Document:

EXHIBIT 10.4
                                                                    ------------

                                LICENSE AGREEMENT

                         LAURA ASHLEY MANUFACTURING B.V.

                                       AND

                         USA OPTICAL DISTRIBUTORS, INC.

     Certain portions of this agreement and the amendments thereto marked by
[***]have been omitted pursuant to previously granted Orders Granting
Confidential Treatment Under the Securities Exchange Act of 1934 and were filed
separately with the Securities and Exchange Commission pursuant to the initial
requests for confidential treatment.

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                                LICENSE AGREEMENT

THIS AGREEMENT is made the 28th day of May, 1991.

BETWEEN

1.   LAURA ASHLEY MANUFACTURING B.V., a company incorporated in the Netherlands
     and having its principal place of business at Luchthavenweg 24, 5507 SK
     Veldhoven, The Netherlands (hereinafter called "the Licensor") of the one
     part; and

2.   USA OPTICAL DISTRIBUTORS, INC., a company incorporated in the State of
     California having its principal office at 419A South Hindry Avenue,
     Inglewood, CA 90301, U.S.A. (hereinafter called "the Licensee") of the
     other part

WHEREAS:

1.   The Licensor is a member of the Laura Ashley group of companies which
     designs, manufactures and retails home furnishing products and garments,
     marketed and sold in many countries of the world, including North America.

2.   The Licensor is the registered proprietor of the trademarks LAURA ASHLEY
     and a distinctive oval device.

3.   The Licensor is the proprietor of a wide range of distinctive textile
     designs and patterns featured on Laura Ashley home furniture products and
     garments.

4.   The Licensee is an established designer, importer and wholesaler of
     fashionable eyeglass frames, including in its range of eyewear styles a
     portfolio of recognized brand names.

5.   The Licensee now wishes to design, import and sell in North America certain
     styles of eyeglass frames under the LAURA ASHLEY brand name.

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IT IS THEREFORE AGREED AND DECLARED AS FOLLOWS:

1.   DEFINITIONS

As used in this Agreement:

1.1  "Affiliate" of a party means a company which is affiliated to such party by
     one or more shareholdings such that, directly or indirectly, one of them is
     subject to the control of the other or both are subject to the common
     control of a third party;

1.2  "Approved Outlets" means first class retail outlets of a quality and
     standing consistent both with the high reputation of the Licensor for
     design, merchandising excellence and service and having the image and
     market positioning of the LAURA ASHLEY brand;

1.3  "Commencement Date" means September 1, 1991, or such later date prior to
     October 1, 1991 when the Licensor notifies the Licensee of its approval of
     the Marketing Plan for the First Contract Year.

1.4  "Contract Term" means the term of this Agreement as provided in Clause 13;

1.5  "Contract Year" means a period of twelve consecutive months from 1st
     February to 31st January during the Contract Term save that the first
     Contract Year shall be deemed to commence on the Commencement Date and to
     end on 31st January 1993 and the last Contract Year shall be deemed to
     commence on 1st February of the Year during which the Contract Term
     terminates and to end on the date of actual termination;

1.6  "Laura Ashley Designs" means surface prints originated or developed by the
     Licensor or its Affiliates;

1.7  "Laura Ashley Group" means the Licensor and its Affiliates referred to
     collectively;

1.8  "Laura Ashley Outlets" means outlets operated by a member of the Laura
     Ashley Group in the Territory under the LAURA ASHLEY name with the consent
     of the Licensor;

1.9  "Licensee" means USA Optical Distributors, Inc., and any of its Affiliates;

1.10 "Licensor" means Laura Ashley Manufacturing B.V.;

1.11 "Marketing Plan" means a plan for marketing Products prepared by the
     Licensee and agreed with the Licensor for each Contract Year as provided in
     Clause 6;

1.12 "Minimum Royalty" means the minimum sum payable to the Licensor by the
     Licensee by way of Royalty in respect of each Contract Year as provided in
     sub-clause 9.3;

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1.13 "Net Sales" means the gross amount of wholesale sales of Products invoiced
     by the Licensee less any deductions for returns, discounts or allowances
     granted to customers, all of which are reasonable and customary in the
     eyewear industry in the Territory, and less any bad debts, as that term is
     recognized under generally accepted accounting principles in the Territory;

1.14 "Parties" means the Licensor and the Licensee;

1.15 "Products" means ophthalmic frames for prescription eyeglasses, eyeglass
     cases and other accessories and related items, all of which are agreed as
     Products intended for sale bearing the Trademarks, and which are listed in
     Schedule I to this Agreement;

1.16 "Royalty" means the Royalty payable by the Licensee to the Licensor and
     described in Clause 9;

1.17 "Selected Designs" means Laura Ashley Designs selected from time to time by
     agreement between the Parties for application to the Products or packaging
     or promotional materials therefor;

1.18 "Territory" means the United States of America, its territories and
     possessions and Canada;

1.19 "Trademarks" means the trademarks of the Licensor listed in Schedule II,
     together with such additional trademarks (if any) as may be included in
     this Agreement from time to time by agreement between the parties;

2.   CONDITION PRECEDENT

     The Licensor's approval of the Marketing Plan for the first Contract Year
     under sub-clause 6.4 is a condition precedent to the Licensor's grant of
     the license under clause 3, and to all other rights, duties and obligations
     under this Agreement which are unrelated to the Licensor's approval of the
     Licensee's first Marketing Plan or to the Parties' confidentiality
     obligations under clause 10. If the Licensor does not approve the
     Licensee's first Marketing Plan by October 1, 1991, then this Agreement
     shall (unless the Parties otherwise agree in writing) terminate on that
     date. Upon such a termination, the parties shall have no further rights,
     duties or obligations under this Agreement, except the confidentially
     obligations under clause 10.

3.   GRANT OF LICENSE

3.1  With effect from the Commencement Date the Licensor hereby grants to the
     Licensee exclusive rights throughout the Contract Term

     (a)  to use the Trademarks on or in connection with the importation,
          distribution, marketing and sale of Products, and

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     (b)  to apply Selected Designs to packaging or promotional materials for
          the Products in the Territory upon the terms and conditions of this
          Agreement.

3.2  Whilst the Licensor shall not, throughout the Contract Term, grant to any
     third party the right to use the Trademarks for the sale of Products within
     the Territory, nothing herein shall restrict the use, licensing,
     manufacture or sale (as the case may be) by the Licensor or any Licensor
     Affiliate either in the Territory or elsewhere of any goods other than
     Products.

4.   PRODUCT QUALITY AND APPROVAL

4.1  The type and quality of each item to be imported, marketed, distributed or
     sold as a Product by the Licensee shall be the subject of discussion and
     agreement with the Licensor prior to its adoption as a Product.

4.2  The Licensee may propose new styles to the Licensor at two possible times:
     either at the same time as it is proposing a new Marketing Plan pursuant to
     sub-clause 6.5, or at other times during the course of any Contract Year.
     Styles proposed by the Licensee at the same time as the Marketing Plan
     shall fall within categories of Products approved in that Marketing Plan.
     Styles proposed at any other time during the Contract Year must fall within
     categories of Products previously approved by the Licensor as part of the
     most recently approved Marketing Plan.

4.3  Each style approved by the Licensor as a Product shall be included in
     Schedule I.

4.4  Approval of a Product shall be evidenced by the authorized officers of the
     Licensor and Licensee initialing that item when it is newly included
     therein; PROVIDED THAT, without prejudice to the Licensor's absolute right
     to approve the quality of any Product sold by the Licensee as elsewhere
     herein provided, the Licensor's approval of any style as a Product shall be
     deemed to have been granted if the Licensor fails to respond to the
     Licensee's request therefor:

     (a)  in the case of styles submitted with the Marketing Plan, within TWENTY
          (20) business days of receiving that request;

     (b)  in the case of styles submitted at other times during the Contract
          Year, within FIFTEEN (15) business days of receiving that request.

4.5  Products shall be of the best quality materials and consistent both with
     the highest standards of craft and skill associated with the reputation of
     the Licensor as designer, manufacturer and retailer of high quality fashion
     goods.

4.6  Prior to commissioning production in commercial quantities of any Product
     the Licensee shall:

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     (a)  procure that the Licensor shall, if it so chooses, have the right to
          inspect the places of proposed manufacture of such Product for the
          purpose of ascertaining that the Licensor's quality standards are
          being met, and

     (b)  submit free of charge at least three samples of each such Product to
          the Licensor for approval. No Product shall be sold by the Licensee in
          the absence of such approval. All Products thereafter offered for sale
          shall correspond with the approved sample.

4.7  No item which fails to meet the quality standards set forth in sub-clause
     4.2 shall be sold as a Product. The Licensee shall procure that its
     suppliers are held to the same requirement.

4.8  The Licensee shall ensure that all Products shall conform with all laws and
     regulations applicable thereto in the Territory.

5.   SALES AND PROMOTION

5.1  The Licensee shall use its best efforts to promote and extend the sale of
     Products throughout the Territory to all potential Approved Outlets.

5.2  The Licensee shall secure and maintain the distribution of adequate stocks
     of Products to (and only to) Approved Outlets such that the Products may be
     made readily and continuously available to customers.

5.3  The Licensor hereby places the Licensee on notice that it may inspect such
     Approved Outlets at any time throughout the Contract Term to assure itself
     that the provisions of this Clause are being complied with. If the Licensor
     notifies the Licensee that an outlet at which Products are sold does not
     (in the absolute discretion of the Licensor) meet the standards of an
     Approved Outlet, the Licensee shall procure that sales of Products at such
     outlets be discontinued at the earliest possible opportunity.

5.4  Products shall not be exported or sold by the Licensee for re-sale outside
     the Territory.

5.5  All advertising and promotional materials and activities relating to the
     Products shall require the Licensor's prior approval and all advertising
     and promotional proposals for the Products shall accordingly be submitted
     by the Licensee to the Licensor for prior approval. In respect of proposals
     by the Licensee for promotional materials and activities which have been
     contemplated by the Marketing Plan for the period to which they relate, the
     Licensor shall respond as quickly as practicable and in any event within
     FIFTEEN (15) business days from receipt of the same, in default of which
     response the Licensor's approval shall be deemed to have been granted.

5.6  The Licensor and its Affiliates in the Territory may purchase Products from
     the Licensee at the lower of

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     (a)  Licensee's standard wholesale price, including customary trade
          discounts and advertising allowances, or

     (b)  the lowest wholesale price at which the Licensee sells equivalent
          quantities of Products to its customers in the Territory, on at least
          net THIRTY (30) day terms.

6.   MARKETING

     Marketing Plans
     ---------------

6.1  The Licensee shall, in consultation with the Licensor, prepare and propose
     to the Licensor a Marketing Plan in respect of each Contract Year.

6.2  The Marketing Plan shall summarize all market information relevant to the
     period to which it relates including (without limitation):

     (a)  a description of the Products to be sold, together with proposals for
          categories and for designs of Products, and including proposed sources
          of supply;

     (b)  the number and identity of prospective customer accounts;

     (c)  suggested wholesale price points for the Products;

     (d)  the anticipated volume expected to be sold of each of the Products;

     (e)  an analysis of competitors' Products by price band;

     (f)  proposals for the interpretation of the Laura Ashley brand image in
          terms of advertising concepts and point of sale and other promotional
          materials;

     (g)  proposed advertising and promotional activities and expenditures for
          the Products; and

     (h)  proposed methods of sales and distribution.

6.3  To the extent practicable, the Licensee shall, upon submission of the
     Marketing Plan, provide the Licensor with three (3) samples of each Product
     which is described in the Marketing Plan and which is being submitted for
     approval.

6.4  The Marketing Plan for the First Contract Year shall be proposed to the
     Licensor by the Licensee no later than 31st July 1991. The Licensor shall
     respond to such proposal no later than 31st August 1991. Subsequent
     Marketing Plans shall be submitted to the Licensor for

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     approval no later than SIX (6) months in advance of the commencement of the
     Contract Year to which they relate.

     Approval by Licensor
     --------------------

6.5  No Marketing Plan shall be implemented unless and until the written
     approval of the Licensor has been obtained, provided that if the Licensor
     fails to respond to the proposal for a Marketing Plan referred to in
     sub-clause 6.4 within TWENTY (20) business days after receipt thereof, the
     Plan shall be deemed approved as submitted.

6.6  The Licensee shall spend no less than THREE PER CENT (3%) of its annual Net
     Sales of Products on advertising and promotional activities for the
     Products in the Territory.

     Additional Products
     -------------------

6.7  The Parties recognize a request by the Licensee to sell sunglasses bearing
     the Trademarks, either under this Agreement or a separate agreement.
     Accordingly the Licensor agrees to enter into good faith discussions with
     the Licensee within ONE HUNDRED AND EIGHTY (180) days from the Commencement
     Date, with a view to accommodating the Licensee's proposal. The Licensor
     further agrees that, until such period has expired, it will not approach
     other potential distributors for sunglasses in the Territory, provided that
     such restriction shall not in any event endure beyond a period of ONE
     HUNDRED AND EIGHTY (180) days from the Commencement Date. If the Licensor
     and the Licensee do not enter into an agreement for the Licensee to sell
     sunglasses bearing the Trademarks, whether pursuant to this or another
     agreement, and the Licensor enters into an agreement with a third party to
     sell sunglasses bearing the Trademarks in the Territory, the Licensor shall
     hold that third party to the same standards as the Licensee under this
     Agreement with respect to quality, styling and Approved Outlets.

7.   MARKET REPORT

     Within two months of the end of each Contract Year the Licensee shall
     submit to the Licensor a written report giving a full resume of sales and
     promotional activities and expenditures during the Year.

8.   TRADEMARKS AND COPYRIGHT

8.1  The Licensee acknowledges that the Trademarks and the goodwill attaching
     thereto are and shall remain the property of the Licensor.

8.2  The Licensee shall not promote or sell Products except in conjunction with
     Trademarks and shall not use Trademarks or Selected Designs except in
     relation to Products in a manner approved by the Licensor.

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8.3  All labels, packaging, display, and promotional and advertising materials
     relating to the Products and their promotion and sale shall bear an
     acknowledgement as to the proprietorship of the Trademarks and the license
     granted to the Licensee as follows:

          "Sold by USA Optical under license from Laura Ashley"

8.4  Wherever Selected Designs are used on packaging (and elsewhere as the
     Licensor may require or approve) the Licensee shall affix or apply a notice
     acknowledging the Licensor's copyright ownership as follows:

          "(C) Laura Ashley 19 [date* of design]"

8.5  Save as provided in sub-clause 8.3 and except as otherwise agreed in
     writing, there shall be no use of the Licensee's name or trademarks on the
     Products or on any labels, packaging, display or advertising materials
     related to the Products.

8.6  All rights arising from the use by the Licensee of the Trademarks shall
     enure to the benefit of the Licensor. This license shall operate solely as
     a permission for the Licensee to use the Trademarks and Selected Designs in
     the manner herein specified and shall not be deemed to confer on the
     Licensee any proprietary right in the Trademarks or Selected Designs, nor
     shall the Licensee acquire any registered design, registered trademark or
     other industrial property rights relating thereto.

8.7  If the Licensee becomes aware of any infringements of the Trademarks or
     copyrights in the Selected Designs, or any act of unfair competition or any
     trademark application in the Territory which in any way may impair the
     value or validity of the Trademarks, or the other rights granted
     by the Licensor hereunder, the Licensee will promptly notify the Licensor
     of that event. The Licensor undertakes that it will respond to such
     notification by taking such steps as it may deem reasonably necessary to
     protect the Licensee's rights hereunder, it being understood that the
     institution and conduct of any litigation which ensues, the selection of
     counsel and the settlement of the litigation and claims affecting the
     Trademarks or Selected Designs shall be entirely within the discretion of
     the Licensor, under the Licensor's control and at the Licensor's expense.
     Should legal action against a third party be deemed necessary or desirable
     by the Licensor, the Licensee will, if requested by the Licensor, cooperate
     with the Licensor in rendering appropriate assistance in instituting and
     prosecuting such legal action, provided that the reasonable expenses which
     the Licensee thereby incurs and the other costs and expenses of such legal
     action, including legal fees, shall be borne by the Licensor.

8.8  During the Contract Term, or upon the termination of this Agreement for any
     reason, the Licensee shall, upon request of the Licensor, execute such
     documents as the Licensor may reasonably require, including registered user
     agreements, to reflect the Licensor's ownership of the Trademarks. The
     Licensee hereby grants to the Licensor a power of attorney coupled with an
     interest to execute such agreements as Licensee's attorney-in-fact. The
     Licensor shall promptly provide the Licensee with copies of any such
     agreements.

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8.9    The Licensor represents to the Licensee:

       (a)    that it is the owner of the Trademarks and of the copyrights in
              all the Selected Designs;

       (b)    that it has the sole and exclusive right to deal with the same and
              to enter into license agreements therefor;

       (c)    that none of the Trademarks or the Selected Designs infringes any
              trademark, service mark, trade name, copyright design or work of
              any other party.

9.     ROYALTY

9.1    In consideration for the rights herein granted (and subject to the
       payments of Minimum Royalty herein contained), the Licensee shall pay to
       the Licensor a royalty at such rate as, after deduction of any
       withholding or other taxes (if any) imposed within the Territory and
       required to be deducted by the Licensee, shall amount to *** of the Net
       Sales of all Products sold by the Licensee.

9.2    The Royalty shall be determined and paid in respect of each Contract Year
       quarter ending on 30th April, 31st July, 31st October and 31st January
       during the Contract Term.

9.3    In respect of each Contract Year, the amount of Royalty payable to the
       Licensor shall in no event be less than the Minimum Royalty quoted below:

                 Contract Year             US $
                 -------------             ----
                 1991/93                   ***
                 1993/94                   ***
                 1994/95                   ***
                 1995/96                   ***

       Minimum Royalty shall be appropriately pro-rated for any period during
       the Contract Term that is less than a full Contract Year.

