list publications)
-----------------------------   ----------   ---------   ----------   ---------   -----------

-----------------------------   ----------   ---------   ----------   ---------   -----------
Charities
-----------------------------   ----------   ---------   ----------   ---------   -----------

-----------------------------   ----------   ---------   ----------   ---------   -----------
Sponsorship
-----------------------------   ----------   ---------   ----------   ---------   -----------

-----------------------------   ----------   ---------   ----------   ---------   -----------
Special Events
-----------------------------   ----------   ---------   ----------   ---------   -----------

-----------------------------   ----------   ---------   ----------   ---------   -----------
Billboards
-----------------------------   ----------   ---------   ----------   ---------   -----------

-----------------------------   ----------   ---------   ----------   ---------   -----------
Promo Items
-----------------------------   ----------   ---------   ----------   ---------   -----------

-----------------------------   ----------   ---------   ----------   ---------   -----------
PR Consultant Fees
-----------------------------   ----------   ---------   ----------   ---------   -----------

-----------------------------   ----------   ---------   ----------   ---------   -----------
Posters & Banners
-----------------------------   ----------   ---------   ----------   ---------   -----------

-----------------------------   ----------   ---------   ----------   ---------   -----------
Bus Shelters
-----------------------------   ----------   ---------   ----------   ---------   -----------

-----------------------------   ----------   ---------   ----------   ---------   -----------
Misc.
-----------------------------   ----------   ---------   ----------   ---------   -----------
SUB TOTAL                       $            $           $            $           $
</TABLE>
<PAGE>
bebe
                                   EXHIBIT "L"
                                   -----------

================================================================================
                         ADVERTISING BUDGET (CONTINUED)
================================================================================

<TABLE><CAPTION>
                                JAN.-MAR.    APR.-JUN.   JULY-SEPT.   OCT.-DEC.   DOLLAR AMT.
                                Q1           Q2          Q3           Q4          TOTAL
-----------------------------   ----------   ---------   ----------   ---------   -----------
<S>                             <C>          <C>         <C>          <C>         <C>
TRADE ADVERTISING
-----------------------------   ----------   ---------   ----------   ---------   -----------
Trade Shows Adv. (list pubs.)
-----------------------------   ----------   ---------   ----------   ---------   -----------

-----------------------------   ----------   ---------   ----------   ---------   -----------

-----------------------------   ----------   ---------   ----------   ---------   -----------

-----------------------------   ----------   ---------   ----------   ---------   -----------
In-store Special Events
-----------------------------   ----------   ---------   ----------   ---------   -----------

-----------------------------   ----------   ---------   ----------   ---------   -----------

-----------------------------   ----------   ---------   ----------   ---------   -----------

-----------------------------   ----------   ---------   ----------   ---------   -----------
Promo Items
-----------------------------   ----------   ---------   ----------   ---------   -----------

-----------------------------   ----------   ---------   ----------   ---------   -----------

-----------------------------   ----------   ---------   ----------   ---------   -----------

-----------------------------   ----------   ---------   ----------   ---------   -----------
PR Consultant Fees
-----------------------------   ----------   ---------   ----------   ---------   -----------

-----------------------------   ----------   ---------   ----------   ---------   -----------

-----------------------------   ----------   ---------   ----------   ---------   -----------

-----------------------------   ----------   ---------   ----------   ---------   -----------
Misc.
-----------------------------   ----------   ---------   ----------   ---------   -----------

-----------------------------   ----------   ---------   ----------   ---------   -----------

-----------------------------   ----------   ---------   ----------   ---------   -----------
SUB TOTAL                       $            $           $            $           $
-----------------------------   ----------   ---------   ----------   ---------   -----------
GROSS TOTAL:                    $            $           $            $           $
-----------------------------   ----------   ---------   ----------   ---------   -----------
</TABLE>
<PAGE>
bebe
                                   EXHIBIT "M"
                                   -----------

================================================================================
                            ADVERTISING APPROVAL FORM
================================================================================

 (SUBMISSIONS MAY BE APPROVED ONLY IN WRITING AND ONLY IF ALL CHANGES ARE MADE)

Name of Licensee: ______________________________________________________________

Licensed Product(s): ___________________________________________________________

                               Artwork Submission

Please check the media of advertising:

[_] Full Page Ad             [_] Billboard         [_] Other ___________________

Name of Publication: ___________________________________________________________

Country: ________________________________    Issue Date: _______________________

Ad Position (As Detailed As Possible): _________________________________________

[_] Left Hand Page           [_] Right Hand Page            [_] Full Page Spread

------------------------------ FOR BEBE USE ONLY -------------------------------

PLEASE FOLLOW THE APPLICABLE INSTRUCTIONS:

[_] ____________________________________________________________________________

[_] ____________________________________________________________________________

Special Instructions: __________________________________________________________

________________________________________________________________________________

__________________          _____________________          _____________________
Approved                    Approved with Changes          Disapproved

================================================================================

                             PUBLICATION SUBMISSION

Name of Publication: ___________________________________________________________

(A COPY OF THE MAGAZINE OR NEWSPAPER MUST BE INCLUDED)

Frequency (Check One): [_] Daily   [_] Weekly   [_] Monthly   [_] Other_________

Comments/Suggestions: __________________________________________________________

________________________________________________________________________________

__________________                                         _____________________
Approved                                                   Disapproved
<PAGE>
bebe
                                   EXHIBIT "N"
                                   -----------

================================================================================
                      ADVERTISING EXPENDITURE SUMMARY FORM
================================================================================

Prepared By ____________________________________________________

Name of Licensee _______________________________________________

Licensed Product _______________________________________________

Territory/Country ______________________________________________

Quarter/Period_____________/__/__ to __/__/__

Contact Year_______________/__/__ to __/__/__

--------------------------------------------------------- ----------------------
TYPE OF ADVERTISING                                       DOLLAR AMOUNT
--------------------------------------------------------- ----------------------

--------------------------------------------------------- ----------------------
CONSUMER ADVERTISING (LIST PUBLICATION)
--------------------------------------------------------- ----------------------

--------------------------------------------------------- ----------------------

--------------------------------------------------------- ----------------------

--------------------------------------------------------- ----------------------

--------------------------------------------------------- ----------------------

--------------------------------------------------------- ----------------------

--------------------------------------------------------- ----------------------
TRADE ADVERTISING (LIST PUBLICATION)
--------------------------------------------------------- ----------------------

--------------------------------------------------------- ----------------------

--------------------------------------------------------- ----------------------

--------------------------------------------------------- ----------------------

--------------------------------------------------------- ----------------------

--------------------------------------------------------- ----------------------

--------------------------------------------------------- ----------------------
CO-OP ADVERTISING
--------------------------------------------------------- ----------------------
NEWSPAPERS
--------------------------------------------------------- ----------------------
CHARITY
--------------------------------------------------------- ----------------------
SPONSORSHIPS
--------------------------------------------------------- ----------------------
SPECIAL EVENTS
--------------------------------------------------------- ----------------------
BILLBOARDS
--------------------------------------------------------- ----------------------
PROMO ITEMS
--------------------------------------------------------- ----------------------
SHOOT/PRODUCTION FEES
--------------------------------------------------------- ----------------------
PR CONSULTANT FEES
--------------------------------------------------------- ----------------------
TV/CINEMA
--------------------------------------------------------- ----------------------
RADIO
--------------------------------------------------------- ----------------------
POSTERS & BANNERS
--------------------------------------------------------- ----------------------
BUS SHELTERS
--------------------------------------------------------- ----------------------
OTHER
--------------------------------------------------------- ----------------------

--------------------------------------------------------- ----------------------
TOTAL:
--------------------------------------------------------- ----------------------
<PAGE>
bebe

                                   EXHIBIT "O"
                                   -----------

                             [INTENTIONALLY OMITTED]

<PAGE>
bebe
                                   EXHIBIT "P"
                                   -----------

================================================================================
                                    TERRITORY
================================================================================

The United States, its territories and possessions.  Canada, Australia, New
Zealand, France, Germany, Belgium, Netherlands, Japan, United Kingdom, Mexico,
Argentina, Brazil, Chile, Denmark, Finland, Sweden, Norway, Israel, Portugal,
Saudi Arabia, South Africa.

<PAGE>
bebe
                                   EXHIBIT "Q"
                                   -----------

================================================================================
                              MONTHLY SALES REPORT
================================================================================

Licensee: ______________________________________________________________________

Product Category:_______________________________________________________________

Territory: _____________________________________________________________________

Date submitted: ________________________________________________________________

Month reported: ________________________________________________________________

* Please fill out a separate form for your sales to bebe stores (on a separate
form).

GROSS SALES                                           NET SALES

__________________________                            __________________________

Prepared by: ___________________________________________________________________

<PAGE>
bebe
                                   EXHIBIT "R"
                                   -----------

================================================================================
                                  WARRANTY CARD
================================================================================

Signature Eyewear warrants its eyewear against defects of manufacturing or
design for a period of one year from date of purchase. Signature Eyewear will
replace or repair - free of charge - any eyewear that proves to be defective
within 12 months of purchase after receipt and inspection. Proof of purchase is
required.

Please send damaged or defective eyewear with original proof of purchase receipt
for warranty claims and a check to cover shipping and handling to:

                             SIGNATURE EYEWEAR, INC.

                                498 NORTH OAK ST.

                           INGLEWOOD, CALIFORNIA 90302

For eyewear not under warranty, or if proof of purchase is not available,
Signature Eyewear will repair or replace eyewear damaged through accidental
breakage or any other use after receipt and inspection for the following price:

                            REPLACEMENT PARTS SERVICE
--------------------------------------------------------------------------------

Frame (front)         $00.00           Temples                          $00.00

--------------------------------------------------------------------------------

Glass Lenses          $00.00           Eyeglass Case                    $00.00

--------------------------------------------------------------------------------

Plastic Lenses        $00.00           Shipping and Handling            $00.00

--------------------------------------------------------------------------------

Please complete this form:

Style purchased ________________________________________________________________

Name ___________________________________    Address ____________________________

City ___________________________________    State ______________________________

Date purchased _________________________    Place Purchased ____________________

<PAGE>
                         AMENDMENT TO LICENSE AGREEMENT
                         ------------------------------

     THIS AMENDMENT ("Amendment") is made and entered into effective as of
September 23, 1999 between bebe stores, inc., a California corporation ("bebe")
and Signature Eyewear, Inc., a California corporation ("LICENSEE").

                                    RECITALS
                                    --------

     1.   bebe and LICENSEE made and entered into that certain License
Agreement, effective as of September 23,1999 (the "License Agreement") relating
to specific rights and license to use certain bebe trademarks in connection with
the design, manufacture, advertisement, promotion, distribution and sale of
Licensed Products, as defined in the Agreement.

     2.   The parties hereto are presently desirous of amending the License
Agreement as follows.

     NOW, THEREFORE, in consideration of the recitals, premises and mutual
covenants contained in this Amendment, the parties agree as follows:

     A.   Section 3 of the License Agreement shall be amended to incorporate the
following additional paragraph:

     3.7. bebe Exclusive Licensed Products. If bebe requests a certain Licensed
     Product to be designed and manufactured for bebe and LICENSEE decides not
     to sell or distribute such Licensed Product to any Authorized Retailer,
     such Licensed Product shall be deemed a "bebe Exclusive Product." LICENSEE
     shall not be obligated to manufacture any bebe Exclusive Product unless
     bebe places an irrevocable purchase order for this Product. bebe Exclusive
     Products shall be subject to all of the terms herein and in the License
     Agreement, including the terms relating to Licensed Products., except: (i)
     bebe shall not have the right to return bebe Exclusive Products TO LICENSEE
     under Section 4.6 of the License Agreement or otherwise; (ii) LICENSEE
     shall not be obligated to maintain any inventory of bebe Exclusive Product;
     and (iii) Sections 4.1, 4.2 and 4.10 shall not apply with respect to bebe
     Exclusive Products.

     B.   Section 5 of the License Agreement shall be amended to incorporate the
following additional paragraph:

     5.6. Sales to bebe and Payment Terms. LICENSEE shall sell Licensed Products
     to bebe at 64% of LICENSEE's Wholesale Price. Parties agree that
     "LICENSEE's Wholesale Price" shall be 50% of the Suggested Retail Price for
     such item. Parties further agree that the aforementioned formula shall
     apply to bebe Exclusive Product, provided, however, that the Suggested
     Retail Price for such bebe Exclusive Products shall be mutually determined
     by the Parties and shall be comparable to similar Licensed Products.
     Royalties owed to bebe pursuant to
<PAGE>

     Section 5.1 of the License Agreement shall not apply to sales to bebe.
     Invoices on such sales will be due by bebe 30 days after receipt.

     C.   Section 4.6 of the License Agreement shall be amended by adding the
following sentence at the end of such section:

     Signature shall not be obligated to accept for exchange any Licensed
     Product that is defective for any reason other than defects in materials or
     workmanship.

     D.   Except as expressly amended in this Amendment, all of the terms,
definitions, covenants and conditions of the License Agreement shall remain in
full force and effect and are hereby ratified and confirmed.

     E.   Each of the parties hereto severally agree that they have read this
Amendment, that they understand the contents thereof, and that each is signing
this Amendment as his or her own free act and deed with full advice of counsel.

     F.   In the event of any conflict or inconsistency between this Amendment
and the License Agreement, the provisions in this Amendment shall govern and
control.

     IN WITNESS WHEREOF, the parties have executed this Amendment effective as
of the date first above written.

          "bebe":

          bebe stores, inc., a California corporation

          By: /s/ Blair W. Lambert

          Name: Blair W. Lambert

          Title: CFO

          "LICENSEE":

          Signature Eyewear, Inc. a California corporation

          By: /s/ Julie Heldman

          Name: Julie Heldman

          Title: President
<PAGE>
                       AMENDMENT TWO TO LICENSE AGREEMENT
                       ----------------------------------

     THIS AMENDMENT ("Amendment") is made and entered into effective as of June
4, 2002, by and between bebe stores, inc., a California corporation ("bebe') and
Signature Eyewear, Inc. a California corporation ("LICENSEE").

                                    RECITALS
                                    --------

     C.   bebe and LICENSEE made and entered into that certain License
Agreement, effective as of September 23, 1999 (the " License Agreement")
relating to specific rights and license to use certain bebe trademarks in
connection with design, manufacture, advertisement, and promotion, distribution
and sale of Licensed Products, as defined in the Agreement.

     D.   The parties hereto are presently desirous of amending the License
Agreement as follows.

     NOW, THEREFORE, in consideration of the recitals, premises and mutual
covenants contained in this Amendment, the parties agree as follows:

1.   Eyewear as defined in Exhibit A of the Agreement shall be amended to
reflect that Sunwear as of June 4, 2002 is no longer a category of Licensed
Products:

     "Eyewear" means eyeglass frames, cases, chains and cords, manufactured for
     use with prescription lenses, including prescription sunglasses.

2.   Section 2.1 of the License Agreement shall be amended to reflect a change
to the end date of the Initial Term Year:

     "Initial Term. The term of this Agreement shall commence on the date of
     this Agreement and shall continue until June 30, 2003 unless sooner
     terminated in accordance with this Agreement ("Initial Term")."

3.   The last sentence of Section 1.1. shall be amended as follows to clarify
the intent of the parties:

     "Nothing herein shall entitle LICENSEE to design, advertise, promote or
     distribute the Licensed Products outside the Territory or to advertise,
     promote, sell or distribute the Licensed Products or to display the
     Licensed Marks on the Internet or any website other than bebeeyes.com or
     signatureeyewear.com."
<PAGE>
4.   The first sentence of Section 4.2 shall be amended as follows to clarify
the intent of the parties:

     "Customers of LICENSEE. In order to protect and foster the value, image and
     reputation of the Licensed Products and Licensed Rights, LICENSEE shall
     only sell the Licensed Products outright and only to retail outlets in the
     Territory that have been informed by LICENSEE that they may not promote,
     advertise or sell the Licensed Products or display, reproduce or publish
     the Mark on any website, the Internet or any other electronic media and
     whose location, merchandising and overall operations are, in the good faith
     belief of LICENSEE, consistent with the high quality of the Licensed
     Products and the reputation, prestige and image of the Marks (collectively,
     the "Authorized Retailers").

5.   Section 5.4 of the License Agreement is hereby amended in its entirety as
follows:

     "Monthly Sales Report. By no later than 20 days after the end of each month
     in each calendar quarter, Licensee shall submit to bebe a report that
     contains all of the information required by bebe's Monthly Sales Report
     Form as modified by bebe from time to time."

6.   Section 9.5 of the License Agreement is hereby replaced with the following
provision for clarification:

     "No Internet Advertisement or Sales by LICENSEE. LICENSEE may not display,
     promote, advertise, distribute, use or sell the Licensed Products or
     display, reproduce or publish the Mark on any website, the Internet or
     other electronic media without bebe's prior written approval, which bebe
     shall grant or withhold at its sole discretion.

     9.5.1. bebe hereby approves the display, promotion, advertisement,
     publication, reproduction and use by LICENSEE on LICENSEE's own website(s)
     of the Licensed Products and the Mark.

     9.5.2 bebe acknowledges that as of June 4, 2002, a number of LICENSEE's
     customers advertise, promote and sell Licensed Products on and through
     their websites or the Internet without bebe's written approval. bebe
     acknowledges and agrees that LICENSEE shall immediately contact all current
     customers in writing (with copies sent to bebe's Licensing Department) and
     request that customers must cease and desist from such advertising or sale
     through their website or on the Internet. If such customer refuses to take
     such action or fails to take such action within a reasonable period
     following such request, LICENSEE agrees to inform bebe in writing and
     Licensee agrees not to sell to such customer any additional Licensed
     Products (other than Licensed Products for which firm
<PAGE>
     orders had been placed by such customer prior to the date of the cease and
     desist letter) until such time as such customer agrees not to advertise,
     promote or sell Licensed Products on its website or through the Internet
     (the "Procedure").

     9.5.3 LICENSEE acknowledges and agrees that it shall investigate all
     current and future customers that it becomes aware of through bebe or
     otherwise that are in violation of Section 4.2 of this Amendment. LICENSEE
     agrees to implement the Procedure as set forth in 9.5.2 for every customer
     violating Section 4.2.

7.   Effective July 1, 2002, Section 9.6 of the Licensing Agreement will be
deleted and amended in its entirety as follows:

     "Minimum Advertising Expenditures. LICENSEE shall pay a Minimum Advertising
     Expenditure for expenses related to advertising which shall be due at the
     beginning of the Contract Year. The Minimum Advertising Expense shall be
     {***}. For convenience purposes only, LICENSEE shall make quarterly
     payments of the Minimum Advertising Expenditure on the first business day
     of each quarter. If the License Agreement is terminated at any time, any
     Minimum Advertising Expenditure due for that Contract Year shall be paid to
     bebe in full within 10 business days of termination.

8.   Section 9 of the License Agreement is hereby amended to effect the
following provisions, beginning July 1, 2002:

     9.7. Cooperative Advertising. LICENSEE shall be responsible for the
     development, at LICENSEE'S sole expense, of any cooperative advertising
     with Approved Customers. LICENSEE shall plan and design cooperative
     advertising and events in accordance with all guidelines provided by bebe
     for advertising including, without limitation, acceptable trademark and/or
     logo usage, and recommendations of layout, models, styling, size and
     placement of advertising. LICENSEE shall use its best efforts to enforce
     such guidelines with Approved Customers. LICENSEE shall submit to bebe for
     written approval any cooperative advertising that does not use images or
     ads supplied by bebe.

     9.8. Trade Advertising. LICENSEE shall be responsible for the development,
     at LICENSEE'S sole expense, of any advertising in trade or industry
     publications. LICENSEE shall plan and design trade advertising in
     accordance with all guidelines provided by bebe for advertising including,
     without limitation, acceptable trademark and/or logo usage, and
     recommendations of layout, models, styling, size and placement of
<PAGE>
     advertising. LICENSEE shall submit to bebe for written approval any trade
     advertising that does not use images or ads supplied by bebe.

10.  Section 10.1 of the License Agreement is hereby amended to add the
following as the final sentences in that section.

     bebe shall determine, in its sole discretion, whether to afford LICENSEE an
     opportunity to cure any breach. bebe's allowance of LICENSEE to cure such
     breach shall not be deemed an allowance to LICENSEE to cure any additional
     breaches. Any breach of the same nature in the same contract year will
     result in bebe automatically terminating this Agreement. The failure of
     bebe at any time to insist upon strict performance of any of the terms and
     conditions contained in this Agreement will not be deemed a waiver of its
     right at any time thereafter to insist upon strict performance.

9.   "Contract Year" in the Glossary of Terms (Exhibit "A") shall be amended to
incorporate the change in the end date of the Term Year as follows:

     "Contract Year" means each twelve (12) month period beginning on July 1.
     The third Contract Year shall hereby be deemed to be the period from April
     1, 2002 to June 30, 2003. All rights or obligations of the parties during
     this fifteen-month period shall be increased to reflect the additional
     quarter. The parties understand and agree that the Minimum Net Optical
     Sales for the fifteen-month period of the third Contract Year will be
     increased to {***}, reflecting the additional quarter to such Contract
     Year. The parties further agree that the Minimum Royalties for the
     fifteen-month period of the third Contract Year shall be based on {***}."

10.  Except as expressly amended in this Amendment Agreement, all of the terms,
definitions, covenants and conditions of the License Agreement shall remain in
full force and effect and are hereby ratified and confirmed. The License
Agreement, and all Amendment Agreements represent the entire understanding and
agreement between the parties and supersedes all prior negotiations,
representations, amendments or agreements, either written or oral. Each of the
parties hereto severally agree that they have read this Amendment, that they
understand the contents thereof, and that each is signing this Amendment as his
own free act and deed with full advice of counsel.

11.  In the event of any conflict or inconsistency between this Amendment and
the License Agreement, the provisions in this Amendment shall govern and
control.
<PAGE>

     IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement
or caused the same to be executed by its duly authorized officer on the day and
year first set forth above.

"bebe"                                      "LICENSEE"
bebe stores, inc.                           Signature Eyewear, Inc.
a California corporation                    a California corporation

By: /s/ John Kyees                          By: /s/ Michael Prince
    ---------------------------                 ---------------------------
    John Kyees                                  Michael Prince
    Chief Financial Officer                     Chief Financial Officer

<PAGE>
                      AMENDMENT THREE TO LICENSE AGREEMENT
                      ------------------------------------

     THIS AMENDMENT ("Amendment") is made and entered into effective as of July
3, 2003, by and between bebe studio, inc., a California corporation ("bebe") and
Signature Eyewear, Inc. a California corporation ("LICENSEE").

                                    RECITALS
                                    --------

     E. A. bebe and LICENSEE made and entered into that certain License
Agreement, effective as of September 23,1999, as thereafter amended (the
"License Agreement") relating to specific rights and license to use certain bebe
trademarks in connection with design, manufacture, advertisement, and promotion,
distribution and sale of Licensed Products, as defined in the Agreement.

     F. B. The parties hereto are presently desirous of amending the license
Agreement as follows.

     NOW, THEREFORE, in consideration of the recitals, premises and mutual
covenants contained in this Amendment, the parties agree as follows:

1.   Pursuant to Section 2.2 of the License Agreement, bebe hereby acknowledges
that LICENSEE has exercised its option to renew this Agreement for an additional
three-year term. Notwithstanding anything to the contrary contained in this
Agreement, this Agreement shall expire, on June 30, 2006 and there shall be no
additional Renewal Terms beyond June 30, 2006.

2.   Section 5.2.1 of the License Agreement shall be deleted and replaced with
the following;

     "The Minimum Payment for each Contract Year shall be equal to [***]."

3.   "Contract Year"in the Glossary of Terms (Exhibit "A") shall be deleted and
replaced with the following:

     "Contract Year" means each twelve (12) month period beginning on July 1
     through June 30. Said Contract Year shall define the periods in which
     LICENSEE shall be obligated to pay to bebe Royalty Payments, Minimum
     Payments, Minimum Quarterly Payments and other payments, as defined herein.
<PAGE>
4.   Minimum Shipments in Exhibit "G" shall be deleted and replaced with the
following:

     **Excludes sales to bebe. Refers to sales in the United States only.

     Renewal Term:

            YEAR                 MINIMUM NET SALES         MINIMUM ROVALTIES
                                    (OPTICAL)
     ---------------------------------------------------------------------------
           Year 4

     7/1/03 to 6/30/04
     ---------------------------------------------------------------------------
           Year 5

     7/1/04 to 6/30/05
     ---------------------------------------------------------------------------
           Year 6

     7/1/05 to 6/30/06
     ---------------------------------------------------------------------------

5.   Except as expressly amended herein, all of the terms, definitions,
covenants and conditions of the License Agreement shall remain in full force and
effect and are hereby ratified and confirmed. The License Agreement as amended
represents the entire understanding and agreement between the parties and
supersedes all prior negotiations, representations, amendments or agreements,
either written or oral. Each of the parties hereto severally agree that they
have read this Amendment, that they understand the contents thereof, and that
each is signing this Amendment as his own free act and deed with full advice of
counsel.

6.   In the event of any conflict or inconsistency between this Amendment and
the License Agreement, the provisions in this Amendment shall govern and
control.

*All minimum shipments figures redacted.
<PAGE>

     G.   IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement or caused the am to be executed by its duly authorized officer on the
day and year first set forth above.

"bebe"                                      "LICENSEE"
bebe studio, inc.                           Signature Eyewear, Inc.
a California corporation                    a California corporation

By: /s/ John Kyees                          By: /s/ Michael Prince
    ---------------------------                 ---------------------------
    John Kyees                                  Michael Prince
    Chief Financial Officer                     Chief Financial Officer

<PAGE>
                       AMENDMENT FOUR TO LICENSE AGREEMENT
                       -----------------------------------

     THIS AMENDMENT ("Amendment") is made and entered into effective as of April
5, 2005, by and between bebe studio, inc., a California corporation ("bebe") and
Signature Eyewear, Inc. a California corporation ("LICENSEE"). RECITALS

     A.   bebe and LICENSEE made and entered into that certain License
Agreement, effective as of September 23, 1999, as thereafter amended (the "
License Agreement") relating to specific rights and license to use certain bebe
trademarks in connection with design, manufacture, advertisement, and promotion,
distribution and sale of Licensed Products, as defined in the Agreement.

     B.   The parties hereto are presently desirous of amending the License
Agreement as follows.

     NOW, THEREFORE, in consideration of the recitals, premises and mutual
covenants contained in this Amendment, the parties agree as follows:

1.   Section 4.2 of the Agreement shall be amended to reflect that prescription
sunglasses shall be sold exclusively through independent optical shops only by
including the following language to the end of Section 4.2:

     "Notwithstanding anything to the contrary contained herein, with respect to
     the Licensed Product prescription sunglasses, LICENSEE shall sell them
     outright and exclusively through independent optical shops in the Territory
     and not through any other distribution channel."

2.   Except as expressly amended herein, all of the terms, definitions,
covenants and conditions of the License Agreement shall remain in full force and
effect and are hereby ratified and confirmed. The License Agreement as amended
represents the entire understanding and agreement between the parties and
supersedes all prior negotiations, representations, amendments or agreements,
either written or oral. Each of the parties hereto severally agree that they
have read this Amendment, that they understand the contents thereof, and that
each is signing this Amendment as his own free act and deed with full advice of
counsel.