9.4    the Minimum Royalty shall be payable as follows:

       9.4.1  with respect to the Contract Year 1991/93

              (a)    on the ***, a first ***

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                     installment of ***;

              (b)    within *** of the end of each of the last ***, further
                     installments each of ***;

       9.4.2  with respect to each subsequent Contract Year, within *** of the
              end of each ***, a sum equivalent to *** attributable to such ***;

       provided that, in each Contract Year, any excess of actual Royalty paid
       per quarter over the applicable installment of Minimum Royalty shall be
       carried forward and credited against subsequent installments of Minimum
       Royalty payable in respect of such Contract Year.

9.5    Except as provided in subclauses 13.4 and 13.5, failure to pay the
       Minimum Royalty as provided in sub-clause 9.4 shall constitute a material
       breach of this Agreement within the meaning of sub-clause 13.2(a).

9.6    Royalty payments pursuant to sub-clause 9.7 shall credit the Licensee
       with amounts of Minimum Royalty, and Minimum Royalty payments pursuant to
       sub-clause 9.4.2 shall credit the Licensee with amounts of Royalty paid
       during the Contract Year in excess of the Minimum Royalty.

9.7    Payment of Royalty in respect of each quarter shall be effected within
       *** of the end thereof, and payment shall be accompanied by a report from
       the Licensee showing the names of customers to whom the Licensee sold
       Products during the period, and a precise computation of Net Sales upon
       which the Royalty payment was based, including the quantity, description
       and value of Products sold by the Licensee during the quarter, and any
       deductions for returns, discounts, allowances granted to customers, or
       bad debts.

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9.8    The Licensee shall keep adequate and accurate records in sufficient
       detail to enable the Royalty to be readily determined and shall, upon the
       Licensor's request, permit such records to be examined by the Licensor's
       representative at any time during normal business hours to verify Royalty
       reports and payments. In the event that such examination reveals an
       understatement of Royalty due to the Licensor in excess of FOUR PER CENT
       (4%), the Licensee shall be liable for costs of the Licensor's audit and
       the incidental expenses incurred in connection with the audit. Those
       costs and expenses shall be separate from and in addition to the
       Royalties owed to the Licensor.

9.9    Unless otherwise specified by the Licensor, all payments due by the
       Licensee to the Licensor hereunder shall be computed and paid in US
       dollars.

9.10   All overdue amounts shall bear interest at the rate of ONE PER CENT (1%)
       per month.

9.11   Until further notice from Licensor, all sums due to the Licensor
       hereunder shall be paid in US dollars by international wire transfer to
       the following account:

       ABN Bank
       Vijzelstraat 68-78
       Amsterdam 1000 AK
       The Netherlands

       Account Name: Laura Ashley Manufacturing B.V.
       Account No.:54 02 74 348
       Swift Code: ABN ANL 2A

10.    CONFIDENTIALITY

       Any information acquired by one Party (the "First Party") in the course
       of this Agreement regarding the affairs and business of the other Party
       (the "Second Party") and its Affiliates shall, during the Contract Term
       and for TEN (10) years thereafter, be treated by it as confidential and
       shall not be disclosed without the prior consent of the Second Party,
       whether such information is disclosed to the Second Party by the First
       Party or otherwise obtained by the First Party as a result of its
       association with Second Party except to the extent either required to be
       divulged in the performance of this Agreement or that such information
       falls within the public domain. Information to be treated as confidential
       under this Agreement shall include, without limitation, the Parties'
       customer lists, unpublished designs, marketing and business plans,
       telemarketing and other unique sales techniques, and sources of supply.

11.    LIABILITY, INDEMNITY AND INSURANCE

11.1   The Licensor and the Licensee each acknowledges and represents to the
       other that it is not a joint venturer, partner or co-venturer with the
       other and that neither party shall incur any liability on behalf of the
       other party or purport to pledge the credit of the other party or accept
       any order or obligation to be binding upon the other party.

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11.2   The Licensee shall indemnify and hold the Licensor, its Affiliates and
       their respective officers and directors, harmless from all claims, suits,
       demands, actions, losses, damages and costs, including reasonable legal
       fees and court costs, which the Licensor may incur or suffer by reason of
       any acts or omissions of the Licensee in connection with the importation,
       distribution, marketing or sale of the Products, including, but not
       limited to

       (a)    any manufacturing defect in a Product;

       (b)    the Licensee's manufacture, distribution or sale of the Products;
              or

       (c)    the labelling, packaging or advertising of the Products in
              violation of any applicable federal, state or local law or
              regulation.

11.3   So long as this Agreement remains in effect and for a period of not less
       than THREE (3) years thereafter, the Licensee agrees at its expense to
       carry product liability insurance with respect to the Products with
       limits of liability of not less than ONE MILLION US DOLLARS
       (US$1,000,000) per accident and ONE MILLION US DOLLARS (US$1,000,000) per
       person and to name the Licensor and its Affiliates and their respective
       officers, employees and directors, as a party insured under such
       insurance policy (with a waiver of subrogation in favor of the Licensor).
       Prior to offering any of the Products for sale and within TEN (10) days
       of a request by the Licensor, the Licensee shall furnish the Licensor a
       certificate of insurance evidencing that the policy with the minimum of
       coverage limits set forth in the preceding sentence is in full force and
       effect.

12.    COMPETITION

       The Licensee undertakes that it will not without the prior consent of the
       Licensor, throughout the Contract Term and for a period of SIX (6) months
       thereafter, engage directly or indirectly in the Territory in the
       importation, distribution, promotion or sale (either on its own account
       or for or on behalf of any other party) of any range of ladies' designer
       eyewear that is similar to the Products in price and any of (i) style,
       (ii) market position and (iii) market segment, nor engage in activities
       which would prejudice the performance of its obligations under this
       Agreement, provided that the Parties acknowledge that:

       (a)    the wholesale distribution of ladies' and men's designer eyewear
              as currently carried on by the Licensee; and

       (b)    the importation, distribution, promotion and sale of the lines of
              ladies designer eyewear set forth in Schedule III

       do not constitute prejudicial activities.

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13.    DURATION

13.1   The Contract Term shall commence on the Commencement Date and shall
       continue, unless terminated earlier according to sub-clause 13.2, until
       31st January 1996.

13.2   Either party may terminate this Agreement at any time by giving the other
       party notice to that effect, stating the precise reasons therefor,
       effective on the date when notice is given or any subsequent date
       specified in the notice, in any of the following events:

       (a)    any material breach by the other party for which effective
              remedial action has not been undertaken within THIRTY (30) days
              after notice is given specifying the breach and requiring remedy
              of the same;

       (b)    if the other party shall be unable to pay its debts in the
              ordinary course of business or shall enter into liquidation
              (otherwise than for reason of corporate amalgamation or
              reconstruction) or shall become bankrupt or insolvent, or shall be
              placed in the control of a receiver or trustee, whether
              compulsorily or voluntarily.

13.3   Without prejudice to the foregoing, the Licensor shall have the right to
       terminate this Agreement as in the manner aforesaid in the following
       events:

       (a)    the Licensee fails in respect of each of any two Contract Years to
              generate and pay to the Licensor amounts by way of Royalty which
              exceed the Minimum Royalty relative to such Year;

       (b)    the Licensee fails to propose a selection of styles of eyewear
              and/or accessories which the Licensor is willing to approve as
              Products after consideration in good faith and having regard to
              the nature of the target market and the particular requirements of
              the Product customer;

       (c)    the Licensee fails in any Contract Year to spend more than THREE
              PERCENT (3%) of annual Net Sales on advertising and promotional
              activities as contemplated by sub-clause 6.6;

       (d)    the management and/or control of the Licensee passes from the
              present managers, shareholders, owners or controllers to other
              parties whom the Licensor may reasonably regard as unsuitable.

13.4   Without prejudice to the foregoing, any acts or omissions by the Licensor
       resulting in one or more of the following events shall be deemed a
       material breach of this Agreement by the Licensor:

       (a)    a third-party licensee of sunglasses bearing the Trademarks, as
              contemplated by sub-clause 6.7, is not held to the same standards
              as the Licensee under this Agreement

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              with respect to quality, styling or Approved Outlets, and as a
              result the value of the Trademarks is significantly impaired;

       (b)    any claim or litigation referred to in sub-clause 8.7 is not
              pursued with sufficient rigor, resulting in significant impairment
              to the value or validity of the Trademarks.

13.5   In the event of a material breach under sub-clause 13.4, the Licensee
       shall have the right to withhold all Minimum Royalty and Royalty payments
       until such time as the material breach has been remedied, at which time
       all such Minimum Royalty and Royalty payments shall be due and payable.
       No withholding of Minimum Royalty or Royalty payment under this
       sub-clause 13.5 shall constitute a material breach of this Agreement.

14.    CONSEQUENCES OF TERMINATION

       On termination of this Agreement (other than a termination pursuant to
       sub-clause 3.3):

14.1   the Licensee shall promptly pay to the Licensor all amounts due by way of
       Royalty or otherwise to the date of termination (which shall be deemed to
       be the end of the calendar quarter in which it falls);

14.2   the Licensee shall make no further use of the Trademarks or Selected
       Designs (subject to sub-clause 14.3);

14.3   the Licensor will, except where termination based on material breach was
       occasioned by the Licensor by reason of the Licensee's gross misconduct,
       permit the Licensee to dispose of any stock then in hand within up to SIX
       (6) months following the date of termination subject to payment of
       Royalty in respect of such sales as provided in Clause 9; and

14.4   the Licensor shall be given a right of first refusal to purchase stocks
       of Products on the terms, subject to the conditions, and at a price, no
       less favorable than the terms conditions and price offered to third party
       purchasers.

15.    EXPENSES

       The expenses incurred by the Licensee in performance of this Agreement,
       including all travel and out-of-pocket expenses, shall be solely for its
       own account.

16.    AGREEMENT PERSONAL

       This Agreement is personal to the Parties and may not be assigned or
       sub-contracted by either party without the consent of the other.

17.    DISPUTES

17.1   Any controversy arising out of or relating to this Agreement shall be
       submitted to and decided

                                       14
<PAGE>

       by arbitration only in the City of New York, pursuant to the Rules then
       outstanding of the American Arbitration Association. Unless the parties
       agree otherwise, there shall be three arbitrators in the arbitration
       proceedings. Each party shall choose one arbitrator, and the two
       arbitrators chosen shall choose a third arbitrator. The New York State
       laws of evidence at trial, and of discovery in civil matters, shall apply
       to the arbitration proceedings. The arbitrators sitting in any
       controversy shall have no power to alter or modify any provision of this
       Agreement or to render any award which, by its terms, effects any such
       alteration or modification. The parties consent to the jurisdiction of
       the Supreme Court of the State of New York for all purposes in connection
       with this agreement to arbitrate, and the parties consent that such Court
       may take the necessary proceedings for the confirmation or disaffirmance
       of any award and may enter judgment thereon. Any process, notice of
       motion or other application to said Court or to a Justice thereof may be
       served within or without the territorial jurisdiction of said Court, by
       registered or certified mail, return receipt requested, or by personal
       service, or in such other manner as is permissible under the Rules of
       said Court, provided a reasonable time for appearance, not less than TEN
       (10) business days, is allowed. In the event of a dispute or controversy
       arising under this Agreement, the prevailing party shall have the right
       to recover its reasonable attorney's fees and costs.

17.2   This Agreement shall be governed by, and interpreted in accordance with,
       the laws of the State of New York.

18.    PURCHASE OF SELECTED DESIGNS

       The Licensee may purchase materials bearing Selected Designs from the
       Licensor or its Affiliates at the lower of

       (a)    the Licensor's or its Affiliates' standard wholesale price,
              including customary trade discounts, or

       (b)    the lowest wholesale price at which the Licensor or its Affiliates
              sell such materials to its customers, on at least net THIRTY (30)
              day terms, provided that the Licensee's purchase orders relate to
              similar quantities of the Selected Designs, to the extent that
              such materials may be reasonably required by the Licensee for the
              production of Products or for the purposes of marketing or
              promoting the Products hereunder.

19.    GENERAL PROVISIONS

       Entire Understanding
       --------------------

19.1   This Agreement (including the Marketing Plans and other documents to be
       agreed to pursuant this Agreement) constitutes the sole agreement between
       the Parties.

       Modifications
       -------------

                                       15
<PAGE>

19.2   This Agreement may not be modified otherwise than by written instrument
       signed by both Parties.

       Communications
       --------------

19.3   Every notice or other communication under this Agreement shall be in
       writing delivered personally, by telex, or by facsimile addressed to the
       relevant Party, with its address set out below, or to any telex or
       facsimile number published as belonging to it (or such other address,
       telex or facsimile number as is notified in the manner herein provided by
       one Party to the other). Every notice or other communication shall be
       deemed to have been received, in the case of a telex message or facsimile
       transmission, at the time of dispatch or transmission, and in the case of
       a letter when delivered personally.

19.4   In proving the giving of a notice hereunder it shall be sufficient to
       prove that the notice was left or that the telex bears the correct
       answerback of the Party to whom the notice was sent, or that the sender's
       original facsimile has printed on it or attached to it a proper automated
       endorsement to the effect that it was received by or at the facsimile
       number of the Party to whom the facsimile was sent.

       Communications to the Licensor:
       -------------------------------

       Laura Ashley Manufacturing B.V.
       Luchthavenweg 24
       5507 AZ
       The Netherlands
       For the Attention of the Managing Director

       with copy to:

       Laura Ashley Holdings plc
       150 Bath Road
       Maidenhead
       Berkshire
       SL6 4YS
       United Kingdom
       For the Attention of the Company Secretary

       Communications to the Licensee:
       ------------------------------

       USA Optical Distributors, Inc.
       419A South Hindry Avenue
       Inglewood
       CA 90301

                                       16
<PAGE>

       United States of America
       For the Attention of the President

       Severability
       ------------

19.5   The provisions contained in this Agreement are considered reasonable by
       the Parties, but if any such provision is found to be invalid or
       unenforceable but would be valid if some part thereof were deleted or the
       scope of application reduced, such provision shall apply with such
       modifications as may be necessary to render it valid or enforceable. In
       any event the balance of this Agreement shall remain in effect.

IN WITNESS WHEREOF the Parties hereto have caused this Agreement to be executed
by their duly authorized representatives the day and year first above written.

SIGNED by         A.M.S.            )     /s/ A.M.S.
          --------------------------      -------------------------------
for and on behalf of                )
LAURA ASHLEY MANUFACTURING B.V.     )
-------------------------------

SIGNED by      Bernard Weiss        )     /s/ Bernard Weiss
          --------------------------      --------------------------------
for and on behalf of                )
USA OPTICAL DISTRIBUTORS, INC.      )
------------------------------------

                                       17
<PAGE>

                                   SCHEDULE I

                                    PRODUCTS

                         [Agreed styles to be described]

                                       18
<PAGE>

                                   SCHEDULE II

                                   TRADEMARKS

                                  LAURA ASHLEY

                               [Trademark Graphic]

                                       19
<PAGE>

                                  SCHEDULE III

                        LINES OF LADIES DESIGNER EYEWEAR
                 WHICH DO NOT CONSTITUTE PREJUDICIAL ACTIVITIES

WIMBLEDON

CALIFORNIA ATTITUDES

GENERIKA

CAMELOT

                                       20
<PAGE>

                               AMENDING AGREEMENT

THIS AGREEMENT is made the 2nd day of August, 1993.

BETWEEN

       1. LAURA ASHLEY MANUFACTURING B.V. a company incorporated in the
Netherlands and having its principal place of business at Luchthavenweg 24, 5507
SK Veldhoven, The Netherlands (hereinafter called "the Licensor") of the one
part; and

       2. SIGNATURE EYEWEAR, INC., (formerly known as USA OPTICAL DISTRIBUTORS,
INC.), a company incorporated in the State of California having its principal
office at 460 South Hindry Avenue, Inglewood, CA 90301, U.S.A. (hereinafter
called "the Licensee") of the second part; and

       3. LAURA ASHLEY LIMITED, a company incorporated in England and having its
registered office at 150 Bath Road, Maidenhead, Berkshire, England (hereinafter
called "the Additional Licensor") of the third part.

WHEREAS:

       1. The Licensor and the Licensee entered into a License Agreement dated
28 May, 1991 (the "License Agreement") granting the Licensee certain rights to
use the Trademarks in connection with the importation, distribution, marketing
and sales of Products; and

       2. The Licensor and the Licensee desire to amend the License Agreement as
set forth herein; and

       3. The Additional Licensor is the owner of.the Trademarks in the United
Kingdom, and the Licensor is the owner of the Trademarks in territories outside
the United Kingdom.

IT IS THEREFORE AGREED AND DECLARED AS FOLLOWS:

1.     Except as otherwise set forth in this Agreement, all defined terms shall
       have the same meaning as set forth in the License Agreement.

2.     Sub-clause 1.15 is hereby deleted, and the following substituted in its
       place:

       "1.15  "Products" means such ophthalmic frames for prescription
              eyeglasses, sunglasses, eyeglass cases and other accessories and
              related items, all of which are intended for sale bearing the
              Trademark, which are listed in Schedule I to this Agreement, as
              amended from time to time;"

                                       1
<PAGE>

3.     Sub-clause 1.18 is hereby deleted, and the following substituted in its
       place:

       "1.18  "Territory" means the United States of America (including its
              territories and possessions) and Canada, as well as the following
              countries added as of the date of this Amending Agreement, subject
              to the restrictions set forth in sub-clauses 3,1.2 and 3.1.3
              below: Mexico, New Zealand, Australia, South Africa, the United
              Kingdom, and every other country in Europe (individually, an
              "Additional Country"); "

4.     Clause 3.1 is hereby deleted, and the following is substituted in its
       place:

       "3.1.1 The Commencement Date of this Agreement was 19 September, 1991. As
              of February 1, 1993, the Licensor and the Additional Licensor (in
              respect of the United Kingdom) hereby grant to the Licensee
              exclusive rights, subject to sub-clauses 3.1.2 and 3.1.3 below,
              throughout the Contract Term

              (a)    to use the Trademarks on or in connection with the
                     importation, distribution, marketing and sale of Products,
                     and

              (b)    to apply Selected Designs to packaging or promotional
                     materials for the Products

                     in the Territory upon the terms and conditions of this
                     Agreement;

       3.1.2  Until January 31, 1994, the Licensee shall have the exclusive
              right to present a marketing plan relating to the Licensee's
              marketing and sales of Products in any country outside the United
              States or Canada (an "Additional Country Marketing Plan"). The
              Licensor's approval of the Licensee's Additional Country Marketing
              Plan for any specific country, as presented to the Licensor, shall
              be a condition precedent to the Licensee's sales of Products in
              that country. If the Licensor fails to respond to any such
              Additional Country Marketing Plan within 30 days after receipt
              thereof, that Additional Country Marketing shall be deemed
              approved as submitted.

              If the Licensor has not approved an Additional Country Marketing
              Plan for any specific Additional Country after 31 January, 1994
              (or, in the case of an Additional Country Marketing Plan presented
              during January 1994, 30 days after Licensor's receipt thereof),
              then the Licensee shall no longer have the exclusive right to
              present to the Licensor an Additional Country Marketing Plan for
              that Additional Country. Instead, the Licensee shall have the
              right of first refusal to sell Products in any such country, in
              accordance with sub-clause 3.1.3 below.

       3.1.3. Under the right of first refusal granted in sub-clause 3.1.2, on
              or after 1 February, 1994, the Licensor shall have the right to
              grant to a third party the exclusive right to sell Products in any
              specified Additional Country for which the Licensor has not

                                       2
<PAGE>

              already approved a plan by Licensee to sell Products, subject to
              the terms of this subclause 3.1.3. In the event that the Licensor
              grants such a right to a third party, the definition of the term
              "Territory" under sub-clause 1.18 of this Agreement shall be
              amended to reflect that grant. The procedures for granting such a
              right are as follows.

              If, on or after 1 February, 1994, the Licensor receives an
              Additional Country Marketing Plan from a third party, the Licensor
              shall deliver a written notice (the "Licensor's Notice") to the
              Licensee specifying the following material terms of the offer: the
              amount of any advance payment, the amount of minimum royalty
              payable, the territory covered by the offer, the length of the
              proposed license, and the commencement date of the proposed
              license. The Licensor shall not be required to deliver to the
              Licensee any information with respect to any other term of the
              third party's offer. The Licensor's Notice shall further state (a)
              that the third party licensee shall be held to the same standards
              as the Licensee under this Agreement with respect to quality,
              styling and Approved Outlets, and (b) that the third party
              licensee shall not be permitted to use the marketing materials or
              the eyeglass frame styles developed by the Licensee pursuant to
              this Agreement.

              The Licensee shall have 30 days to respond to the Licensor's
              Notice. If the Licensee does not respond to the Licensor's Notice
              within 30 days, then the Licensor shall have the right to grant an
              exclusive license to the third party, under the terms set forth in
              the Licensor's Notice (the "Third Party License"). If the Licensee
              responds to the Licensor's Notice within that 30 day period,
              delivering an Additional Country Marketing Plan for the territory
              specified in the notice, and specifying terms that do not exceed
              the third party's offer in all material respects (the "Licensee's
              Notice"), then the Licensor shall have the right to determine in
              the Licensor's sole discretion whether to grant the exclusive
              right to sell Products in that Additional Country to the Licensee
              or the third party, or to refrain from granting that right at that
              time. If the Licensee's Notice specifies terms that exceed the
              third party's offer in all material respects, then the Licensor
              shall not have the right to grant the exclusive right to sell
              Products in that Additional Country to the third party at that
              time, but may, in its discretion, (a) grant that right to the
              Licensee, (b) solicit from the third party an offer which matches
              or exceeds the Licensee's offer in all material respects, or (c)
              refrain from granting that right at that time. If Licensor elects
              to solicit such an offer from the third party, and then within a
              reasonable period of time obtains from the third party an offer
              which matches or exceeds the Licensee's offer in all material
              respects, the Licensor shall have the right to grant the exclusive
              right to sell Products in that Additional Country to the third
              party.

              In determining whether or not the Licensee's offer matches or
              exceeds the third party's offer, the Licensor shall examine the
              Licensee's past performance in countries outside the United States
              and Canada, taking into consideration the Licensee's decisions,
              after consultation with Licensor, to grow slowly in order to
              ensure success.

                                       3
<PAGE>

              The Licensee's right of first refusal relating to the territory
              covered by the Licensor's Notice shall terminate once the Licensor
              and the third party have entered into the Third Party License. If
              the Third Party License is terminated for any reason, the Licensor
              shall notify the Licensee within a reasonable period of time of
              such termination, and the Licensee shall have the right to make an
              offer to have the exclusive license for the territory previously
              covered by the Third Party License, but shall no longer have a
              right of first refusal related to that territory.

              Any disputes arising out of or otherwise related to the right of
              first refusal granted under sub-clauses 3.1.2 and 3.1.3 of this
              Agreement shall be submitted to arbitration pursuant to the rules
              of the American Arbitration Association."

5.     The portion of Clause 8 in quotation marks is hereby deleted, and the
       following substituted in its place:

       "Sold by Signature Eyewear under license from Laura Ashley"

6.     Clause 9.3 is hereby deleted, and the following substituted in its place:

       "9.3   The Amount of Royalty in U.S. dollars payable for each Contract
              Year for each Category defined in sub-clause 13.1.4 shall in no
              event be less than the Minimum Royalty amount for that Category as
              set forth below:

                               Minimum      Minimum       Minimum
                               Royalty      Royalty       Royalty
                               for          for           for
                               USA &        Additional    Non-
                               Canada       Countries     Optical     Total
       Contract                Optional     Optical       Sunwear     Minimum
       Year                    Sales        Sales         Sales       Royalty

       INITIAL TERM:

       1993/94           ***
       1994/95           ***
       1995/96           ***

       FIRST RENEWAL TERM

       1996/97           ***
       1997/98           ***
       1998/99           ***
       1999/00           ***
       2000/01           ***

                                       4
<PAGE>

       ADDITIONAL RENEWAL TERMS

       2001/02           ***
       2002/03           ***
       2003/04           ***
       2004/05           ***
       2005/06           ***

7.     Clause 13.1 is hereby deleted, and the following substituted in its
       place:

       "13.1.1  The Contract Term commenced 19 September, 1991, and shall,
                unless terminated earlier in accordance with sub-clauses 13.2,
                13.3 or 13.4(b) below, remain in effect for an initial term
                ending on 31 January, 1996 (the "Initial Term"). The Contract
                Term is subject to a first automatic renewal term of five
                Contract Years (the "First Renewal Term"), as set forth in
                sub-clause 13.1.2, and additional one-year renewal terms
                (individually, an "Additional Renewal Term"), as set forth in
                sub-clause 13.1.3 below.

       13.1.2   Subject to sub-clauses 13.2 and 13.4(b), on February 1, 1996 the
                Contract Term shall be automatically renewed for the First
                Renewal Term for all Categories (as defined in sub-clause
                13.1.4), provided that the amount of Royalty payable to the
                Licensor for each of the final two Contract Years of the Initial
                Term for each such Category is equal to or greater than the
                Minimum Royalty for that Category during those Contract Years,
                as set forth in sub-clause 9.3 above.

                The Licensor shall have the right, for a period of 90 days after
                31 January, 1996, to terminate the Licensee's rights with
                respect to any Category defined under sub-clause 13.1.4 above if
                the Licensee fails in respect of any two Contract Years to have
                sufficient Net Sales to generate Royalty amounts which equal or
                exceed the Minimum Royalty for that Category and those Contract
                Years; if the Licensor does not exercise such right to terminate
                the Licensee's rights within the 90 day period, the Licensor's
                right to terminate shall be deemed to be waived.

       13.1.3   Subject to sub-clauses 13.2 and 13.4(b), on February 1, 2001,
                and on February 1 of each succeeding year, the Contract Term
                shall be automatically renewed for an Additional Renewal Term,
                for all Categories (as defined in sub-clause 13.1.4), provided
                that the amount of Royalty payable to the Licensor for each of
                the previous two Contract Years for each Category is equal to or
                greater than the Minimum Royalty for that Category during those
                Contract Years, as set forth in sub-clause 9.3 above.

                The Licensor shall have the right, for a period of 90 days after
                31 January of any Additional Renewal Term Contract Year, to
                terminate the Licensee's rights with respect to any Category
                defined under sub-clause 13.1.4 above if

                                       5
<PAGE>

                the Licensee fails, in respect of the two Contract Years then
                ended, to have sufficient Net Sales to generate Royalty amounts
                which equal or exceed the Minimum Royalty for that Category and
                those Contract Years; provided that, if the Licensor does not
                exercise such right to terminate the Licensee's rights within
                the 90 day period, the Licensor's right to terminate shall be
                deemed to be waived.

       13.1.4   For the purposes of determining the Minimum Royalty payable
                under this Agreement, the following categories (the
                "Categories") have the meanings set forth below:

                "USA & Canada Optical Sales" means sales of Products in the
                United States of America (including its territories and
                possessions) and Canada which are made to stores specializing in
                ophthalmic frames for prescription eyeglasses, whether those
                sales are made directly to such stores or through distributors
                which specialize in selling to such stores.

                "Additional Countries Optical Sales" means sales of Products in
                all other countries within the Territory other than the United
                States and Canada which are made to stores specializing in
                ophthalmic frames for prescription eyeglasses, whether those
                sales are made directly to such stores or through distributors
                which specialize in selling to such stores.

                "Non-Optical Sunwear Sales" means sales of sunglasses which are
                Products made to stores which do not specialize in ophthalmic
                frames for prescription eyeglasses, whether those sales are made
                directly to such stores or through distributors which specialize
                in selling to such stores."

8.     Sub-clause 13.2 is hereby amended (a) to be known hereafter as
       sub-clause 13.2.1, and (b) to add the following sub-clause 13.2.2:

       "13.2.2  The Licensor shall have the right, for a period of 90 days after
                any Contract Year, to terminate the Licensee's rights with
                respect to any Category defined under sub-clause 13.1.4 above if
                the Licensee fails in respect of any two Contract Years to have
                sufficient Net Sales to generate Royalty amounts which equal or
                exceed the Minimum Royalty for that Category and those Contract
                Years; provided that, if the Licensor does not exercise such
                right to terminate the Licensee's rights within a 90 day period
                after the end of any Contract Year, that right shall be deemed
                to be waived.

9.     Sub-clause 13.4(a) is hereby deleted, and the following substituted in
       its place:

       (a)      a third-party licensee which obtains the license to sell
                eyeglass frames bearing the Trademarks, in any of the
                Categories, as contemplated by sub-clauses 13.1.2, 13.1.3 and
                13.1.4 above, is not held to the same standards as the Licensee
                under this

                                       6
<PAGE>

                Agreement with respect to quality, styling or Approved Outlets,
                and as a result the value of the Trademarks is significantly
                impaired;"

10.    The portion of Clause 19.4 entitled "Communications to the Licensee" is
       hereby deleted, and the following is substituted in its place:

       "Communications to the Licensee:
       --------------------------------

       Signature Eyewear, Inc.
       460 South Hindry Ave.
       Inglewood, CA 90301
       United States of America
       For the Attention of the President

       Communications to the Additional Licensor:
       -----------------------------------------

       Laura Ashley Limited
       150 Bath Road
       Maidenhead, Berkshire
       England
       For the Attention of the Company Secretary"

11.    Clause 6.7 and sub-clause 13.3(a) are hereby deleted.

12.    Except as otherwise stated herein, all remaining clauses of the License
       Agreement shall remain in full force and effect, provided that all
       references to the Licensor therein shall be deemed to include the
       Additional Licensor where applicable.

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
by their duly authorized representatives the day and year first above written.

SIGNED by                           )         /s/
for and on behalf of                )         ------------------------
LAURA ASHLEY MANUFACTURING B.V.     )
-------------------------------

SIGNED by                           )         /s/
for and on behalf of                )         ------------------------
LAURA ASHLEY LIMITED                )
--------------------

SIGNED by                           )         /s/ Julie Heldman
for and on behalf of                )         --------------------------
SIGNATURE EYEWEAR, INC.             )
-------------------------------
(formerly known as
USA OPTICAL DISTRIBUTORS, INC.)

                                       7
<PAGE>

                                   SCHEDULE I

                                    PRODUCTS

        The following are the styles of eyeglass frames approved by Licensor, as
of April 30, 1993.

        1.      Laura Ashley eyeglass frames for women:

                ANNE
                ARABELLA
                DIANA
                ELIZABETH
                EMMA
                HEATHER
                ISABELLE
                JAINE
                JOY
                JULIET
                KATE
                KATHRYN
                ROSALIND
                SOMERSET
                TESS

        2.      Laura Ashley sunglasses:

                SUN 101
                SUN 102
                SUN 103

        3.      Laura Ashley for Girls eyeglasses:

                AMY
                JULIE
                LILY

                                       8
<PAGE>

                           FURTHER AMENDING AGREEMENT
                           --------------------------

     THIS AGREEMENT is made on 18 December, 2002

B E T W E E N:

     1. SIGNATURE EYEWEAR, INC. (formerly known as USA Optical Distributors,
Inc.), a company incorporated in the State of California having its principal
office at 498 North Oak Street, Inglewood, CA 90302, USA ("the Licensee") of the
first part; and

     2. LAURA ASHLEY LIMITED, a company incorporated in England and having its
registered office at 27 Bagley's Lane, London, SW6 2QA (the "Licensor") of the
second part.

                                  INTRODUCTION

     1  The Licensor's assignor and the Licensee entered into a licence
agreement dated 28 May 1991 (the "Licence Agreement").

     2  The Licence Agreement was amended by agreements dated 2 August 1993, 31
May 1994, 30 January 1995, 21 August 1995, and 4 October 2000.

     3  The parties now wish to amend the Licence Agreement further.

     IT IS THEREFORE AGREED:

     1. Clause 13.2.1 (b) of the Licence Agreement is hereby deleted and
replaced with the following:

        "(b) if the other party shall enter into liquidation (otherwise than for
        reason of corporate amalgamation or reconstruction) or shall become
        bankrupt or shall be placed in the control of a receiver or trustee,
        whether compulsorily or voluntarily."

     2. There shall be added a new clause 13.2.1A as follows:

        "For the avoidance of doubt, and without affecting the meaning of
        material breach for any other purpose, non-payment of Royalty shall be a
        material breach for the purpose of clause 13.2.1(a)."

     3. Any definition in the Licence Agreement shall apply to this agreement.

     4. For this agreement, Licence Agreement shall mean the Licence Agreement
as amended unless the context otherwise dictates.

     5. This agreement shall be effective from 24 October 2002.

     6. Save as provided here, the Licence Agreement shall remain unaffected.
<PAGE>

     IN WITNESS whereof, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives the day and year first above
written

SIGNED by                         )
for and on behalf of              )
SIGNATURE EYEWEAR, INC.           )

SIGNED by                         )
for and on behalf of              )
LAURA ASHLEY LIMITED              )

<PAGE>

PLEASE REPLY TO FAX NO: +44 20 7880 5111
Our ref:       WGW/vcm/Letter 14042003

14 April 2003

Mr Michael Prince
Signature Eyewear, Inc.
498 N Oak Street
Inglewood
CA 90302
USA

Dear Mr Prince

LICENCE AGREEMENT BETWEEN LAURA ASHLEY LIMITED (BY ASSIGNMENT FROM LAURA ASHLEY
MANUFACTURING BV) AND SIGNATURE EYEWEAR, INC. DATED 28 MAY 1991 (AS AMENDED FROM
TIME TO TIME) (THE "LICENCE")

We refer to the Licence. The terms used in this letter shall have the same
meaning as in the Licence unless the contrary is indicated. We refer to your
e-mail dated 17 March 2003 addressed to Angie Yam. In consideration for the sum
of [***], which shall be added to the sum of [***] due by 7 April 2003 mentioned
below, we are agreeable to the following:

1.   The actual royalties from the quarter ending 31 January 2003 which remain
     unpaid as of the date hereof ($121,851) must be paid on or before the
     following dates:

          (i)     [***] (plus with the consideration of $1 mentioned above
                  giving a total of [***]) by 7 April 2003;

          (ii)    [***] by 21 April 2003; and

          (iii)   [***] by 3 May 2003.

<PAGE>

2.   The table for the Minimum Royalties for the Additional Renewal Terms ending
     31 January 2004 through 2008 shall be deleted and replaced with the
     following:

                                             Minimum
     Additional Renewal Terms ending         Royalty
     -------------------------------         -------

     January 2004                             [***]

     January 2005                             [***]

     January 2006                             [***]

     January 2007                             [***]

     January 2008                             [***]

3.   The Additional Renewal Terms ending in January 2007 and 2008 are subject to
     the additional proviso that no material breach which, if capable of remedy,
     has not been within the prescribed grace period has been committed from the
     date hereof up to 31 January 2006.

4.   The Minimum Royalty for the Additional Renewal Term ending 31 January 2004
     shall be payable as follows:

          (i)     [***] on or before 30 April 2003;

          (ii)    [***] on or before 31 July 2003;

          (iii)   [***] on or before 31 October 2003;

          (iv)    [***] on or before 28 February 2004; and,

          (v)     the balance [***] shall be payable in accordance with Section
                  9.4 of the License as if it were the sole Minimum Royalty for
                  such Additional Renewal Term.

5.   For the avoidance of doubt, the Minimum Royalties for the Additional
     Renewal Term ending 31 January 2004 and each Additional Renewal Term
     thereafter are intentionally not segregated by product type or territory.

6.   At least six months prior to the end of the Contract Year ending 31 January
     2008 provided that Siganture Eyewear, Inc. has not committed any material
     breach of terms of the Licence, the parties will discuss and consider the
     renewal of the Agreement for a further Additional Renewal Terms. If there
     is no agreement on further Additional Renewal Terms, the Licence shall end
     on 31 January 2008.