3.   In the event of any conflict or inconsistency between this Amendment and
the License Agreement, the provisions in this Amendment shall govern and
control.
<PAGE>

     IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement
or caused the same to be executed by its duly authorized officer on the day and
year first set forth above.

"bebe"                                      "LICENSEE"
bebe studio, inc.                           Signature Eyewear, Inc.
a California corporation                    a California corporation

By: /s/ Walter Parks                        By: /s/ Michael Prince
    ---------------------------                 ---------------------------
    Walter Parks                                Michael Prince
    Chief Financial Officer                     Chief Financial OfficerExhibit 10-34 - Asset Purchase Agreement for Gemprint

     

    ASSET
      PURCHASE AGREEMENT

     

    Among

     

    COLLECTORS
      UNIVERSE, INC.,

     

    GEMPRINT
      CORPORATION,

     

    CVF
      TECHNOLOGIES CORPORATION,

     

    HEPTAGON
      INVESTMENTS LTD.

     

    and

     

    1456733
      ONTARIO, INC.

     

    Dated:

     

    November
      25, 2005

     

    

    

    
      
        
          
            	 	 	 

          

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    ARTICLE
      I    DEFINITIONS                                                                                 
                                                              
  1

    1.1    Specific.                                                                                                                                                    
        1

    1.2    General.                                                                                                                                                     
      11

     

    ARTICLE
      II    SALE
      AND
      PURCHASE OF
      ASSETS                                                                                                 
11

    2.1    Assets
      to
      be
      Transferred.                                                                                                                      
11

    2.2    Excluded
      Assets.                                                                                                                                     
11

    2.3    Title
      to
      Purchased
      Assets.                                                                                                                     
12

    2.4    Consents
      to
      Assignment.                                                                                                                       
12

     

    ARTICLE
      III    ASSUMPTION
      OF
      LIABILITIES                                                                                                         
12

    3.1    Assumed
      Liabilities                                                                                                                                  12

    3.2    Excluded
      Liabilities.                                                                                                                                 
13

    3.3    Contested
      Obligations.                                                                                                                           
15

     

    ARTICLE
      IV   PURCHASE
      PRICE, ESCROW, PAYMENT AND RELATED
      MATTERS                                     
15

    4.1    Purchase
      Price.                                                                                                                                         
15

    4.2    Contingent
      Payments                                                                                                                              
15

    4.3    Escrow.                                                                                                                                                      
      16

    4.4    Payment
      of the Purchase
      Price.                                                                                                              16

    4.5    Disbursement
      Schedule                                                                                                                          
16

    4.6    Transfer
      Taxes                                                                                                                                          
17

    4.7    Allocation
      of Purchase
      Price.                                                                                                                 
17

    4.8    [Intentionally
      omitted.]                                                                                                                             17

    4.9    [Intentionally
      omitted.]                                                                                                                            
17

    4.10         
      GST
      Election                                                                                                                                             
17

    4.11         
      Accounts
      Receivable
      Election                                                                                                               
17

    4.12         
      Deferred
      Revenue
      Election                                                                                                                      17 

     

    ARTICLE
      VCLOSING                                                                                                                                                               
18

    5.1    Time
      and
      Place                                                                                                                                          
18

    5.2    Transactions
      Upon the Execution of this
      Agreement                                                                         18

    5.3    Transactions
      at the
      Closing.                                                                                                                   
18

     

    ARTICLE
      VI    REPRESENTATIONS
      AND WARRANTIES OF SELLER, CVF AND
      HEPTAGON                     
20

    6.1    Organization;
      Authority; Due
      Authorization.                                                                                       20

    6.2    No
      Violation                                                                                                                                               
21

    6.3    Licenses;
      Regulatory and Other
      Approvals.                                                                                        
22

    6.4    Title
      to
      Purchased
      Assets                                                                                                                       
22

    6.5    Financial
      Condition.                                                                                                                                  
22

    6.6    Tax
      Matters.                                                                                                                                               
25

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

    6.7    Compliance
      with Applicable Laws; Governmental
      Matters.                                                              
26

    6.8    Litigation.                                                                                                                                                   
      28

    6.9    Property
      of
      Seller.                                                                                                                                     
29

    6.10         
      Agreements.                                                                                                                                              
      31

    6.11         
      Labor
      and
      Employment
      Matters.                                                                                                            
32

    6.12        
       Employee
      Benefits                                                                                                                                     33

            (a)    Compliance
      with Applicable Law,
      etc                                                                             33

            (b)    Pension
      Plan                                                                                                                      
33

    6.13          
      Insurance.                                                                                                                                                 
      34

    6.14          
      Customers,
      Licensees and
      Suppliers.                                                                                                   
34

    6.15          
      Potential
      Conflicts of
      Interest.                                                                                                               
34

    6.16          
      Certain
      Transactions                                                                                                                               
34

    6.17          
      Solvency.                                                                                                                                                  
      35

    6.18         
       Books
      and
      Records.                                                                                                                                
35

    6.19          
      Delivery
      of
      Documents.                                                                                                                          
35

    6.20          
      Subsidiaries                                                                                                                                              
      35

    6.21          
      No
      Broker                                                                                                                                                  
35

    6.22          
      Non-Residency                                                                                                                                        
      35

    6.23          
      Full
      Disclosure.                                                                                                                                        
35

     

    ARTICLE
      VII   REPRESENTATIONS
      AND WARRANTIES OF
      BUYER                                                            
    37                                                         

    7.1    Due
      Incorporation.                                                                                                                                   37

    7.2    Authority
      to Execute and Perform
      Agreements.                                                                                  37

    7.3    Due
      Authorization;
      Enforceability                                                                                                         37

    7.4    No
      Violation                                                                                                                                              
37

    7.5    Regulatory
      and Other
      Approvals.                                                                                                         
38

    7.6    No
      Broker.                                                                                                                                                 
38

    7.7    Investment
      Canada
      Act                                                                                                                           38

     

    ARTICLE
      VIII        COVENANTS
      AND AGREEMENTS OF THE PARTIES EFFECTIVE PRIOR TO
      CLOSING       38

    8.1    Business
      Examinations and Physical Investigations of Purchased
      Assets                                  
38

    8.2    Cooperation;
      Consents.                                                                                                                         
39

    8.3    Preservation
      and Conduct of
      Business.                                                                                              
39

    8.5    Interim
      Seller Financial
      Statements                                                                                                       
41

    8.6    Notices.                                                                                                                                                     
      42

    8.7    Non-Competition                                                                                                                                     
      42

    8.8    Employment
      Matters.                                                                                                                               42   

    8.9    No
      Solicitation or
      Negotiation                                                                                                                43

    8.10         
      Risk
      of
      Loss                                                                                                                                              
43

    8.11         
      Transition
      Assistance.                                                                                                                           
43

    8.12          Assistance
      in Transfer of Records and
      Data.                                                                                     
44

    8.13          Change
      of
      Record
      Title                                                                                                                           
44

    8.14         
      Meeting
      of Seller’s
      Shareholders                                                                                                          
44

    8.15         
      Bulk
      Sales                                                                                                                                                   44

    8.16         
      GST
      Registration                                                                                                                                      
44

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

    8.17         
      [Intentionally
      omitted.]                                                                                                                           
44

    8.18         
      SIL                                                                                                                                                              
      44

    8.19         
      Class
      B
      Stock                                                                                                                                            
44

     

    ARTICLE
      IX          CONDITIONS
      PRECEDENT TO THE OBLIGATION OF EACH PARTY TO
      CLOSE                   
45

    9.1    No
      Action
      or
      Proceeding.                                                                                                                       
45

    9.2    Governmental
      and Other
      Approvals.                                                                                                    
45

    9.3    Shareholder
      Approval                                                                                                                             
45

     

    ARTICLE
      X    CONDITIONS
      PRECEDENT TO THE OBLIGATION OF BUYER TO
      CLOSE                               
45

    10.1    Representations
      and
      Warranties                                                                                                        
45

    10.2    Performance
      of
      Covenants                                                                                                                    46

    10.3    No
      Adverse
      Change                                                                                                                              
46

    10.4    Opinion
      of Counsel to
      Seller.                                                                                                               
46

    10.5    Litigation                                                                                                                                                 
      46

    10.6    Pay-Off
      Letters.                                                                                                                                      
46

    10.7    Non-Competition
      Agreements.                                                                                                            
47

    10.8    [Intentionally
      omitted.]                                                                                                                         
47

     

    ARTICLE
      XI    CONDITIONS
      PRECEDENT TO THE OBLIGATION OF SELLER TO
      CLOSE                            
47

    11.1    Representations
      and
      Warranties                                                                                                        
47

    11.2    Performance
      of
      Covenants.                                                                                                                  47

     

    ARTICLE
      XII   COVENANTS
      AND AGREEMENTS OF THE PARTIES AFTER
      CLOSING                               
47

    12.1    Continuation
      of
      Existence.                                                                                                                  
47

    12.2    Change
      Seller’s
      Name                                                                                                                           47

    12.3    NWT
      Receivable                                                                                                                                    48

    12.4    Refunds
      and
      Remittances                                                                                                                     48

     

    ARTICLE
      XIII      INDEMNIFICATION                                                                                                                           
      48

    13.1    Indemnification
      by Seller, CVF and
      Heptagon.                                                                                
48

    13.2    Indemnification
      by
      Buyer                                                                                                                     49

    13.3    Computation
      of
      Losses                                                                                                                        
49

    13.4    Notice
      to
      Indemnifying
      Party.                                                                                                             
50

    13.5    Third
      Party
      Claims.                                                                                                                                50

    13.6    Survival
      of Representations and Covenants of Seller and the
      Shareholders                             
51

    13.7    Survival
      of Representations and Covenants of
      Buyer                                                                   
52

    13.8    Determination
      of Indemnification Amounts;
      Limitations.                                                             
52

    13.9    No
      Waiver
      Relating to Claims for
      Fraud                                                                                           
53

    13.10         
      Disbursements                                                                                                                                      
      53

     

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

    ARTICLE
      XIV    
TERMINATION;
      REMEDIES                                                                                                              
53

    14.1    Termination
      Without
      Default                                                                                                              
53

    14.2    Termination
      Upon
      Default                                                                                                                   
54

    14.3    Specific
      Performance.                                                                                                                           
54

    14.4    Attorneys’
      Fees                                                                                                                                    
54

     

    ARTICLE
      XV   EXPENSES;
      CONFIDENTIALITY                                                                                                      
55

    15.1    Expenses.                                                                                                                                                
      55

    15.2    Confidentiality                                                                                                                                       
      55

    15.3    Publicity.                                                                                                                                                 
      56

     

    ARTICLE
      XVI         NOTICES                                                                                                                                                 
      56

    16.1    Notices.                                                                                                                                                   
      56

     

    ARTICLE
      XVII        MISCELLANEOUS                                                                                                                               
      57

    17.1    Further
      Assurances.                                                                                                                             
57

    17.2    Modifications
      and Amendments; Waivers and
      Consents.                                                            
58

    17.3    Entire
      Agreement.                                                                                                                                 
58

    17.4    Governing
      Law and
      Venue                                                                                                                  
58

    17.5    Binding
      Effect.                                                                                                                                       
58

    17.6    Counterparts/Facsimile
      Signatures.                                                                                                   
59

    17.7    Section
      Headings.                                                                                                                                  59 

    17.8    Currency.                                                                                                                                                
      59

    17.9    Severability.                                                                                                                                           
      59

    17.10         
      No
      Third
      Party
      Rights.                                                                                                                         
59

    17.11         
      Construction.                                                                                                                                          59
      

    17.12         
      Time                                                                                                                                                         
      59

    17.13         
      No
      Contra
      Proferentem                                                                                                                         
59

    

    
      
        
          
            	 	 	 

          

          

        

        
        

      

      
        iv

        
          

        

      

      
        
        

        
           

           

           

        

      

    

    Annex

    Annex
      I Shareholders

     

    Exhibits

    Exhibit
      A     Escrow
      Agreement

    Exhibit
      B     Non-Competition
      Agreement

    Exhibit
      C     Lock-Up
      Agreement

    Exhibit
      D     Opinion
      of Seller’s Counsel

     

    Schedules

    Schedule
      1.1(a)    Assumed
      Contracts

    Schedule
      1.1(b)    Prepaid
      Items

    Schedule
      6.1     Jurisdictions

    Schedule
      6.2      No
      Violations

    Schedule
      6.3(a)         Licenses;
      Required Governmental Approvals

    Schedule
      6.3(b)        Required
      Contractual Consents

    Schedule
      6.4            
Liens
      to
      be Released

    Schedule
      6.5(a)        Financial
      Statements

    Schedule
      6.5(b)        No
      Undisclosed Liabilities

    Schedule
      6.5(c)         Inventories

    Schedule
      6.5(d)        Accounts
      Receivable

    Schedule
      6.5(e)         Accounts
      Payable 

    Schedule
      6.5(f)         Absence
      of Changes

    Schedule
      6.6            
Tax
      Matters

    Schedule
      6.7(a)         No
      Actions by Authorities

    Schedule
      6.7(b)         Hazardous
      Substances

    Schedule
      6.8             
Litigation

    Schedule
      6.9(a)         Tangible
      Personal Property

    Schedule
      6.9(b)         Intellectual
      Property 

    Schedule
      6.9(c)         Real
      Estate

    Schedule
      6.10           
Agreements

    Schedule
      6.11           
Labor
      Agreements

    Schedule
      6.12(b)       Pension
      Plan

    Schedule
      6.13           
Insurance
      

    Schedule
      6.14            Customers,
      Licensees and Suppliers

    Schedule
      6.15           
Conflicts
      of Interest 

    Schedule
      6.16           
Certain
      Transactions

     

    Schedule
      6.1(A)(c)  Shareholders
      - No Violations

    Schedule
      6.1(A)(d)  Shareholders-
      Consents

    

    

     

    
      
        
          
            	 	 	 

          

          

        

        
        

      

      
        v

        
          

        

      

      
        
        

        
           

           

           

        

      

    

     

    ASSET
      PURCHASE AGREEMENT

     

    THIS
      ASSET PURCHASE AGREEMENT (this “Agreement”)
      dated
      as of November 25, 2005 is made and entered into by and among Collectors
      Universe, Inc., a Delaware corporation (“Buyer”),
      Gemprint Corporation, a corporation incorporated pursuant to the laws of Canada
      (“Seller”),
      CVF
      Technologies Corporation, a Nevada corporation (“CVF”),
      Heptagon Investments Ltd., a British Virgin Islands corporation (“Heptagon”),
      and
      1456733 Ontario, Inc., an Ontario, Canada corporation (“Shepherd
      Group”).

     

    RECITALS

     

    A. Seller
      is
      engaged in the business of maintaining and marketing a non-invasive
      identification and registration system for diamonds and other
      gemstones.

     

    B. CVF,
      Heptagon and Shepherd Group (collectively, the “Shareholders”)
      own
      64.9%, 4.45%, and 11.6%, respectively, of the issued and outstanding stock
      of
      Seller.

     

    C. CVF
      and
      Heptagon have each made loans to Seller and hold substantially all of the
      indebtedness of Seller. 

     

    D. Buyer
      wishes to purchase from Seller the Business (as defined below) together with
      the
      Purchased Assets (as defined below), and to assume the Assumed Liabilities
      (as
      defined below), and Seller wishes to sell to Buyer the Business together with
      the Purchased Assets and to have Buyer assume the Assumed Liabilities, upon
      the
      terms and conditions of this Agreement.

     

    NOW,
      THEREFORE, in consideration of the mutual promises and covenants set forth
      herein, the parties hereby agree as follows:

     

    ARTICLE
      I

     

    DEFINITIONS

     

    1.1  Specific.
      When
      used in this Agreement, the following terms shall have the respective meanings
      set forth below:

     

    “Accounts
      Receivable”
of
      a
      Person shall mean all accounts, notes, accounts receivable, payment intangibles,
      contract rights, drafts, and other forms of claims, demands, instruments,
      receivables and rights to the payment of money or other forms of consideration,
      whether for goods or other property sold, leased or licensed, services performed
      or to be performed, or otherwise, owned by that Person or in which that Person
      has any interest, together with all guarantees, security agreements and other
      rights and interests guaranteeing or securing the same.

     

    “Affiliate”
shall
      mean with respect to any Person (i) a Person directly or indirectly
      controlling, controlled by or under common control with such Person, (ii) a
      Person owning or controlling 10% or more of the outstanding voting securities
      of
      such Person or (iii) an officer, director, member or partner of such
      Person. When the Affiliate is an officer, director, member or 

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    partner
      of such Person, any other Person for which the Affiliate acts in that capacity
      shall also be considered an Affiliate. For these purposes, control means the
      possession, direct or indirect, of the power to direct or cause the direction
      of
      the management and policies of a Person, whether its the ownership of voting
      securities, by contract or otherwise.

     

    “Agreement”
shall
      mean this Asset Purchase Agreement, including all exhibits and schedules
      thereto, as the same may hereafter be amended, modified or supplemented from
      time to time in accordance with the provisions of Section 17.2.

     

    “Alternative
      Proposal”
shall
      mean a proposal or offer (other than by Buyer) for a stock purchase, asset
      acquisition, merger, consolidation or other business combination involving
      Seller or any proposal to acquire in any manner a direct or indirect substantial
      equity interest in, or all or any substantial part of the assets of, Seller
      (including without limitation, any debt or equity interests in Seller held
      by
      any Shareholder, or any interest in CVF).

     

    “Applicable
      Authority”
shall
      have the meaning specified in Section 6.7(b).

     

    “Applicable
      Law”
shall
      mean, with respect to any Person, any domestic or foreign, federal, state,
      provincial or local statute, law, ordinance, rule, administrative
      interpretation, regulation, order, writ, injunction, directive, judgment, decree
      or other requirement of any Authority applicable to such Person or any of its
      Affiliates or any of their respective properties, assets, officers, directors,
      general partners, managers, employees, consultants or agents (in connection
      with
      such officer’s, director’s, general partner’s, manager’s, employee’s,
      consultant’s or agent’s activities on behalf of such Person or any of its
      Affiliates).

     

    “Assumed
      Contracts”
shall
      mean Seller Contracts specified in Schedule
      1.1(a)
      and,
      subject to the terms and conditions of Section
      8.3,
      all
      Contracts entered into by Seller in the ordinary course of business and in
      accordance with the terms of this Agreement after the date hereof, but shall
      not
      include any Deferred Item until a Deferred Consent is obtained.

     

    “Assumed
      Liabilities”
shall
      have the meaning specified in Section
      3.1.

     

    “Authority”
shall
      mean any governmental, regulatory or administrative body, agency or authority,
      any court of judicial authority, any arbitrator or any public, private or
      industry regulatory authority, whether Federal, state, local or
      foreign.

     

    “Books
      and Records”
of
      a
      Person shall mean all books and records, ledgers, employee records, customer
      lists, files, correspondence, computer data bases, accounting information and
      other records of every kind, whether written, computerized or maintained in
      any
      other medium, which are owned by that Person or in which that Person has any
      interest.

     

    “Business”
shall
      mean a non-invasive identification and registration system for diamonds and
      other gemstones conducted by Seller using the Purchased Assets, as currently
      constituted and operated and as the same continues to be constituted and
      operated until the Closing.

     

    “Business
      Day”
shall
      mean a day other than a Saturday, Sunday or other day on which commercial banks
      in Los Angeles, California are authorized or required by Applicable Law to
      close.

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Buyer”
shall
      mean Collectors Universe, Inc. a Delaware corporation.

     

    “Buyer
      Documents”
shall
      mean this Agreement and all other agreements, instruments and certificates
      to be
      executed and delivered by Buyer in connection with this Agreement.

     

    “Cash”
shall
      mean money, currency or a credit balance in a deposit account or “money market”
account at a bank, brokerage firm or other financial institution.

     

    “Cash
      Equivalents”
shall
      mean (i) marketable direct obligations issued or unconditionally guaranteed
      by
      the United States or Canadian Government or issued by any agency thereof and
      backed by the full faith and credit of the United States or Canada, in each
      case
      maturing within one (1) year from the date of acquisition, (ii) marketable
      direct obligations issued by any state of the United States of America, any
      province of Canada or any political subdivision thereof, (iii) commercial
      paper issued by any bank or any bank holding company owning any bank maturing
      no
      more than one (1) year from the date of its creation and, at the time of
      acquisition, and (iv) certificates of deposit or bankers’ acceptances maturing
      within one (1) year from the date of acquisition issued by any commercial bank
      organized under the laws of the United States of America, Canada or any state
      or
      province thereof having combined capital and surplus of not less than
      $250,000,000.

     

    “Closing”
shall
      mean the consummation of the transactions contemplated in this
      Agreement.

     

    “Closing
      Date”
shall
      mean the date upon which the Closing occurs.

     

    “Closing
      Payment”
shall
      have the meaning specified in Section
      4.4.

     

    “Code”
shall
      mean the Internal Revenue Code of 1986, as amended.

     

    “Contingent
      Payment”
shall
      have the meaning specified in Section 4.2

     

    “Contracts”
of
      a
      Person shall mean all contracts, agreements, warranties, guaranties, indentures,
      bonds, options, leases, subleases, mortgages, plans, collective bargaining
      agreements, licenses, registration or verification agreements, maintenance
      or
      support agreements, commitments or binding arrangements of any nature
      whatsoever, express or implied, written or unwritten, and all amendments
      thereto, entered into or binding upon that Person or to which any property
      of
      that Person may be subject.

     

    “Crystal
      Beam”
shall
      mean Crystal Beam Melody, Inc., a Delaware corporation.

     

    “CVF”
shall
      have the meaning specified in the Preamble.

     

    “Deferred
      Consent”
shall
      have meaning specification in Section 2.4.

     

    “Deferred
      Item”
shall
      have meaning specification in Section 2.4.

     

    “Disbursement
      Schedule”
shall
      have the meaning specified in Section 4.5.

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Effective
      Time”
shall
      mean 12:01 a.m. Los Angeles time on the day after the Closing
      Date.

     

    “Environmental
      Laws”
shall
      have the meaning specified in Section 6.7(b).
      

     

    “Environmental
      Orders”
shall
      have the meaning specified in Section
      6.7(b).
      

     

    “Escrow”
shall
      mean the escrow to be opened with the Escrow Agent and established for the
      sale
      to Buyer of all of the Purchased Assets in accordance with the terms of this
      Agreement.

     

    “Escrow
      Agreement”
shall
      have the meaning given such term in Section 4.3.

     

    “Escrow
      Holdback”
shall
      mean the $425,000 portion of the Purchase Price to be held in Escrow in
      accordance with the terms of this Agreement.

     

    “Excluded
      Assets”
shall
      mean:

     

    (a)  all
      of
      Seller’s Cash, Cash Equivalents and marketable securities;

     

    (b)  all
      Seller Contracts which are not Assumed Contracts;

     

    (c)  all
      of
      Seller’s rights to refunds of all or any part of any Taxes paid by Seller prior
      to, at or after the Effective Time;

     

    (d)  all
      of
      Seller’s tax and information returns; all correspondence between Seller and its
      shareholders; all corporate documents relating to the formation, capitalization
      and borrowings of Seller or pertaining to its relations with its shareholders;
      and all other financial records of Seller which do not relate exclusively to
      Seller’s ownership and operation of the Purchased Assets or the Business;
      provided, however, that upon reasonable notice from Buyer to Seller or its
      successors-in-interest, Seller or its successors-in-interest shall provide
      Buyer
      with access at no charge to any of the foregoing described material and with
      copies of any of said documents; and

     

    (e)  all
      of
      Seller’s right to receive mail and other communications which do not relate to
      the ownership of the Purchased Assets or the operation of the
      Business.

     

    “Excluded
      Liabilities”
shall
      mean all liabilities and obligations of Seller which are not Assumed
      Liabilities, including, without limitation, all such liabilities and obligations
      referred to in Section 3.2
      and all
      other liabilities and obligations of Seller which pertain exclusively to the
      Excluded Assets, all as determined in a manner consistent with the manner in
      which the same are determined on Seller Balance Sheet.

     

    “GAAP”
shall
      mean United States generally accepted accounting principles set forth in the
      opinions and pronouncements of the Accounting Principles Board of the American
      Institute of Certified Public Accountants and statements and pronouncements
      of
      the Financial Accounting Standards Board or in such other statements by such
      other entity as may be approved by a significant segment of the accounting
      profession, as in effect on the date of this Agreement.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    “GST”
means
      all goods and services tax payable under the Excise
      Tax Act (Canada)
      or under any provincial legislation similar to such Act and any reference to
      a
      specific provision of such Act or any such provincial legislation shall refer
      to
      any successor provision thereto of like or similar effect.

     

    “Hazardous
      Substances”
shall
      have the meaning specified in Section 6.7(b).

     

    “Heptagon”
shall
      have the meaning specified in the Preamble.

     

    “Indemnified
      Party”
shall
      have the meaning specified in Section
      13.4.

     

    “Indemnifying
      Party”
shall
      have the meaning specified in Section
      13.4.

     

    “Indemnity
      Cap Amount”
shall
      mean (i) the sum of the Purchase Price and the Assumed Liabilities with
      respect to Section
      13.1(f),
      the
      representations and warranties set forth in Sections
      6.1,
      6.4,
      6.9(b),
      6.1(A)(b)
      and
6.1(A)(e),
      and any
      other representations and warranties of Seller as to title to any of the
      Purchased Assets or as to any Liens or Permitted Liens relating thereto, and
      (ii) $1,500,000 with respect to all other representations and warranties of
      Seller or the Shareholders.

     

    “Indemnity
      Percentage”
shall,
      for each of CVF and Heptagon, be the percentage set forth opposite such
      Shareholder’s name on Annex I.

     

    “Intellectual
      Property”
of
      a
      Person shall mean all intangible properties owned by that Person or in which
      that Person has any interest (including the right to use by license or
      otherwise), and includes, without limitation, (i) all registered and
      unregistered trademarks, service marks, trade names, trade dress, logos,
      corporate names, slogans and commercial symbols, all applications therefor,
      and
      all associated goodwill; (ii) all domain names and URL’s (including, in the case
      of Seller, the domain name “gemprint.com”), and all websites and the “look and
      feel” of all such websites (including, without limitation, each such website’s
      particular typefaces, color schemes, themes and the like); (iii) all
      statutory, common law and registered copyrights, all applications therefor
      and
      all associated goodwill; (iv) all patents and patent applications, all
      associated technical information, shop rights, know-how, trade secrets,
      processes, operating, maintenance and other manuals, drawings and
      specifications, process flow diagrams and related data, and all associated
      goodwill; (v) all software developed for Seller pursuant to an agreement
      between Seller and the software designer designating the software a “work made
      for hire,” all software developed by an employee of Seller, and all
      documentation thereof, (including all electronic data processing systems and
      program specifications, functional specifications, source and object codes,
      algorithms, architecture, input data, report layouts and format, record file
      layouts, diagrams, narrative descriptions and flow charts) (collectively, the
      “owned software,”) and all “off the shelf” software purchased in retail
      transactions (collectively 

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    the
      “licensed software”) (the “owned software” and the “licensed software”
collectively referred to herein as the “Software”); (vi) all other mask
      works, moral rights, inventions, discoveries, improvements, processes, formulae
      (secret or otherwise), data, drawings, specifications, trade secrets,
      confidential information, financial, marketing and business data, the database
      of scans generated from the operation of the Business and all other databases,
      pricing and cost models and information, business and marketing plans, operating
      procedures, customer and supplier lists, knowledge of customer preferences
      and
      buying practices and all other ideas (including those in the possession of
      third
      parties, but which are the property of that Person); (vii) all drawings,
      records, books or other tangible media embodying the foregoing; (viii) all
      rights to obtain and rights to register patents, trademarks and copyrights;
      and
      (ix) all rights to sue or recover and retain damages and costs and attorneys
      fees for present and past infringement of any of the foregoing.