<PAGE>

7.   Laura Ashley waives any right to terminate the Licence as may exist as of
     31 January 2003 based on clause 13.2.2, and agrees that for all purposes
     under the Licence and the Licensee shall be deemed to have not failed in
     the Contract Year ended 31 January 2003 to have sufficient Net Sales to
     generate Royalty amounts which equal or exceed the Minimum Royalty in any
     Category of such Year.

8.   The revised Minimum Royalties shall revert to the original Minimum
     Royalties with retrospective effect if Laura Ashley shall be entitled to
     terminate the Licence in accordance with its terms, or, if applicable,
     under the common law.

Any amendment or waiver made by this letter shall be void or ineffective AB
INITIO should a change of control to which Laura Ashley approves does not occur
by 30 April 2003. Further, any consent to any change of control relating to the
Transaction (as defined in the relevant Consent document) signed by or on behalf
of Laura Ashley Limited on or around the date hereof is signed subject to
acceptance of this offer, and subject to the condition that you replace your
existing bank credit facility or facilities (term and/or revolving) in an
aggregate amount not less than [***] and that you obtain an additional term
facility in the amount not less than [***].

To accept this offer of variation, please sign below on both copies of this
letter and return one to me by post and by fax. A transaction report showing
that the fax has been received at +44 20 7880 5111 or actual receipt at the
above fax number constitutes communication of acceptance.

Yours sincerely

/s/ ANGIE YAM
Director of Corporate and Strategic Affairs
-------------------------------------------
For and on behalf of Laura Ashley Limited

cc: Ms Olivia Smales, Licensing Manager, Laura Ashley
    Mr Alan Spatz, Messrs Troy Gould

Signed: /s/ Michael Prince                               Date:   4/14/03
        ----------------------------------------------         -----------
        For and on behalf of Signature Eyewear, Inc.
        Chief Financial Officer

<PAGE>

                         [SIGNATURE EYEWEAR LETTERHEAD]

February 9, 2007

Sean Anglim
Head of Operations
Laura Ashley Limited
27 Bagleys Lane
Fulham, London
SW6 2QA

Dear Sean:

Per our conversation, Laura Ashley confirms there is no minimum sales
requirement for the 2006/07 contract year.

     1.   For the 2006/07 contract year ending January 31, 2007, Signature will
          pay a royalty minimum of *** (a final payment of *** to be made
          March 19, 2007).

     2.   For royalty and administrative support in conjunction with building
          the brand, in respect of the year ending January 27, 2007, Signature
          will pay Laura Ashley *** (three payments of *** in May 07, August
          07, November 07, and the balance of *** in January 08).

     3.   Signature also agrees to a fee of ***, in respect of the year ending
          January 27, 2007, to be paid in March of 2007.

     4.   Signature and Laura Ashley agree to extend the license agreement until
          January 2010 under the following terms and conditions:

          a.)  Signature will pay Laura Ashley the greater of *** royalty or
               the minimum royalty as outlined below:

          b.)  Year                 Minimum Royalty
               ----                 ---------------

               2007/06                    ***
               2006/09                    ***
               2009/10                    ***
<PAGE>

Signature truly appreciates Laura Ashley's understanding in regard to the future
development of the Laura Ashley eyewear brand. We are excited to work together
to build a strong and profitable eyewear business in the years to come.

Please sign our memorandum of understanding and fax back to 310-330-270. If you
have any questions please call us at 9 am (PST) on Thursday.

Best,

Michael Prince                                    /s/ Sean Anglim
----------------------                            ------------------------------
CEO                                               Approved and Accepted
Signature Eyewear                                 Sean Anglim-Head of Operations
                                                  Laura Ashley LimitedEXHIBIT 10.6
                                                                    ------------

                                    AGREEMENT

                              DATED APRIL 21, 2003

                                  US$4,150,000

                                 CREDIT FACILITY

                                       FOR

                             SIGNATURE EYEWEAR, INC.

                                   PROVIDED BY

                            BLUEBIRD FINANCE LIMITED

<PAGE>

                                    CONTENTS

CLAUSE                                                                     PAGE

1.       Interpretation......................................................1
         1.1          Definitions............................................1
         1.2          Construction...........................................5
2.       Facility............................................................6
3.       Purpose.............................................................7
         3.1          Loans..................................................7
         3.2          Letter of Credit.......................................7
         3.3          No obligation to monitor...............................7
         3.4          Security...............................................7
4.       Conditions Precedent................................................7
         4.1          Conditions precedent documents.........................7
         4.2          Further conditions precedent...........................7
5.       Utilization - Loans.................................................7
         5.1          Giving of Requests.....................................7
         5.2          Completion of Requests.................................8
         5.3          Advance of Loan........................................8
         5.4          Consolidation..........................................8
6.       Utilization - Letters of Credit.....................................8
         6.1          Giving of Requests.....................................8
         6.2          Completion of Requests.................................8
         6.3          Issue of Letter of Credit..............................9
7.       Letters of Credit...................................................9
         7.1          General................................................9
         7.2          Fees in respect of the Letter of Credit...............10
         7.3          Claims under a Letter of Credit.......................10
         7.4          Indemnities...........................................10
8.       Repayment..........................................................10
9.       Prepayment and Cancellation........................................10
         9.1          Mandatory prepayment - illegality.....................10
         9.2          Mandatory prepayment - change of control..............11
         9.3          Voluntary prepayment..................................11
         9.4          Automatic cancellation................................11
         9.5          Voluntary cancellation................................12
         9.6          Involuntary prepayment and cancellation...............12
         9.7          Re-borrowing of Loans.................................12
         9.8          Miscellaneous provisions..............................12
10.      Interest...........................................................12
         10.1         Calculation of interest...............................12
         10.2         Payment of interest...................................13
         10.3         Interest on overdue amounts...........................13
11.      Terms..............................................................13
12.      Taxes..............................................................13

<PAGE>

         12.1         Tax gross-up..........................................13
         12.2         Tax indemnity.........................................14
         12.3         Stamp taxes...........................................14
         12.4         Value added taxes.....................................14
13.      Increased Costs....................................................14
         13.1         Increased Costs.......................................14
         13.2         Exceptions............................................15
         13.3         Claims................................................15
14.      Payments...........................................................15
         14.1         Place.................................................15
         14.2         Funds.................................................15
         14.3         Currency..............................................15
         14.4         No set-off or counterclaim............................15
         14.5         Business Days.........................................16
         14.6         Timing of payments....................................16
15.      Representations....................................................16
         15.1         Representations.......................................16
         15.2         Status................................................16
         15.3         Powers and authority..................................16
         15.4         Legal validity........................................16
         15.5         Non-conflict..........................................16
         15.6         No default............................................17
         15.7         Authorizations........................................17
         15.8         Financial statements..................................17
         15.9         No material adverse change............................18
         15.10        Litigation............................................18
         15.11        Information...........................................18
         15.12        Pari passu ranking....................................19
         15.13        Taxes on payments.....................................19
         15.14        Stamp duties..........................................19
         15.15        Immunity..............................................19
         15.16        Pre-existing relationship; Capacity
                        to protect own interest.............................19
         15.17        Regulatory laws.......................................20
         15.18        Times for making representations......................20
16.      Information Covenants..............................................21
         16.1         Financial statements..................................21
         16.2         Form of financial statements..........................21
         16.3         Asset reports.........................................21
         16.4         Information - miscellaneous...........................22
         16.5         Notification of Default...............................22
         16.6         Year end..............................................22
17.      General Covenants..................................................22
         17.1         General...............................................22
         17.2         Authorizations........................................23
         17.3         Compliance with laws..................................23
         17.4         Pari passu ranking....................................23
         17.5         Negative pledge.......................................23
         17.6         Disposals.............................................24

<PAGE>

         17.7         Financial Indebtedness................................24
         17.8         Change of business....................................25
         17.9         Mergers...............................................25
         17.10        Acquisitions..........................................25
         17.11        Environmental matters.................................25
         17.12        Insurance.............................................26
         17.13        ERISA.................................................26
         17.14        Securities Laws.......................................27
         17.15        No new Subsidiaries...................................27
18.      Default............................................................27
         18.1         Events of Default.....................................27
         18.2         Non-payment...........................................28
         18.3         Breach of other obligations...........................28
         18.4         Misrepresentation.....................................28
         18.5         Cross-default.........................................28
         18.6         Insolvency............................................29
         18.7         Insolvency proceedings................................29
         18.8         Creditors' process....................................30
         18.9         Cessation of business.................................30
         18.10        Effectiveness of Finance Documents....................30
         18.11        Material adverse change...............................30
         18.12        Acceleration..........................................30
19.      Evidence and Calculations..........................................31
         19.1         Accounts..............................................31
         19.2         Certificates and determinations.......................31
         19.3         Calculations..........................................31
20.      Indemnities........................................................31
         20.1         Currency indemnity....................................31
         20.2         Other indemnities.....................................32
21.      Expenses...........................................................32
         21.1         Initial costs.........................................32
         21.2         Subsequent costs......................................32
         21.3         Enforcement costs.....................................33
22.      Waivers............................................................33
23.      Changes to the Parties.............................................33
         23.1         Assignments and transfers by the Company..............33
         23.2         Assignments and transfers by the Lender...............33
24.      Disclosure of Information..........................................33
25.      Set-Off............................................................34
26.      Severability.......................................................34
27.      Counterparts.......................................................34
28.      Notices............................................................35
         28.1         In writing............................................35
         28.2         Contact details.......................................35
         28.3         Effectiveness.........................................35
29.      Language...........................................................36
30.      Governing Law......................................................36
31.      Enforcement........................................................36
         31.1         Waiver of immunity....................................36
         31.2         Waiver of trial by jury...............................36
32.      Integration........................................................37

<PAGE>

Signatories.................................................................38

SCHEDULES

1.       Conditions Precedent Documents.....................................39
2.       Form of Request....................................................41
3.       Security Interests.................................................42
4.       Form of Security Agreement.........................................43
5.       Defaults...........................................................44
6.       Material Adverse Change............................................45
7.       Litigation.........................................................46
8.       Form of Legal Opinion of the Company's Counsel.....................47
9.       Letter of Credit...................................................55

<PAGE>

THIS AGREEMENT is dated April 21, 2003

BETWEEN:

(1)  SIGNATURE EYEWEAR, INC., a corporation organized under the laws of the
     State of California (the Company); and

(2)  BLUEBIRD FINANCE LIMITED as lender, a company organized under the laws of
     the British Virgin Islands (the LENDER).

IT IS AGREED as follows:

1.   INTERPRETATION

1.1  DEFINITIONS

     In this Agreement:

     AFFILIATE means a Subsidiary or a Holding Company of a person or any other
     Subsidiary of that Holding Company.

     AVAILABILITY PERIOD means the period from and including the date of this
     Agreement to and including: (a) with respect to Loans, the date falling
     three months before the Final Maturity Date; and (b) with respect to the
     Letter of Credit, close of business on the date of this Agreement.

     BUSINESS DAY means a day (other than a Saturday or a Sunday) on which banks
     are open for general business in California, USA.

     COMMITMENT means the Letter of Credit Commitment and the Loan Commitment.

     CREDIT means a Loan or the procurement of the Letter of Credit.

     DECEMBER FINANCIAL STATEMENTS means the draft unaudited consolidated
     financial statements of the Company for the period ended December 31, 2002.

     DEFAULT means:

     (a)  an Event of Default; or

     (b)  an event which would be (with the expiry of a grace period, the giving
          of notice or the making of any determination under the Finance
          Documents or any combination of them) an Event of Default.

     EVENT OF DEFAULT means an event specified as such in Clause 18 (Default).

     FACILITY means the credit facility made available under this Agreement.

                                        1
<PAGE>

     FINAL MATURITY DATE means the tenth anniversary of the date of this
     Agreement.

     FINANCE DOCUMENT means:

     (a) this Agreement;

     (b) a Security Document;

     (c) the Subordination Agreement; or

     (d) any other document designated as such by the Lender and the Company.

     FINANCIAL INDEBTEDNESS means any indebtedness for or in respect of:

     (a)  moneys borrowed;

     (b)  any acceptance credit;

     (c)  any bond, note, debenture, loan stock or other similar instrument;

     (d)  any redeemable preference share;

     (e)  any agreement treated as a finance or capital lease in accordance with
          generally accepted accounting principles in the jurisdiction of
          incorporation of the Company;

     (f)  receivables sold or discounted (otherwise than on a non-recourse
          basis);

     (g)  the acquisition cost of any asset to the extent payable after its
          acquisition or possession by the party liable where the deferred
          payment is arranged primarily as a method of raising finance or
          financing the acquisition of that asset;

     (h)  any derivative transaction protecting against or benefiting from
          fluctuations in any rate or price (and, except for non-payment of an
          amount, the then mark to market value of the derivative transaction
          will be used to calculate its amount);

     (i)  any other transaction (including any forward sale or purchase
          agreement) which has the commercial effect of a borrowing;

     (j)  any counter-indemnity obligation in respect of any guarantee,
          indemnity, bond, letter of credit or any other instrument issued by a
          bank or financial institution; or

     (k)  any guarantee, indemnity or similar assurance against financial loss
          of any person in respect of any item referred to in the above
          paragraphs.

     GROUP means the Company and its Subsidiaries.

     HOLDING COMPANY of any other person, means a company in respect of which
     that other person is a Subsidiary.

                                       2
<PAGE>

     INCREASED COST means:

     (a)  an additional or increased cost;

     (b)  a reduction in the rate of return from the Facility; or

     (c)  a reduction of an amount due and payable under any Finance Document,

     which is incurred or suffered by the Lender or any of its Affiliates but
     only to the extent:

     (i)  attributable to the Lender having entered into any Finance Document or
          funding or performing its obligations under any Finance Document; and

     (ii) such costs, reduction or amounts exceeds US$25,000 in aggregate.

     LC ISSUER means Bank of America (Asia) Limited.

     LETTER OF CREDIT means the US$1,250,000 letter of credit issued by the LC
     Issuer in favor of the Senior Lender at the request of the Lender as
     collateral for the obligations of the Company under the Senior Credit
     Agreement in the form of Schedule 9 (Letter of Credit).

     LETTER OF CREDIT COMMITMENT means US$1,250,000, as such amount shall be
     automatically reduced to zero on the earlier of:

     (a) the Utilization Date of the Letter of Credit; and

     (b) close of business in California on the date of this Agreement.

     LOAN means, unless otherwise stated in this Agreement, the principal amount
     of each borrowing under this Agreement or the principal amount outstanding
     of that borrowing.

     LOAN COMMITMENT means US$2,900,000, as such amount shall be automatically
     reduced by an amount equal to US $72,500 on:

     (a)  the date falling 27 months after the date of this Agreement; and (b)
          every 3 months after such date,

     to the extent not cancelled, transferred or otherwise reduced under this
     Agreement.

     MATERIAL ADVERSE EFFECT means a material adverse effect on:

     (a)  the business, financial condition or results of operations of any
          member of the Group or the Group as a whole;

     (b)  the ability of the Company to perform its obligations under any
          Finance Document;

     (c)  the validity or enforceability of any Finance Document; or

     (d)  any right or remedy of the Lender in respect of a Finance Document.

                                        3
<PAGE>

     OCTOBER FINANCIAL STATEMENTS means the draft consolidated financial
     statements of the Company for the year ended October 31, 2002.

     PARTY means a party to this Agreement.

     REPEATING REPRESENTATIONS means the representations which are deemed to be
     repeated under Clause 15.18 (Times for making representations).

     REQUEST means a request for a Credit, substantially in the form of Schedule
     2 (Form of Request).

     SECURITY AGREEMENT means a security agreement in the form of Schedule 4
     (Form of Security Agreement) with such amendments as the Lender may approve
     or reasonably require.

     SECURITY DOCUMENT means:

     (a)  each Security Agreement; and

     (b)  any other document evidencing or creating security over any asset of
          the Company to secure any obligation of the Company to the Lender
          under the Finance Documents.

     SECURITY INTEREST means any mortgage, pledge, lien, charge, assignment,
     hypothecation or security interest or any other agreement or arrangement
     having a similar effect.

     SENIOR CREDIT AGREEMENT means the US$3,500,000 loan and security agreement
     dated on or about the date hereof between the Senior Lender and the Company
     and the two promissory notes issued by the Company pursuant thereto.

     SENIOR LENDER means Home Loan and Investment Company, a Colorado
     corporation.

     SUBORDINATION AGREEMENT means the subordination agreement dated on or about
     the date of this Agreement between the Senior Lender, the Company and the
     Lender.

     SUBSIDIARY means an entity of which a person has direct or indirect control
     or owns directly or indirectly more than 50% of the voting capital or
     similar right of ownership and CONTROL for this purpose means the power to
     direct the management and the policies of the entity whether through the
     ownership of voting capital, by contract or otherwise.

     TAX means any tax, levy, impost, duty or other charge or withholding of a
     similar nature (including any related penalty or interest).

     TAX DEDUCTION means a deduction or withholding for or on account of Tax
     from a payment under a Finance Document.

     TAX PAYMENT means a payment made by the Company to the Lender in any way
     related to a Tax Deduction or under any indemnity given by the Company in
     respect of Tax under any Finance Document.

     TERM means:

                                        4
<PAGE>

     (a)  three months or each period determined under this Agreement by
          reference to which interest on an overdue amount is calculated; or

     (b)  the period for which the Lender or any Affiliate of the Lender may be
          under any liability with respect to the Letter of Credit.

     UTILIZATION DATE means each date on which the Facility is utilized.

1.2  CONSTRUCTION

(a)  In this Agreement, unless the contrary intention appears, a reference to:

     (i)  an AMENDMENT includes a supplement, novation, restatement or
          re-enactment and AMENDED will be construed accordingly;

     (II) ASSETS includes present and future properties, revenues and rights of
          every description; (iii) an AUTHORIZATION includes an authorization,
          consent, approval, resolution, license, exemption, filing,
          registration or notarization;

     (IV) DISPOSAL means a sale, transfer, grant, lease or other disposal,
          whether voluntary or involuntary, and DISPOSE will be construed
          accordingly;

     (V)  INDEBTEDNESS includes any obligation (whether incurred as principal or
          as surety) for the payment or repayment of money;

     (vi) a PERSON includes any individual, company, corporation, limited
          liability partnership, limited liability company, unincorporated
          association or body (including a partnership, trust, joint venture or
          consortium), government, state, agency, organization or other entity
          whether or not having separate legal personality;

     (vii) a REGULATION includes any regulation, rule, official directive,
          request or guideline (whether or not having the force of law but, if
          not having the force of law, being of a type with which any person to
          which it applies is accustomed to comply) of any governmental,
          inter-governmental or supranational body, agency, department or
          regulatory, self-regulatory or other authority or organization;

     (viii) a currency is a reference to the lawful currency for the time being
          of the relevant country; (ix) a Default being OUTSTANDING means that
          it has not been remedied or waived; (x) a provision of law is a
          reference to that provision as extended, applied, amended or
          re-enacted and includes any subordinate legislation;

     (xi) a Clause, a Subclause or a Schedule is a reference to a clause or
          subclause of, or a schedule to, this Agreement;

     (xii) a Party or any other person includes its successors in title,
          permitted assigns and permitted transferees;

                                       5
<PAGE>

     (xiii) a Finance Document or another document is a reference to that
          Finance Document or other document as amended; and

     (xiv) a time of day is a reference to California time.

(b)  Unless the contrary intention appears, a reference to a MONTH or MONTHS is
     a reference to a period starting on one day in a calendar month and ending
     on the numerically corresponding day in the next calendar month or the
     calendar month in which it is to end, except that:

     (i)  if the numerically corresponding day is not a Business Day, the period
          will end on the next Business Day in that month (if there is one) or
          the preceding Business Day (if there is not);

     (ii) if there is no numerically corresponding day in that month, that
          period will end on the last Business Day in that month; and

     (iii) notwithstanding sub-paragraph (b)(i) above, a period which commences
          on the last Business Day of a month will end on the last Business Day
          in the next month or the calendar month in which it is to end, as
          appropriate.

(c)  Unless expressly provided to the contrary in a Finance Document, a person
     who is not a party to a Finance Document may not enforce any of its terms
     and, notwithstanding any term of any Finance Document, no consent of any
     third party is required for any variation (including any release or
     compromise of any liability) or termination of that Finance Document.

(d)  Unless the contrary intention appears:

     (i)  a reference to a Party will not include that Party if it has ceased to
          be a Party under this Agreement;

     (ii) an amount in US Dollars is only payable in US Dollars;

     (iii) a word or expression used in any other Finance Document or in any
          notice given in connection with any Finance Document has the same
          meaning in that Finance Document or notice as in this Agreement; and

     (iv) any obligation of the Company under the Finance Documents which is not
          a payment obligation remains in force for so long as any payment
          obligation of the Company is or may be outstanding under the Finance
          Documents.

(e)  The headings in this Agreement do not affect its interpretation. 2.
     FACILITY

     Subject to the terms of this Agreement, the Lender makes available to the
     Company:

     (a)  a revolving credit facility in an aggregate amount equal to the Loan
          Commitment; and

     (b)  a credit facility in an aggregate amount equal to the Letter of Credit
          Commitment.

                                        6
<PAGE>

3.   PURPOSE

3.1  LOANS

     Each Loan may only be used for:

     (a)  payments to creditors of the Company designated by the Lender; and

     (b)  the general working capital needs of the Company.

3.2  LETTER OF CREDIT

     The Letter of Credit may only be issued as collateral for the obligations
     of the Company under the Senior Credit Agreement.

3.3  NO OBLIGATION TO MONITOR

     The Lender is not bound to monitor or verify the utilization of the
     Facility.

3.4  SECURITY

     The obligations of the Company under the Finance Documents are secured by
     the Security Documents.

4.   CONDITIONS PRECEDENT

4.1  CONDITIONS PRECEDENT DOCUMENTS

     A Request may not be given until the Lender has notified the Company that
     it has received all of the documents and evidence set out in Schedule 1
     (Conditions precedent documents) in form and substance satisfactory to the
     Lender. The Lender must give this notification to the Company promptly upon
     being so satisfied.

4.2  FURTHER CONDITIONS PRECEDENT

     The obligations of the Lender to make any Credit available are subject to
     the further conditions precedent that on both the date of the Request and
     the Utilization Date for that Credit:

     (a)  the Repeating Representations are correct in all material respects;
          and (b) no Default is outstanding or would result from the Credit.

5.   UTILIZATION - LOANS

5.1  GIVING OF REQUESTS

     (a)  The Company may borrow a Loan by giving to the Lender a duly completed
          Request.

     (b)  Unless the Lender otherwise agrees, the latest time for receipt by the
          Lender of a duly completed Request is 11:00 a.m. two Business Days
          before the Utilization Date for the proposed Loan.

                                        7
<PAGE>

5.2  COMPLETION OF REQUESTS

     A Request for a Loan will not be regarded as having been duly completed
     unless:

     (a)  the Utilization Date is a Business Day falling within the applicable
          Availability Period; and

     (b)  the amount of the Loan requested is:

          (i)  a minimum of US$25,000 and an integral multiple of US$25,000; or

          (ii) the maximum undrawn amount available under this Agreement for
               Loans under the Facility on the proposed Utilization Date.

     Only one Loan may be requested in a Request.

5.3  ADVANCE OF LOAN

     (a)  The Lender is not obliged to make a Loan if, as a result, the Loans
          would exceed the Loan Commitment.

     (b)  If the conditions set out in this Agreement have been met, the Lender
          must make the Loan available to the Company on the Utilization Date
          set out in the Request for the Loan.

5.4  CONSOLIDATION

     Immediately upon being made available to the Company a Loan shall be
     consolidated with any other Loan and treated as one Loan.

6.   UTILIZATION - LETTERS OF CREDIT 6.1 GIVING OF REQUESTS

     (a)  The Company may request the Lender to procure that the Letter of
          Credit be issued by giving to the Lender a duly completed Request.

     (b)  Unless the Lender otherwise agrees, the latest time for receipt by the
          Lender of a duly completed Request is 11.00 a.m. two Business Days
          before the proposed Utilization Date for the Letter of Credit.

6.2  COMPLETION OF REQUESTS

     A Request for the procurement of the Letter of Credit will not be regarded
     as being duly completed unless:

     (a)  it specifies that it is for the Letter of Credit;

     (b)  the Utilization Date is a Business Day falling within the applicable
          Availability Period; and

     (c)  the delivery instructions for the Letter of Credit are specified.

                                        8
<PAGE>

     Only the Letter of Credit may be requested in a Request.

6.3  ISSUE OF LETTER OF CREDIT

(a)  The Lender is not obliged to procure the issue of the Letter of Credit if
     as a result the Credit attributable to the Letter of Credit would exceed
     the Letter of Credit Commitment.

(b)  If the conditions set out in this Agreement have been met, the Lender must
     procure the issue of the Letter of Credit on the Utilization Date set out
     in the Request for the procurement of the Letter of Credit.

7.   LETTERS OF CREDIT

7.1  GENERAL

(a)  The Letter of Credit is REPAID or PREPAID if:

     (i)  the Company provides cash cover to the Lender for the Letter of
          Credit;

     (ii) the maximum amount payable under the Letter of Credit is reduced in
          accordance with its terms; or

     (iii) the Lender is satisfied that neither it nor any of its Affiliates has
          any further liability with respect to the Letter of Credit.

     The amount by which the Letter of Credit is repaid or prepaid under
     sub-paragraphs (i) and (ii) above is the amount of the relevant cash cover
     or reduction.

(b)  If the Letter of Credit or any amount outstanding under the Letter of
     Credit is expressed to be immediately payable, the Company must repay or
     prepay that amount immediately.

(C)  CASH COVER is provided for the Letter of Credit if the Company pays an
     amount in the currency of the Letter of Credit to an interest-bearing
     account with the Lender in the name of the Company and the following
     conditions are met:

     (i)  until no amount is or may be outstanding under the Letter of Credit,
          withdrawals from the account may only be made to pay the Lender
          amounts due and payable by it or any of its Affiliates with respect to
          the Letter of Credit or under this Clause; and

     (ii) the Company has executed a security document over that account, in
          form and substance satisfactory to the Lender, creating a first
          ranking security interest over that account in favor of the Lender.

(d)  The OUTSTANDING or PRINCIPAL amount of the Letter of Credit at any time is
     the maximum amount that is or may be payable by the Company or any of its
     Affiliates to the LC Issuer or any other person in respect of the Letter of
     Credit at that time.

                                        9
<PAGE>

7.2  FEES IN RESPECT OF THE LETTER OF CREDIT

(a)  The Company must pay to the Lender immediately on demand an amount equal to
     the letter of credit fee payable to the LC Issuer on the outstanding amount
     of the Letter of Credit for the period from the issue of the Letter of
     Credit until its maturity date.

(b)  The letter of credit fee is payable annually in advance.

7.3  CLAIMS UNDER A LETTER OF CREDIT

(a)  The Company irrevocably and unconditionally authorizes the Lender to pay to
     the LC Issuer an amount equal to any claim made or purported to be made
     under the Letter of Credit which appears on its face to be in order (a
     CLAIM).

(b)  The Company must immediately on demand pay to the Lender an amount equal to
     the amount of any claim.

(c)  The Company acknowledges that the Lender and the LC Issuer:

     (i)  are not obliged to carry out any investigation or seek any
          confirmation from any other person before paying a claim; and

     (ii) deal in documents only and will not be concerned with the legality of
          a claim or any underlying transaction or any available set-off,
          counterclaim or other defence of any person.

(d)  The obligations of the Company under this Clause will not be affected by:

     (i)  the sufficiency, accuracy or genuiness of any claim or any other
          document; or

     (ii) any incapacity of, or limitation on the powers of, any person signing
          a claim or other document.

7.4 INDEMNITIES

     The Company must immediately on demand indemnify the Lender against any
     loss or liability which the Lender incurs under or in connection with the
     Letter of Credit.

8.   REPAYMENT

(a)  The Company must repay the Loan so that the Loan never exceeds the Loan
     Commitment.

(b)  The Company must repay the Letter of Credit in full on its maturity date.

9.   PREPAYMENT AND CANCELLATION

9.1  MANDATORY PREPAYMENT - ILLEGALITY

(a)  The Lender must notify the Company promptly if it becomes aware that it is
     unlawful in any jurisdiction for the Lender to perform any of its
     obligations under a Finance Document or to fund or maintain any Credit.

                                       10
<PAGE>

(b)  After notification under paragraph (a) above:

     (i)  the Company must repay or prepay the Lender each Credit on the date
          specified in paragraph (c) below; and

     (ii) the Commitment will be immediately cancelled.

(c)  The date for repayment or prepayment of a Credit will be:

     (i)  the last day of the current Term of that Credit; or

     (ii) if earlier, the date specified by the Lender in the notification under
          paragraph (a) above and which must not be earlier than the last day of
          any applicable grace period allowed by law.

9.2  MANDATORY PREPAYMENT - CHANGE OF CONTROL

(a)  For the purposes of this Clause:

     a CHANGE OF CONTROL occurs if any person or group of persons acting in
     concert cease(s) to be the beneficial owner directly or indirectly through
     wholly owned Subsidiaries of more than 50% of the issued share capital of
     the Company; and

     ACTING IN CONCERT means acting together pursuant to an agreement or
     understanding (whether formal or informal)

(b)  The Company must promptly notify the Lender if it becomes aware of any
     change of control.

(c)  After a change of control, the Lender may, by notice to the Company:

     (i)  cancel the Commitment; and

     (ii) declare all outstanding Credits, together with accrued interest and
          all other amounts accrued under the Finance Documents, to be
          immediately due and payable.

     Any such notice will take effect in accordance with its terms.

9.3  VOLUNTARY PREPAYMENT

(a)  The Company may, by giving not less than five Business Days' prior notice
     to the Lender, prepay any Credit at any time in whole or in part.

(b)  A prepayment of part of a Credit must be in a minimum amount of US$25,000
     and an integral multiple of US$25,000.

9.4  AUTOMATIC CANCELLATION

(a)  The Loan Commitment will be automatically cancelled at the close of
     business on the Final Maturity Date.

                                       11
<PAGE>

(b)  The Letter of Credit Commitment will be automatically cancelled at the
     close of business on the date of this Agreement.

9.5  VOLUNTARY CANCELLATION

(a)  The Company may, by giving not less than five Business Days' prior notice
     to the Lender, cancel the unutilized amount of the Loan Commitment in whole
     or in part.

(b)  Partial cancellation of the Loan Commitment must be in a minimum amount of
     US$25,000 and an integral multiple of US$25,000. If the Loan Commitment is
     cancelled in part, it may not be reduced below US$300,000.

9.6  INVOLUNTARY PREPAYMENT AND CANCELLATION

(a)  If the Company is, or will be, required to pay to the Lender a Tax Payment
     or an Increased Cost, the Company may, while the requirement continues,
     give notice to the Lender requesting prepayment and cancellation.

(b)  After notification under paragraph (a) above:

     (i)  the Company must repay or prepay each Credit on the date specified in
          paragraph (c) below; and

     (ii) the Commitment will be immediately cancelled.

(c)  The date for repayment or prepayment of a Credit will be the last day of
     the current Term for that Credit or, if earlier, the date specified by the
     Company in its notification.

9.7  RE-BORROWING OF LOANS

     Any voluntary prepayment of all or any part of the Loan may be re-borrowed
     on the terms of this Agreement. Any mandatory or involuntary prepayment of
     all or part of the Loan may not be re-borrowed.

9.8  MISCELLANEOUS PROVISIONS

(a)  Any notice of prepayment and/or cancellation under this Agreement is
     irrevocable and must specify the relevant date(s) and the affected Credits.

(b)  All prepayments under this Agreement must be made with accrued interest on
     the amount prepaid.

(c)  No prepayment or cancellation is allowed except in accordance with the
     express terms of this Agreement.

10.  INTEREST

10.1 CALCULATION OF INTEREST

     The rate of interest on the Loan is 5 (five) percent per annum.

                                       12
<PAGE>

10.2 PAYMENT OF INTEREST

(a)  Up to and including the second anniversary of the date of this Agreement,
     the Company must pay accrued interest on the Loan on the first and on the
     second anniversary of the date of this Agreement.

(b)  After the second anniversary of the date of this Agreement the Company must
     pay accrued interest on the Loan on the last day of each Term.

10.3 INTEREST ON OVERDUE AMOUNTS

(a)  If the Company fails to pay any amount payable by it under the Finance
     Documents, it must immediately on demand by the Lender pay interest on the
     overdue amount from its due date up to the date of actual payment, both
     before, on and after judgment.

(b)  Interest is payable for successive Terms selected by the Lender:

     (i)  on an overdue amount with respect to the Loan, at a rate two percent
          per annum above the rate of interest referred to in Clause 10.1
          (Calculation of interest) above; and

     (ii) on an overdue amount with respect to the Letter of Credit, at the rate
          notified by, and payable to, the LC Issuer (as notified by the Lender
          to the Company) from time to time.

(c)  Interest (if unpaid) on an overdue amount will be compounded with that
     overdue amount at the end of each of its Terms but will remain immediately
     due and payable.

11.  TERMS

     The Loan has successive Terms of three months starting on the date of this
     Agreement or on the expiry of the preceding Term.

12.  TAXES

12.1 TAX GROSS-UP

(a)  The Company must make all payments to be made by it under the Finance
     Documents without any Tax Deduction, unless a Tax Deduction is required by
     law.

(b)  If the Company or the Lender is aware that the Company must make a Tax
     Deduction (or that there is a change in the rate or the basis of a Tax
     Deduction), it must notify the other Party promptly.

(c)  If a Tax Deduction is required by law to be made by the Company, the amount
     of the payment due from the Company will be increased to an amount which
     (after making the Tax Deduction) leaves an amount equal to the payment
     which would have been due if no Tax Deduction had been required.

(d)  If the Company is required to make a Tax Deduction, it must make the
     minimum Tax Deduction allowed by law and must make any payment required in
     connection with that Tax Deduction within the time allowed by law.

                                       13
<PAGE>

(e)  Within 30 days of making either a Tax Deduction or a payment required in
     connection with a Tax Deduction, the Company must deliver to the Lender
     evidence satisfactory to the Lender (acting reasonably) that the Tax
     Deduction has been made or (as applicable) the appropriate payment has been
     paid to the relevant taxing authority.

12.2 TAX INDEMNITY

(a)  Except as provided below, the Company must indemnify the Lender against any
     loss or liability which the Lender (in its absolute discretion) determines
     will be or has been suffered (directly or indirectly) by it for or on
     account of Tax in relation to a payment received or receivable (or any
     payment deemed to be received or receivable) under a Finance Document.

(b)  Paragraph (a) above does not apply to any Tax assessed on the Lender under
     the laws of the jurisdiction in which the Lender is incorporated or, if
     different, the jurisdiction (or jurisdictions) in which the Lender is
     treated as resident for tax purposes if that Tax is imposed on or
     calculated by reference to the net income received or receivable by the
     Lender. However, any payment deemed to be received or receivable, including
     any amount treated as income but not actually received by the Lender, such
     as a Tax Deduction, will not be treated as net income received or
     receivable for this purpose.

(c)  If the Lender makes, or intends to make, a claim under paragraph (a) above,
     it must promptly notify the Company of the event which will give, or has
     given, rise to the claim.

12.3 STAMP TAXES

     The Company must pay and indemnify the Lender against any stamp duty,
     documentary, property, registration or other similar Tax payable in the
     jurisdictions of its incorporation, operations or where any of its assets
     are located in connection with the entry into, performance or enforcement
     of any Finance Document.