     

    “Inventories”
of
      a
      Person shall mean all inventories, including, without limitation, inventories
      of
      raw materials, work-in-progress, storehouse stocks, materials, supplies,
      Gemprint certificates of registration, finished goods and consigned goods,
      owned
      by that Person or in which that Person has any interest (including the right
      to
      use), whether located on the premises of that Person, in transit to or from
      such
      premises, in storage facilities or otherwise.

     

    “Knowledge”
shall
      mean, with respect to Seller, the actual knowledge of each of its directors,
      Jeff Dreben, Robert Nally, John Shepherd, Ian Barnett and Brad Boyko, and its
      executive officers, Jeff Dreben (Chairman), Brad Boyko (President), and David
      Lewis (Chief Financial Officer and Secretary), and the knowledge that each
      such
      Person would have acquired upon diligent inquiry and the knowledge that is
      imputed to each such Person and/or Seller by operation of Applicable Law.

     

    “Labor
      Agreements”
of
      a
      Person shall mean, collectively, (i) all employment agreements, collective
      bargaining agreements or other labor agreements to which that Person is a party
      or by which any of its properties is bound; (ii) all pension, profit
      sharing, deferred compensation, bonus, stock option, stock purchase, savings,
      retainer, consulting, retirement, welfare or incentive plans or to which that
      Person is a party or by which any of its properties is bound; and (iii) all
      plans or agreements under which “fringe benefits” (including, but not limited
      to, hospitalization plans or programs, medical insurance, vacation plans or
      programs, sick plans or programs and related benefits) are afforded to any
      employees of that Person.

     

    “Licenses”
of
      a
      Person shall mean all licenses and permits issued to that Person or in which
      that Person has any interest (including the right to use).

     

    “Lien”
shall
      mean any lien, pledge, mortgage, security interest, lease, charge, conditional
      sales contract, option, restriction, reversionary interest, right of first
      refusal, voting trust arrangement, preemptive right, claim under bailment or
      storage contract, easement or any other adverse claim or right
      whatsoever.

     

    “Losses”
shall
      mean all damages, awards, judgments, assessments, fines, sanctions, penalties,
      charges, costs, expenses, payments, Taxes, diminutions in value and other
      losses, however suffered or characterized, all interest thereon, all costs
      and
      expenses of investigating any claim, lawsuit or arbitration and any appeal
      therefrom, all actual attorneys’ fees incurred in connection therewith, whether
      or not such claim, lawsuit or arbitration is ultimately defeated and, subject
      to
Section
      13.5,
      all
      amounts paid incident to any compromise or settlement of any such claim, lawsuit
      or arbitration.

     

    “NWT”
shall
      mean the jurisdiction referred to as the North West Territories.

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    “NWT
      Receivable”
shall
      mean the receivable identified in Schedule
      6.5(d)
      as the
“NWT Receivable” in an amount which is outstanding as of Closing.

     

    “Order”
shall
      mean any decree, order, judgment, writ, award, injunction, rule or consent
      of or
      by an Authority.

     

    “Paid
      Registration”
shall
      mean a computerized identification scan of a diamond or other gemstone that
      satisfies all of the following conditions: (a) the scan is made after the
      Closing Date, (b) the scan is done by a Person using the product presently
      known as the “Gemprint ISi Registration System,” or such other product as may be
      marketed or developed by Buyer which utilizes all or part of the Intellectual
      Property described in Schedule 6.9(b)
      or any
      derivative thereof, and (c)(i) the Person making the scan has paid a
      registration or license fee to Buyer and/or any of its Affiliates with respect
      to such scan or (ii) if a fee was not paid, the Person making the scan has
      caused the scan to be stored in a registration system to be maintained by Buyer,
      any of its Affiliates or any other Person from whom Buyer receives a direct
      or
      indirect economic benefit.

     

    “Permitted
      Liens”
shall
      mean (i) Liens for Taxes or governmental assessments, charges or claims the
      payment of which is not yet due or payable and that are not yet delinquent,
      or
      Liens for Taxes the validity of which are being contested in good faith by
      appropriate proceedings; (ii) statutory Liens of landlords and Liens of
      laboratories, carriers, warehousemen, mechanics, materialmen and other similar
      Persons and other Liens imposed by Applicable Law incurred in the ordinary
      course of business for sums not yet due or payable and that are not yet
      delinquent or being contested in good faith; (iii) Liens relating to deposits
      made in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other types of social security or
      to
      secure the performance of leases, trade contracts or other similar agreements;
      and (iv) Liens securing executory obligations under any lease that constitutes
      an “operating lease” under GAAP.

     

    “Person”
shall
      mean any entity, corporation, company, association, joint venture, joint stock
      company, partnership, trust, organization, individual (including personal
      representatives, executors and heirs of a deceased individual), nation, state,
      government (including agencies, departments, bureaus, boards, divisions and
      instrumentalities thereof), trustee, receiver or liquidator, as well as any
      syndicate or group that would be deemed to be a Person under
      Section 13(d)(3) of the Securities Exchange Act of 1934.

     

    “Prepaid
      Items”
of
      a
      Person shall mean all prepaid items (such as insurance deposits, municipal
      or
      local tax payments or deposits, utility deposits and the like), deferred
      charges, reserve accounts and other security and similar deposits owned by
      that
      Person or in which that Person has any interest.

     

    “Proceeding”
shall
      have the meaning specified in Section
      6.6(b).

     

    “Publication
      Names and Marks”
shall
      have the meaning specified in Section 12.2.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    “Purchased
      Assets”
shall
      mean all of the Business, goodwill, assets, properties and rights (other than
      the Excluded Assets) of every nature, kind and description, whether tangible
      or
      intangible, real, personal or mixed, wherever located and whether or not carried
      or reflected on the Books and Records of Seller, which are owned by Seller
      or in
      which Seller has any interest (including the right to use), including, but
      not
      limited to the following:

     

    (a)  all
      Intellectual Property of Seller;

     

    (b)  all
      Tangible Personal Property of Seller;

     

    (c)  all
      Inventories of Seller;

     

    (d)  all
      of
      Seller’s Real Property;

     

    (e)  all
      Prepaid Items of Seller, including, without limitation, those Prepaid Items
      described in Schedule
      1.1(b);

     

    (f)  all
      transferable Licenses of Seller;

     

    (g)  the
      Assumed Contracts;

     

    (h)  all
      Accounts Receivable of Seller;

     

    (i)  all
      Books
      and Records of Seller;

     

    (j)  all
      rights of Seller under express or implied warranties from the suppliers of
      Seller with respect to the Purchased Assets, to the extent
      assignable;

     

    (k)  all
      of
      Seller’s claims, causes of action, chooses in action, rights of recovery and
      rights of set-off of any kind other than those relating to the Excluded Assets
      or Excluded Liabilities;

     

    (l)  all
      of
      Seller’s right to receive mail and other communications with respect to the
      Business and the Purchased Assets, including, without limitation, all telephone
      and facsimile numbers and electronic mail addresses of Seller;

     

    (m)  all
      certifications and approvals from all certifying agencies issued to Seller
      and
      all of Seller’s rights to all data and records held by certifying
      agencies;

     

    (n)  any
      and
      all of the Seller’s equity interests in Crystal Beam Melody, Inc.;

     

    (o)  all
      goodwill of the Business as a going concern; and

     

    (p)  all
      other
      properties, tangible and intangible, not otherwise referred to above which
      are
      owned by Seller or in which it has any interest.

     

    “Purchase
      Price”
shall
      have the meaning specified in Section
      4.1.

     

    “Real
      Property”
of
      a
      Person shall mean, collectively, all real properties owned by that Person or
      in
      which that Person has any interest or estate (including the right to use or
      lease), together with all buildings, fixtures, trade fixtures, plant, and all
      other equipment and improvements located thereon or attached thereto, all of
      that Person’s rights arising out of ownership or use or lease thereof (including
      oil and mineral rights), and all subleases, franchises, licenses, permits,
      easements and rights-of-way which are appurtenant thereto.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    “Required
      Contractual Consents”
shall
      mean those consents listed in Schedule
      6.3(b).

     

    “Required
      Governmental Approvals”
shall
      mean those filings, notices or approvals listed in Schedule
      6.3(a).

     

    “Seller”
shall
      mean Gemprint Corporation, a corporation incorporated pursuant to the laws
      of
      Canada.

     

    “Seller
      Balance Sheet”
shall
      mean the balance sheet contained in Seller Financial Statements.

     

    “Seller
      Balance Sheet Date”
shall
      mean September 30, 2005.

     

    “Seller
      Contract”
shall
      mean any Contract to which Seller is a party.

     

    “Seller
      Documents”
shall
      mean this Agreement and all other agreements, instruments and certificates
      to be
      executed by Seller in connection with this Agreement.

     

    “Seller
      Financial Statements”
shall
      mean the unaudited balance sheet and statement of income of Seller as of and
      for
      the nine-month period ended September 30, 2005, including all notes
      thereto.

     

    “Seller
      Material Adverse Effect”
or
      other similar phrase including the word “material” with respect to Seller shall
      mean any condition, circumstance, change in or effect on the condition
      (financial or otherwise), intellectual property rights or other assets,
      liabilities, business, operations or prospects of Seller or the Business that,
      individually or in the aggregate with any other condition, circumstance, change
      in or effect thereon, results in or is reasonably likely to result in (i) an
      adverse effect individually or in the aggregate, of at least $150,000, (ii)
      a
      material adverse effect upon the validity, binding effect or enforceability
      of
      this Agreement or any other Seller Document or (iii) a material adverse effect
      upon the ability of Seller to perform its obligations under this Agreement
      or
      any other Seller Document. 

     

    “Seller
      Material Contracts”
shall
      mean, collectively, the Contracts of Seller which are required to be identified
      anywhere in the Schedules
      by the
      terms and provisions of this Agreement.

     

    “Shareholders”
shall
      have the meaning specified in the Recitals.

     

    “Shareholder
      Documents”
shall
      mean this Agreement and all other agreements, documents, instruments and
      certificates to be executed and delivered by the Shareholders, or any of them,
      in connection with this Agreement.

     

    “Shepherd
      Group”
shall
      have the meaning specified in the Preamble.

     

    “Software”
shall
      have the meaning specified in the definition of Intellectual
      Property.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    “Subsidiary”
of
      a
      Person shall mean each corporation, limited liability company, partnership,
      joint venture, trust or other entity in which that Person has, directly or
      indirectly, (a) an equity interest representing 10% or more of any class of
      the
      capital stock thereof or other equity interest therein or the management and
      policies of which that Person has the ability to direct, whether by contract,
      voting power or otherwise, or
      (b) at
      least 50% of the securities or other ownership interests having by their terms
      ordinary voting power to elect at least 50% of the board of directors or other
      Persons performing similar functions is directly or indirectly owned or
      controlled by such Person, by any one or more of its Subsidiaries, or by such
      Person and one or more of its Subsidiaries.

     

    “Tangible
      Personal Property”
of
      a
      Person shall mean all machinery, equipment, vehicles, furniture, trade fixtures,
      computers, supplies, spare parts, tools, stores and other tangible personal
      property owned by that Person, leased by that Person or in which that Person
      has
      any other interest (including the right to use), other than the Inventories
      and
      the Books and Records of that Person.

     

    “Tax”
shall
      mean any federal, state, provincial, local or foreign tax, charge, fee, levy,
      deficiency or other assessment of whatever kind or nature (including without
      limitation, any net income, gross income, gross receipts, sales, use, value
      added, GST, ad valorem, employer health, transfer, franchise, profits, workers’
compensation, license, withholding, payroll, employment, unemployment, excise,
      estimated, severance, stamp, occupation, real property (land transfer), personal
      property, intangible property, occupancy, recording, minimum, capital, Canada
      or
      Quebec pension plan, environmental and windfall profits tax, or as a result
      of
      any tax sharing or similar agreement, together with any interest, penalty,
      addition to tax or additional amount imposed by any Tax Authority. “Taxing”
and
      Taxable”
shall
      have the correlative meanings.

     

    “Tax
      Authority”
shall
      mean any Authority having jurisdiction over the reporting and payment of any
      Taxes.

     

    “Tax
      Benefit”
shall
      mean the aggregate of (a) any increased deductions or losses allowable to the
      Indemnified Party for federal income tax purposes in the same year or in a
      subsequent taxable period or reduction in income or gains for federal income
      tax
      purposes in the same year or in a subsequent taxable period, multiplied by
      the
      aggregate tax-effected marginal tax rate for the Indemnified Party, and (b)
      the
      amount of any increase in any Tax credit allowable to the Indemnified Party
      in
      the same year or in a subsequent taxable period or reduction in any recapture
      of
      Tax credits allowable to the Indemnified Party in the same year or in a
      subsequent taxable period, in each case determined under the Applicable Laws
      in
      effect on the date of payment and discounted to present value from the due
      date
      of the Tax Return (without extension) for the period in which such items are
      allowable to the date of payment of the indemnification amount at the prime
      rate
      of interest in effect on the date of payment as quoted in The Wall Street
      Journal. 

     

    “Tax
      Liability”
shall
      have the meaning specified at Section
      6.6(b).

     

    “Tax
      Return”
shall
      mean any report, election, declaration, claim for refund, estimate, information
      statement or return (including any schedules and attachments thereto) and any
      amendments relating to or required to be filed in connection with any Taxes
      pursuant to the statutes, rules or regulations of any Tax
      Authority.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    “Third
      Party Claim”
shall
      have the meaning specified in Section
      13.5(a).

     

    “Tolkowsky”
shall
      mean Gabi Tolkowsky & Sons B.V.B.A.

     

    “Transfer
      Taxes”
shall
      mean all Taxes (other than Taxes measured on or by net income) incurred or
      imposed upon Buyer, Seller or any Subsidiary thereof by reason of the transfer
      of the Purchased Assets to Buyer pursuant to this Agreement, including, without
      limitation, sales and use taxes, real property transfer taxes, GST, retail
      sales
      tax, excise taxes, and stamp, documentary, filing, recording, permit, license,
      registration or authorization duties or fees (including penalties and interest
      in respect of any of the foregoing).

     

    1.2  General.
      References in this Agreement to “Articles,”
      “Sections,”
      “Exhibits”
and
      “Schedules,”
shall
      be to the Articles, Sections, Exhibits and Schedules of this Agreement, unless
      otherwise specifically provided; where the context or construction requires,
      all
      words applied in the plural shall be deemed to have been used in the singular,
      and vice versa; the masculine shall include the feminine and neuter, and vice
      versa; and the present tense shall include the past and future tense, and vice
      versa; the words “herein”, “hereof” and “hereunder” and words of similar import,
      when used in this Agreement, shall refer to this Agreement as a whole and not
      to
      any particular provision of this Agreement; and except as otherwise specified
      in
      this Agreement, all references in this Agreement (a) to any Person shall be
      deemed to include such Person’s permitted heirs, personal representatives,
      successors and assigns, (b) to any agreement, any document or any other
      written instrument shall be a reference to such agreement, document or
      instrument together with all exhibits, schedules, attachments and appendices
      thereto, and in each case as amended, restated, supplemented or otherwise
      modified from time to time in accordance with the terms thereof prior to the
      Effective Time and (c) to any law, statute or regulation shall be
      deemed
      references to such law, statute or regulation as the same may be supplemented,
      amended, consolidated, superseded or modified from time to time prior to the
      Effective Time. All accounting terms used herein have the meanings ascribed
      to
      them under GAAP. References in this Agreement to “Dollars”
or
      “$”
shall
      be to United States dollars.

     

    ARTICLE
      II  

     

    SALE
      AND PURCHASE OF ASSETS

     

    2.1  Assets
      to be Transferred.
      Subject
      to the terms and conditions set forth in this Agreement and in reliance upon
      the
      representations and warranties of Seller, the Shareholders and Buyer herein
      set
      forth, at the Closing, Seller shall sell, transfer, convey, assign and deliver
      to Buyer, by appropriate deeds, bills of sale, assignments and other instruments
      satisfactory to Buyer and its counsel, and Buyer shall purchase from Seller,
      all
      of Seller’s right, title and interest, as of the Effective Time, in and to the
      Purchased Assets.

     

    2.2  Excluded
      Assets.
      The
      Excluded Assets shall be excluded from the Purchased Assets purchased
      hereunder.

     

    2.3  Title
      to Purchased Assets.
      The
      Purchased Assets shall be conveyed free and clear of all Liens, excepting only
      the Assumed Liabilities and the Permitted Liens.

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    2.4  Consents
      to Assignment.
      Anything
      in this Agreement to the contrary notwithstanding, this Agreement shall not
      constitute an agreement to assign or transfer any contract, lease,
      authorization, license or permit, or any claim, right or benefit arising
      thereunder or resulting therefrom, if an attempted assignment or transfer
      thereof, without a Required Contractual Consent or Required Governmental
      Approval, would constitute a breach thereof or in any way adversely affect
      the
      rights of Buyer thereunder. If a Required Contractual Consent or Required
      Governmental Approval is not obtained (a “Deferred
      Consent”),
      or if
      an attempted assignment or transfer thereof would be ineffective or would affect
      the rights thereunder so that Buyer would not receive all such rights, then,
      in
      each such case at Closing, (a) the Contract or License to which such Deferred
      Consent relates (a “Deferred
      Item”)
      shall
      be withheld from sale pursuant to this Agreement, (b) from and after the
      Closing, Seller and Buyer will cooperate, in all reasonable respects, to obtain
      such Deferred Consent as soon as practicable after the Closing, (c) until such
      Deferred Consent is obtained, Seller and Buyer will cooperate, in all reasonable
      respects, to provide to Buyer the benefits under the Deferred Item to which
      such
      Deferred Consent relates (with Buyer entitled to all the gains and responsible
      for all the losses, taxes liabilities and/or obligations thereunder), and (d)
      upon obtaining such Deferred Consent after the Closing, Seller shall execute
      such transfer instrument for the Deferred Item in form satisfactory to Buyer
      and
      its counsel. In particular, in the event that any such Deferred Consent is
      not
      obtained prior to the Closing, then Buyer and Seller shall enter into such
      arrangements (including subleasing or subcontracting if permitted) to provide
      to
      the parties the economic and operational equivalent of obtaining such Deferred
      Consent and assigning or transferring such Contract or License, including
      enforcement for the benefit of Buyer of all claims or rights arising thereunder,
      and the performance by Buyer of the obligations thereunder on a prompt and
      punctual basis. Notwithstanding
      the foregoing, if a Deferred Consent is not obtained within twelve (12) months
      after the Closing, Buyer may elect not to accept an assignment of such Deferred
      Item or to assume the obligations thereunder in which event such Deferred Item
      shall thereupon be an Excluded Asset and all obligations thereunder an Excluded
      Liability.

     

    ARTICLE
      III  

     

    ASSUMPTION
      OF LIABILITIES

     

    3.1  Assumed
      Liabilities.
      As
      further consideration for the purchase and sale of the Purchased Assets, Buyer
      shall, from and after the Effective Time, assume, perform, discharge and pay
      when due those obligations and liabilities (the “Assumed
      Liabilities”)
      of
      Seller relating to the Business which are specifically set forth in this
Section
      3.1,
      but
      only to the extent specifically set forth in this Section
      3.1
      and
      subject to any contrary provisions which may be contained in Section 3.2:

     

    (a)  all
      unpaid or unperformed obligations and liabilities of Seller under the Assumed
      Contracts (including, without limitation, under that certain Lease Agreement
      dated as of March 10, 2005 by and between Fana Burnhamthorpe Corp. and Seller,
      as amended) arising after the Effective Time, but not arising out of any breach
      or default thereof prior to the Effective Time; provided, however, that, with
      respect to a Deferred Item, no assumption shall occur until such time as the
      Deferred Consent relating thereto has been obtained and if such Deferred Consent
      is obtained, the assumption shall only be with respect to the unpaid or
      unperformed obligations and liabilities of Seller under the Deferred Item
      arising after the date the Deferred Consent is obtained. No person who is not
      a
      party to this Agreement shall have any equitable or other rights against Seller
      or Buyer by virtue of this Agreement;

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    (b)  the
      trade
      payables and accrued expenses of Seller set forth on Schedule
      6.5(e)
      which
      remain outstanding as of the Closing and are reflected on the Disbursement
      Schedule (other than the obligation owed to NWT in excess of the amount of
      the
      NWT Receivable), and such payables or expenses as may hereafter be incurred
      in
      the ordinary course of business conducted in accordance with this Agreement
      provided, that such additional payables or expenses are reflected on the
      Disbursement Schedule and the aggregate amount of all such trade payables and
      accrued expenses, excluding any payables owing to NWT, does not exceed
      $150,000;

     

    (c)  to
      the
      extent immediately following the Closing, Buyer employs Brad Boyko or Nicolae
      Dinu, each of whom is presently an employee of Seller, and Buyer thereafter
      terminates either such employee, (i) Buyer shall be responsible for fifty
      percent (50%) of any severance obligations to such employee based on such
      employees’ salary and benefits immediately prior to the Closing if the
      termination occurs within six (6) months of Closing, and (ii) one hundred
      percent (100%) of any severance obligations to such employee if the termination
      occurs six (6) months after the Closing;

     

    (d)  all
      unpaid or unperformed obligations and liabilities of Seller under the Licenses
      assigned to Buyer hereunder arising after the Effective Time, but not arising
      out of any breach or default thereof prior to the Effective Time;

     

    (e)  the
      performance of all warranty work, arising after the Effective Time but relating
      to products of Seller manufactured or sold by Seller or services provided by
      Seller prior to the Effective Time;

     

    (f)  the
      amount payable to Scientific Instrumentation, Ltd. referred to in Section
      8.18,
      but
      which shall not exceed $41,050 CDN less the trade payable of Seller owed to
      such
      party; and 

     

    (g)  to
      the
      extent not covered by insurance in effect for the benefit of Seller as of the
      Effective Time, all claims for real or personal injury or property damage which
      is caused by any defect in any product manufactured by Seller but sold by Buyer
      after the Effective Time.

     

    3.2  Excluded
      Liabilities.
      Except
      for the Assumed Liabilities, Buyer shall not assume or be liable for any
      liabilities or obligations of Seller, direct or indirect, fixed, contingent
      or
      otherwise, known or unknown, which exist at the Effective Time or which arise
      thereafter as a result of any act, omission or circumstance taking place prior
      to the Effective Time, and whether or not the same are reflected on Seller
      Balance Sheet. Furthermore, notwithstanding anything to the contrary stated
      in
Section
      3.1,
      Buyer
      shall not assume or be liable for any of the following liabilities or
      obligations:

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    (a)  any
      of
      Seller’s liabilities or obligations under any Seller Contract which is not an
      Assumed Contract, or under any Assumed Contract to the extent such liabilities
      or obligations arise prior to the Effective Time;

     

    (b)  any
      indebtedness
      and any
      trade or other current liability of Seller which is not within the liabilities
      described in Section 3.1(b);
      

     

    (c)  any
      and
      all liabilities to NWT in excess of the amount of the NWT Receivable;
      and

     

    (d)  any
      Tax
      imposed on Seller;

     

    (e)  except
      as
      expressly set forth in Section 3.1(c),
      any of
      Seller’s liabilities or obligations relating to the employment of its employees
      or relating to any Seller benefit plan, including but not limited to unpaid
      or
      unperformed wages, salaries, payroll taxes, sick pay, vacation pay, fringe
      benefits and other employee benefits

     

    (f)  except
      as
      expressly set forth in Section 3.1(c),
      any of
      Seller’s liabilities or obligations for any severance, “parachute” or other
      similar payment to any officer, director or employee of Seller arising by virtue
      of the transactions contemplated herein;

     

    (g)  any
      of
      Seller’s liabilities or obligations under any Applicable Law or
      Order;

     

    (h)  any
      of
      Seller’s liabilities or obligations arising from the litigations or other
      matters described in Schedule
      6.8;

     

    (i)  any
      of
      Seller’s liabilities or obligations for Taxes, expenses or fees incident to or
      arising out of the negotiation, preparation, approval or authorization of this
      Agreement or the consummation (or preparation of the consummation) of the
      transactions contemplated hereby, including, without limitation, all attorney’s
      and accountant’s fees;

     

    (j)  any
      of
      Seller’s liabilities or obligations arising outside of the ordinary course of
      the Business or otherwise arising by reason of any breach of contract, tort
      or
      infringement of the rights of another;

     

    (k)  any
      of
      Seller’s liabilities or obligations which would not have existed had each of
      Seller’s representations and warranties been true as of the date hereof and as
      of the Effective Time and had Seller complied with each of its covenants
      contained in this Agreement; 

     

    (l)  any
      of
      Seller’s liabilities or obligations of any nature to any past or present
      shareholder of Seller or holder of any indebtedness of Seller; and

     

    (m)  Without
      limiting Section 3.2(a)
      or
(g),
      any
      obligation or liability of Seller to the National Research Council of Canada
      or
      any other Person with respect to any Industrial Research Assistance Program,
      any
      Contract entered into in connection therewith or any condition or Applicable
      Law
      relating thereto.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    3.3  Contested
      Obligations.
      Nothing
      contained herein shall require Buyer to pay or discharge any debts or
      obligations expressly assumed hereby so long as Buyer shall in good faith
      contest or cause to be contested the amount or validity thereof.

     

    ARTICLE
      IV  

     

    PURCHASE
      PRICE, ESCROW, PAYMENT AND RELATED MATTERS

     

    4.1  Purchase
      Price.
      The
      total purchase price (the “Purchase
      Price”)
      for
      the Purchased Assets shall consist of a base purchase price of $7,500,000
      and, if applicable, contingent payments as specified in Section
      4.2.

     

    4.2  Contingent
      Payments.
      For
      a
      period of five (5) years from the Closing Date, Buyer shall pay to Seller a
      contingent payment of $1.00 for each Paid Registration in excess of 100,000
      Paid
      Registrations during each twelve (12) month period (or such lesser period
      described below) ending June 30th
      (the
“Contingent
      Payments”);
      provided, however, that (a) for the period commencing on the Closing Date
      and ending on June 30, 2006, the number of Paid Registrations which must be
      exceeded before a Contingent Payment is payable shall be prorated based on
      the
      number of days in such period, (b) for the period commencing on July 1,
      2010 and ending on the fifth
      anniversary of the Closing Date, the number of Paid Registrations which must
      be
      exceeded before a Contingent Payment is payable shall be prorated based on
      the
      number of days in such period, and (c) no Contingent Payments shall be payable
      with respect to Paid Registrations arising after the fifth anniversary of the
      Closing Date (other than for Paid Registrations relating to scans made prior
      to
      such date and for which payment is received by Buyer with ninety (90) days
      of
      such date). Contingent Payments, if any, for any period shall be paid by Buyer
      within ninety (90) days of the end of such period or if the threshold for making
      a Contingent Payment has been satisfied during such twelve (12) month period,
      within forty-five (45) days after the end of each quarter during such period,
      commencing with the quarter in which such threshold is satisfied. Buyer shall
      furnish to Seller, within ninety (90) days of the end of each twelve (12) month
      period (or such lesser period) as described above, or such earlier date upon
      which a Contingent Payment is made, a written Paid Registration and Contingent
      Payments report setting forth information relating to the determination of
      the
      amount of the Contingent Payments for the period. The report shall be certified
      by the Director of Finance or Chief Financial Officer of the Buyer. During
      the
      five (5) year period in which Contingent Payments apply and for a period of
      two
      (2) years thereafter, Buyer shall keep accurate and complete records in
      sufficient detail to enable the Contingent Payments payable under this Agreement
      to be determined. 