12.4 VALUE ADDED TAXES

     Any amount (including costs and expenses) payable under a Finance Document
     by the Company is exclusive of any value added tax or any other Tax of a
     similar nature which might be chargeable in connection with that amount. If
     any such Tax is chargeable, the Company must pay to the Lender (in addition
     to and at the same time as paying that amount) an amount equal to the
     amount of that Tax.

13.  INCREASED COSTS

13.1 INCREASED COSTS

     Except as provided below in this Clause, the Company must pay to the Lender
     the amount of any Increased Cost incurred by the Lender or any of its
     Affiliates as a result of:

(a)  the introduction of, or any change in, or any change in the interpretation,
     administration or application of, any law or regulation; or

(b)  compliance with any law or regulation,

                                       14
<PAGE>

     made after the date of this Agreement.

13.2 EXCEPTIONS

     The Company need not make any payment for an Increased Cost to the extent
     that the Increased Cost is:

(a)  compensated for under another Clause or would have been but for an
     exception to that Clause;

(b)  a tax on the overall net income of the Lender or any of its Affiliates; or

(c)  attributable to the Lender or its Affiliate willfully failing to comply
     with any law or regulation.

13.3 CLAIMS

     The Lender must notify the Company promptly of the circumstances giving
     rise to, and the amount of, the claim.

14.  PAYMENTS

14.1 PLACE

     Unless a Finance Document specifies that payments under it are to be made
     in another manner, all payments under a Finance Document must be made to
     the relevant Party to its account at such office or bank as it may notify
     to the other Party for this purpose by not less than five Business Days'
     prior notice.

14.2 FUNDS

     Payments under the Finance Documents to the Lender must be made for value
     on the due date at such times and in such funds as the Lender may specify
     to the Company as being customary at the time for the settlement of
     transactions in that currency in the place for payment.

14.3 CURRENCY

(a)  Unless a Finance Document specifies that payments under it are to be made
     in a different manner, the currency of each amount payable under the
     Finance Documents is determined under this Clause.

(b)  Amounts payable in respect of costs and expenses are payable in the
     currency in which they are incurred. (c) Each other amount payable under
     the Finance Documents is payable in US Dollars.

14.4 NO SET-OFF OR COUNTERCLAIM

     All payments made by the Company under the Finance Documents must be made
     without set-off or counterclaim.

                                       15
<PAGE>

14.5 BUSINESS DAYS

(a)  If a payment under the Finance Documents is due on a day which is not a
     Business Day, the due date for that payment will instead be the next
     Business Day in the same calendar month (if there is one) or the preceding
     Business Day (if there is not) or whatever day the Lender determines is
     market practice.

(b)  During any extension of the due date for payment of any principal under
     this Agreement interest is payable on that principal at the rate payable on
     the original due date.

14.6 TIMING OF PAYMENTS

     If a Finance Document does not provide for when a particular payment is
     due, that payment will be due within three Business Days of demand by the
     Lender.

15.  REPRESENTATIONS

15.1 REPRESENTATIONS

     The representations set out in this Clause are made by the Company to the
     Lender.

15.2 STATUS

(a)  It is a corporation, duly incorporated and validly existing under the laws
     of the State of California.

(b)  It and each of its Subsidiaries has the power to own its assets and carry
     on its business as it is being conducted.

15.3 POWERS AND AUTHORITY

     It has the power to enter into and perform, and has taken all necessary
     action to authorize the entry into and performance of, the Finance
     Documents to which it is or will be a party and the transactions
     contemplated by those Finance Documents.

15.4 LEGAL VALIDITY

     Each Finance Document to which it is a party is its legally binding, valid
     and enforceable obligation.

15.5 NON-CONFLICT

     The entry into and performance by it of, and the transactions contemplated
     by, the Finance Documents do not conflict with:

(a)  any law or regulation applicable to it;

(b)  its or any of its Subsidiaries' constitutional documents; or

(c)  any document which is binding upon it or any of its Subsidiaries or any of
     its or its Subsidiaries' assets other than documents with respect to which
     the Company's maximum potential liability does not exceed US$75,000 in
     aggregate and the payment of such liability would not have a Material
     Adverse Effect.

                                       16
<PAGE>

15.6 NO DEFAULT

(a)  No Default is outstanding or will result from the execution of, or the
     performance of any transaction contemplated by, any Finance Document other
     than as described in Schedule 5 (Defaults).

(b)  No other event is outstanding which constitutes a default under any
     document which is binding on it or any of its Subsidiaries or any of its or
     its Subsidiaries' assets other than:

     (i)  as described in Schedule 5 (Defaults);

     (ii) any document with respect to the counterparty of which the Company's
          maximum aggregate potential liability is greater than US$100,000 and
          which liability will be repaid in full within 30 days of the date of
          this Agreement; or

     (iii) any document with respect to the counterparty of which the Company's
          maximum aggregate potential liability does not exceed US$100,000 and
          the payment of such liability would not have a Material Adverse
          Effect.

15.7 AUTHORIZATIONS

     All authorizations required by it in connection with the entry into,
     performance, validity and enforceability of, and the transactions
     contemplated by, the Finance Documents have been obtained or effected (as
     appropriate) and are in full force and effect.

15.8 FINANCIAL STATEMENTS

(a)  The October Financial Statements have been prepared in good faith with due
     care and diligence and fairly represent its financial condition and results
     of operations as at the date to which they were drawn up, subject to:

     (i)  normal year end adjustments and completion of the footnotes; and

     (ii) adjustments required by the Company's auditors to be made as follows:

          (A)  increase in inventory reserves as a result of obsolescence or
               slow movement of inventory;

          (B)  increase in the reserves for returns of goods, inventory and
               merchandise; and

          (C)  increase in the bad debt reserve,

     all such adjustments to be notified to the Lender promptly upon agreement
     thereof by the Company and its auditors.

                                       17
<PAGE>

(b)  The December Financial Statements have been prepared in good faith with due
     care and diligence and fairly represent its financial condition and results
     of operations as at the date to which they were drawn up, subject to:

     (i)  normal year end adjustments; and

     (ii) adjustments directly resulting from any adjustments made to the
          October Financial Statements in accordance with paragraph (a)(ii)
          above.

     The December Financial Statements contain no footnotes.

(c)  Its audited consolidated financial statements most recently delivered to
     the Lender:

     (i)  have been prepared in accordance with accounting principles and
          practices generally accepted in its jurisdiction of incorporation,
          consistently applied; and

     (ii) fairly represent its consolidated financial condition and results of
          operations as at the date to which they were drawn up,

     except, in each case, as disclosed to the contrary in those financial
     statements.

15.9 NO MATERIAL ADVERSE CHANGE

     There has been no material adverse change in the consolidated financial
     condition or results of operations of the Company since December 31, 2002
     other than:

(a)  as set out in Schedule 6 (Material Adverse Change); or

(b)  as otherwise known to the Lender.

15.10 LITIGATION

     No litigation, arbitration or administrative proceedings are current or, to
     its knowledge, pending or threatened, which, if adversely determined, are
     reasonably likely to have a Material Adverse Effect other than:

(a)  as set out in Schedule 7 (Litigation); or

(b)  threatened claims for an amount not exceeding US$100,000 in aggregate.

15.11 INFORMATION

(a)  All written information (including, for the avoidance of doubt, information
     supplied by, or attached to, e-mail) supplied by it to the Lender in
     connection with the Finance Documents is true and accurate in all respects
     as at its date or (if appropriate) as at the date (if any) at which it is
     stated to be given other than inaccuracies which are not material in the
     context of:

     (i)  the overall business, financial condition or results of operations of
          the Company; or

     (ii) the ability of the Company to perform its obligations under any
          Finance Document.

                                       18
<PAGE>

(b)  It has not omitted to supply any information which, if disclosed, might
     make the information supplied by it to the Lender in connection with the
     Finance Documents untrue or misleading in any material respect other than:

     (i)  omissions which are not material in the context of:

          (A)  the overall business, financial condition or results of
               operations of the Company; or

          (B)  the ability of the Company to perform its obligations under any
               Finance Document;

     (ii) information that is known to the Lender; or

     (iii) information that is available to the general public in the city where
          the management of the Lender is located through:

          (A)  major media sources; or

          (B)  relevant optical industry press.

15.12 PARI PASSU RANKING

     Its payment obligations under the Finance Documents rank at least pari
     passu with all its other present and future unsecured payment obligations,
     except for obligations mandatorily preferred by law applying to companies
     generally.

15.13 TAXES ON PAYMENTS

     All amounts payable by it under the Finance Documents may be made without
     any Tax Deduction.

15.14 STAMP DUTIES

     No stamp duty, documentary, property, registration or similar Tax or charge
     is payable in its jurisdiction of incorporation in respect of any Finance
     Document.

15.15 IMMUNITY

(a)  The execution by it of each Finance Document constitutes, and the exercise
     by it of its rights and performance of its obligations under each Finance
     Document will constitute, private and commercial acts performed for private
     and commercial purposes.

(b)  It will not be entitled to claim immunity from suit, execution, attachment
     or other legal process in any proceedings taken in its jurisdiction of
     incorporation in relation to any Finance Document.

15.16 PRE-EXISTING RELATIONSHIP; CAPACITY TO PROTECT OWN INTEREST

(a)  The Lender and the Company, or any of their respective officers, directors
     or controlling persons, have a pre-existing business or personal
     relationship.

                                       19
<PAGE>

(b)  The Company has the capacity to protect its interests in connection with
     its obligations under the Finance Documents by reason of its business and
     financial experience or that of its professional advisors.

15.17 REGULATORY LAWS

(a)  In this Subclause:

     HOLDING COMPANY, AFFILIATE AND SUBSIDIARY COMPANY

     have the meanings given to them in the United States Public Utility Holding
     Company Act of 1935.

     INVESTMENT COMPANY

     has the meaning given to it in the United States Investment Company Act of
     1940.

     PUBLIC UTILITY

     has the meaning given to it in the United States Federal Power Act of 1920.

(b)  No member of the Group is:

     (i)  a holding company, an affiliate of a holding company or a subsidiary
          company of a holding company, or subject to regulation, under the
          United States Public Utility Holding Company Act of 1935;

     (ii) required to register as an investment company;

     (iii) a public utility, or subject to regulation, under the United States
          Federal Power Act of 1920; or

     (iv) subject to regulation under any United States Federal or State law or
          regulation that limits its ability to incur or guarantee indebtedness.

15.18 TIMES FOR MAKING REPRESENTATIONS

(a)  The representations set out in this Clause are made by the Company on the
     date of this Agreement.

(b)  Unless a representation is expressed to be given at a specific date, each
     representation is deemed to be repeated by the Company on the date of each
     Request and the first day of each Term.

(c)  When a representation is repeated, it is applied to the circumstances
     existing at the time of repetition.

                                       20
<PAGE>

16.  INFORMATION COVENANTS

16.1 FINANCIAL STATEMENTS

(a)  The Company must supply to the Lender:

     (i)  its audited consolidated financial statements for each of its
          financial years; and

     (ii) its interim financial statements for the first three quarters of each
          of its financial years.

(b)  All financial statements must be supplied as soon as they are available
     and:

     (i)  in the case of the Company's audited consolidated financial
          statements, within 180 days; and

     (ii) in the case of the Company's interim financial statements, within 120
          days, of the end of the relevant financial period.

16.2 FORM OF FINANCIAL STATEMENTS

(a)  The Company must ensure that each set of financial statements supplied
     under this Agreement fairly presents its financial condition and results of
     operations (consolidated or otherwise) as at the date to which those
     financial statements were drawn up.

(b)  The Company must notify the Lender of any change to the manner in which its
     audited consolidated financial statements are prepared.

(c)  If requested by the Lender, the Company must supply to the Lender:

     (i)  a full description of any change notified under paragraph (b) above;
          and

     (ii) sufficient information to enable it to make a proper comparison
          between the financial position shown by the set of financial
          statements prepared on the changed basis and its most recent audited
          consolidated financial statements delivered to the Lender under this
          Agreement.

16.3 ASSET REPORTS

(a)  The Company must supply to the Lender an asset report in form and substance
     satisfactory to the Lender, together with such additional information,
     reports and/or statements as the Lender may require, setting out:

     (i)  a listing and aging (by invoice date) of all accounts receivable and
          accounts payable together with applicable sales and payment terms,
          details of outstanding balances due from all account debtors (as that
          term is defined in the Uniform Commercial Code as in effect in the
          State of California) and the Company's worksheet for applicable
          reserves;

     (ii) a reconciliation of the aging referred to in paragraph (i) above with
          the previous aging delivered to the Lender;

                                       21
<PAGE>

     (iii) a listing of all the Company's inventory (as that term is defined in
          the Uniform Commercial Code as in effect in the State of California)
          setting out types, locations and values (calculated in accordance with
          generally accepted accounting principles); and

     (iv) details of reserves for obsolete inventory and the Company's
          applicable worksheet.

(b)  The asset report referred to in paragraph (a) above must be supplied within
     15 days after the end of each calendar month.

16.4 INFORMATION - MISCELLANEOUS

     The Company must supply to the Lender:

     (a)  copies of all documents dispatched by the Company to its shareholders
          (or any class of them) or its creditors generally or any class of them
          at the same time as they are dispatched;

     (b)  promptly upon becoming aware of them, details of any litigation,
          arbitration or administrative proceedings which are current,
          threatened or pending and which might, if adversely determined, have a
          Material Adverse Effect;

     (c)  promptly on request, a list of the then current Subsidiaries; and

     (d)  promptly on request, such further information regarding the financial
          condition and operations of the Group as the Lender may reasonably
          request.

16.5 NOTIFICATION OF DEFAULT

(a)  The Company must notify the Lender of any Default (and the steps, if any,
     being taken to remedy it) promptly upon becoming aware of its occurrence.

(b)  Promptly on request by the Lender, the Company must supply to the Lender a
     certificate, signed by two of its authorized signatories on its behalf,
     certifying that no Default is outstanding or, if a Default is outstanding,
     specifying the Default and the steps, if any, being taken to remedy it.

16.6 YEAR END

     The Company must not change its financial year end.

17.  GENERAL COVENANTS

17.1 GENERAL

     The Company agrees to be bound by the covenants set out in this Clause
     relating to it and, where the covenant is expressed to apply to a member or
     members of the Group, the Company must ensure that any member of the Group
     that is its Subsidiary performs that covenant.

                                       22
<PAGE>

17.2 AUTHORIZATIONS

     The Company must promptly obtain, maintain and comply with the terms of any
     authorization required under any law or regulation to enable it to perform
     its obligations under, or for the validity or enforceability of, any
     Finance Document.

17.3 COMPLIANCE WITH LAWS

     Each member of the Group must comply in all respects with all laws to which
     it is subject where failure to do so is reasonably likely to have a
     Material Adverse Effect.

17.4 PARI PASSU RANKING

     The Company must ensure that its payment obligations under the Finance
     Documents rank at least pari passu with all its other present and future
     unsecured payment obligations, except for obligations mandatorily preferred
     by law applying to companies generally.

17.5 NEGATIVE PLEDGE

(a)  Except as provided below, no member of the Group may create or allow to
     exist any Security Interest on any of its assets.

(b)  Paragraph (a) above does not apply to:

     (i)  any Security Interest constituted by the Security Documents;

     (ii) any Security Interest granted to the Senior Lender in connection with
          the Senior Credit Agreement, but only to the extent such Security
          Interest is in respect of the personal property subject to the
          Security Documents;

     (iii) any Security Interest listed in Schedule 3 (Security Interests)
          except to the extent the principal amount secured by that Security
          Interest exceeds the amount stated in that Schedule;

     (iv) any Security Interest comprising a netting or set-off arrangement
          entered into by a member of the Group in the ordinary course of its
          banking arrangements for the purpose of netting debit and credit
          balances;

     (v)  any lien arising by operation of law and in the ordinary course of
          business; and

     (vi) any Security Interest on an asset, or an asset of any person, acquired
          by a member of the Group after the date of this Agreement but only for
          the period of 6 months from the date of acquisition and to the extent
          that the principal amount secured by that Security Interest has not
          been incurred or increased in contemplation of, or since, the
          acquisition.

(c)  No member of the Group may:

     (i)  sell, transfer or otherwise dispose of any of its assets on terms
          where it is or may be leased to or re-acquired or acquired by a member
          of the Group or any of its related entities; or

                                       23
<PAGE>

     (ii) sell, transfer or otherwise dispose of any of its receivables on
          recourse terms,

     in circumstances where the transaction is entered into primarily as a
     method of raising Financial Indebtedness or of financing the acquisition of
     an asset.

17.6 DISPOSALS

(a)  Except as provided below, no member of the Group may, either in a single
     transaction or in a series of transactions and whether related or not,
     dispose of all or any part of its assets.

(b)  Paragraph (a) above does not apply to any disposal:

     (i)  made in the ordinary course of trading of the disposing entity;

     (ii) of assets in exchange for other assets comparable or superior as to
          type, value and quality; or

     (iii) where the higher of the market value or consideration receivable
          (when aggregated with the higher of the market value or consideration
          for any other disposal not allowed under the preceding sub-paragraphs)
          does not exceed US$150,000 or its equivalent in any financial year of
          the Company.

17.7 FINANCIAL INDEBTEDNESS

(a)  Except as provided below, no member of the Group (other than the Company)
     may incur any Financial Indebtedness.

(b)  Paragraph (a) above does not apply to:

     (i)  any Financial Indebtedness incurred under the Finance Documents;

     (ii) any Financial Indebtedness incurred under the Stock Purchase Agreement
          dated the date of this Agreement between the Company and the Lender
          relating to the purchase and sale of Series A 5% convertible preferred
          stock;

     (iii) any Financial Indebtedness incurred under the Senior Credit
          Agreement;

     (iv) any Financial Indebtedness incurred under the Promissory Note dated
          February 4, 2003 issued by the Company in favor of Axwood Investments
          Limited;

     (v)  any Financial Indebtedness incurred under the Promissory Note dated on
          or about March 26, 2003 issued by the Company in favor of Wells Fargo
          Equipment Finance, Inc. and US Bancorp Oliver-Allen Technology
          Leasing;

     (vi) any Financial Indebtedness owed by a member of the Group to another
          member of the Group;

     (vii) any Financial Indebtedness of any person acquired by a member of the
          Group which is incurred under arrangements in existence at the date of
          acquisition, but only for a period of 6 months from the date of
          acquisition;

                                       24
<PAGE>

     (viii) any derivative transaction protecting against or benefiting from
          fluctuations in any rate or price entered into in the ordinary course
          of business; or

     (ix) Financial Indebtedness which in aggregate does not exceed US$150,000
          or its equivalent at any time.

17.8 CHANGE OF BUSINESS

     The Company must ensure that no change is made to the general nature of the
     business of the Company or the Group from that carried on at the date of
     this Agreement.

17.9 MERGERS

     The Company may not enter into any amalgamation, demerger, merger or
     reconstruction without the prior consent of the Lender.

17.10 ACQUISITIONS

(a)  Except as provided below, no member of the Group may make any acquisition
     or investment.

(b)  Paragraph (a) above does not apply to:

     (i)  acquisitions or investments made in the ordinary course of trade; or

     (ii) acquisitions where the consideration (when aggregated with the
          consideration of any other acquisition not allowed under the preceding
          sub-paragraphs) does not exceed US$150,000 or its equivalent in any
          financial year of the Company.

17.11 ENVIRONMENTAL MATTERS

(a)  In this Subclause:

     ENVIRONMENTAL APPROVAL means any authorization required by an Environmental
     Law.

     ENVIRONMENTAL CLAIM means any claim by any person in connection with:

     (i)  a breach, or alleged breach, of an Environmental Law;

     (ii) any accident, fire, explosion or other event of any type involving an
          emission or substance which is capable of causing harm to any living
          organism or the environment; or

     (iii) any other environmental contamination.

     ENVIRONMENTAL LAW means any law or regulation concerning:

     (i)  the protection of health and safety;

     (ii) the environment; or

     (iii) any emission or substance which is capable of causing harm to any
          living organism or the environment.

                                       25
<PAGE>

(b)  Each member of the Group must ensure that it is, and has been, in
     compliance with all Environmental Law and Environmental Approvals
     applicable to it, where failure to do so is reasonably likely to have a
     Material Adverse Effect or results in any liability for the Lender.

(c)  The Company must promptly upon becoming aware notify the Lender of:

     (i)  any Environmental Claim current, or to its knowledge, pending or
          threatened; or

     (ii) any circumstances reasonably likely to result in an Environmental
          Claim,

     which, if substantiated, is reasonably likely to either have a Material
     Adverse Effect or result in any liability for the Lender.

17.12 INSURANCE

     Each member of the Group must insure its business and assets with insurance
     companies to such an extent and against such risks as companies engaged in
     a similar business normally insure.

17.13 ERISA

(a)  In this Subclause:

     CODE

     means the United States Internal Revenue Code of 1986.

     ERISA

     means the United States Employee Retirement Income Security Act of 1974.

     ERISA AFFILIATE

     means any person treated as a single employer with any member of the Group
     for the purpose of section 414 of the Code.

     PLAN

     means an employee benefit plan as defined in section 3(3) of ERISA:

     (i)  maintained by any member of the Group or any ERISA Affiliate; or

     (ii) to which any member of the Group or any ERISA Affiliate is required to
          make any payment or contribution.

     REPORTABLE EVENT

     means:

     (i)  an event specified as such in section 4043 of ERISA or any related
          regulation, other than an event in relation to which the requirement
          to give notice of that event is waived by any regulation; or

                                       26
<PAGE>

     (ii) a failure to meet the minimum funding standard under section 412 of
          the Code or section 302 of ERISA, whether or not there has been any
          waiver of notice or waiver of the minimum funding standard under
          section 412 of the Code.

(b)  Each member of the Group must promptly upon becoming aware of it notify the
     Lender of:

     (i)  any Reportable Event;

     (ii) the termination of or withdrawal from, or any circumstances reasonably
          likely to result in the termination of or withdrawal from, any Plan
          subject to Title IV of ERISA; and

     (iii) a claim or other communication alleging material non-compliance with
          any law or regulation relating to any Plan.

(c)  Each member of the Group and its ERISA Affiliates must be, and remain, in
     compliance in all respects with all laws and regulations relating to each
     of its Plans.

(d)  Each member of the Group and its ERISA Affiliates must ensure that no event
     or condition exists at any time in relation to a Plan which is reasonably
     likely to result in the imposition of a Security Interest on any of its
     assets or which is reasonably likely to have a Material Adverse Effect.

17.14 SECURITIES LAWS

(a)  In this Subclause:

     MARGIN STOCK

     has the meaning given to it in Regulations U and X issued by the Board of
     Governors of the United States Federal Reserve System.

(b)  No member of the Group may:

     (i)  extend credit for the purpose, directly or indirectly, of buying or
          carrying Margin Stock; or

     (ii) use any Loan, directly or indirectly, to buy or carry Margin Stock or
          to extend credit to others for the purpose of buying or carrying
          Margin Stock.

(c)  No member of the Group may use any part of any Loan to acquire any security
     in a transaction that is subject to sections 13 or 14 of the United States
     Securities Exchange Act of 1934.

17.15 NO NEW SUBSIDIARIES

     No member of the Group may create, acquire or invest in a Subsidiary.

18.  DEFAULT

18.1 EVENTS OF DEFAULT

     Each of the events set out in this Clause is an Event of Default.

                                       27
<PAGE>

18.2 NON-PAYMENT

     The Company does not pay on the due date any amount payable by it under the
     Finance Documents in the manner required under the Finance Documents,
     unless the non-payment:

(a)  is caused by technical or administrative error; and (b) is remedied within
     three Business Days of the due date.

18.3 BREACH OF OTHER OBLIGATIONS

(a)  The Company does not comply with any term of Clause 17 (General Covenants)
     above.

(b)  The Company does not comply with any other term of the Finance Documents
     not already referred to in this Clause, unless the non-compliance:

     (i)  is capable of remedy; and

     (ii) is remedied within fourteen days of the earlier of the Lender giving
          notice and the Company becoming aware of the non-compliance.

18.4 MISREPRESENTATION

     A representation made or repeated by the Company in any Finance Document or
     in any document delivered by or on behalf of the Company under any Finance
     Document is incorrect in any material respect when made or deemed to be
     repeated, unless the circumstances giving rise to the misrepresentation:

(a)  are capable of remedy; and

(b)  are remedied within fourteen days of the earlier of the Lender giving
     notice and the Company becoming aware of the misrepresentation.

18.5 CROSS-DEFAULT

(a)  Any of the following occurs in respect of a member of the Group:

     (i)  any of its Financial Indebtedness is not paid when due (after the
          expiry of any originally applicable grace period);

     (ii) any of its Financial Indebtedness:

          (A)  becomes prematurely due and payable;

          (B)  is placed on demand; or

          (C)  is capable of being declared by a creditor to be prematurely due
               and payable or being placed on demand,

          in each case, as a result of an event of default (howsoever
          described); or

                                       28
<PAGE>

     (iii) any commitment for its Financial Indebtedness is cancelled or
          suspended as a result of an event of default (howsoever described),

     unless the aggregate amount of Financial Indebtedness falling within all or
     any of paragraphs (i) and (ii) above is less than US$150,000 or its
     equivalent.

(b)  Any Event of Default (under and as defined in the Senior Credit Agreement)
     occurs.

18.6 INSOLVENCY

     Any of the following occurs in respect of a member of the Group:

     (a)  it is, or is deemed for the purposes of any law to be, unable to pay
          its debts as they fall due or insolvent;

     (b)  it admits its inability to pay its debts as they fall due;

     (c)  it suspends making payments on any of its debts which in aggregate
          exceed US$150,000 or announces an intention to do so;

     (d)  by reason of actual or anticipated financial difficulties, it begins
          negotiations with any creditor for the rescheduling of any of its
          indebtedness which in aggregate exceed US$150,000; or

     (e)  a moratorium is declared in respect of any of its indebtedness which
          in aggregate exceeds US$150,000.

     If a moratorium occurs in respect of any member of the Group, the ending of
     the moratorium will not remedy any Event of Default caused by the
     moratorium.

18.7 INSOLVENCY PROCEEDINGS

(a)  Except as provided below, any of the following occurs in respect of a
     member of the Group:

     (i)  other than as provided in Clause 18.6 (Insolvency) above, any step is
          taken with a view to a moratorium or a composition, assignment or
          similar arrangement with any of its creditors;

     (ii) a resolution of its shareholders or directors is passed or adopted to
          petition for or to file documents with a court or any registrar for,
          its bankruptcy, winding-up, administration or dissolution;

     (iii) any person presents a petition, or files documents with a court or
          any registrar, for its bankruptcy, winding-up, administration or
          dissolution;

     (iv) an order for its bankruptcy, winding-up, administration or dissolution
          is made;

     (v)  any liquidator, trustee in bankruptcy, judicial custodian, compulsory
          manager, receiver, administrative receiver, administrator or similar
          officer is appointed in respect of it or any of its assets;

                                       29
<PAGE>

     (vi) its shareholders, directors or other officers request the appointment
          of, or give notice of their intention to appoint, a liquidator,
          trustee in bankruptcy, judicial custodian, compulsory manager,
          receiver, administrative receiver, administrator or similar officer;
          or

     (vii) any other analogous step or procedure is taken in any jurisdiction.

(b)  Paragraph (a) above does not apply to a petition for bankruptcy,
     dissolution or winding-up presented by a creditor which is being contested
     in good faith and with due diligence and is dismissed, discharged or struck
     out within 45 days.

18.8 CREDITORS' PROCESS

     Any attachment, sequestration, distress, execution or analogous event
     affects any asset(s) of a member of the Group, having an aggregate value of
     at least US$150,000, and is not discharged within 30 days.

18.9 CESSATION OF BUSINESS

     A member of the Group ceases, or threatens to cease, to carry on business
     except as a result of any disposal allowed under this Agreement.

18.10 EFFECTIVENESS OF FINANCE DOCUMENTS

(a)  It is or becomes unlawful for the Company to perform any of its obligations
     under the Finance Documents.

(b)  Any Finance Document is not effective or is alleged by the Company to be
     ineffective for any reason.

(c)  The Company repudiates a Finance Document or evidences an intention to
     repudiate a Finance Document.

18.11 MATERIAL ADVERSE CHANGE

     Any event or series of events occurs which has or will have a Material
     Adverse Effect.

18.12 ACCELERATION

(a)  If an Event of Default is outstanding, the Lender may, by notice to the
     Company:

     (i)  cancel the Loan Commitment; and/or

     (ii) declare that all or part of any amounts outstanding under the Finance
          Documents are:

          (A)  immediately due and payable; and/or

          (B)  payable on demand by the Lender; and/or

     (iii) declare that full cash cover in respect of the Letter of Credit is
          immediately due and payable.

                                       30
<PAGE>

     Any notice given under this Subclause will take effect in accordance with
     its terms.

(b)  If any of the following in respect of any member of the Group occurs, the
     Loan Commitment will, if not already cancelled under this Agreement, be
     immediately and automatically cancelled and the Loan, together with accrued
     interest, and all other amounts outstanding under the Finance Documents
     will be immediately due and payable:

     (i)  it makes a general assignment for the benefit of creditors;

     (ii) it commences a voluntary case or proceeding under the United States
          Bankruptcy Code of 1978 or any other United States Federal or State
          bankruptcy, insolvency or similar law (U.S. Bankruptcy Law); or

     (iii) an involuntary case under any U.S. Bankruptcy Law is commenced
          against it and is not controverted within 20 days or is not dismissed
          or stayed within 60 days after commencement of the case.

19.  EVIDENCE AND CALCULATIONS 19.1 ACCOUNTS

     Accounts maintained by the Lender in connection with this Agreement are
     prima facie evidence of the matters to which they relate for the purpose of
     any litigation or arbitration proceedings.

19.2 CERTIFICATES AND DETERMINATIONS

     Any certification or determination by the Lender of a rate or amount under
     the Finance Documents will be, in the absence of manifest error, conclusive
     evidence of the matters to which it relates.

19.3 CALCULATIONS

     Any interest accruing under this Agreement accrues from day to day and is
     calculated on the basis of the actual number of days elapsed and a year of
     360 days.

20.  INDEMNITIES 20.1 CURRENCY INDEMNITY

(a)  The Company must, as an independent obligation, indemnify the Lender
     against any loss or liability which the Lender incurs as a consequence of:

     (i)  the Lender receiving an amount in respect of the Company's liability
          under the Finance Documents; or

     (ii) that liability being converted into a claim, proof, judgment or order,

     in a currency other than the currency in which the amount is expressed to
     be payable under the relevant Finance Document.

                                       31
<PAGE>

(b)  Unless otherwise required by law, the Company waives any right it may have
     in any jurisdiction to pay any amount under the Finance Documents in a
     currency other than that in which it is expressed to be payable.

20.2 OTHER INDEMNITIES

(a)  The Company must indemnify the Lender against any loss or liability which
     the Lender incurs as a consequence of:

     (i)  the occurrence of any Event of Default;

     (ii) any failure by the Company to pay any amount due under a Finance
          Document on its due date;

     (iii) (other than by reason of negligence or default by the Lender) a
          Credit not being made after the Request has been delivered for that
          Credit;

     (iv) a Credit (or part of a Credit) not being prepaid in accordance with a
          notice of prepayment;

     (v)  reasonable investigation of any event which the Lender reasonably
          believes to be a Default; or

     (vi) acting or relying on any notice relating to the Finance Documents (or
          the transactions contemplated thereby) which the Lender reasonably
          believes to be genuine, correct and appropriately authorized.

(b)  The Company's liability in each case includes any loss or expense on
     account of funds borrowed, contracted for or utilized to fund any amount
     payable under any Finance Document, any amount repaid or prepaid or any
     Credit.

21.  EXPENSES

21.1 INITIAL COSTS

(a)  Each Party shall be responsible for the amount of all costs and expenses
     (including legal fees) incurred by it in connection with the negotiation,
     preparation, printing and execution of the Finance Documents.

(b)  The Company will promptly on demand pay to the Lender the amount of all
     costs and expenses (including legal fees) reasonably incurred by it in
     connection with the negotiation, preparation, printing, execution and
     maintenance (including any issuance, utilization, non-utilization, per
     annum or arrangement fee) of the Letter of Credit.

21.2 SUBSEQUENT COSTS

     The Company must pay to the Lender the amount of all costs and expenses
     (including legal fees) reasonably incurred by it in connection with:

                                       32
<PAGE>

     (a)  the negotiation, preparation, printing and execution of any Finance
          Document executed after the date of this Agreement; and

     (b)  any amendment, waiver or consent requested by or on behalf of the
          Company or specifically allowed by this Agreement.

21.3 ENFORCEMENT COSTS

     The Company must pay to the Lender the amount of all costs and expenses
     (including legal fees) incurred by it in connection with the enforcement
     of, or the preservation of any rights under, any Finance Document.

22.  WAIVERS

     The rights of the Lender under the Finance Documents:

     (a)  may be exercised as often as necessary;

     (b)  are cumulative and not exclusive of its rights under the general law;
          and

     (c)  may be waived only in writing and specifically.

     Delay in exercising or non-exercise of any right is not a waiver of that
     right.

23.  CHANGES TO THE PARTIES

23.1 ASSIGNMENTS AND TRANSFERS BY THE COMPANY

     The Company may not assign or transfer any of its rights and obligations
     under the Finance Documents without the prior consent of the Lender.

23.2 ASSIGNMENTS AND TRANSFERS BY THE LENDER

(a)  The Lender may, subject to the following provisions of this Subclause, at
     any time assign or transfer (including by way of novation) any of its
     rights and obligations under this Agreement to any other person (the New
     Lender).

(b)  A transfer of obligations will be effective only if the New Lender confirms
     to the Company that it is bound by the terms of this Agreement as the
     Lender. On the transfer becoming effective in this manner the Lender will
     be released from its obligations under this Agreement to the extent that
     they are transferred to the New Lender.

24.  DISCLOSURE OF INFORMATION

(a)  The Lender must keep confidential any information supplied to it by or on
     behalf of the Company in connection with the Finance Documents. However,
     the Lender is entitled to disclose information:

     (i)  which is publicly available, other than as a result of a breach by the
          Lender of this Clause;

                                       33
<PAGE>

     (ii) in connection with any legal or arbitration proceedings;

     (iii) if required to do so under any law or regulation;

     (iv) to a governmental, banking, taxation or other regulatory authority;

     (v)  to its professional advisers;

     (vi) to the extent allowed under paragraph (b) below; or

     (vii) with the agreement of the Company.

(b)  The Lender may disclose to an Affiliate or any person with whom it may
     enter, or has entered into, any kind of transfer, participation or other
     agreement in relation to this Agreement (a participant):

     (i)  a copy of any Finance Document; and

     (ii) any information which the Lender has acquired under or in connection
          with any Finance Document.

     However, before a participant may receive any confidential information, it
     must agree with the Lender to keep that information confidential on the
     terms of paragraph (a) above.

     This Clause supersedes any previous confidentiality undertaking given by
     the Lender in connection with this Agreement.

25.  SET-OFF

     The Lender may set off any matured obligation owed to it by the Company
     under the Finance Documents (to the extent beneficially owned by the
     Lender) against any obligation (whether or not matured) owed by the Lender
     to the Company, regardless of the place of payment, booking branch or
     currency of either obligation. If the obligations are in different
     currencies, the Lender may convert either obligation at a market rate of
     exchange in its usual course of business for the purpose of the set-off.

26.  SEVERABILITY

     If a term of a Finance Document is or becomes illegal, invalid or
     unenforceable in any jurisdiction, that will not affect:

     (a)  the legality, validity or enforceability in that jurisdiction of any
          other term of the Finance Documents; or

     (b)  the legality, validity or enforceability in other jurisdictions of
          that or any other term of the Finance Documents.