     

    During
      such five (5) years and for a period of two (2) years thereafter, Seller may,
      upon reasonable notice and subject to the execution of a confidentiality
      agreement in form satisfactory to Buyer, appoint, at its expense, a member
      or
      other employee of a national accounting firm to audit Buyer’s books and records,
      not more than one time during any twelve (12) month period, relative to Paid
      Registrations and Contingent Payments reasonably necessary to determine the
      Contingent Payments payable under this Agreement. If as a result of such audit.
      Seller disputes the amount of Contingent Payments made by Buyer for the
      applicable period, Seller shall, within thirty (30) days of the completion
      of
      such audit, notify Buyer in writing of each disputed item, specifying the amount
      thereof in dispute and setting forth, in reasonable detail, the basis for such
      dispute, and providing Buyer with a copy of the complete audit report prepared
      by such accounting firm. In the event of such a dispute, Buyer and Seller shall
      attempt to resolve in good faith any disputed items and reach a written
      agreement with respect thereto. If Buyer and Seller are unable to reach a
      resolution within thirty (30) days after receipt by Buyer of Seller’s written
      notice of dispute, Buyer and Seller shall submit the items remaining in dispute
      for final binding resolution to the New York office of an independent national
      accounting firm as may be mutually acceptable to Buyer and Seller (the
“Arbitrating
      Accountants”),
      the
      cost and expenses of which shall be shared equally by Buyer and Seller (or
      the
      Shareholders based on their respective Indemnity Percentages). If the disputed
      items are referred to the Arbitrating Accountants, the Contingent Payments
      under
      dispute shall be determined by the Arbitrating Accountants. Such determination
      shall be (i) in writing, (ii) furnished to Buyer and Seller as soon as
      practicable, but in no event later than sixty (60) days from the date of
      submission to the Arbitrating Accountants, (iii)made in accordance with this
      Agreement, and (iv) nonappealable by the Shareholders, Seller and Buyer or
      any of their respective Affiliates and successors and not to be subject to
      collateral attack for any reason other than manifest error or fraud. In the
      event that the parties agree, or the Arbitrating Accountants, determine, that
      a
      shortfall in the payment of Contingent Payments for any twelve (12) month period
      (or such lesser period described above) 

    
      
        
        

      

      
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    of
      the
      Contingent Payment due for such period occurred, Buyer shall pay such shortfall
      within fourteen (14) days of demand to Seller. In addition, should the shortfall
      be greater than five percent (5%) of the Contingent Payment Buyer shall pay
      Seller the reasonable costs of the audit undertaken with respect to the
      determination of such shortfall. 

     

    4.3  Escrow.
      Immediately upon the execution hereof by the parties hereto, the parties shall
      deposit an original counterpart of this Agreement with the Escrow Agent. The
      parties hereto agree that this Agreement, together with the Escrow Agreement
      attached hereto as Exhibit
      A,
      shall
      constitute the escrow instructions for the transfer of the Purchased Assets
      and
      the release of the Purchase Price and the Escrow Holdback (the “Escrow
      Agreement”).
      In
      the event of a conflict between the Escrow Agreement and the terms of this
      Agreement (exclusive of Exhibit
      A)
      then
      the terms of this Agreement (exclusive of Exhibit
      A)
      shall
      control.

     

    4.4  Payment
      of the Purchase Price. At
      the
      Closing, Buyer shall pay the sum of $7,500,000 (the “Closing
      Payment”)
      to the
      Escrow Agent by means of a wire transfer of immediately available funds into
      a
      bank account designated in writing by the Escrow Agent on or before the 2nd
      business day prior to the Closing. 

     

    4.5  Disbursement
      Schedule.
      At
      least three (3) Business Days prior to Closing, Seller shall deliver to Buyer
      for its review and approval a schedule certified by the President and Chief
      Financial Officer of Seller (the “Disbursement
      Schedule”)
      setting forth all of Seller’s outstanding payment obligations as of the date of
      the Disbursement Schedule (including without limitation all amounts payable,
      including the redemption amount and accrued and unpaid dividends plus interest,
      if any, required to be paid to holders of Seller’s “Class B Stock” under the
      Seller’s articles of incorporation and amendment for the redemption of such
      stock and/or with respect to other claims of such holders) together with an
      estimate of all additional payment obligations that may accrue through the
      Closing, in each case with the name and address of the payee to whom such
      obligation is owed. Seller shall make such changes to the Disbursement Schedule
      as Buyer may reasonably require. Without limiting the foregoing, if the
      aggregate amount of such obligations (but excluding those trade payables of
      Seller set forth on Schedule
      6.5(e)
      which
      are deemed Assumed Liabilities) exceeds $7,000,000, CVF and Heptagon shall,
      on a
      pro rata basis, convert into equity of Seller such portion of Seller’s
      obligations to each of them as may be necessary until the aggregate obligations
      set forth on the Disbursement Schedule approved by Buyer do not exceed
      $7,000,000.

     

    
      
        
        

      

      
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    4.6  Transfer
      Taxes.
      All
      Transfer Taxes arising out of the sale of the Purchased Assets hereunder, as
      well as all charges for or in connection with the recording of any document
      or
      instrument herein provided, shall be paid by Buyer. Buyer shall also duly and
      timely file all Tax Returns in connection with such Transfer Taxes. 

     

    4.7  Allocation
      of Purchase Price.
      It is
      understood that the total consideration to be received by Seller for the
      transfer of the Purchased Assets to Buyer shall be the Purchase Price, plus
      Buyer’s assumption of the Assumed Liabilities, subject to increase by the
      Contingent Payments, if any. As
      soon
      as is reasonably practicable, but in no extent later than 30 calendar days
      after
      the Closing, Seller and Buyer shall agree upon the allocation of such total
      consideration
      among the Purchased Assets and Assumed Liabilities with the specific allocation
      amounts subject to the results of a fair market valuation obtained by Buyer;
      provided, however, that such allocation shall reflect no more than $1,000,000
      of
      tangible assets. Buyer and Seller agree to file the requisite tax forms with
      their respective federal income tax returns (or as otherwise required by
      Applicable Law) reflecting the allocation of the Purchase Price. Each party
      hereto further agrees that it shall not file any return (or treat any item
      or
      items thereon) nor make any other statement or submission to the Internal
      Revenue Service, Canada Revenue Agency or any comparable state or provincial
      agency, or any court or other judicial or administrative body, which return,
      item, statement or submission is inconsistent in whole or in part with the
      agreed upon allocation.

     

    4.8  [Intentionally
      omitted.]

     

    4.9  [Intentionally
      omitted.]

     

    4.10  GST
      Election.
      Buyer
      and Seller shall elect jointly pursuant to the provision of subsection 167.(1.1)
      of the Excise
      Tax Act (Canada) by
      completing and filing all prescribed forms and related documents in such manner
      and at such time as is prescribed, that for the purposes of such Act, no tax
      is
      payable under such Act in respect of the Purchased Assets and the Buyer shall
      be
      deemed to have acquired the Purchased Assets for use exclusively in commercial
      activities of the Buyer.

     

    4.11  Accounts
      Receivable Election.
      Buyer
      and Seller shall, at the Closing, jointly execute elections under subsection
      22(1) of the Income
      Tax Act (Canada)
      in the form prescribed for such purpose in respect of the accounts receivable
      sold by Seller to Buyer pursuant to the Agreement. Such election shall designate
      the portions of the Purchase Price allocated in accordance with Schedule
      4.7
      to such
      accounts receivable as the consideration paid by Buyer to Seller for the
      accounts receivable under this Agreement.

     

    4.12  Deferred
      Revenue Election.
      Buyer
      and Seller shall, at the Closing, execute a joint election to have the provision
      of subsection 20(24) of the Income
      Tax Act (Canada)
      apply and shall agree to make such election on a timely basis in accordance
      with
      the provisions of subsection 20(25) of such Act. Seller and Buyer agree that
      Seller shall transfer a portion of the Purchased Assets to Buyer as
      consideration for the assumption by Buyer of Seller’s obligations pursuant to
      subsection 12(1)(a) of such Act.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

      ARTICLE
        V

       

      CLOSING

    

     

    5.1  Time
      and Place.
      Subject
      to the provisions of Section
      14.1
      as to
      termination without default, the Closing shall take place at the offices of
      Loeb
& Loeb LLP, 10100 Santa Monica Blvd., Suite 2200, Los Angeles, California
      90067, at 10:00 a.m. local time on the date which is two (2) Business Days
      after
      all conditions precedent to each party’s obligations hereunder have been
      satisfied or waived or at such other time and place as Buyer and Seller mutually
      agree in writing, provided, however, that (i) if the Buyer has not obtained
      its
registration
      under subdivision (d) of Division I of Part IX of the Excise
      Tax Act
      (Canada)
      with respect to GST by such date, Buyer may postpone the Closing for up to
      45
      days until a date which is two (2) Business Days after such registration is
      obtained, and (ii) without the prior written consent of Buyer, the Closing
      shall
      not occur after December 31, 2005. The parties shall use their best efforts
      to provide originally signed counterpart documents (and where appropriate
      facsimile or PDF copies of originally signed counterpart documents) to Loeb
      & Loeb, LLP and McCarter Grespan Robson Beynon Thompson LLP in advance of
      the Closing to be held in trust pending authorization by such legal counsel
      to
      release and deliver such documents, so that the Closing may occur without the
      need for the parties to be present at such offices on the Closing Date. The
      Closing shall be effective (and the possession and control of the Purchased
      Assets and the responsibility for the Assumed Liabilities shall vest in Buyer)
      as of the Effective Time, and all transactions and deliveries at the Closing
      shall be deemed to have occurred simultaneously.

     

    5.2  Transactions
      Upon the Execution of this Agreement.
      Upon
      the execution and delivery of this Agreement, each of the Shareholders shall
      execute and deliver to Buyer the Lock-Up Agreement in the form of Exhibit
      C.

     

    5.3  Transactions
      at the Closing.
      At the
      Closing, the following shall occur:

     

    (a)  Buyer
      shall pay the Closing Payment to the Escrow Agent;

     

    (b)  The
      Escrow Agent shall disburse the Closing Payment to or for the benefit of Seller
      in accordance with the Disbursement Schedule; provided, however that (a) any
      amounts payable to Seller’s employees shall be remitted to Seller for
      disbursement, (b) any expenses or other amounts payable by Seller hereunder
      shall be retained by the Escrow Agent for appropriate payment disbursement
      in
      accordance with this Agreement or the Escrow Agreement, (c) the Escrow
      Holdback shall be retained by the Escrow Agent to be held and disbursed in
      accordance with the Escrow Agreement, and (d) the balance, if any, shall be
      paid
      by the Escrow Agent to Seller in accordance with written instructions provided
      by Seller.

     

    (c)  Buyer
      shall deliver to Seller the certificates referred to in Sections
      11.1
      and
11.2;

     

    (d)  Buyer
      shall deliver to Seller executed copies of the Tax elections described in
ARTICLE
      IV;

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    (e)  Buyer
      shall provide to Seller a certificate of good standing with respect to its
      jurisdiction of formation;

     

    (f)  Seller
      shall deliver to Buyer an assignment of Contracts, Licenses, assignments in
      registrable form of all trademarks, service marks, patents, copyrights, domain
      names, general intellectual property and registrations or applications for
      the
      same included within the Purchased Assets and a bill of sale and assignment
      covering the balance of the Purchased Assets, in form satisfactory to Buyer
      and
      its counsel, together with such other instruments of sale, transfer, conveyance,
      assignment and confirmation, and Seller shall take such
      further actions, as Buyer may reasonably deem necessary or desirable in order
      to
      transfer, convey and assign to Buyer, and to confirm Buyer’s title to, all of
      the Purchased Assets, to put Buyer in actual possession and operating control
      thereof and to assist Buyer in exercising all rights with respect
      thereto;

     

    (g)  Seller
      shall deliver to Buyer a copy of all of the Books and Records of
      Seller;

     

    (h)  Seller
      and the Shareholders shall deliver to Buyer the certificates referred to in
      Sections
      10.1,
      10.2
      and
10.3;

     

    (i)  Seller
      shall deliver to Buyer the opinion of counsel referred to in Section 10.4;

     

    (j)  Seller
      shall provide to Buyer a certificate of compliance with respect to its
      jurisdiction of formation and certificate of status for each other jurisdiction
      in which Seller does business;

     

    (k)  Seller
      shall deliver to Buyer certified copies of personal property security reports
      for each jurisdiction in which Seller does business, obtained by Seller at
      its
      sole expense, with currency dates of not earlier than five (5) days prior to
      the
      Closing Date, showing that as of the currency date of said report, there are
      no
      financing statements on file in the personal property registration systems
      of
      such jurisdictions with respect to any of the Purchased Assets except for
      Permitted Liens or Liens for which pay-off letters in form satisfactory to
      Buyer
      have been delivered in the manner described in Section 10.6;

     

    (l)  Seller
      shall deliver to Buyer a certificate issued by the Ministry of Finance of
      Ontario pursuant to section 6 of the Retail
      sales Tax Act (Ontario),
      which indicates that the Seller has paid all taxes collectible or payable under
      the said Act up to the Closing Date or has entered into an arrangement
      satisfactory to the said Minster for the payment of such taxes;

     

    (m)  Seller
      shall deliver to Buyer all other properties, documents and certificates required
      to be delivered to Buyer hereunder, to the extent not theretofore delivered;
      and

     

    (n)  Seller
      shall deliver to Buyer executed copies of the Tax elections described in
ARTICLE
      IV;

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    (o)  Seller,
      CVF, Heptagon and Shepherd Group shall execute and deliver the Non-Competition
      Agreement referred to in Section
      10.7;
      

     

    (p)  Seller
      shall deliver a certified copy of its articles of incorporation, by-laws and
      the
      resolutions of its board of directors and minutes of the meeting of its
      shareholders approving the transactions contemplated herein, together with
      duly
      executed incumbency certificates; and 

     

    (q)  Escrow
      Agent shall either cause lien releases to be filed with respect to each Lien
      that is to be paid out of the Closing Payment or shall appoint Cassels Brock
      & Blackwell LLP, Buyer’s Canadian counsel, as agent to make such filings on
      its behalf.

     

    ARTICLE
      VI  

     

    REPRESENTATIONS
      AND WARRANTIES

     

    OF
      SELLER,
      CVF
      AND HEPTAGON

     

    Seller
      and each of CVF and Heptagon hereby jointly and severally, subject to
Section 13.8,
      represents and warrants to Buyer that:

     

    6.1  Organization;
      Authority; Due Authorization.

     

    (a)  Organization
      and Good Standing.
      Seller
      is a corporation duly organized, validly existing and in good standing under
      the
      Applicable Laws of its jurisdiction of incorporation; has all requisite power
      to
      own, lease and operate its assets, properties and business and to carry on
      its
      business as conducted during the twelve-month period prior to the date hereof,
      as now conducted and as proposed to be conducted; and is duly qualified or
      licensed to do business as a foreign corporation and is in good standing in
      every jurisdiction in which the nature of its business or the location of its
      properties requires such qualification or licensing, except for such
      jurisdictions where the failure to so qualify or be licensed would not have
      any
      adverse effect on the enforceability of any of Seller Material Contracts or
      Seller’s ability to bring or defend lawsuits, or a Seller Material Adverse
      Effect. Schedule
      6.1
      sets
      forth all jurisdictions in which Seller is qualified or licensed to do business
      as a foreign corporation and all fictitious business names used by Seller within
      the last five (5) years. Seller changed its corporate name from Omphalos
      Recovery Systems, Inc. to Gemprint Corporation in accordance with Applicable
      Law. CVF, Heptagon and Shepard Group are the record and beneficial owners of
      64.9%, 4.45% and 11.6%, respectively, of the issued and outstanding stock of
      Seller.

     

    (b)  Authority
      to Execute and Perform Agreements.
      Except
      for obtaining the approval of Seller’s shareholders at a duly noticed meeting
      (which meeting and approval shall occur prior to Closing), Seller has all
      requisite power, authority and approvals required to enter into, execute and
      deliver this Agreement and all of the other Seller Documents and (assuming
      the
      Required Contractual Consents, the Required Governmental Approvals and such
      approval of Seller’s shareholders are obtained) to perform fully its obligations
      hereunder and thereunder.

     

    (c)  Due
      Authorization; Enforceability.
      Except
      for obtaining the approval of Seller’s shareholders at a duly noticed meeting
      (which meeting and approval shall occur prior to Closing), Seller has taken
      all
      corporate actions necessary to authorize it to enter into and perform fully
      its
      obligations under this Agreement and all of the other Seller Documents to be
      executed by it and to consummate the transactions contemplated herein and
      therein. Seller has delivered to Buyer a true and correct certified copy of
      the
      resolutions adopted by its board of directors with respect to the foregoing.
      This Agreement has been duly and validly executed by Seller and (assuming due
      authorization, execution and delivery by Buyer and obtaining the approval of
      Seller’s
      shareholders as described herein) constitutes the legal, valid and binding
      obligation of Seller, enforceable in accordance with its terms, except as the
      same may be limited by applicable bankruptcy, insolvency, reorganization,
      moratorium or similar Applicable Laws affecting creditors’ rights generally or
      by general equitable principles affecting the enforcement of
      contracts.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    (d)  Approval
      of Shareholders.
      Approval to the transactions contemplated by this Agreement by Seller’s
      shareholders under Applicable Law and Seller’s articles of incorporation and
      by-laws shall occur upon obtaining the approval of holders of at least 2/3
      of
      the issued
      and outstanding stock of Seller at a duly noticed meeting. All classes of stock
      shall be aggregated for purposes of determining whether such approval is
      obtained and the approval of shareholders of each class of Seller’s stock is not
      required to approve such transactions. 

     

    (e)  Class
      B Stock.
      As of
      the date hereof, CIC Industrial Interests Inc. is the registered owner of all
      of
      the issued and outstanding "Class B Stock" of Seller, such shares having been
      transferred to CIC Industrial Interests Inc. by Saskatoon Community Bond
      Corporation pursuant to a Share Sale Agreement dated December 4, 1998. On or
      about October 31, 1997, Saskatoon Community Bond Corporation delivered a
      redemption notice to Seller with respect to 860,927 of the shares of “Class B
      Stock”, requiring Seller to redeem such issued and outstanding "Class B Stock"
      and triggering the provisions for redeeming such shares under Seller's articles
      of incorporation and amendment. While Seller is unable to locate a second
      redemption notice from Saskatoon Community Bond Corporation triggering the
      redemption provisions for the remainder of the issued and outstanding shares
      of
“Class B Stock”, the Share Sale Agreement dated December 4, 1998 between
      Saskatoon Community Bond Corporation and CIC Industrial Interests Inc. confirms
      that Saskatoon Community Bond Corporation triggered the redemption provisions
      under Seller’s articles of incorporation for all of its issued and outstanding
      shares of “Class B Stock” prior to the date of such agreement. As of the date
      hereof, the "Class B Stock" has not been redeemed by Seller. Further, Saskatoon
      Community Bond Corporation has not provided Seller with notice revoking its
      redemption notices for any “Class B Stock” as of the date hereof. 

     

    6.2  No
      Violation.
      Except
      as disclosed in Schedule
      6.2,
      and
      assuming that the Required Governmental Approvals and the Required Contractual
      Consents are obtained and that the approval of the shareholders of the Seller
      are obtained at a duly noticed meeting, neither the execution or delivery by
      Seller of this Agreement or any of Seller Documents nor the consummation of
      the
      transactions contemplated herein or therein will: (a) violate any provision
      of the Articles of Incorporation, bylaws or other charter documents of such
      party; (b) violate, conflict with or constitute a default under, permit the
      termination or acceleration of, or cause the loss of any rights or options
      under, any Seller Material Contract; (c) require any authorization, consent
      or approval of, exemption or other action by, or notice to, any party to any
      Seller Material Contract; (d) result in the creation or imposition of any
      Lien upon any of the Purchased Assets which is not a Permitted Lien or
      (e) violate or require any consent or notice under any Applicable Law or
      Order to which Seller or any of its properties is subject (including, without
      limitation, the Bulk Sales Act (Ontario).

     

    
      
        
        

      

      
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    6.3  Licenses;
      Regulatory and Other Approvals. Schedule
      6.3(a)
      sets
      forth a complete and accurate description of all Licenses of Seller, denoting
      which of same are transferable to Buyer pursuant to Applicable Law and which
      are
      not transferable to Buyer. All of such Licenses are in effect and in good
      standing. Schedules
      6.3 (b)
      sets
      forth a complete and accurate description of each consent, approval,
      authorization, notice, filing, exemption or other requirement which must,
      pursuant to any Applicable Law or Order or the terms of any Seller Material
      Contract, be obtained from any Authority or Person or which must otherwise
      be
      satisfied by Seller or any Shareholder in order that (a) the execution or
      delivery by Seller or any Shareholder of this Agreement or any of the other
      Seller Documents, and (b) the consummation of the transactions contemplated
      herein or therein, will not (i) violate in any material respect any Applicable
      Law, any applicable Order to which such party is subject or any License of
      Seller; (ii) constitute a material default under, or give rise to a right of
      termination or acceleration of, or to a loss of any material benefits by Buyer
      under, any assigned Seller Material Contract; or (iii) result in the creation
      or
      imposition of any Lien upon any of the Purchased Assets which is not a Permitted
      Lien.

    
       

    

    6.4  Title
      to Purchased Assets.
      Without
      limiting the specific representations and warranties as to specific classes
      of
      Purchased Assets contained elsewhere herein, Seller is the absolute beneficial
      owner of the Purchased Assets and has good and marketable title to each of
      the
      Purchased Assets owned by it and the valid and enforceable right to receive
      and/or use each of the Purchased Assets in which Seller has any other interest,
      free and clear of all Liens, other than (a) Permitted Liens or (b) the
      Liens listed in Schedule 6.4
      which
      shall be paid in full at Closing out of the Closing Payment. Without limiting
      the generality of the foregoing, there has been no assignment, subletting or
      grants of any Lien by Seller in respect of any of the Purchased Assets except
      as
      expressly disclosed herein. The delivery to Buyer of the instruments of transfer
      of beneficial and legal ownership contemplated by this Agreement will at the
      Effective Time vest good and marketable title to, or the valid and enforceable
      right to receive and/or use, each such Purchased Asset in Buyer, free and clear
      of all Liens, other than Permitted Liens.
      No
      person other than Buyer has any agreement or option or right to purchase the
      Purchased Assets from Seller.

     

    6.5  Financial
      Condition.

     

    (a)  Financial
      Statements.
      Schedule
      6.5(a)
      sets
      forth (i) the balance sheets of Seller as of December 31, 2002, 2003
      and 2004 and the related statements of income and retained earnings and changes
      of financial position for the fiscal years then ended, which were examined
      by
      independent certified public accountants as part of the annual audit of the
      consolidated financial statements of CVF, and issued an unqualified opinion
      (except for a going concern issue) with respect thereto, and (ii) the
      unaudited Seller internally prepared balance sheets and statements of income
      of
      Seller for the nine-month period ended September 30, 2005. Said financial
      statements (i) were prepared in accordance with the Books and Records of
      Seller; (ii) were prepared in accordance with GAAP except that: (A) a
      cumulative non-cash adjustment to reflect a valuation for the convertibility
      features of Seller’s debt obligations to CVF has not been made, (B) an
      evaluation of the foreign currency translation effects has not been performed
      and (C) the footnotes to the balance sheets and the related statements of income
      do not contain all
      of
      the information required by GAAP; (iii) fairly present Seller’s financial
      condition and the results of its operations as of the relevant dates thereof
      and
      for the periods covered thereby; (iv) contain and reflect all necessary
      adjustments and accruals for a fair presentation of Seller’s financial condition
      and the results of its operations for the periods covered by said financial
      statements (except that the unaudited balance sheet as of September 30, 2005
      and
      the related statements of income are subject to year-end audit adjustments,
      the
      net effect of which could not reasonably be expected to have a Seller Material
      Adverse Effect); (v) contain and reflect adequate provisions for all reasonably
      anticipated liabilities for all Taxes, with respect to the period then ended
      and
      all prior periods; and (vi) with respect to contracts and commitments for
      the sale of goods or the provision of services by Seller, contain and reflect
      adequate reserves for all reasonably anticipated material losses and costs
      and
      expenses in excess of expected receipts.

     

    
      
        
        

      

      
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    (b)  No
      Undisclosed Liabilities.
      Except
      for (i) those liabilities specifically accrued or reserved against on
      Seller Balance Sheet, (ii) those current liabilities for trade or business
      obligations incurred since Seller Balance Sheet Date in connection with the
      purchase of goods or services in the ordinary course of the Business and
      consistent with past practices, (none of which is, individually or in the
      aggregate, material and none of which is for breach of contract, breach of
      warranty, tort or infringement), (iii) those liabilities arising under any
      Seller Material Contract (none of which liabilities is for breach of contract,
      breach of warranty, tort or infringement) or (iv) those liabilities
      otherwise specifically disclosed in Schedule
      6.5(b)
      (none of
      which liabilities is for breach of contract, breach of warranty, tort or
      infringement), Seller has, as of the date hereof, no direct or indirect
      indebtedness, liability, claim, loss, damage, deficiency, obligation or
      responsibility, known or unknown, fixed or unfixed, choate or inchoate,
      liquidated or unliquidated, secured or unsecured, accrued, absolute, contingent
      or otherwise, and whether or not of a kind required by generally accepted
      accounting principles to be set forth on a financial statement, which
      individually or in the aggregate are material to the condition (financial or
      otherwise), assets, liabilities, business, operations, properties or prospects
      of Seller. Seller has no Knowledge of any circumstances, conditions, events
      or
      arrangements which may hereafter give rise to any liabilities of Seller except
      in the ordinary course of the Business or as otherwise set forth in Schedule 6.5(b).

     

    (c)  Inventories.
      All
      Inventories shown on Seller Balance Sheet (which are described in Schedule 6.5(c))
      and all
      Inventories existing as of the date hereof consisted of, and consist of, items
      of a quality and quantity useable and saleable in the ordinary course of
      business by Seller without markdown or discount, were, and are, merchantable
      and
      fit for their particular purpose, except for obsolete and slow-moving items
      and
      items below standard quality (which in any event did not, and do not, exceed
      normal commercial standards in amount), all of which had been, and have been,
      written down on the books of Seller to the lower of cost or net realizable
      market value or had been, and have been, provided for by adequate reserves.
      Except as set forth in Schedule
      6.5(c),
      all
      such Inventories were, and are, owned by Seller and will be free and clear
      of
      any Liens, other than Permitted Liens, as of the Closing. No items included
      in
      such Inventories were, or are, held by Seller on consignment from others. The
      amounts of all such Inventories shown on Seller Balance Sheet were based on
      quantities determined by physical count or measurement taken on Seller Balance
      Sheet Date and valued at the lower of cost (determined
      on a first-in, first-out basis) or market value and on a basis consistent with
      that of prior years.
      As of
      the Effective Time, the Inventories will be at such levels and include such
      items as are adequate and sufficient to enable Buyer to conduct the Business
      in
      the ordinary course for a period of at least ten (10) weeks after the Effective
      Time, in a manner consistent with Seller’s prior practices.

     

    
      
        
        

      

      
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    (d)  Accounts
      Receivable.
      Schedule
      6.5(d)
      sets
      forth a complete and accurate schedule of the Accounts Receivable of Seller
      as
      of Seller Balance Sheet Date, as reflected in Seller Balance Sheet, together
      with an accurate aging of the same. All Accounts Receivable of Seller accrued
      on
      Seller Balance Sheet and all Accounts Receivable of Seller existing as of the
      date hereof resulted from valid sales in the ordinary course of the Business
      and
      were, and are, subject to no valid offsets or counterclaims. Except as set
      forth
      in Schedule
      6.5(d),
      all
      such Accounts Receivable were, and are, owned by Seller and will be free and
      clear of any Liens, other than Permitted Liens, as of the Closing. All
      allowances for doubtful accounts and warranty returns reflected on Seller
      Balance Sheet have been established in accordance with GAAP.
      Within
      six (6) months of the Closing Date, the obligors of the NWT Receivable shall
      have paid the entire amount of the NWT Receivable to Buyer.

     

    (e)  Accounts
      Payable.
      Schedule
      6.5(e)
      sets
      forth a true and correct aged list of all trade payables, accrued expenses
      and
      indebtedness of Seller as of Seller Balance Sheet Date and as of the date
      hereof. The payment to be made by the Escrow Agent at Closing in accordance
      with
      the Disbursement Schedule and the assumption by Buyer of the Assumed Liabilities
      shall operate to provide compliance under Applicable Law relating to bulk
      transfers and all amounts (including without limitation, all accrued dividends)
      required to be paid by Seller to holders of its “Class B Stock.”

     

    (f)  Absence
      of Certain Changes.
      Except
      as indicated in Schedule
      6.5(f),
      since
      Seller Balance Sheet Date, Seller has conducted the Business only in the
      ordinary course consistent with its past practices and has not:

     

    (i)  suffered
      any change, event or condition which, in any case or in the aggregate, has
      had
      or could reasonably be expected to have a Seller Material Adverse
      Effect;

     

    (ii)  suffered
      any destruction, damage to or loss of any asset (whether or not covered by
      insurance) which has had or could reasonably be expected to have a Seller
      Material Adverse Effect;

     

    (iii)  incurred
      any obligation or liability or taken property subject to any liability, whether
      absolute, accrued, contingent or otherwise and whether due or to become due,
      except current liabilities for trade or business obligations incurred since
      Seller Balance Sheet Date in connection with the purchase of goods or services
      in the ordinary course of the Business and consistent with its prior practices,
      none of which liabilities, in any event, involved a potential liability of
      Seller in excess of $25,000, individually, or $150,000, in the
      aggregate;

     

    (iv)  mortgaged,
      pledged or subjected to any Lien any of its property, business or assets,
      tangible or intangible;

     

    (v)  sold,
      transferred, leased to others or otherwise disposed of any of its assets,
      tangible or intangible, except for inventory sold in the ordinary course of
      the
      Business consistent with its past practices or immaterial amounts of other
      tangible personal property not required by the Business;

     

    
      
        
        

      

      
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    (vi)  amended
      or terminated any Seller Material Contract or any License of Seller or received
      any notice of termination of any Seller Material Contract, committed a material
      default under any such Seller Material Contract or License, or suffered a
      material default by any other party thereto;

     

    (vii)  declared
      or made any payment of dividends or other distribution to its shareholders
      or
      upon or in respect of any shares of its capital stock, or purchased, retired
      or
      redeemed, or obligated itself to purchase, retire or redeem, any of its shares
      of capital stock or other securities;

     

    (viii)  changed
      its accounting methods or practices (including, without limitation, any change
      in depreciation or amortization policies or rates) or revalued any of its
      assets;

     

    (ix)  entered
      into any transaction, contract or commitment other than in the ordinary course
      of the Business and consistent with its prior practices;

     

    (x)  suffered
      any loss of one or more material customers or any material amounts of business,
      in the aggregate or received notice of any such impending loss; or

     

    (xi)  entered
      into any agreement or made any commitment to take any of the types of actions
      described in subparagraphs (i) through (x) above.

     

    (g)  Books
      of Account.
      The
      books of account of Seller are stated in reasonable detail and accurately and
      fairly reflect in all material respects the transactions and dispositions of
      the
      assets of Seller as required by GAAP (other than as noted in Section 6.5(a)).
      Seller
      has devised and maintains a system of internal accounting controls sufficient
      to
      provide reasonable assurances that (i) transactions are executed in accordance
      with management’s general or specific authorization; (ii) transactions are
      recorded as necessary (A) to permit the preparation of financial statements
      in
      conformity with GAAP (other than as noted in Section 6.5(a))
      and (B)
      to maintain accountability for assets; and (iii) the amount recorded for assets
      on the books and records of Seller is compared with the existing assets at
      reasonable intervals and appropriate action is taken with respect to any
      differences.

     

    6.6  Tax
      Matters.
      Except
      as indicated in Schedule
      6.6:

     

    (a)  Tax
      Returns.
      Seller
      has (i) duly and timely filed all Tax Returns required to be filed by it on
      or prior to the date hereof, which Tax Returns are true, correct and complete,
      and (ii) duly and timely paid all Taxes due and payable in respect of all
      periods up to and including the date hereof and properly accrued on Seller
      Financial Statements all Taxes not yet payable in respect of all periods up
      to
      and including the date hereof. Seller has heretofore provided
      Buyer with (i) a true and accurate schedule which sets forth each Taxing
      jurisdiction in which Seller has filed or is required to file, or be included
      in, Tax Returns and indicating whether Seller has filed unitary or separate
      income or franchise Tax Returns with respect to each such jurisdiction, (ii)
      a
      true and complete copy of each Tax Return of Seller for the last five complete
      fiscal years and such other Tax Returns as have been requested by Buyer, (iii)
      a
      schedule of all material elections with respect to Taxes affecting Seller or
      for
      which Seller is or may be liable that are in effect as of the Closing Date,
      and
      (iv) a schedule of any and all deferred intercompany transactions and excess
      loss accounts, including, in each case, a description and the amounts thereof.
      Seller has timely and properly withheld or collected, paid over and reported
      all
      Taxes required to be withheld or collected by Seller on or before the date
      hereof.

     

    
      
        
        

      

      
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    (b)  Asserted
      Tax Liabilities.
      (i) No Tax Authority has asserted any adjustment that could result in an
      additional Tax for which Seller is or may be liable or that could result in
      a
      Lien on any of its assets (collectively, “Tax
      Liability”);
      (ii)
      there is no pending audit, examination, investigation, dispute, proceeding
      or
      claim (collectively, “Proceeding”)
      relating to any Tax Liability and, to the Knowledge of Seller, no Tax Authority
      is contemplating such a Proceeding and there is no basis for any such
      Proceeding, (iii) no statute of limitations with respect to any Tax has been
      waived or extended (unless the period to which it has been waived or extended
      has expired); (iv) there is no outstanding power of attorney authorizing
      anyone to act on behalf of Seller in connection with any Tax Liability, Tax
      Return or Proceeding relating to any Tax; (v) there is no outstanding closing
      agreement, ruling request, request to consent to change a method of accounting,
      subpoena or request for information with or by any Tax Authority with respect
      to
      Seller, its income, assets or business, or any Tax Liability; (vi) Seller
      is not required to file Tax Returns or pay Taxes under any Applicable Law of
      the
      United States of America or any of its States or local government;
      (vii) Seller has not deferred any income to a period after the Closing Date
      that has economically accrued on or prior to the Closing Date or accelerated
      any
      deduction into a period on or before the Closing Date that economically accrues
      after the Closing Date; (viii) Seller is not and has never been a party to
      any Tax sharing or Tax allocation agreement, arrangement or understanding;
      (ix) Seller is not and has never been included in any consolidated,
      combined or unitary Tax Return with any Person other than Seller; (x) all
      Taxable periods for the assessment or collection of any Tax Liability are closed
      by agreement or by operation of the normal statute of limitations (without
      extension) or will close by operation of the normal statute of limitations
      for
      such Taxes (in each case determined without regard to any omission, fraud or
      other special circumstance other than the timely filing of the Tax Return)
      and
      (xi) no Tax Authority has ever asserted that Seller should file
      a
      Tax Return in any jurisdiction where it does not file.

     

    (c)  Seller’s
      GST Registration.
      Seller
      is duly registered under subdivision (d) of Division I of Part IX of the
Excise
      Tax Act (Canada) with
      respect to GST and its registration number is 103995262RT0001. The Purchased
      Assets constitute all or substantially all of the assets owned and primarily
      used by Seller in respect of the operations of the Business.

     

    6.7  Compliance
      with Applicable Laws; Governmental Matters.

     

    (a)  General.
      Seller
      has, in all material respects, complied with and is now, in all material
      respects, in compliance with all Applicable Laws and Orders, and no material
      capital expenditures will be required in order to insure continued compliance
      therewith. Except for the Licenses already held by Seller, no other franchise,
      license, permit, Order or approval of any Authority is material to or necessary
      for the conduct of the Business as previously conducted during the twelve-month
      period prior to the date hereof, as presently conducted or as proposed to be
      conducted. Each such License is in full force and effect; Seller is now and
      has
      at all times in the past been in full compliance with each thereof; no
      violations are or have been recorded by any Authority in respect of any thereof;
      and no proceeding is pending, or to the Knowledge of Seller, threatened, to
      revoke, amend or limit any thereof. Except as indicated in Schedule
      6.7(a),
      there
      are no pending or threatened proceedings by or before any Authority which
      involve new special assessments, assessment districts, bonds, Taxes,
      condemnation actions, Applicable Laws or Orders or similar matters which, if
      instituted, could be reasonably expected to have a Seller Material Adverse
      Effect.

     

    
      
        
        

      

      
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    (b)  Environmental
      and Industrial Hygiene Compliance.
      Except
      as set forth in Schedule
      6.7(b),
      (i)
      there
      are no Hazardous Substances located on or in or under any of the Real Property
      of Seller; Seller has not used any of the Real Property of Seller or any other
      real property to produce, generate, manufacture, treat, store, handle,
      transport, or dispose of any Hazardous Substances except in compliance with
      Environmental Laws; (ii) Seller and the Shareholders do not have Knowledge
      of
      Seller or any of its predecessors having caused or permitted the Release of
      any
      Hazardous Substances on or off-site from any of the Real Property of Seller
      or
      any other place or places where Seller conducts or has conducted the Business
      or
      in the course of transportation by Seller from or to any real property; all
      Hazardous Substances disposed of, treated, or stored by Seller or, to the best
      of Seller’s and the Shareholders’ Knowledge, any predecessors of Seller, have
      been disposed of, treated and stored in compliance with all Environmental Laws;
      Seller has not transported any Hazardous Substances outside of Canada; and
      (iii) to the best Knowledge of Seller, there are no underground or
      above-ground storage tanks or associated piping or appurtenances (active or
      abandoned), or urea formaldehyde foam insulation, asbestos, polychlorinated
      biphenyls, or radioactive substances located on or in or under the surface
      of
      any of the Real Property of Seller or other assets used thereon. 

     

    For
      purposes of this Section, the defined terms being as follows: 

     

    “Applicable
      Authority”
means
      any: (i) multinational, national, federal, provincial, state, regional,
      municipal, local, or other government, governmental or public department,
      central bank, court, tribunal, arbitral body, commission, board, bureau, or
      agency, whether domestic or foreign; (ii) any subdivision, agent, commission,
      board, or authority of any of the foregoing; or (iii) any quasi-governmental,
      private, or self-regulatory body, organization, or agency.

     

    “Environmental
      Laws”
means
      all federal, provincial, municipal, or local laws, statutes, regulations,
      ordinances, rules, guidelines, orders, directives, and other requirements of
      any
      Applicable Authority or of any court, tribunal, or other similar body, relating
      to environmental or health matters, including legislation governing the
      labeling, use, and storage of Hazardous Substances.

     

    “Environmental
      Orders”
means
      applicable orders, decisions, or the like rendered by any Authority under or
      pursuant to any Environmental Laws.

     

    “Hazardous
      Substances”
means
      petroleum and petroleum products, polychlorinated biphenyls, asbestos, urea
      formaldehyde foam insulation, any flammable and/or radioactive materials, or
      any
      other substance or material that is prohibited, controlled, or regulated under
      any Environmental Laws.

     

    
      
        
        

      

      
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    “Release”
means
      a
      releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging,
      injecting, escaping, leeching, spraying, burying, abandoning, incinerating,
      disposing, or dumping of Hazardous Substances or Hazardous Waste, or threat
      thereof, which is in breach of any Environmental Law or Environmental
      Order.

     

    (c)  Indemnity
      and Hold Harmless.
      Without
      limiting any other indemnity contained herein, Seller, CVF and Heptagon shall,
      subject to Section 13.8,
      from
      and after the Effective Time, jointly and severally indemnify and hold harmless
      Buyer, and its respective shareholders, directors, officers, employees, agents
      and attorneys, and any successors to Seller’s interest in any such affected
      property, and their respective shareholders, directors, officers, employees,
      agents and attorneys, from and against any and all Losses directly or indirectly
      arising out of the presence, use, generation, storage, or disposal of Hazardous
      Substances on any property of Seller, whether the same was the fault of Seller
      or any prior owner or operator of such affected property or any other Person,
      including, without limitation, all general, special, foreseeable or
      unforeseeable consequential damages and the cost of any required or necessary
      repair, cleanup, or detoxification and the preparation of any closure or other
      required plans, whether or not such action is required or necessary prior to
      or
      following transfer of title to any such affected property, and to the full
      extent that such action is attributable, directly or indirectly, to the presence
      or use, generation, storage, release, threatened release, or disposal of
      Hazardous Substances by any Person on any property of Seller prior to the
      Effective Time.

     

    6.8  Litigation. Schedule
      6.8
      sets
      forth an accurate and complete description of every pending or, to the Knowledge
      of Seller, threatened adverse claim, dispute, governmental investigation, suit,
      action (including, without limitation, nonjudicial real or personal property
      foreclosure actions), arbitration, legal, administrative or other proceeding
      of
      any nature, domestic or foreign, criminal or civil, at law or in equity, by
      or
      against or otherwise affecting Seller, or its businesses, operations,
      properties, financial conditions or prospects and which could be reasonably
      expected to result individually (aggregating related actions) in Losses of
      $150,000 or more (in excess of Losses irrevocably accepted as covered under
      any
      insurance policy issued by a credit worthy insurance company). Schedule
      6.8
      also
      sets forth an accurate and complete description of every pending, or to the
      Knowledge of Seller, threatened action, claim, dispute, governmental
      investigation, suit, arbitration or other proceeding which challenges or seeks
      to prevent, enjoin, alter or materially delay any of the transactions
      contemplated by this Agreement. Seller has delivered to Buyer copies of all
      relevant court papers and other documents relating to the matters referred
      to in
Schedule
      6.8.
      Except
      as disclosed in Schedule
      6.8:

     

    (a)  no
      such
      matter or matters, if decided adversely to Seller, could reasonably be expected
      to have a Seller Material Adverse Effect;

     

    (b)  Seller
      is
      not in default with respect to any Order by which it is bound or to which its
      property is subject and there exists no Order enjoining or requiring Seller
      to
      take any action of any kind with respect to the Business;

     

    (c)  neither
      Seller nor, to the Knowledge of Seller, any officer, director, manager or
      employee of Seller has been permanently or temporarily enjoined by any Order
      from engaging in or continuing any conduct or practice in connection with the
      Business; and

     

    
      
        
        

      

      
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    (d)  to
      the
      Knowledge of Seller, no basis exists for any claim, investigation, suit or
      proceeding which, if decided adversely to Seller, could reasonably be expected
      to have a Seller Material Adverse Effect.

     

    6.9  Property
      of Seller.

     

    (a)  Tangible
      Personal Property.
      Schedule
      6.9(a)
      sets
      forth (i) a description, including the location, of each item of Tangible
      Personal Property owned by Seller which is (A) licensed to, and in the
      possession of, a Person other than Seller, or (B) having on the date hereof
      either a depreciated book value or estimated fair market value per unit in
      excess of $25,000, or not owned by Seller but in the possession of or used
      in
      the Business and having rental payments therefor in excess of $2,000 per month
      or $25,000 per year; (ii) a description of the owner of, and any Seller
      Contract relating to the use of, each such item of Tangible Personal Property
      not owned by Seller and the circumstances under which such property is used
      and
      (iii) the Tangible Personal Property of Seller reflected in the Seller Balance
      Sheet. Except as indicated in Schedule
      6.9(a):

     

    (i)  Seller
      has good and marketable title to each item of its Tangible Personal Property,
      free and clear of all Liens other than Permitted Liens and the Liens listed
      in
Schedule
      6.4
      that
      will be paid in full at Closing out of the Closing Payment;

     

    (ii)  no
      officer, director, shareholder or employee of Seller, nor any Affiliate thereof,
      owns directly or indirectly, in whole or in part, any item of the Tangible
      Personal Property of Seller or has any other interest therein; and

     

    (iii)  each
      item
      of Tangible Personal Property owned or used by Seller or its licensees is in
      good operating condition and repair, usable in the ordinary course of the
      Business, and the operation thereof as conducted during the twelve-month period
      prior to the date
      hereof, as presently conducted and as proposed to be conducted is not in
      violation of any Applicable Law, including, without limitation, applicable
      Environmental Laws and Orders and laws relating to occupational health and
      safety.

     

    (b)  Intellectual
      Property. Schedule
      6.9(b)
      sets
      forth, as of the date hereof, (i) a true and complete description of
      Seller’s proprietary identification and registration system of gemstones;
      (ii) a true and complete schedule of each patent, patent application and
      associated invention, industrial model, process and design, technical
      information, know-how and operating maintenance or other manual and each
      registration and application for any of the foregoing, constituting a part
      of
      such Intellectual Property (including, without limitation, any registrations
      and/or applications filed with the Canadian Intellectual Property Office);
      (iii) registered and unregistered fictitious business name, trademark,
      service mark, trade name, domain name, URL, web site and slogan, and each
      registration and application for any of the foregoing, constituting a part
      of
      the Intellectual Property of Seller (including, without limitation, any
      registrations and/or applications filed with the Canadian Intellectual Property
      Office); (iv) a true and complete schedule of each statutory, common law
      and registered copyright, and each registration and application for any of
      the
      foregoing, constituting a part of such Intellectual Property (including, without
      limitation, any registrations and/or applications filed with the Canadian
      Intellectual Property Office); (v) each item of Software and associated
      documentation constituting a part of such Intellectual Property other than:
      (A)
“shrink wrap” software and (B) third party software generally available to the
      public at a cost of less than $2,500;
      (vi) a
      true and complete list, without extensive or revealing descriptions, of each
      trade secret constituting a part of such Intellectual Property, including each
      related process or item of know-how or other technical data, and including,
      as
      to each such trade secret, the specific location of each writing, computer
      program or other tangible medium containing its complete description,
      specifications, source codes, charts, procedures, manuals and other descriptive
      material relating to it; (vii) a true and complete list of all Contracts to
      which Seller is a licensee relating to any item of such Intellectual Property;
      (viii) a true and complete list of all Contracts to which Seller is a licensor
      relating to any item of such Intellectual Property; and (ix) a true and complete
      list of all Contracts under which Seller is obligated to provide maintenance,
      support or update any of such Intellectual Property. The consummation of the
      transactions contemplated herein will not adversely affect in any manner the
      nature or usefulness of any item of such Intellectual Property in the hands
      of
      Seller. Except as indicated in Schedule
      6.9(b):

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    (A)  Seller
      is
      the owner of all right, title and interest in and to each item of its
      Intellectual Property, free and clear of all Liens, other than Permitted Liens
      and Liens that will be paid in full, and released, at Closing out of the Closing
      Payment;

     

    (B)  all
      patents, trademarks, service marks, copyrights and other state, provincial,
      federal and foreign registrations and all applications therefor listed in
Schedule
      6.9(b)
      are
      valid and in full force and effect and are not subject to any Taxes, maintenance
      fees or actions falling due within 90 days after the date hereof;

     

    (C)  all
      of
      the Software of Seller performs in full compliance with all of the
      specifications therefor (including, without limitation, functional
      specifications) set forth in user manuals, promotional materials or license
      agreements;

     

    (D)  accurate
      and complete copies of all source codes relating to all versions of each item
      of
      Software of Seller exist and have been made available to Buyer;

     

    (E)  all
      items
      of Software of Seller (other than licensed Software), including all prior
      versions thereof, were conceived, made and reduced to practice solely by Persons
      who were employees of Seller, and such Software resulted exclusively from work
      performed by those employees for Seller; any and all ideas, designs, concepts,
      techniques, inventions and discoveries which were conceived, made or reduced
      to
      practice by those employees relating in any way to such Software are “works made
      for hire” as a matter of law and are owned exclusively by Seller; and valid
      registrations exist and are in effect with respect to all of such
      Software;

     

    (F)  the
      patents and Software owned by Seller do not infringe the rights of any Person,
      there are no pending claims, actions, judicial or other adversary proceedings,
      disputes or disagreements involving Seller concerning any item of its
      Intellectual Property, and, to the Knowledge of Seller, no such action,
      proceeding, dispute or disagreement is threatened and no basis exists for such
      action, proceeding, dispute or disagreement;

     

    
      
        
        

      

      
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    (G)  all
      current officers, employees and consultants of Seller (other than employees
      and
      consultants who have not been involved in developing any Intellectual Property
      of Seller and who have no managerial responsibilities) have executed and
      delivered to Seller agreements regarding the protection of proprietary
      information and the assignment to Seller of all Intellectual Property rights
      arising from the services performed for Seller by such Persons, and Seller
      has
      made available to Buyer or its counsel copies of all such agreements;

     

    (H)  to
      the
      Knowledge of Seller, no employee or consultant of Seller is in violation of
      any
      term of any employment Contract, patent disclosure agreement, non-competition
      agreement or any other Contract or restrictive covenant relating to the right
      of
      such Person to be employed or engaged by Seller or to use the Intellectual
      Property rights of others; and

     

    (I)  Neither
      the National Research Council of Canada, any other Authority nor any other
      Person has any right to, or claim against, Seller’s Intellectual Property as a
      result of any Industrial Research Assistance Program, any Contract entered
      into
      in connection therewith or any condition or Applicable Law relating
      thereto.

     

    (c)  Real
      Property.
      Schedule
      6.9(c)
      sets
      forth: (i) a true and complete description of all Real Property in which
      Seller has any interest, and all buildings and other structures located on
      that
      Real Property; and the nature of the interest therein of Seller; and
      (ii) an identification of all Seller Contracts together with all amendments
      thereto, under which Seller has any interest or estate in any Real Property.
      

     

    (d)  Necessary
      Properties.
      Except
      for the Real Property, the Purchased Assets include all of the assets, real
      properties, tangible personal properties and intangible properties necessary
      for
      the conduct of the Business as conducted during the twelve-month period prior
      to
      the date hereof, as presently conducted and as proposed to be conducted and
      include substantially all of those properties actually used in the conduct
      of
      such businesses during the twelve-month period prior to the date
      hereof.

     

    6.10  Agreements. Schedule
      6.10
      sets
      forth a true and correct list of each Seller Contract except  any Seller
      Contract which is specifically identified in Schedules
      6.9(a),
      6.9(b), 6.9(c),
      6.11,
      6.12
      or
6.13.
      Seller
      has delivered to Buyer a true and correct copy of the Amendment to Founders
      Agreement between Seller and Tolkowsky, the Amendment to License Agreement
      between Seller and Crystal Beam Melody, Inc. and the Amendment to Escrow
      Agreement between Seller and Crystal Beam Melody, Inc., all entered into and
      effective as of November 22, 2005.

     

    Except
      as
      indicated in Schedule
      6.10:

     

    (a)  each
      Seller Material Contract is the valid and binding obligation of the other
      contracting party, enforceable in accordance with its terms against the other
      contracting party and in full force and effect, except as the same may be
      limited by applicable bankruptcy, insolvency, reorganization, moratorium or
      similar Applicable Laws affecting creditors’ rights generally or by general
      equitable principles affecting the enforcement of contracts; there is no default
      or event which, with notice or lapse of time or both, would constitute a default
      by any other contracting party thereunder; no consent need be obtained from
      any
      Person in respect thereof in connection with the transactions contemplated
      hereby; and all rights of Seller thereunder are owned free and clear of any
      Liens, other than Permitted Liens and the Liens listed in Schedule
      6.4;

     

    
      
        
        

      

      
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    (b)  Seller
      has fulfilled all material obligations required pursuant to each Seller Material
      Contract to have been performed by it prior to the date hereof, and provided
      that CVF and Heptagon fulfill their obligations under Section
      8.3
      to
      advance funds to Seller, Seller has no reason to believe that Seller will not
      be
      able to fulfill, when due, all of its obligations under each Seller Material
      Contract which remain to be performed after the date hereof;

     

    (c)  no
      other
      contracting party to any Seller Material Contract has breached such Seller
      Material Contract in any material respect within the twelve-month period prior
      to the date hereof; Seller has no Knowledge of any anticipated material breach
      thereof by any such party; and there are not now, nor have there been in the
      twelve-month period prior to the date hereof, any disagreements or disputes
      between Seller and any other party to any Seller Material Contract relating
      to
      the validity or interpretation of such Seller Material Contract or to the
      performance by any party thereunder;

     

    (d)  Seller
      is
      not a party to, nor is any of its property bound by, any Seller Contract, or
      any
      provision of its Articles of Incorporation or Bylaws, which (i) restricts
      the conduct of the Business anywhere in the world or its ability to sell
      products or services to a specific Person, (ii) grants most favored nation
      pricing and/or terms to any Person, (iii) requires or may potentially require
      the renegotiation of government Contracts or (iv) contains any unusual or
      burdensome provisions which could reasonably be expected to have a Seller
      Material Adverse Effect;

     

    (e)  Seller
      is
      not under any material liability or obligation with respect to the return of
      inventory or products sold by Seller which are in the possession of
      distributors, wholesalers, retailers or customers, or with respect to credit
      for
      services rendered to third parties; and

     

    (f)  the
      Assumed Contracts include all of the contracts and agreements necessary for
      the
      conduct of the Business as conducted during the twelve-month period prior to
      the
      date hereof, as presently conducted by Seller and as proposed to be conducted,
      and include substantially all of Seller.

     

    6.11  Labor
      and Employment Matters.

     

    (a)  Labor
      Agreements.
      Schedule
      6.11
      sets
      forth a true and current list of all of the Labor Agreements to which Seller
      is
      a party. Schedule
      6.11
      also
      includes a true and complete schedule listing the names, total annual
      compensation, total accrued vacation, overtime, sick leave and other fringe
      benefits and bonuses of each person employed by Seller presently receiving
      compensation.

     

    
      
        
        

      

      
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    Except
      as
      set forth in Schedule
      6.11:

     

    (i)  the
      employment of each employee of Seller may be terminated immediately by Seller,
      except as otherwise provided by statute or decisional authority;

     

    (ii)  to
      the
      Knowledge of Seller, no key executive employee of Seller and no group of
      employees of Seller has plans to terminate his, her or its employment at or
      prior to the Closing, whether or not as a result of the transactions
      contemplated herein;

     

    (iii)  Seller
      has no material labor relations problems and

     

    (iv)  Seller
      is
      not a party to any collective bargaining agreements and, to the Knowledge of
      Seller, no labor group or group of employees has made a claim for recognition
      or
      certification.

     

    (b)  Compliance
      With Labor Laws and Agreements.
      Seller
      has complied in all material respects with all Applicable Laws and Orders
      relating to the employment of labor, including those related to wages, hours,
      collective bargaining and the payment and withholding of Taxes and other sums
      as
      required by appropriate Authorities and has withheld and paid to the appropriate
      Authorities, or is holding for payment not yet due to such Authorities, all
      amounts required to be withheld from such employees of Seller and is not liable
      for any arrears of wages, Taxes, penalties or other sums for failure to comply
      with any of the foregoing. 

     

    6.12  Employee
      Benefits. 

     

    (a)       
      Compliance with Applicable Law, etc. Seller has deducted and remitted to
      the relevant governmental authority all income Taxes, unemployment insurance
      contributions, Canada Pension Plan contributions, Workplace Safety &
Insurance premiums, provincial health insurance premiums and any taxes or other
      amounts which it is required by statute to collect and remit to any governmental
      authority. All accruals for unpaid vacation pay, premiums for unemployment
      insurance, health premiums, Canadian Pension Plan premiums, accrued wages,
      salaries and commissions, employee benefit plan payments and overtime have
      been
      properly reflected in the books and records of Seller. No notice has been
      received by Seller of any complaints filed by any of the employees employed
      or
      formerly employed in the Business against Seller claiming that Seller has
      violated the Employment Standards Act (Ontario) or the Human Rights Code
      (Ontario) (or any applicable employee or human rights or similar legislation
      in
      the other jurisdictions in which the Business is conducted), which are currently
      outstanding or of any complaints or proceedings of any kind involving Seller
      in
      respect of the employees of Seller or, to Seller’s Knowledge, after due inquiry,
      any of the employees of Seller, before any labor relations board. There are
      no
      outstanding orders or charges against Seller under the Workplace Safety and
      Insurance Act (Ontario) (or any applicable health and safety legislation in
      at
      the other jurisdictions in which the Business is conducted).

     

    (b)     
        Pension Plan. Except as set forth on Schedule 6.12(b),
      Seller has no retirement, pension, bonus, stock purchase, profit sharing, stock
      option, deferred compensation, severance or termination pay, insurance, medical,
      hospital, dental, vision care, drug, sick leave, disability, salary
      continuation, legal benefits, unemployment benefits, vacation, incentive or
      other compensation plan or arrangement or other employee benefit that is
      maintained or otherwise contributed to, or required to be contributed to, by
      Seller for the benefit of employees or former employees employed in the
      Business.

     

    
      
        
        

      

      
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    6.13  Insurance. Schedule
      6.13
      sets
      forth a true and correct list of all policies or binders of fire, liability,
      workers’ compensation, vehicular or other insurance held by or on behalf of
      Seller specifying the insurer, the policy number or covering note number with
      respect to binders, and describing each pending claim thereunder of more than
      $25,000. Such policies and binders are in full force and effect and are in
      all
      material respects in accordance with the customary insurance requirements for
      the industry of Seller and in compliance with all Applicable Laws and Orders.
      Seller is not in default, nor has ever been in default, with respect to any
      provision contained in any such policy or binder or has failed to give any
      notice or present any claim under any such policy or binder in due and timely
      fashion. Seller has complied with the terms of any co-insurance
      provisions contained in any such policy or policies of insurance. There are
      no
      outstanding unpaid claims under any such policy or binder. Seller has not
      received a notice of cancellation or non-renewal of any such policy or binder.
      Seller has no Knowledge of any inaccuracy in any application for such policies
      or binders, any failure to pay premiums when due, or any similar state of facts
      which may form the basis for termination of any such insurance. Seller has
      never
      been refused any insurance with respect to its properties or operations, nor
      has
      its insurance coverage ever been limited.

     

    6.14  Customers,
      Licensees and Suppliers. Schedule
      6.14
      is a
      correct and current list of all customers, licensees, and suppliers of the
      Business who purchased more than $25,000 of products or services from Seller,
      generated more than 250 registrations to Seller or sold more than $25,000 of
      products or services to Seller during the last fiscal year, together with
      summaries of the sales made to each such customer, registrations generated
      by
      such licensees and purchases made from each such supplier during Seller’s last
      fiscal year. Except as indicated in Schedule
      6.14,
      no
      single customer of Seller, licensee or supplier is of material importance to
      Seller.

     

    6.15  Potential
      Conflicts of Interest.
      Except
      as indicated in Section
      6.15,
      no
      officer or director of Seller or any Shareholder, no key employee of Seller
      or
      any Shareholder and no Affiliate of any of the foregoing (a) owns, directly
      or indirectly, any interest in (excepting not more than a one percent (1%)
      shareholding for investment purposes in securities of publicly held and traded
      companies), or is an officer, director, employee or consultant of, any Person
      which is a competitor, lessor, lessee, customer, licensee or supplier of Seller;
      (b) holds a beneficial interest in any Seller Contract (other than stock
      options and other contracts, commitments or agreements between Seller and such
      persons in their capacities as employees, officers or directors of Seller);
      (c) owns, directly or indirectly, in whole or in part, any tangible or
      intangible property (including, without limitation any patent, trademark, trade
      name, service mark, franchise, invention, permit, license, trade secret or
      confidential information) which Seller is using or the use of which is necessary
      for its conduct of the Business; or (d) has any cause of action or other
      claim whatsoever against Seller, except for claims in the ordinary course of
      the
      Business, such as for accrued vacation pay, accrued benefits under employee
      benefit plans and similar matters and agreements existing on the date
      hereof.

     

    6.16  Certain
      Transactions.
      Schedule
      6.16
      contains
      a detailed description (including all material terms thereof) of all purchases
      and sales or other transactions, if any, between Seller, on the one hand, and
      any officer, director, manager, shareholder, partner, member, key employee
      or
      Affiliate thereof, on the other hand, within the five years immediately
      preceding the date of this Agreement. Except as disclosed in Schedule
      6.16,
      all
      such purchases and sales or other transactions were made on the basis of
      prevailing market rates and terms such that from the perspective of Seller,
      all
      such transactions were made on terms no less favorable than those which would
      have been available from unrelated third parties.

     

    
      
        
        

      

      
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    6.17  Solvency.
      As
      of the
      Closing and immediately after consummating the transactions contemplated by
      this
      Agreement, Seller will not (i) be insolvent (either because its financial
      condition is such that the sum of its debts is greater than the fair value
      of
      its assets or because the present fair salable value of its assets will be
      less
      than the amount required to pay its probable
      liability on its debts as they become absolute and matured), (ii) have
      unreasonably small capital with which to engage in its business, or (iii) have
      incurred or plan to incur debts beyond its ability to repay such debts as they
      become due and payable and/or absolute and matured.

     

    6.18  Books
      and Records.
      Seller
      has made all of its Books and Records available to Buyer for its inspection,
      each of which is accurate and complete in all material respects.

     

    6.19  Delivery
      of Documents.
      Seller
      has delivered to Buyer true and current copies of all agreements and documents
      referred to in the Schedules. 

     

    6.20  Subsidiaries.
      Except
      for its equity interests in Crystal Beam Melody, Inc., Seller does not own
      directly or indirectly, any interest or investment (whether equity or debt)
      in
      any Person.

     

    6.21  No
      Broker.
      No
      broker, finder, agent or similar intermediary has acted for or on behalf of
      Seller or the Shareholders in connection with this Agreement or the transactions
      contemplated hereby, and no broker, finder, agent, similar intermediary or
      other
      Person is entitled to any broker’s, finder’s, or similar fee, other commission
      or payment in connection therewith based on any agreement, arrangement or
      understanding with Seller or the Shareholders or any action taken by Seller
      or
      the Shareholders. 

     

    6.22  Non-Residency.
      Seller
      is not a non-resident of Canada within the meaning of the Income
      Tax Act (Canada).

     

    6.23  Full
      Disclosure.
      All
      documents and other papers delivered to Buyer by or on behalf of Seller in
      connection with this Agreement and the transactions contemplated hereby are
      true, complete and authentic. The information furnished to Buyer by or on behalf
      of Seller in connection with this Agreement and the transactions contemplated
      herein does not contain any untrue statement of a material fact and does not
      omit to state any material fact necessary to make the statements made, in the
      context in which made, not false or misleading. There is no fact which Seller
      has not disclosed to Buyer in writing which could reasonably be expected to
      have
      a Seller Material Adverse Effect.

     

    
      
        
        

      

      
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    ARTICLE
      VI(A)

     

    REPRESENTATIONS
      AND WARRANTIES OF THE SHAREHOLDERS

     

    Subject
      to the exceptions and limitations set forth in this Agreement, each Shareholder
      hereby represents and warrants, to Buyer for itself and only with respect to
      itself as follows:

     

    6.1(A) Authority,
      Enforceability, No Violation, Consents, Title to Shares, Etc.

     

    (a) Organization
      and Good Standing.
      The
      Shareholder is a corporation, duly organized, validly existing and in good
      standing under the laws of its jurisdiction of incorporation and has all
      requisite power and authority to own and vote its stock in the capital of
      Seller.

     

    (b) Authority;
      Authorization of Transactions Contemplated by this Agreement.
      The
      Shareholder has approved and authorized Seller to execute this Agreement and
      all
      of the Seller Documents to be executed by Seller and to consummate the
      transactions herein and therein in accordance with the Agreement. The
      Shareholder has all requisite power and authority to execute and deliver this
      Agreement and the other Shareholder documents required to be delivered by such
      Shareholder to which such Shareholder is a party, to consummate the transactions
      contemplated hereby and thereby and to perform such Shareholder’s obligations
      under each Shareholder Document. The execution and delivery by the Shareholder
      of each of the Shareholder Documents to which the Shareholder is or will be
      a
      party and the performance by the Shareholder of such Shareholder’s obligations
      hereunder and thereunder have been duly and validly authorized by all necessary
      action. Each of the Shareholder Documents to which the Shareholder is or will
      be
      a party is, or upon its execution and delivery will be (assuming the valid
      authorization, execution and delivery of such Shareholder Document by the other
      parties thereto), a valid and binding obligation of such Shareholder,
      enforceable against such Shareholder in accordance with the terms thereof,
      except to the extent that such enforceability may be limited by any applicable
      bankruptcy, insolvency, reorganization, moratorium or other similar Applicable
      Laws relating to creditors’ rights generally and to general principles of
      equity. The Shareholder has delivered to Buyer the Shareholder’s duly executed
      Lock-Up Agreement adopting and approving this Agreement and the transactions
      contemplated hereby in accordance with the applicable requirements of Applicable
      Law, and such remains in full force and effect.

     

    (c) No
      Violation.
      Except
      as set forth on Schedule
      6.1(A)(c),
      neither
      the execution or delivery by the Shareholder of any of the Shareholder Documents
      to which the Shareholder is or will be a party, the consummation by such
      Shareholder of the transactions contemplated hereby and thereby, nor the
      performance by such Shareholder of its obligations hereunder and thereunder
      will
      (i) if the Shareholder is an entity, violate any provision of the articles
      of
      incorporation, bylaws, or other charter documents of such Shareholder or any
      resolution adopted by the equityholders of such Shareholder or the board of
      directors (or other responsible governing body) or any committee of thereof,
      or
      the Lock-Up Agreement (ii) violate, or give any Authority or other Person the
      right to challenge the transactions contemplated by this Agreement or any of
      the
      other or to exercise any remedy or obtain any relief under, Applicable
      Law.

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

    (d) Consents.
      Except
      as set forth on Schedule
      6.1(A)(d),
      no
      material filing with, and no material permit, authorization, consent or approval
      of, any Person is necessary for the Shareholder’s execution and delivery of this
      Agreement and the other Shareholder Documents, the consummation by the
      Shareholder of the transactions contemplated hereby or thereby or the
      Shareholder’s performance of the Shareholder’s obligations hereunder or
      thereunder.

     

    (e) Title
      to Shares.
      The
      Shareholder is the sole record and beneficial owner, free and clear of any
      and
      all Liens, of the shares of Seller’s capital stock set forth opposite such
      Shareholder’s name on Annex
      I,
      and the
      shares of the Seller’s capital stock set forth therein constitute all of the
      shares of Seller’s capital stock beneficially owned or held of record by the
Shareholder.
      There are no rights, obligations or other agreements or commitments (written
      or
      oral) obligating the Shareholder with respect to voting the shares of Seller’s
      capital stock owned by the Shareholder.

     

    ARTICLE
      VII  

     

    REPRESENTATIONS
      AND WARRANTIES OF BUYER

     

    Buyer
      represents and warrants to Seller and the Shareholders as follows:

     

    7.1  Due
      Incorporation.
      Buyer is
      a corporation duly organized, validly existing and in good standing under the
      Applicable Laws of its jurisdiction of incorporation.

     

    7.2  Authority
      to Execute and Perform Agreements.
      Buyer
      has all requisite power, authority and approval required to enter into, execute
      and deliver this Agreement and the other Buyer Documents and (assuming the
      Required Contractual Consents and the Required Governmental Approvals are
      obtained) to perform fully Buyer’s obligations hereunder and
      thereunder.

     

    7.3  Due
      Authorization; Enforceability.
      Buyer
      has taken all corporate actions
      necessary to authorize it to enter into and perform its obligations under this
      Agreement and all other Buyer Documents and to consummate the transactions
      contemplated herein and therein. Buyer has delivered to Seller a true and
      correct certified copy of the resolutions adopted by its board of directors
      with
      respect to the foregoing. This Agreement has been duly and validly executed
      by
      Buyer and (assuming the due authorization, execution and delivery by Seller)
      constitutes the legal, valid and binding obligations of Buyer, enforceable
      in
      accordance with its terms, except as the same may be limited by applicable
      bankruptcy, insolvency, reorganization, moratorium or similar Applicable Laws
      affecting creditors’ rights generally or by general equitable principles
      affecting the enforcement of contracts.

     

    7.4  No
      Violation.
      Neither
      the execution and delivery of this Agreement and all other Buyer Documents
      nor
      the consummation of the transactions contemplated hereby and thereby will
      (a) violate any provision of the Certificate of Incorporation or bylaws of
      Buyer; (b) violate, conflict with, or constitute a default under any
      contract or other lease agreement or other instrument to which Buyer is a party
      or by which it or its property is bound; (c) require the consent of any
      party to any material contract or other agreement to which Buyer is a party
      by
      which it or its property is bound; or (d) violate any Applicable Laws or
      Orders to which Buyer or its property is subject.

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    7.5  Regulatory
      and Other Approvals.
      Except
      for such approvals as have already been obtained, no other consent, approval,
      authorization, notice, filing, exemption or other requirement must, pursuant
      to
      any Applicable Law or Order or the terms of any material Contract to which
      Buyer
      is a party or to which its properties are subject, be obtained from any
      Authority or Person or must otherwise be satisfied by Buyer in order that (i)
      the execution or delivery by Buyer of this Agreement and any of Buyer Documents
      or (ii) the consummation of the transactions contemplated herein or therein
      will
      not violate any Applicable Law or Order or the terms of any such material
      Contract of Buyer.

     

    7.6  No
      Broker.
      Other
      than Lazard Freres & Co. LLC, no broker, finder, agent or similar
      intermediary has acted for or on behalf of Buyer in connection with this
      Agreement or the transactions contemplated hereby, and no broker, finder, agent
      or similar intermediary is entitled to, or will be paid, any broker’s, finder’s,
      or similar fee or other commission in connection therewith based on any
      agreement, arrangement or understanding with Buyer or any action taken by Buyer.
      Buyer shall fully discharge all obligations to Lazard Freres & Co. LLC, in
      connection with this Agreement and the transactions contemplated
      hereby.

     

    7.7  Investment
      Canada Act.
      Buyer
      is a non-Canadian within the meaning of the Investment
      Canada Act
      (Canada).

     

    ARTICLE
      VIII  

     

    COVENANTS
      AND AGREEMENTS OF THE PARTIES

     

    EFFECTIVE
      PRIOR TO CLOSING

     

    The
      parties hereto covenant and agree as follows:

     

    8.1  Business
      Examinations and Physical Investigations of Purchased Assets.
      Prior
      to the Effective Time Buyer shall be entitled, through its employees and
      representatives, including, without limitation, Loeb & Loeb LLP, Grant
      Thornton LLP and Buyer’s lenders, prospective lenders, investment bankers and
      consultants, to make such investigations and examinations of the Business,
      the
      Purchased Assets, the Books and Records of Seller and the affairs and financial
      condition of Seller as Buyer may request for the purpose of familiarizing Buyer
      with the Business, the Purchased Assets and the Assumed Liabilities and
      obtaining any Required Governmental Approvals, any Required Contractual Consents
      or any required Licenses or Permits. In order that Buyer may have the full
      opportunity to do so, Seller shall furnish Buyer and its representatives during
      such period with all information concerning the Business, the Purchased Assets
      and the affairs and financial condition of Seller as Buyer or such
      representatives may request and cause Seller’s officers, employees, consultants,
      agents, accountants and attorneys to cooperate fully with Buyer and such
      representatives and to make full disclosure of all information and documents
      requested by Buyer and/or such representatives; provided, however, that without
      the consent of the relevant employee, no personnel file of any employee of
      Seller shall be made available to Buyer or its representatives. Any such
      investigations and examinations shall be conducted at reasonable times and
      under
      reasonable circumstances and all confidential information shall be subject
      to
      the Confidentiality Agreement between Buyer and Seller dated June 23, 2005.
      No investigation by Buyer shall, however, diminish or obviate in any way, or
      affect Buyer’s right to rely upon, any of the representations, warranties,
      covenants or agreements of Seller contained in this Agreement. 

     

    
      
        
        

      

      
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    8.2  Cooperation;
      Consents.
      Prior to
      the Closing Date, each party shall cooperate with the other to the end that
      the
      parties shall (i) in a timely manner make all necessary filings with, and
      conduct negotiations with, all Authorities and other Persons the consent or
      approval of which, or a license or permit from which, is required for the
      consummation of the transactions contemplated herein and (ii) provide to
      each other party such information as the other party may reasonably request
      in
      order to enable it to prepare such filings and to conduct such negotiations.
      The
      Shareholders shall cause Seller to timely fulfill its obligations hereunder
      and
      shall not, either directly or indirectly through any of their representatives
      or
      otherwise, take any action to hinder, delay or frustrate the consummation of
      the
      transactions described herein. Without limiting the foregoing, the Shareholders
      shall not revoke, rescind, withdraw or cancel their authorization and approval
      of the transactions described herein. The parties shall also use their
      respective best efforts to expedite the review process and to obtain all such
      necessary consents, approvals, licenses and permits as promptly as practicable.
      To the extent permitted by Applicable Law, the parties shall request that each
      Authority or other Person whose review, consent or approval is requested treat
      as confidential all information which is submitted to it. Notwithstanding the
      foregoing, in no event shall Buyer, Seller or any of their Affiliates be
      obligated (i) to make any payments to third parties (other than filing fees
      payable to Authorities), (ii) to consent to any change in the terms of any
      agreement or arrangement which would be materially adverse to its interests
      or
      the interests of its Affiliates, (iii) to make any disposition, including,
      without limitation any disposition of any Subsidiary, asset, business or line
      of
      products or (iv) to comply with any condition or undertaking or take any action
      which is reasonably unacceptable to it, to obtain any such Required Governmental
      Approval or Required Contractual Consent. Seller and Buyer shall bear their
      own
      costs and expenses incurred or fees paid to Authorities to obtain the Required
      Governmental Approvals and Required Contractual Consents. Each Party shall
      bear
      its own costs and expenses (including fees paid to authorities) incurred to
      obtain such consents, approvals, licenses or permits.

     

    8.3  Preservation
      and Conduct of Business.
      From the
      date hereof through the Effective Time, Seller shall conduct the Business only
      in the ordinary course and consistent with prudent commercial practices and
      shall use its best efforts (i) to preserve the Business intact,
      (ii) to keep available to Buyer the services of its present officers,
      employees, agents and independent contractors, (iii) to pay its current
      obligations in a manner consistent with its past practices, and (iv) to preserve
      for the benefit of Buyer the goodwill of its customers, licensees, suppliers
      and
      others having business relations with it.
      If
      Seller requires additional funds in order to operate pending Closing, CVF and
      Heptagon shall from time to time advance such funds to Seller on a timely basis.
      Such advances shall be Excluded Liabilities and shall either be repaid by Seller
      or, if applicable, shall be converted into equity of Seller in accordance with
      Section
      4.5.

     

    8.4  Covenants.
      Without
      limiting the foregoing, from and after the execution of this Agreement through
      the Effective Time:

     

    
      
        
        

      

      
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    (a)  Affirmative
      Covenants.
      Seller
      shall:

     

    (i)  (A)
      maintain its assets in the ordinary course of its business consistent with
      its
      past practices in good operating order and condition, reasonable wear and tear,
      damage by fire and other casualty excepted, (B) promptly repair, restore or
      replace assets in the ordinary course of its business consistent with its past
      practices, and (C) upon any damage, destruction or loss to any of its assets,
      apply any and all insurance proceeds received with respect thereto to the prompt
      repair, replacement and restoration thereof to the condition of its assets
      before such event;

     

    (ii)  comply
      in
      all material respects with all Applicable Laws;

     

    (iii)  maintain
      in force (including necessary renewals thereof) the insurance policies listed
      on
Schedule
      6.13,
      except
      to the extent that they may be replaced with equivalent policies appropriate
      to
      insure its respective assets, properties and business to the same extent as
      currently insured at the same rates or at different rates approved by
      Buyer;

     

    (iv)  promptly
      notify Buyer of any lawsuits, claims, proceedings or investigations which after
      the date hereof are threatened or commenced against Seller or any officer,
      director, employee, consultant, agent or shareholder thereof, in their
      capacities as such, which, if decided adversely, could reasonably be expected
      to
      have a Seller Material Adverse Effect; and

     

    (v)  promptly
      notify Buyer in writing of any other action, event, condition or circumstance,
      or group of actions, events, conditions or circumstances, that results in,
      or
      could reasonably be expected to result in, a Seller Material Adverse Effect,
      other than changes in general economic conditions.

     

    (b)  Negative
      Covenants.
      Without
      Buyer’s prior written consent, which shall not be unreasonably withheld, Seller
      shall not:

     

    (i)  merge
      or
      consolidate with any other Person, acquire control of all or substantially
      all
      of the assets of any other Person, or take any steps incident to, or in
      furtherance of, any of such actions, whether by entering into an agreement
      or
      otherwise;

     

    (ii)  purchase,
      lease, license or otherwise acquire any material amount of rights or assets
      from
      any other Person other than in the ordinary course of its business and
      consistent with its past practices;

     

    (iii)  sell,
      assign, lease, license, transfer or otherwise dispose of, or mortgage, pledge
      or
      encumber (other than by a Permitted Lien) any material amount of its assets
      other than in the ordinary course of its business consistent with its past
      practices;

     

    (iv)  make
      or
      commit to make any capital expenditure if, after giving effect thereto, the
      aggregate of capital expenditures made or committed to be made after the date
      of
      this Agreement would exceed $25,000;

     

    
      
        
        

      

      
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    (v)  except
      in
      accordance with Section 8.3,
      create,
      incur, assume, or guarantee any indebtedness for borrowed money or enter into
      any “keep well” or other agreement to maintain any financial statement
      condition, in each case other than in the ordinary course of its business where
      the aggregate dollar amount of all of the foregoing by Seller does not exceed
      $50,000;

     

    (vi)  issue
      or
      sell any shares of its capital stock of any class or any other of its
      securities, or issue, grant or create any warrants, obligations, subscriptions,
      options, convertible securities, stock appreciation rights or other commitments
      to issue shares of capital stock;

     

    (vii)  amend
      its
      Articles of Incorporation, charter bylaws or other charter
      documents;

     

    (viii)  pay,
      discharge or satisfy any claim, liability or obligation (absolute, accrued,
      contingent or otherwise), other than the payment, discharge or satisfaction
      for
      fair and equivalent value in the ordinary course of its business consistent
      with
      its past practices of liabilities or obligations reflected or reserved against
      in its Company Balance Sheet or incurred in the ordinary course of its business
      since the Seller Balance Sheet Date or as otherwise contemplated by this
      Agreement;

     

    (ix)  amend,
      renew or terminate any Seller Material Contract or any License or Permit to
      which it is a party, or relinquish or fail to renew any Seller Material Contract
      or any License or Permit to which it is a party or waive, release or assign
      any
      material rights or claims thereunder, in each case in a manner that could
      reasonably be expected to have a Seller Material Adverse Effect;

     

    (x)  commit
      a
      material default under any term or provision of, or suffer or permit to exist
      any condition or event which, with notice or lapse of time or both, would
      constitute a material default by it under, any Seller Material Contract or
      any
      of its Licenses or Permits;

     

    (xi)  dispose
      of or permit to lapse any rights to the use of any Intellectual Property or
      dispose of or disclose any Intellectual Property not a matter of public
      knowledge, except for dispositions and lapses which, in the aggregate, do not
      have a Seller Material Adverse Effect; 

     

    (xii)  take
      any
      action which could reasonably be expected to have a Seller Material Adverse
      Effect; or

     

    (xiii)  agree
      to
      do any of the things described in the preceding clauses (i)-(xii).

     

    8.5  Interim
      Seller Financial Statements.
      From
      the date hereof through the Effective Time, within 30 calendar days following
      the end of each calendar month, Seller shall deliver to Buyer a Seller “in
      house” prepared summary of its earnings for the period from Seller Balance Sheet
      Date through the end of such calendar month and the applicable comparative
      period in the preceding fiscal year and balance sheet as of the end of such
      month, in each case accompanied by a certificate of the President of Seller
      to
      the effect that all such financial statements fairly present the financial
      position and results of operations of Seller as of the date or for the periods
      indicated, in accordance with GAAP, except as otherwise indicated in such
      statements or described in Section 6.5(a)
      and
      subject to year end audit adjustments. Such certificate shall also state that
      except as noted, from Seller Balance Sheet Date through the end of the previous
      month there has been no Seller Material Adverse Effect. 

     

    
      
        
        

      

      
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    8.6  Notices.
      From the
      date hereof through the Effective Time, Seller shall give to Buyer prompt
      written notice of the occurrence or existence of any event, condition or
      circumstance occurring which would constitute a violation or breach of this
      Agreement by Seller or the Shareholders or which would render inaccurate in
      any
      material respect any of Seller’s representations or warranties of Seller or the
      Shareholders contained herein. Upon the request of Buyer and, in any event,
      two
      (2) Business Days prior to Closing, Seller shall provide Buyer with a copy
      of
      each Contract entered into by Seller after the date hereof.

     

    8.7  Non-Competition.
      On or
      prior to the Closing Date, Seller and each Shareholder shall execute and deliver
      to Buyer the Non-Competition Agreement in the form of Exhibit B.

     

    8.8  Employment
      Matters.

     

      Certain
      Employee Matters.

     

    (i)  Except
      as
      provided in Section 3.1(c),
      Seller
      shall pay to all employees who are employed in the Business prior to or as
      of
      the Closing Date all compensation and benefits to which they are entitled
      (whether pursuant to Seller policy, employment agreements, severance or
      termination agreements, notice requirements under Applicable Law or any labor
      union or collective bargaining agreements) for periods prior to the Closing
      Date, including without limitation salaries, commissions, bonuses, deferred
      compensation, severance, insurance, pensions and profit sharing, and including
      any contingent payments, bonuses or incentive compensation accrued but unpaid
      through the Closing Date, and shall be responsible for severance payments to
      any
      such employees who are employed by Buyer in the Business after the Closing
      Date.

     

    (ii)  Buyer
      shall have the right, in its sole and absolute discretion (but not any
      obligation), to offer employment on or after Closing Date on, subject to
      Applicable Law, an “at will” basis to any of the employees of Seller, in each
      instance whether or not any of such persons is on disability or workers’
compensation leave as of the Closing Date, and in each instance, on terms and
      conditions determined by Buyer, in its sole and absolute discretion. In this
      regard, if Buyer so desires, from the date hereof through the Closing Date,
      Seller shall permit Buyer to approach and negotiate with any or all employees
      of
      Seller, including, but not limited to, managerial staff, in an effort to
      persuade them to continue in the employ of Seller pending the Closing and in
      the
      employ of Buyer thereafter, and Seller shall use reasonable efforts to assist
      Buyer in such negotiations. 

     

    (iii)  To
      the
      extent the consummation of the transactions contemplated herein (which may
      include the termination of Seller’s employees) requires the giving of any such
      notices, Seller shall be responsible for providing on a timely basis any and
      all
      required notices under Applicable Law to its employees or other Persons. Seller,
      CVF and Heptagon shall, subject to Section 13.8,
      jointly
      and severally indemnify and hold harmless Buyer, its Affiliates and their
      respective shareholders, members, directors, officers, managers, employees,
      agents, attorneys and successors-in-interest from and against any and all Losses
      which Buyer and any such other Persons may incur relating to or arising from
      any
      termination of any employee of the Business
      before Closing, including, without limitation, Losses related to severance
      expenses and payments, the failure to timely provide notice prior to
      termination, or costs and expenses and claims arising under any statute, rule,
      regulation, ordinance, policy, common law or contract.

     

    
      
        
        

      

      
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    (iv)  Notwithstanding
      any possible inferences to the contrary, nothing contained in this Agreement
      shall confer upon any employee of Seller who is hired by Buyer any right with
      respect to continuance of employment by Buyer, nor shall anything herein
      interfere with the right of Buyer to terminate the employment of any such
      employee at any time, with or without cause, or restrict Buyer in the exercise
      of its independent business judgment in modifying any of the terms and
      conditions of the employment of any such employee. No provision of this
      Agreement shall create any third party beneficiary rights in any employee of
      the
      Business, any beneficiary or dependents thereof, or any collective bargaining
      representative thereof with respect to the compensation, terms and conditions
      of
      employment and benefits that may be provided to any such employee by Buyer
      or
      under any benefit plan which Buyer may maintain. 

     

    8.9  No
      Solicitation or Negotiation.
      Unless
      and until this Agreement is terminated, neither Seller nor any Shareholder
      shall, nor shall any of them cause, suffer or permit any of their directors,
      officers, employees, representatives, agents, investment bankers, advisors,
      accountants or attorneys to, initiate or solicit, directly or indirectly, any
      inquiries or the making of any proposal that constitutes or could be reasonably
      expected to lead to an Alternative Proposal from any Person, or engage in any
      discussions or negotiations relating thereto, or accept any Alternative
      Proposal, or make or authorize any statement, recommendation or solicitation
      in
      support of any Alternative Proposal, or provide any confidential information
      or
      data to any Person with respect to any Alternative Proposal, or otherwise
      facilitate, attempt to seek or continue any of the foregoing. Seller or such
      Shareholder who receives any of the foregoing shall notify Buyer orally and
      in
      writing of the receipt of any such inquiries, offers or proposals (including
      term and conditions of any such offer or proposal, the identity of the Person
      making it and a copy of any written Alternative Proposal), as promptly as
      practicable and in any event within forty-eight (48) hours after the receipt
      thereof, and shall keep Buyer informed of the status and details of any such
      inquiry, offer or proposal.

     

    8.10  Risk
      of Loss.
      Seller
      hereby assumes all risk of loss, damage and destruction to all or any part
      of
      the Purchased Assets until the Effective Time from any cause whatsoever, whether
      or not Seller is insured therefor, including, but not limited to, fire, flood,
      accident, acts of God, earthquake, insurrection, riot, or other causes commonly
      referred to as force majeure events. Seller further assumes all risk until
      the
      Effective Time of any Seller Material Adverse Effect from any cause
      whatsoever.

     

    8.11  Transition
      Assistance.
      Seller
      will use reasonable efforts (without incurring costs) to assist Buyer in
      transitioning third party provided services such as internet access, utilities,
      phone service, etc. and in transitionary licensees.

     

    
      
        
        

      

      
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    8.12  Assistance
      in Transfer of Records and Data.
      Seller
      will fully cooperate with Buyer and make such advance preparations (including
      making copies in advance, collecting paperwork, coordinating information about
      computer systems and configurations) as are necessary so that Seller can
      deliver, and Seller shall deliver, the data, records and other Intellectual
      Property to Buyer on the Closing Date. 

     

    8.13  Change
      of Record Title.
      To the
      extent that record title to any of the Purchased Assets continues to be held
      by
      Seller in the name of Omphalos Recovery Systems, Inc., Seller shall, prior
      to
      the Closing Date, cause record title in such Purchased Assets to be changed
      to
      its current corporate name and provide Buyer with confirmation of such change
      in
      record title in form satisfactory to Buyer and its counsel. 

     

    8.14  Meeting
      of Seller’s Shareholders.
      Within
      one (1) Business Day of the execution of this Agreement by all parties, the
      Shareholders shall cause Seller to provide notice of a meeting of all
      shareholders of Seller upon 21 days’ notice in accordance with its by-laws and
      to provide such 21 days’ notice to all shareholders of Seller of the execution
      of this Agreement and the desire to complete the transaction which will be
      voted
      on such meeting. Seller has provided to Buyer a true and correct copy of the
      notice that it shall provide to its shareholders in accordance with the
      preceding sentence. Seller shall hold such meeting of all shareholders of Seller
      on the day specified in the notice and shall not adjourn or postpone the meeting
      without conducting a vote on the approval of this transaction.

     

    8.15  Bulk
      Sales.
      If
      Seller does not obtain an order under Section 3 of the Bulk Sales Act (Ontario)
      exempting the sale of the Purchased Assets from the application of such Act
      at
      least three (3) Business Days prior to the Closing Date, then Seller shall
      comply with the provisions of such Act and, in particular, Seller shall provide
      to Buyer duplicate originals of a statement of its secured and unsecured trade
      creditors in accordance with Section 4 of such Act at Closing and Buyer shall
      deduct from the Purchase Price and pay directly, or cause to be paid through
      Escrow by the Escrow Agent, to such creditors the amount of Seller’s
      indebtedness to them (other than any Assumed Liabilities) by certified cheques,
      provided that Buyer shall be under no obligation to pay any creditors if the
      aggregate amount and such indebtedness is more than the Purchase
      Price. 

     

    8.16  GST
      Registration.
      Prior
      to the Closing, Buyer shall duly register under subdivision (d) of Division
      I of
      Part IX of the Excise
      Tax Act (Canada)
      with respect to GST.

     

    8.17  [Intentionally
      omitted.]

     

    8.18  SIL.
      Upon
      Closing, and the payment by Buyer to Scientific Instrumentation, Ltd. of the
      amounts set forth in the Disbursement Schedule, Seller shall cause Scientific
      Instrumentation, Ltd. to deliver to Buyer all drawings, designs, sketches and
      other tangible and intangible assets relating to the manufacture of Seller’s ISi
      and other equipment, together with 14 completed ISi units, and all parts and
      supplies relating thereto. 

     

    8.19  Class
      B Stock.
      Seller
      shall use its best efforts to enter into an agreement prior to Closing with
      the
      holder of all of the issued and outstanding “Class B Stock” as to the amount
      payable to such holder in respect of such stock or other claims. Such agreement
      shall also contain a waiver from both Seller and the holder of the “Class B
      Stock” waiving the requirement in Seller’s articles of incorporation (as amended
      and supplemented) that the “Class B Stock” can only be redeemed sixty (60) days
      after Seller receives a redemption notice from the holder of the “Class B
      Stock”. In any event, Seller shall cause to be paid to such holder from the
      Purchase Price such amounts.

     

    
      
        
        

      

      
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    ARTICLE
      IX  

     

    CONDITIONS
      PRECEDENT TO THE OBLIGATION

     

    OF
      EACH PARTY TO CLOSE

     

    The
      obligations of Seller, the Shareholders and Buyer to consummate the transactions
      contemplated herein shall be subject to the fulfillment, at or prior to the
      Closing of all of the conditions set forth below in this ARTICLE
      IX.

     

    9.1  No
      Action or Proceeding.
      The
      consummation of the transactions contemplated herein shall not violate any
      Applicable Law. Further, no temporary restraining Order, preliminary or
      permanent injunction, cease and desist Order or other legal restraint preventing
      the consummation of the transactions contemplated herein, or imposing material
      damages in respect thereof, shall be in effect, nor shall there be any action
      or
      proceeding pending or threatened by any Person which seeks any of the foregoing
      or seeks to impose conditions which would be materially burdensome upon the
      Business, and which presents a substantial risk that the relief sought will
      be
      granted.

     

    9.2  Governmental
      and Other Approvals.
      Other
      than with respect to Deferred Consents, all Required Governmental Approvals
      and
      all Required Contractual Consents shall have been obtained without the
      imposition of any conditions that are or would be materially burdensome upon
      the
      Business. Other than with respect to Deferred Consents, all Required
      Governmental Approvals and Required Contractual Consents shall be in effect
      and
      all conditions and requirements prescribed by any of the same to be satisfied
      on
      or prior to the Closing Date shall have been satisfied.

     

    9.3  Shareholder
      Approval.
      The
      transactions contemplated by the Agreement shall have been approved by the
      shareholders of Seller at a meeting duly called for that purpose upon 21 days’
notice to such shareholders.

     

    ARTICLE
      X  

     

    CONDITIONS
      PRECEDENT TO THE OBLIGATION

     

    OF
      BUYER TO CLOSE

     

    The
      obligation of Buyer to consummate the transactions contemplated herein shall
      be
      subject to the fulfillment, at or before the Closing Date, of all of the
      conditions set forth below in this ARTICLE
      X.

     

    10.1  Representations
      and Warranties.
      The
      representations and warranties of Seller and the Shareholders contained in
      this
      Agreement and in each other Seller Document shall have been true and correct
      when made and shall be true and correct in all material respects on and as
      of
      the Closing Date with the same force and effect as though made on and as of
      the
      Closing Date, other than such representations and warranties as are made as
      of
      another specified date, which shall be true and correct as of such date;
      provided, however, that if any portion of any representation or warranty is
      already qualified by materiality, then for purposes of determining whether
      this
Section
      10.1
      has been
      satisfied, that portion of such representation or warranty as so qualified
      must
      be true and correct in all respects. At the Closing Seller and the Shareholders
      shall have delivered to Buyer certificates to such effect signed by the
      President and the Chief Financial Officer of Seller and each Shareholder, and
      addressed to Buyer.

    
      
        
        

      

      
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    10.2  Performance
      of Covenants.
      Each
      obligation of Seller or a Shareholder to be performed by it on or before the
      Closing Date pursuant to the terms of this Agreement and each other Seller
      Document shall have been duly performed on or before the Closing
      Date
      and such
      party shall have delivered to Buyer a certificate to such effect signed by
      its
      President and Chief Financial Officer and addressed to Buyer.

     

    10.3  No
      Adverse Change.
      There
      shall not have occurred between the date hereof and the Closing Date any Seller
      Material Adverse Effect, nor shall there have occurred any event, development
      or
      state of facts or circumstances (other than a change in general economic
      conditions) which could reasonably be expected to result in any of the
      foregoing, either alone or together with other such occurrences. At the Closing
      Seller shall have delivered to Buyer a certificate to such effect signed by
      the
      President and Chief Financial Officer of Seller and addressed to Buyer and
      its
      lenders.

     

    10.4  Opinion
      of Counsel to Seller.
      Buyer
      shall have received the favorable opinion of McCarter Grespan Robson Beynon
      Thompson LLP, counsel to Seller, dated as of the Closing Date, addressed to
      Buyer,
      in the
      form of Exhibit
      D.

     

    10.5  Litigation.
      No
      action, suit or proceeding shall have been instituted before any court or
      governmental body or instituted or threatened by any governmental agency or
      body
      which has or could reasonably be expected to have, in the good faith opinion
      of
      Buyer, an adverse effect on the Intellectual Property or other Purchased Assets
      or a Seller Material Adverse Effect.

     

    10.6  Pay-Off
      Letters.
      Seller
      or the Escrow Agent shall have received from each Shareholder and each Person
      who holds a Lien (other than a Permitted Lien) against any of the Purchased
      Assets a written commitment, in form satisfactory to Buyer and its counsel,
      to
      the effect that upon receipt by such party of payment in full of the obligations
      owed to such party as set forth in such commitment (which in the case of the
      Shareholders shall be subject to reduction by converting all or a portion of
      such obligation into equity of Seller as described in Section 4.5)
      such
      Party will release all liens and security interests in its favor encumbering
      the
      Purchased Assets. In this regard, Seller or the Escrow Agent shall also have
      received UCC termination statements, signed verification statements discharging
      the personal property security interests from each Shareholder and Person who
      holds a Lien (other than a Permitted Lien) against the Purchased Assets, as
      well
      as such other documents sufficient to release all other types of Liens and
      security interests registered against the Purchased Assets, with authority
      to
      file and/or record the same in the appropriate governmental offices upon payment
      of the amount set forth in such pay-off letter and shall have transmitted the
      same for filing and/or recordation.

     

    
      
        
        

      

      
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    10.7  Non-Competition
      Agreements.
      Seller
      and each Shareholder shall have executed and delivered to Buyer the
      Non-Competition Agreements contemplated in Section 8.7. 

     

    10.8  [Intentionally
      omitted.]

     

    ARTICLE
      XI  

     

    CONDITIONS
      PRECEDENT TO THE OBLIGATION

     

    OF
      SELLER TO CLOSE

     

    The
      obligation of Seller to consummate the transactions contemplated herein shall
      be
      subject to the fulfillment, at or before the Closing Date, of all the conditions
      set forth below in this ARTICLE
      XI.

     

    11.1  Representations
      and Warranties.
      The
      representations and warranties of Buyer contained in this Agreement and in
      each
      other Buyer Document shall have been true and correct when made and shall be
      true and correct in all material respects on and as of the Closing Date with
      the
      same force and effect as though made on and as of the Closing Date, other than
      such representations and warranties as are made as of another specified date,
      which shall be true and correct as of such date; provided, however, that if
      any
      portion of any representation or warranty is already qualified by materiality,
      for purposes of determining whether this Section
      11.1
      has been
      satisfied, that portion of such representation or warranty as so qualified
      must
      be true and correct in all respects; and provided, further, that no breach
      of
      Buyer’s representations or warranties shall constitute a failure of this
      condition precedent unless that breach, either alone or together with all other
      such breaches, is material to Seller. At the Closing Buyer shall have delivered
      to Seller a certificate to such effect signed by the President and Chief
      Financial Officer of Buyer and addressed to Seller.

     

    11.2  Performance
      of Covenants.
      Each of
      the obligations of Buyer to be performed by it on or before the Closing Date
      pursuant to the terms of this Agreement and each other Buyer Document shall
      have
      been duly performed in all material respects on or before the Closing Date;
      provided, however, that no breach of any such obligation or covenant shall
      constitute a failure of this condition precedent unless that breach, either
      alone or together with all other such breaches, is material to Seller. At the
      Closing Buyer shall have delivered to Seller a certificate to such effect signed
      by the President and Chief Financial Officer of Buyer and addressed to
      Seller.

     

    ARTICLE
      XII  

     

    COVENANTS
      AND AGREEMENTS OF THE PARTIES

     

    AFTER
      CLOSING

     

    12.1  Continuation
      of Existence.
      Seller
      shall maintain its corporate existence, powers and authority until at least
      the
      second anniversary of the Closing Date and during such period shall also
      maintain a net worth, determined in accordance with GAAP, of at least
      $1,000,000.

     

    12.2  Change
      Seller’s Name.
      Upon
      the Closing, Seller shall discontinue further use of the name “Gemprint”, or any
      other name or logo which is part of the Intellectual Property either alone
      or in
      combination with other words and all marks, trade dress, logos, monograms,
      domain names and other source identifiers similar to any of the foregoing or
      embodying any of the foregoing alone or in combination with other words
      (collectively the “Publication
      Names and Marks”).
      Immediately upon the Closing, the Company, the Shareholders and their Affiliates
      shall cease all use of the Publication Names and Marks on or in connection
      with
      all stationary, business cards, purchase orders, invoices and other similar
      correspondence and other documents of a contractual nature; provided, however,
      that where Seller is legally required to identify itself until its name has
      been
      changed, it may continue to use its corporate name. The Company and the
      Shareholders agree that, upon the Closing, neither the Company, the Shareholders
      nor any of their respective Affiliates shall have any rights in the Publication
      Names and Marks and neither the Company, the Shareholders nor any of their
      respective Affiliates shall contest the ownership or validity of any rights
      being assigned to Buyer hereunder in or to the Publication Names and Marks.
      Not
      later then one (1) Business Day after the Closing Date, Seller shall file
      articles of amendment with Industry Canada and otherwise take such corporate
      action as may be necessary to change its name to another name not including
      the
      word “Gemprint” or any other Publication Names and Marks. Seller shall provide
      Buyer, following the Closing, with a copy of the articles of amendment filed
      with Industry Canada.

     

    
      
        
        

      

      
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    12.3  NWT
      Receivable.
      If the
      NWT Receivable to be assigned to Buyer as part of the Purchased Assets has
      not
      been paid in full within six (6) months of the Closing Date, Seller shall,
      upon
      demand of Buyer, pay to Buyer the then outstanding balance of the NWT
      Receivable. Upon receipt of such payment, Buyer shall assign to Seller the
      right
      to collect such outstanding NWT Receivable (which shall not include any right
      to
      collect any receivable generated after the Closing Date). 

     

    12.4  Refunds
      and Remittances.
      After
      the Closing Date, if Seller or any of its Affiliates receives any refund or
      other amount which is a Purchased Asset, relates to an Assumed Liability or
      is
      otherwise properly due and owing to Buyer in accordance with the terms of this
      Agreement, Seller promptly shall remit, or shall cause to be remitted, such
      amount to Buyer.

     

    ARTICLE
      XIII  

     

    INDEMNIFICATION

     

    13.1  Indemnification
      by Seller, CVF and Heptagon.
      Seller,
      CVF and Heptagon shall, subject to Section
      13.8,
      jointly
      and severally, indemnify, defend and hold harmless (i) Buyer,
      (ii) each of Buyer’s Affiliates, assigns and successors in interest to the
      Purchased Assets, and (iii) each of their respective shareholders, members,
      directors, officers, managers, employees, agents, attorneys and representatives,
      from and against any and all Losses which may be incurred or suffered by any
      such party and which may arise out of or result from:

     

    (a)  provided
      Buyer’s claim therefor is instituted by written notice within the time period
      specified in Section 13.6,
      any
      breach of any representation, warranty, covenant or agreement of Seller or
      the
      Shareholders contained in this Agreement or in any other Seller Document and
      any
      breach of any such representation or warranty as if such representation and
      warranty were made on and as of the Closing Date, including, without limitation,
      any attempt (whether or not successful) by any Person to cause or require Buyer
      to pay, perform or discharge any debt, obligation, deficiency, liability or
      commitment the existence of which constitutes a breach of any such
      representation, warranty, covenant or agreement;

     

    
      
        
        

      

      
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    (b)  any
      litigation, arbitration, governmental investigation, suit, action or other
      proceeding referred to at Section
      6.8;

     

    (c)  any
      severance obligation of Buyer to any of Seller’s employees that Buyer employs in
      the Business following the Closing in excess of the obligation being assumed
      by
      Buyer pursuant to Section
      3.1(c);

     

    (d)  any
      Tax
      Liability of Seller, any liability not disclosed in Schedule
      6.5(e)
      or in
      the Disbursement Schedule or disclosed but in excess of $150,000 in the
      aggregate, and any other Excluded Liability;

     

    (e)  any
      other
      debt, liability or obligation of Seller, direct or indirect, fixed, contingent
      or otherwise, now or as of the Effective Time known or unknown, and whether
      or
      not then due or payable, which exists at or as of the Effective Time or which
      arises after the Effective Time but which is based upon or arises from any
      act,
      omission, transaction, circumstance, sale of goods or services, state of facts
      or other condition which occurred or existed on or before the Effective Time,
      except to the extent the same is expressly assumed by Buyer pursuant to
Section 3.1;
      

     

    (f)  any
      claim
      that any of the patents, software or other Intellectual Property owned by Seller
      and used by it infringes the rights of any other Person; 

     

    (g)  any
      claim
      by any holder of “Class B Stock” of Seller with respect to any notice of
      redemption, the redemption or attempted redemption of such stock, the payment
      of
      amounts due such holder or to which such holder is entitled, the approval of
      Seller’s shareholders to the transactions contemplated herein, any other matter
      which may relate to this Agreement or any other claim made by such holders;
      and

     

    (h)  any
      and
      all actions, suits, proceedings, claims, demands, assessments, judgments, costs
      and expenses, including, without limitation, legal fees and expenses, incurred
      in enforcing this indemnity.

     

    13.2   Indemnification
      by Buyer.
      Provided Seller’s claim therefor is instituted by written notice within the time
      period specified in Section
      13.7,
      Buyer
      shall indemnify, defend and hold harmless Seller from and against any Losses
      arising out of or due to (i) a breach of any representation, warranty,
      covenant or agreement of Buyer contained in this Agreement or in any Buyer
      Document and any breach of any such representation or warranty as if such
      representation and warranty were made on and as of the Closing Date; and
      (ii) any liability or obligation assumed by Buyer pursuant to Section
      3.1.

     

    13.3  Computation
      of Losses. For
      purposes of calculating any Losses suffered by an indemnified party pursuant
      to
Sections
      13.1,
      (h),
      or
      under any other specific indemnification covenant contained in this Agreement,
      the amount of the Losses suffered by the indemnified party shall be the net
      amount of Losses so suffered after giving effect to (i) any insurance proceeds
      recoverable with respect to such matter and (ii) any Tax Benefits attributable
      to such Losses.  Each
      Loss
      shall bear interest at 5% per annum from the date incurred to the date the
      indemnification payment with respect thereto is made.

     

    
      
        
        

      

      
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    13.4  Notice
      to Indemnifying Party.
      Any
      party (the “Indemnified
      Party”)
      seeking indemnification pursuant to Sections
      13.1
      or
1.1(h),
      or
      pursuant to any other indemnification covenant contained in this Agreement,
      shall promptly give the party from whom such indemnification is sought (the
      “Indemnifying
      Party”)
      written notice of the matter with respect to which such indemnification is
      sought, which notice shall specify in reasonable detail, if known, the amount
      or
      an estimate of the amount of the liability arising therefrom and the basis
      of
      the claim. Such notice shall be a condition precedent to any liability of the
      Indemnifying Party for indemnification hereunder, but the failure of the
      Indemnified Party to give prompt notice of a claim shall not adversely affect
      the Indemnified Party’s right to indemnification hereunder except
      to
      the extent that (but only to the extent that) the Indemnifying Party
      conclusively demonstrates that (i) but for such failure, the Indemnifying Party
      could have avoided all or a portion of the Losses in question through contest,
      compromise, settlement or otherwise or (ii) the Indemnifying Party has suffered
      a Loss it would not have suffered absent such failure.

     

    13.5  Third
      Party Claims.

     

    (a)  Defense
      by Indemnifying Party.
      In
      connection with any claim giving rise to indemnity hereunder resulting from
      or
      arising out of any claim or legal proceeding by a Person who is not a party
      to
      this Agreement (a “Third
      Party Claim”),
      the
      Indemnifying Party at its sole cost and expense may, upon written notice to
      the
      Indemnified Party, assume the defense of any such
      Third Party Claim (i) if it acknowledges to the Indemnified Party in writing
      its
      obligations to indemnify the Indemnified Party with respect to all elements
      of
      such Third Party Claim (subject to any limitations on such liability contained
      in this Agreement) and (ii) if it provides assurances, reasonably satisfactory
      to the Indemnified Party, that it will be financially able to satisfy such
      Third
      Party Claim in full if the same is decided adversely. If the Indemnifying Party
      assumes the defense of any Third Party Claim, it may use counsel of its choice
      to prosecute such defense, subject to the approval of such counsel by the
      Indemnified Party, which approval shall not be unreasonably withheld or delayed.
      The Indemnified Party shall be entitled to participate in (but not control)
      the
      defense of any such Third Party Claim, with its counsel and at its own expense;
      provided, however, that if the Indemnified Party, in its sole discretion,
      determines that there exists a conflict of interest between the Indemnifying
      Party (or any constituent party thereof) and the Indemnified Party (it being
      understood that the mere fact that the Indemnifying Party is required to
      indemnify the Indemnified Party hereunder shall not, absent any other conflict
      of interest, constitute a conflict of interest for this purpose), then the
      Indemnified Party (or any constituent party thereof) shall have the right to
      engage separate counsel, the reasonable costs and expenses of which shall be
      paid by the Indemnifying Party, but in no event shall the Indemnified Party
      be
      liable for the costs and expenses of more than one such separate
      counsel. If
      the
      Indemnifying Party assumes the defense of any such Third Party Claim, the
      Indemnifying Party shall take all steps necessary to pursue the resolution
      thereof in a prompt and diligent manner. In the event that the Indemnifying
      Party exercises the right to undertake any such defense against any such Third
      Party Claim as provided above, the Indemnified Party shall cooperate with the
      Indemnifying Party in such defense and make available to the Indemnifying Party
      all witnesses, pertinent records, materials and information in the Indemnified
      Party’s possession or under the Indemnified Party’s control relating thereto as
      are reasonably required by the Indemnifying Party without cost to the
      Indemnifying Party. The Indemnifying Party shall be entitled to consent to
      a
      settlement of, or the stipulation of any judgment arising from, any such Third
      Party Claim, with the consent of the Indemnified Party, which consent shall
      not
      be unreasonably withheld or delayed; provided, however, that no such consent
      shall be required from the Indemnified Party if (i) the Indemnifying Party
      pays
      or causes to be paid all Losses arising out of such settlement or judgment
      concurrently with the effectiveness thereof (as well as all other Losses
      theretofore incurred by the Indemnified Party which then remain unpaid or
      unreimbursed), (ii) in the case of a settlement, the settlement is conditioned
      upon a complete release by the claimant of the Indemnified Party and (iii)
      such
      settlement or judgment does not require the encumbrance of any asset of the
      Indemnified Party, invalidate, subordinate or result in a license of any
      Intellectual Property which is part of the Purchased Assets or impose any
      restriction upon its conduct of business. Notwithstanding the foregoing,
      however, Buyer, if it is the Indemnified Party, shall in all cases be entitled
      to control of the defense of any such Third Party Claim if it (a) may result
      in
      liabilities which, taken with other then existing claims by Buyer under this
      ARTICLE
      XIII,
      would
      not be fully indemnified hereunder, (b) may have an adverse impact on the
      operations or the financial condition of Buyer or the Business (including an
      effect on the Tax liabilities, earnings or ongoing business relationships of
      Buyer or the Business thereafter) even if the Indemnifying Party pays all
      indemnification amounts in full, (c) relates to any Intellectual Property
      which is part of the Purchased Assets, (d) seeks non-monetary relief
      (including, but not limited to, an order or injunction) which could adversely
      affect the Business, or (d) seeks criminal penalties, fines or sanctions against
      Buyer.

     

    
      
        
        

      

      
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    (b)  Defense
      by Indemnified Party.
      If the
      Indemnifying Party does not assume the defense of any such Third Party Claim,
      the Indemnified Party may defend against such Third Party Claim and settle
      or
      compromise the same, after giving notice thereof to the Indemnifying Party,
      on
      such terms as the Indemnified Party may deem appropriate, and the Indemnifying
      Party shall be entitled to participate in (but not control) such defense with
      its own counsel and at its own expense. The Indemnifying Party shall cooperate
      with the Indemnified Party in such defense and make available to the Indemnified
      Party, at the Indemnifying Party’s expense, all such witnesses, records,
      materials and information in the Indemnifying Party’s possession or under the
      Indemnifying Party’s control relating thereto as are reasonably required by the
      Indemnified Party. If the Indemnifying Party thereafter seeks to question the
      manner in which the Indemnified Party defended such Third Party Claim or the
      amount or nature of any such settlement, the Indemnifying Party shall have
      the
      burden to prove by a preponderance of the evidence that the Indemnified Party
      did not defend or settle such third-party claim in a reasonably prudent manner.
      The Indemnified Party shall not settle or compromise any Third Party Claim
      for
      which it is entitled to indemnification hereunder, unless suit shall have been
      instituted against it and the Indemnifying Party shall not have assumed the
      defense of such suit after notification as provided in Section
      13.4.

     

    13.6  Survival
      of Representations and Covenants of Seller and the Shareholders.
      Notwithstanding any right of Buyer fully to investigate the affairs of Seller
      and notwithstanding any actual knowledge of facts determined or determinable
      by
      Buyer pursuant to such investigation or right of investigation, Buyer shall
      have
      the right to rely fully upon the representations, warranties, covenants and
      agreements of Seller and the Shareholders contained in this Agreement or in
      any
      agreement, instrument or other document delivered to Buyer by Seller, the
      Shareholders or any of their representatives in connection with the transactions
      contemplated by this Agreement. With the sole exception of those covenants
      which
      are to be performed by Seller after the Closing (which shall survive until
      a
      claim thereon is barred by the applicable statute of limitations (including
      extensions and waivers thereof)), each representation, warranty, covenant and
      agreement of Seller and the Shareholders contained herein shall survive the
      execution and delivery of this Agreement and the Closing and shall thereafter
      terminate and expire on the second anniversary of the Closing Date, unless,
      on or before such date, Buyer has delivered to Seller and the Shareholders
      a
      written notice of a claim with respect to such representation, warranty,
      covenant or agreement; provided, however, that (i) the representations and
      warranties contained in Section
      6.4
      shall
      continue indefinitely and shall not terminate or expire, and (ii) the
      representations and warranties contained in Sections
      6.6,
      6.7(b)
      and 6.16
      shall
      terminate and expire ninety (90) days after the expiration of the statute of
      limitations (including extensions and waivers thereof) applicable to claims
      by
      third parties against Buyer in respect of the matter or matters which are the
      subject of such representations and warranties unless, on or before such date,
      Buyer has delivered to Seller a written notice of a claim with respect to such
      representation or warranty; and provided, further, that nothing contained herein
      shall terminate or limit in any manner whatsoever any rights Buyer has or may
      have in respect of any knowing or intentional misrepresentation by Seller or
      the
      Shareholders.

     

    
      
        
        

      

      
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    13.7  Survival
      of Representations and Covenants of Buyer.
      With
      the sole exception of those covenants which are to be performed by Buyer after
      the Closing (which shall survive until a claim thereon is barred by the
      applicable statute of limitations), each representation, warranty, covenant
      and
      agreement of Buyer contained herein shall survive the execution and delivery
      of
      this Agreement and the Closing and shall thereafter terminate and expire on
      the
      second anniversary of the Closing Date, unless, on or before such date, Seller
      has delivered to Buyer a written notice of a claim with respect to such
      representation, warranty, covenant or agreement. 

     

    13.8  Determination
      of Indemnification Amounts; Limitations.

     

    (a)  Indemnity
      Cap Amount.
      Except
      as otherwise provided herein, the aggregate liability of Seller, CVF and
      Heptagon for indemnification with respect to Section 13.1(f)
      or any
      breach of a representation or warranty shall not exceed the Indemnity Cap Amount
      and the individual liability of each Shareholder for such indemnification shall
      not exceed an amount equal to the Indemnity Cap Amount multiplied by the
      Indemnity Percentage set forth in Annex
      I
      for each
      Shareholder.

     

    (b)  Liability
      of Each Shareholder.
      The
      maximum liability of CVF or Heptagon with respect to any claim for Losses under
      Section 6.7(c)
      or with
      respect to Section
      13.1(f)
      or any
      breach of a representation or warranty shall be such Shareholder’s Indemnity
      Percentage of the Indemnity Cap Amount; provided, that the representation’s and
      warranties contained in ARTICLE
      VI(A),
      and any
      indemnification with respect to the Non-Competition Agreement, are made
      severally by each Shareholder as to himself or itself only and any Shareholder
      who has breached such Non-Competition Agreement or any such representation
      or
      warranty as to himself or itself (but only such Shareholder) shall be liable
      with respect to all Losses arising from the breach thereof without being limited
      by Section 13.8(a).

     

    (c)  Order
      of Payment.
      Buyer
      shall seek payment for any amounts due with respect to all claims for
      indemnification under Section 6.7(c)
      or
ARTICLE
      XIII
      solely
      as follows: (i) first, out of the Escrow in accordance with the provisions
      of
      the Escrow Agreement, and (ii) second, to the extent that amounts owing by
      the Seller and the Shareholders exceed the amount of the remaining funds in
      the
      Escrow then due to Seller, Buyer shall be entitled to seek payment from Seller
      and from each Shareholder directly for such Shareholder’s Indemnity Percentage
      of the amount of such excess, subject to the limitation in Section
      13.8(a).

     

    
      
        
        

      

      
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    13.9  No
      Waiver Relating to Claims for Fraud.
      The
      liability of any party under this ARTICLE
      XIII
      shall be
      in addition to, and not exclusive of, any other liability that such party may
      have at law or equity solely with respect to such party’s fraudulent acts or
      omissions, if any. None of the provisions set forth in Section 13.8
      shall be
      deemed a waiver by any party to this Agreement of any right or remedy which
      such
      party may have at law or equity solely with respect to any other party’s
      fraudulent acts or omissions, nor shall any such provisions limit, or be deemed
      to limit (i) the amounts of recovery sought or awarded in any such claims for
      fraud, (ii) the time period during which a claim for fraud may be brought or
      (iii) the recourse which any such party may seek against another party with
      respect to a claim for fraud. 

     

    13.10  Disbursements.
      Twelve
      (12) months from the Closing Date, Escrow Agent shall release from Escrow to
      Seller an amount equal to the difference between (a) $212,500 and
      (b) the sum of (i) the disbursements made from Escrow prior to such
      date, and (ii) the sum of all Losses subject to then-pending
      indemnification claims made under this Agreement.

     

    ARTICLE
      XIV  

     

    TERMINATION;
      REMEDIES

     

    14.1  Termination
      Without Default.
      Anything herein to the contrary notwithstanding, this Agreement and the
      transaction contemplated by this Agreement shall terminate at the close of
      business on February 28, 2006, unless extended by the mutual consent in
      writing of the parties, and, except as specified in Section
      14.2,
      may
      otherwise be terminated before the Closing only as follows (and in no other
      manner):

     

    (a)  Mutual
      Consent.
      By the
      mutual consent in writing of the parties.

     

    (b)  Conditions
      to Buyer’s Performance Impossible.
      By
      Buyer upon written notice to Seller if any event occurs which would render
      impossible the satisfaction of one or more conditions to the obligations of
      Buyer set forth in ARTICLE IX
      or
Sections 10.3,
      10.4
      or
10.5.

     

    (c)  Conditions
      to Seller’s Performance Impossible.
      By
      Seller upon written notice to Buyer if any event occurs which would render
      impossible the satisfaction of one or more conditions to the obligations of
      Seller set forth in ARTICLE IX. 

     

    (d)  Alternative
      Proposal.
      By
      Buyer upon written notice to Seller and the Shareholders of a default under
      Section 8.9,
      or any
      of Seller, CVF or Heptagon accepts an Alternative Proposal or publicly announces
      that any of them are considering whether to accept an Alternative
      Proposal. 

     

    
      
        
        

      

      
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    (e)  Buyer
      Option.
      By
      Buyer
      upon written notice to Seller, given at any time after December 31, 2005,
      if the Closing has not occurred by December 31, 2005 other than as a result
      of a default by Buyer in the performance of its obligations
      hereunder.

     

    14.2  Termination
      Upon Default.
      Either
      party may terminate this Agreement by giving notice to the other on or prior
      to
      the Closing Date, without prejudice to any rights or obligations it may have,
      if
      (i) after written notice of the default and the passage of (A)
      ten
      (10)
      Business Days, in the case of a default which is by its nature incapable of
      being cured, or (B) thirty (30) Business Days, or such shorter period as may
      end
      upon the scheduled Closing Date, in the case of a default which by its nature
      is
      capable of being cured, the other party has failed in the due and timely
      performance of any of its covenants or agreements herein contained (other than
      those contained in Section 8.9
      or there
      shall have been a breach of the other’s warranties or representations herein
      contained, and (ii) such failure or breach could reasonably be expected to
      give
      the
      non-defaulting party grounds not to close pursuant to Sections
      10.1,
      10.2,
      11.1
      or
11.2,
      as the
      case may be. In any such event the party who is not guilty of the breach may,
      in
      addition to all of its other rights and remedies, recover all Losses incurred
      by
      it from the party responsible for the breach.

     

    14.3  Specific
      Performance.
      The
      parties acknowledge that the Purchased Assets are unique and cannot be obtained
      by Buyer except from Seller and for that reason, among others, Buyer will be
      irreparably damaged in the absence of the consummation of this Agreement.
      Therefore, in the event of any breach by Seller or the Shareholders of this
      Agreement, Buyer shall have the right, at its election, to obtain an order
      for
      specific performance of this Agreement, without the need to post a bond or
      other
      security, to prove any actual damage or to prove that money damages would not
      provide an adequate remedy.

     

    14.4  Attorneys’
      Fees.
      If
      Seller or Buyer shall bring an action against the other by reason of any alleged
      breach of any covenant, provision or condition hereof, or otherwise arising
      out
      of this Agreement (including, without limitation, in connection with an
      arbitration proceeding brought pursuant to Section
      4.2)
      , the
      unsuccessful party shall pay to the prevailing party all attorneys’ fees and
      costs actually incurred by the prevailing party, in addition to any other relief
      to which it may be entitled. As used in this Section
      14.4
      and
      elsewhere in this Agreement, “actual attorneys’ fees” or “attorneys’ fees
      actually incurred” means the full and actual cost of any legal services actually
      performed in connection with the matter for which such fees are sought
      calculated on the basis of the usual fees charged by the attorneys performing
      such services, and shall not be limited to “reasonable attorneys’ fees” as that
      term may be defined in statutory or decisional authority. 

     

    14.5  Waiver
      of Immunity.
      To
      the
      extent that Seller may be entitled, in any jurisdiction in which judicial
      proceedings may at any time be commenced with respect to this Agreement or
      any
      other Seller Document, to claim for itself or its revenues, assets or properties
      immunity (whether on grounds of sovereignty or otherwise) from suit, from the
      jurisdiction of any court from attachment prior to judgment, from attachment
      in
      aid of execution of judgment or from execution of judgment and to the extent
      that in any jurisdictions there may be attributed such an immunity (whether
      or
      not claimed), Seller hereby irrevocably agrees not to claim and hereby
      irrevocably waives such immunity in respect of suit, jurisdiction of any court,
      attachment prior to judgment, attachment in aid of execution of judgment and
      execution of judgment, and consents to the giving of any relief in any legal
      action, suit or proceeding by execution or any other form of process for the
      enforcement of any judgment against Seller or its properties or assets. The
      foregoing waiver and consent are intended to be effective to the fullest extent
      now or hereafter permitted by applicable law in any jurisdiction in which any
      suit, action or proceeding may be commenced with respect to this Agreement
      or
      any other Seller Document. Nothing expressed or implied in this Section
      14.5
      is
      intended, nor shall be construed, to constitute an agreement respecting or
      an
      expressed or implied waiver by, Seller of any such claim of immunity (i) with
      respect to a claim or action brought by Buyer which is not with respect to
      any
      of (A) this Agreement, (B) any other Seller Document or (C) the transactions
      contemplated by this Agreement, regardless of what forum such claim or action
      is
      asserted, or (ii) with respect to any claim or action brought by a party who
      is
      not a party to this Agreement, regardless of what forum such
      claim or action is asserted. The parties do not intend to grant, either
      expressly or by implication, nor shall this Section
      14.5
      be
      construed to confer, any rights on any parties not a party hereto. 

     

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

    ARTICLE
      XV  

     

    EXPENSES;
      CONFIDENTIALITY

     

    15.1  Expenses.
      Except
      as otherwise expressly set forth herein, each party shall bear their own direct
      and indirect expenses incurred in connection with the negotiation and
      preparation of this Agreement, the other Seller Documents and Buyer Documents
      and the consummation and performance of the transactions contemplated herein
      and
      therein.
      Seller
      and Buyer shall each be responsible for one-half of the Escrow
      costs.

     

    15.2  Confidentiality.
      Except
      in connection with any dispute between the parties and subject to any obligation
      to comply with (i) any Law, (ii) any rule or regulation of any
      Authority or securities exchange or (iii) any subpoena or other legal
      process to make information available to the Persons entitled thereto, whether
      or not the transactions contemplated herein shall be concluded, all information
      obtained by Seller or any Shareholder, on the one hand, or Buyer, on the other
      hand, about the other, and all of the terms and conditions of this Agreement,
      shall, for a period of five (5) years after the date of this Agreement, be
      kept
      in confidence by each party, and each party shall cause its shareholders,
      members, partners, directors, officers, managers, employees, agents and
      attorneys to hold such information confidential. Such confidentiality shall
      be
      maintained to the same degree as such party maintains its own confidential
      information and shall be maintained until such time, if any, as any such data
      or
      information either is, or becomes, published or a matter of public knowledge;
      provided, however, that the foregoing shall not apply to any information
      obtained by Buyer through its own independent investigations of Seller or
      received by Buyer from a source not known by Buyer to be bound by a
      confidentiality agreement with, or other contractual, legal or fiduciary
      obligation of confidentiality to, Seller nor to any information obtained by
      Buyer which is generally known to others engaged in the trade or business of
      Seller; and provided, further, that from and after the Closing, Buyer shall
      be
      under no obligation to maintain confidential any such information concerning
      Seller. In the event either party becomes legally compelled to disclose any
      such
      information, it shall promptly provide the other with written notice of such
      requirement so that the other may seek a protective order or other remedy.
      If
      this Agreement shall be terminated for any reason, each party shall return
      or
      cause to be returned to the other all written data, information, files, records
      and copies of documents, worksheets and other materials obtained by such party
      in connection with this Agreement. The
      provisions of this Section
      15.2
      shall
      survive the Closing and continue indefinitely thereafter.

     

    
      
        
        

      

      
        55

        
          

        

      

      
        
        

      

    

    15.3  Publicity.
      Up to
      (and including) the Closing Date, no publicity release or announcement
      concerning this Agreement or the transactions contemplated herein shall be
      issued without advance written approval of the form and substance thereof by
      Buyer and Seller; provided, however, that such restrictions shall not apply
      to
      any disclosure required by Authorities, Applicable Law or the rules of any
      securities exchange which may be applicable (except
      that each of Buyer and CVF shall provide to the other draft of any release
      or
      announcement at least one (1) calendar day prior to making such release or
      announcement). For a period of ten (10) days after the Closing Date, the parties
      shall consult with each other before issuing any press release or public
      statement with respect to this Agreement or the transactions contemplated
      herein, and, except as may be required by Applicable Law or the rules of any
      securities exchange which may be applicable (except that each of Buyer and
      CVF
      shall provide to the other draft of any release or announcement at least one
      (1)
      calendar day prior to making such release or announcement), will not issue
      any
      such press release or public statement prior to such consultation. Neither
      Seller nor any officer, employee, director, stockholder or other representative
      thereof shall, at any time from and after the Closing, issue any press release
      or make any public statement that is critical, disparaging or otherwise could
      reasonably be interpreted as being negative with respect to Buyer or any of
      its
      Affiliates or their respective businesses, financial condition, directors,
      officers, managers or employees.

     

    ARTICLE
      XVI

     

    NOTICES

     

    16.1  Notices.
      All
      notices, requests and other communications hereunder shall be in writing and
      shall be delivered by courier or other means of personal service (including
      by
      means of a nationally recognized courier service or a professional messenger
      service), or sent by or telecopy or mailed first class, postage prepaid, by
      overnight mail by a nationally recognized service, in all cases, addressed
      to: 

     

    If
      to
      Buyer, to: Collectors
      Universe, Inc.

     

    P.O.
      Box
      6280

    Newport
      Beach, California 92658

    Facsimile:
      (949) 567-1140

     

    Attention: Chief
      Executive Officer 

     

    with
      a
      copy to: Loeb
      & Loeb LLP

    10100
      Santa Monica Blvd., Suite 2200

    Los
      Angeles, California 90067

    Facsimile:
      (310) 282-2200

     

    Attention:
      Christopher J. Kelly, Esq.

     

     

    
      
        
        

      

      
        56

        
          

        

      

      
        
        

      

    

    If
      to
      Seller, to: Gemprint
      Corporation 

     

    c/o
      CVF
      Technologies Corporation

    8604
      Main
      Street, Suite I

    Williamsville,
      NY 14221

    Facsimile:
      (716) 565-4717

    Attention:
      Jeff Dreben

    with
      a
      copy to: McCarter
      Grespan Robson Beynon Thompson LLP

    675
      Riverbend Drive

    Kitchener,
      Ontario,

    Canada
      N2K 353

    Facsimile:
       (519)
      742-1841

    Attention:
      Paul E. Grespan, Esq.

     

    If
      to
      CVF: CVF
      Technologies Corporation

    8604
      Main
      Street, Suite I

    Williamsville,
      NY 14221

    Facsimile:
      (716) 565-4717

    Attention:
      Jeff Dreben

     

    If
      to
      Heptagon: Heptagon
      Investments Ltd.

    c/o
      MC-Patrimoine SA

    5
      Rue
      Cesar Soulie, 1260 Nyon

    Switzerland

    Facsimile:
      (41) 22-362-6782

     

    If
      to the
      Shepherd Group: 1456733
      Ontario, Inc.

    144
      Front
      Street West, Suite 400

    Toronto,
      Ontario, Canada M5J 2L7

    Facsimile:
      (416) 599-7800

    Attention:
      John Shepherd

     

    All
      notices, requests and other communications shall be deemed given on the date
      of
      actual receipt or delivery as evidenced by written receipt, acknowledgement
      or
      other evidence of actual receipt or delivery to the address specified above.
      In
      case of service by telecopy, a copy of such notice shall be personally delivered
      or sent by overnight mail, in the manner set forth above, within three
      (3) Business Days thereafter. Either party hereto may from time to time by
      notice in writing served as set forth above designate a different address or
      a
      different or additional person to which all such notices or communications
      thereafter are to be given.

     

    ARTICLE
      XVII

     

    MISCELLANEOUS

     

    17.1  Further
      Assurances.
      Each of
      the parties shall use its reasonable and diligent best efforts to proceed
      promptly with the transactions contemplated herein, to fulfill the conditions
      precedent for such party’s benefit or to cause the same to be fulfilled and to
      execute such further documents and other papers and perform such further acts
      as
      may be reasonably required or desirable to carry out the provisions hereof
      and
      the transactions contemplated herein.

     

    
      
        
        

      

      
        57

        
          

        

      

      
        
        

      

    

    17.2  Modifications
      and Amendments; Waivers and Consents.
      At any
      time prior to the Closing Date or termination of this Agreement, Buyer, on
      the
      one hand, and Seller, on the other hand, may, by written agreement:

     

    (a)  extend
      the time for the performance of any of the obligations or other acts of the
      other party hereto;

     

    (b)  waive
      any
      inaccuracies in the representations and warranties made by the other party
      contained in this Agreement or any other agreement or document delivered
      pursuant to this Agreement; and

     

    (c)  waive
      compliance with any of the covenants or agreements of the other party contained
      in this Agreement. However, no such waiver shall operate as a waiver of, or
      estoppel with respect to, any subsequent or other failure. Whenever this
      Agreement requires or permits a waiver or consent by or on behalf of any party
      hereto, such waiver or consent shall be given in writing.

     

    17.3  Entire
      Agreement.
      This
      Agreement (including the Exhibits hereto and Schedules) and the agreements,
      documents and instruments to be executed and delivered pursuant hereto or
      referred to herein are intended to embody the final, complete and exclusive
      agreement among the parties with respect to the purchase of the Purchased Assets
      and related transactions; are intended to supersede all prior agreements,
      understandings and representations written or oral, with respect thereto; and
      may not be contradicted by evidence of any such prior or contemporaneous
      agreement, understanding or representation, whether written or
      oral.

     

    17.4  Governing
      Law and Venue.
      This
      Agreement is to be governed by and construed in accordance with the laws of
      the
      State of Delaware applicable to contracts made and to be performed wholly within
      such State, and without regard to the conflicts of laws principles thereof.
      Any
      suit brought hereon, whether in contract, tort, equity or otherwise, shall
      be
      brought in the state or federal courts sitting in New York County, New York,
      the
      parties hereto hereby waiving any claim or defense that such forum is not
      convenient or proper. Each party hereby agrees that any such court shall have
      in
      personam jurisdiction over it, consents to service of process in any manner
      prescribed in ARTICLE
      XVI
      or in
      any other manner authorized by New York law, and agrees that a final judgment
      in
      any such action or proceeding shall be conclusive and may be enforced in other
      jurisdictions by suit on the judgment or in any other manner specified by
      law.

     

    17.5  Binding
      Effect.
      This
      Agreement and the rights, covenants, conditions and obligations of the
      respective parties hereto and any instrument or agreement executed pursuant
      hereto shall be binding upon the parties and their respective successors,
      assigns and legal representatives. Neither this Agreement, nor any rights or
      obligations of any party hereunder, may be assigned by a party without the
      prior
      written consent of the other party; provided, however, that prior to or
      following the Closing, this Agreement and any rights and obligations of Buyer
      hereunder, and under any Buyer Documents may, without the prior written consent
      of Seller, be assigned and delegated by Buyer to any Person affiliated with
      Buyer or pledged or hypothecated
      to any lender(s) of Buyer or any such Affiliate, and following the Closing,
      this
      Agreement and any rights and obligations of Buyer hereunder and under any Buyer
      Documents may also be assigned and delegated by Buyer, without the prior written
      consent of Seller, to any successor-in-interest of Buyer to the Business or
      the
      Purchased Assets or to a substantial portion thereof; provided, however, that
      no
      delegation by Buyer of any such obligation shall relieve Buyer of liability
      therefor.

     

    
      
        
        

      

      
        58

        
          

        

      

      
        
        

      

    

    17.6  Counterparts/Facsimile
      Signatures.
      This
      Agreement may be executed simultaneously in any number of counterparts and
      by
      facsimile signatures, each of which shall be deemed an original but all of
      which
      together shall constitute one and the same instrument. In making proof of this
      Agreement it shall not be necessary to produce or account for more than one
      counterpart.

     

    17.7  Section
      Headings.
      The
      section headings of this Agreement are for convenience of reference only and
      shall not be deemed to alter or affect any provision hereof.

     

    17.8  Currency.
      All
      payments required to be made pursuant to this Agreement, including, without
      limitation, all amounts which in the aggregate comprise the Purchase Price
      and
      adjustments thereto made subsequent to the Closing, and amounts required to
      be
      paid in accordance with any indemnity provisions of this Agreement, shall be
      made in United States dollars.

     

    17.9  Severability.
      In the
      event that any provision or any part of any provision of this Agreement shall
      be
      void or unenforceable for any reason whatsoever, then such provision shall
      be
      stricken and of no force and effect. However, unless such stricken provision
      goes to the essence of the consideration bargained for by a party, the remaining
      provisions of this Agreement shall continue in full force and effect, and to
      the
      extent required, shall be modified to preserve their validity.

     

    17.10  No
      Third Party Rights.
      Nothing
      in this Agreement, whether express or implied, is intended to confer any rights
      or remedies under or by reason of this Agreement on any Persons other than
      the
      parties to it and their respective successors and assigns, nor is anything
      in
      this Agreement intended to relieve or discharge the obligation or liability
      of
      any third Persons to any party to this Agreement, nor shall any provision give
      any third Persons any right of subrogation or action over against any party
      to
      this Agreement.

     

    17.11  Construction.
      The
      language in all parts of this Agreement shall in all cases be construed simply,
      according to its fair meaning, and not strictly for or against any of the
      parties hereto. Without limitation, there shall be no presumption against any
      party on the ground that such party was responsible for drafting this Agreement
      or any part thereof. 

     

    17.12  Time.
      Time
      shall be of the essence hereof.

     

    
      
        
        

      

      
        59

        
          

        

      

      
        
        

      

    

    17.13  No
      Contra Proferentem.
      The
      parties acknowledge and agree that they have each had ample time and opportunity
      to obtain legal and other professional advice which may deem necessary or
      desirable with respect to this Agreement and the transactions contemplated
      hereunder and that in continuing any provision in this Agreement or any document
      contemplated hereby, the legal principle of “contra proferentem” shall not apply
      or be applied.

     

    [signatures
      on following page]

     

    

    
      
        
          
            	 	 	 

          

          

        

        
        

      

      
        60

        
          

        

      

      
        
        

        
          

        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
      the
      day and year first above written.

     

    COLLECTORS
      UNIVERSE, INC.

     

    a
      Delaware corporation

     

    By:
       

    Its: 

     

    GEMPRINT
      CORPORATION

     

    a
      Canadian corporation

     

    By:
       

    Its: 

     

    

     

    CVF
      TECHNOLOGIES CORPORATION

     

    a
      Nevada
      corporation

     

    By:
       

    Its: 

     

    

     

    HEPTAGON
      INVESTMENTS LTD.

     

    a
      British
      Virgin Islands corporation

     

    By:
       

    Its: 

     

    

     

    1456733
      ONTARIO, INC.

     

    an
      Ontario, Canada corporation

     

    By:
       

    Its: 

     

    

     

    

    
      
        
          
            	 	
                    S-1

                  	 

          

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

     

    ANNEX
      I

     

    

    
      	
               

              Shareholder

            	
               

              Shares
                of Capital Stock

            	
               

              Indemnity
                Percentage

            
	
               

              CVF

            	
               

              31,536,066
                shares of “Class A Stock”

            	
               

              93.6%

            
	
               

              Heptagon

            	
               

              2,162,974
                shares of “Class A Stock”

            	
               

              6.4%

            
	
               

              Shepherd
                Group

            	
               

              5,614,743
                shares of “Class A Stock”

            	
               

              0
                %

            

    

     

     

     

     

     

     

     

    
      
        A-1

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