27.  COUNTERPARTS

     Each Finance Document may be executed in any number of counterparts. This
     has the same effect as if the signatures on the counterparts were on a
     single copy of the Finance Document.

                                       34
<PAGE>

28.  NOTICES

28.1 IN WRITING

(a)  Any communication in connection with a Finance Document must be in writing
     and, unless otherwise stated, may be given in person, by courier service,
     post, fax, e-mail or any other electronic communication approved by the
     Lender.

(b)  For the purpose of the Finance Documents, an electronic communication will
     be treated as being in writing.

(c)  Unless it is agreed to the contrary, any consent or agreement required
     under a Finance Document must be given in writing.

28.2 CONTACT DETAILS

(a)  The contact details of the Company for this purpose are:

         Address:          498 North Oak Street
                           Inglewood, CA  90302
                           USA

         Fax number:       +1 310 330 2764
         Attention:        Chief Executive Officer

(b) The contact details of the Lender for this purpose are:

         Address:          PO Box 957
                           Road Town, Tortola
                           British Virgin Islands

         Attention:        The Directors

(c)  The Company or the Lender may change their contact details by giving five
     Business Days' notice to the other Party.

(d)  Where a Party nominates a particular department or officer to receive a
     communication, a communication will not be effective if it fails to specify
     that department or officer.

28.3 EFFECTIVENESS

(a)  Except as provided below, any communication in connection with a Finance
     Document will be deemed to be given as follows:

     (i)  if delivered in person or by courier service, at the time of delivery;

     (ii) if posted, five days after being deposited in the post, postage
          prepaid, in a correctly addressed envelope;

     (iii) if by fax, when received in legible form; and

                                       35
<PAGE>

     (iv) if by e-mail or any other electronic communication, when received in
          legible form.

(b)  A communication given under paragraph (a) above but received on a
     non-working day or after business hours in the place of receipt will only
     be deemed to be given on the next working day in that place.

(c)  A communication to the Lender will only be effective on actual receipt by
     it.

29.  LANGUAGE

(a)  Any notice given in connection with a Finance Document must be in English.

(b)  Any other document provided in connection with a Finance Document must be:

     (i)  in English; or

     (ii) (unless the Lender otherwise agrees) accompanied by a certified
          English translation. In this case, the English translation prevails
          unless the document is a statutory or other official document.

30.  GOVERNING LAW

     This Agreement is governed by the law of the State of California.

31.  ENFORCEMENT

31.1 WAIVER OF IMMUNITY

     The Company irrevocably and unconditionally:

     (a)  agrees not to claim any immunity from proceedings brought by the
          Lender against the Company in relation to a Finance Document and to
          ensure that no such claim is made on its behalf;

     (b)  consents generally to the giving of any relief or the issue of any
          process in connection with those proceedings; and

     (c)  waives all rights of immunity in respect of it or its assets.

31.2 WAIVER OF TRIAL BY JURY

     EACH PARTY WAIVES ANY RIGHT IT MAY HAVE TO A JURY TRIAL OF ANY CLAIM OR
     CAUSE OF ACTION BASED ON, ARISING FROM OR IN CONNECTION WITH ANY FINANCE
     DOCUMENT OR ANY TRANSACTION CONTEMPLATED BY ANY FINANCE DOCUMENT. THIS
     AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO TRIAL BY COURT.

                                       36
<PAGE>

32.  INTEGRATION

     The Finance Documents contain the complete agreement between the Parties on
     the matters to which they relate and supersede all prior commitments,
     agreements and understandings, whether written or oral, on those matters.

     This Agreement has been entered into on the date stated at the beginning of
     this Agreement.

                                       37
<PAGE>

                                   SIGNATORIES

         COMPANY

         Signature Eyewear, Inc.

         By: _______________________________

Name:    Michael Prince

Title:   Chief Financial Officer

         LENDER

         Bluebird Finance Limited

         By: __________________________________

Name:  ________________________________________

Title:  _______________________________________

                                       38
<PAGE>

                                   SCHEDULE 1

                         CONDITIONS PRECEDENT DOCUMENTS

COMPANY

1.       A copy of the constitutional documents of the Company.

2.       A copy of a resolution of the board of directors of the Company
         approving the terms of, and the transactions contemplated by, this
         Agreement.

3.       A specimen of the signature of each person authorized on behalf of the
         Company to execute or witness the execution of any Finance Document or
         to sign or send any document or notice in connection with any Finance
         Document.

4.       A copy of the October Financial Statements and the December Financial
         Statements.

5.       A certificate of an authorized signatory of the Company certifying that
         each copy document specified in this Schedule is correct (other than as
         provided in Clause 15.8(a) (Financial statements) above with respect to
         the October Financial Statements), complete and in full force and
         effect as at a date no earlier than the date of this Agreement.

SECURITY

6.       The Security Agreement dated on or about the date of this Agreement
         between the Company and the Lender duly executed by the parties to it.

7.       UCC-1 forms required to be filed under the Security Document.

8.       Evidence of insurance cover in compliance with this Agreement.

9.       Evidence that all Security Interests granted in favor of City National
         Bank, N.A. have been released.

LEGAL OPINIONS

1.       A legal opinion of Jeffer, Mangels, Butler & Marmaro LLP, legal
         advisers in California to the Company, addressed to the Lender,
         substantially in the form of Schedule 8 (Form of Legal Opinion of the
         Company's Counsel).

OTHER DOCUMENTS AND EVIDENCE

1.                Evidence that all fees and expenses then due and payable from
                  the Company under this Agreement have been or will be paid by
                  the first Utilization Date.

2.                Evidence that the all amounts owing to City National Bank,
                  N.A. on the date of this Agreement will be repaid or prepaid,
                  and cancelled, in full on or by the first Utilization Date.

                                       39
<PAGE>

3.                Written confirmation from the Senior Lender that all
                  conditions precedent to utilization of the credit facilities
                  provided pursuant to the Senior Credit Agreement have been
                  satisfied and that US$3,500,000 will be advanced to, or to the
                  order of, the Company on the first Utilization Date.

4.                A copy of any other authorization or other document, opinion
                  or assurance which the Lender has notified the Company is
                  necessary or desirable in connection with the entry into and
                  performance of, and the transactions contemplated by, any
                  Finance Document or for the validity and enforceability of any
                  Finance Document.

5.                Executed copies of the following documents:

                    (a)  Stock Purchase Agreement dated the date of this
                         Agreement between the Company and the Lender relating
                         to the purchase and sale of Series A 2% Convertible
                         Preferred Stock of the Company (the STOCK PURCHASE
                         AGREEMENT);

                    (b)  Certificate of Determination dated the date of this
                         Agreement issued by the Company pursuant to authority
                         granted by article IV of its Restated Articles of
                         Incorporation;

                    (c)  Registration Rights Agreement dated the date of this
                         Agreement entered into pursuant to the Stock Purchase
                         Agreement;

                    (d)  Settlement Agreements with various creditors, the
                         details of which have been disclosed to the Lender;

                    (e)  Agreement Re Assignment of Claims and Mutual General
                         Release dated March 31, 2003 between Moulin Optical
                         Manufactory Limited, Allied Industrial Limited,
                         Dartmouth Commerce of Manhattan, Inc., a California
                         corporation (DARTMOUTH) and the Company;

                    (f)  Agreement for the Purchase and Sale of Debt dated April
                         1, 2003 between Dartmouth and the Company;

                    (g)  Senior Credit Agreement; and

                    (h)  Subordination Agreement.

                                       40
<PAGE>

                                   SCHEDULE 2

                                 FORM OF REQUEST

         To:      Bluebird Finance Limited

         From:    Signature Eyewear, Inc.

         Date:    [         ]

  SIGNATURE EYEWEAR, INC. - US$4,150,000 CREDIT AGREEMENT DATED [      ], 2003
                                 (the AGREEMENT)

1.       We refer to the Agreement. This is a Request.

2.       We wish to [borrow a Loan/request the procurement of the Letter of
         Credit]o on the following terms:

               (a)  Utilization Date: [     ];

               (b)  Amount: [     ].

3.       Our [payment/delivery]o instructions are: [     ].

4.       We confirm that each condition precedent under the Agreement which must
         be satisfied on the date of this Request is so satisfied.

5.       This Request is irrevocable.

By:

________________________________
SIGNATURE EYEWEAR, INC.

                                       41
<PAGE>

                                   SCHEDULE 3

                               SECURITY INTERESTS

1.       The Security Interest granted by the Company to City National Bank,
         N.A. with respect to certain of the Company's assets, which Security
         Interest will be released on the date of this Agreement.

2.       The Security Interest granted by the Company to Wells Fargo Equipment
         Finance, Inc. and US Bancorp Oliver-Allen Technology Leasing with
         respect to certain equipment pursuant to a security agreement dated
         March 26, 2003 to secure the Company's obligations under the Financial
         Indebtedness referred to in Clause 17.7(b)(v) (Financial Indebtedness).

3.       The Security Interest granted by the Company to Axwood Investments
         Limited with respect to certain inventory pursuant to a security
         agreement dated February 4, 2003 to secure the Company's obligations
         under the Financial Indebtedness referred to in Clause 17.7(b)(iv)
         (Financial Indebtedness).

4.       The Security Interests granted by the Company to the lessors of certain
         office equipment (including, a telephone system, postage meter,
         photocopier, certain computer equipment and a warehouse storage racking
         system referred to as the "Carousel") utilized by the Company in its
         business.

                                       42
<PAGE>

                                   SCHEDULE 4

                           FORM OF SECURITY AGREEMENT

                       [Insert form of Security Agreement]

                                       43
<PAGE>

                                   SCHEDULE 5

                                    DEFAULTS

1.       As a result of the Company's current financial condition and cash flow
         situation, it is in actual or technical default with most of the
         companies and entities with which it has, or currently does, transact
         its business, other than as previously disclosed to the Lender.

2.       The Company is in contravention of certain financial covenants
         contained in certain license agreements and is accordingly in technical
         or actual default under such licenses. The Company has not received any
         written notices of default from any of the licensors under such license
         agreements.

                                       44
<PAGE>

                                   SCHEDULE 6

                             MATERIAL ADVERSE CHANGE

The Company has continued to suffer operating losses in the ordinary course of
its business since December 31, 2002. In addition, given the Company's current
financial condition and cash flow, the Company is in actual or technical default
with most of the companies and entities with which the Company has, or currently
does, transact its business.

                                       45
<PAGE>

                                   SCHEDULE 7

                                   LITIGATION

1.       The Chapter 7 trustee in bankruptcy of an optical company which holds a
         disputed claim against the Company of approximately US$58,000 contacted
         the Company with respect to such claim approximately nine months ago.
         When advised of the dispute, the trustee advised that it would enquire
         into the matter. The Company has had no further contact from either the
         trustee or any other party with respect to this disputed claim.

2.       Walker v. Signature Eyewear - case pending in Washington State Court
         arising out of an employment dispute. The amount claimed does not
         exceed US$25,000.

3.       Gary Raymond v. Signature Eyewear - Mr. Raymond, a former employee of
         the Company, has made a written demand in the amount of approximately
         US$138,000 to the Company for certain vacation pay and commissions he
         claims he is owed. The Company disputes the claims made by Mr. Raymond.

4.       Amplicon Financial has threatened in writing to bring a claim against
         the Company in an amount of approximately US$30,000.

5.       The Company intends to use the proceeds from the transactions
         contemplated by the Finance Documents and the Senior Credit Agreement,
         in part, to settle certain outstanding claims against the Company and
         thereby curing certain outstanding defaults. The Company has previously
         delivered to the Lender a schedule of the pending or threatened claims
         that the Company intends to settle using the proceeds from these
         transactions. The Company intends to settle these matters within thirty
         days of the date of this Agreement or such later date as has been
         agreed with certain claimants.

6.       As a result of the Company's current financial condition and cash flow,
         the Company is in actual or technical default with most of the
         companies and entities with which the Company has, or currently does,
         transact its business. Some of these parties have asserted, or may
         assert, claims against the Company and some of these claims will be in
         excess of US$100,000 in the aggregate.

                                       46
<PAGE>

                                   SCHEDULE 8

                 FORM OF LEGAL OPINION OF THE COMPANY'S COUNSEL

                                 APRIL ___, 2003

Bluebird Finance Limited
P.O. Box 957
Road Town, Tortola
British Virgin Islands

     Re:  Bluebird Finance Limited - $4,650,000 Loan to Signature Eyewear, Inc.
          ---------------------------------------------------------------------

Ladies and Gentlemen:

     We have acted as special counsel for Signature Eyewear, Inc., a California
corporation (the "Company"), in connection with the loan (the "Loan")
contemplated by that certain Credit Facility Agreement (the "Loan Agreement"),
of even date, between the Company and Bluebird Finance Limited, a British Virgin
Islands company (the "Lender"). We do not represent the Company in all of its
legal matters, and the Company has retained other legal counsel to represent it
in connection with certain other legal matters. We do not assume any
responsibility for any transaction or matter where the Company has been
represented by other counsel. Capitalized terms, which are used herein but not
defined herein, shall have the meanings ascribed to them in the Loan Agreement.

     In connection with this opinion, we have examined and relied upon (i) the
representations and warranties as to factual matters contained in and made
pursuant to the Purchase Agreement by various parties, and (ii) originals or
copies, certified or otherwise identified to our satisfaction as being true
copies, of the following documents (collectively, the "Documents"):

     (1)  the Loan Agreement;

     (2)  The Security Agreement between the Company and Lender;

     (3)  [the Financing Statement];

     (4)  Officers' Closing Certificate of the Company;

     (5)  Articles of Incorporation of the Company, as amended, as certified by
          the office of the Secretary of State of the State of California as of
          March 26, 2003 (the "Articles");

     (6)  Amended and Restated Bylaws of the Company, dated June 6, 1997 (the
          "Bylaws");

     (7)  Certificate of Status Domestic Corporation for the Company issued by
          the California Secretary of State and dated March 26, 2003 (the
          "Domestic Status Certificate"); and

                                       47
<PAGE>

     (8)  the Representation Letter from Bernard Weiss and Michael Prince (the
          "Representation Letter").

     Except as set forth above, the documents listed in clauses (1), (2) and (3)
are each dated as of April ___, 2003 and are referred to herein collectively as
the "Transaction Documents."

     We have rendered these opinions based solely upon our review of the
Documents, and upon our examination of such statutes, decisions and matters of
law as we deem necessary to express the opinions set forth below. In particular,
our opinion that the Company is "in good standing under the laws of the State of
California" set forth in opinion number 1, below, is based solely on the
Domestic Status Certificate. We have made no examination of public records
(including, without limitation, the plaintiff or defendant indices of state and
federal courts), nor have we undertaken any independent investigation to
determine the existence or nonexistence of facts contained or asserted in the
Documents or the assumptions set forth herein and you acknowledge we have no
duty to perform any such independent investigation.

     In addition, in rendering this opinion, we have not taken into
consideration the effect, if any, that certain other transactions that will be
occurring on or about the time of the Closing, may have upon the Company or the
opinions set forth herein, including, without limitation, transactions between
(i) the Company and Home Loan Investment Company (the "Senior Loan Documents"),
(ii) the Company, Moulin Optical Manufactory Limited, Allied Industrial Limited
and Dartmouth Commerce of Manhattan, Inc. ("Dartmouth"), (iii) the Company and
Dartmouth, and (iv) the Weiss Family Trust and Dartmouth.

     In rendering this opinion, we have assumed (i) the genuineness and
authenticity of all signatures on original documents, (ii) the authenticity of
all documents submitted to us as originals and the conformity to originals of
documents submitted to us as certified or photostatic copies, (iii) the
accuracy, completeness and authenticity of certificates of public officials,
(iv) each person signing a document is a competent adult person not operating
under any legal disability, duress or having been defrauded in the execution of
documents, and (v) the due authorization, execution and delivery of all
documents (except the due authorization, execution and delivery by the Company
of the Transaction Documents), and (vi) that the parties to the Transaction
Documents will act in good faith in connection with their obligations under the
Transaction Documents.

     For purposes of this opinion, we have made the following additional
assumptions:

     (a)......Other than the Documents, there are no documents, understandings
or agreements between or among the parties which would expand or otherwise
modify the obligations of the respective parties to the Documents regarding the
transactions contemplated thereby and which would have an effect on this
opinion;

     (b)......To the extent that the obligations of the Company may be dependent
upon such matters, we have assumed for purposes of this opinion, that: (i) each
party to the Transaction Documents other than the Company ("Other Party") is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of formation and qualified to do business in other jurisdictions,
to the extent necessary; (ii) each Other Party has the requisite organizational
or other power and authority to execute and deliver, and to perform its
obligations under, the Transaction Documents to which it is a party; (iii) the
Transaction Documents to which each Other Party is a party have been duly
authorized, executed and delivered by it, and each of such Transaction Documents
constitutes the legally valid and binding obligation of such Other Party,
enforceable against such party in accordance with its terms; and (iv) that each
such Other Party is, at all relevant times in connection with the origination
and enforcement of the Loan, duly qualified and authorized to conduct intrastate
business and to make the Loan within the State of California and holds any and
all licenses to conduct such activity as may be required by applicable
California law.

                                       48
<PAGE>

     (c)......The Lender will exercise any rights or remedies it may have under
the Transaction Documents in good faith, in circumstances in which it is
commercially reasonable to do so, in a commercially reasonable manner to the
extent required by applicable law, and otherwise pursuant to the Uniform
Commercial Code as adopted in the State of California (the "UCC");

     (d)......The representations and warranties of the Company and the Lender
in the Transaction Documents are true and correct; and (e) The choice of
California law in the Transaction Documents will be enforced.

     In addition, we have assumed that the documents necessary to perfect the
security interests of the Lender under the Transaction Documents have been or
will be correctly filed in the Office of the Secretary of State of California,
and with all appropriate officials or in all applicable offices of agencies and
departments of the government of the United States of America and any other
governmental authorities having jurisdiction over the subject matter therein
described and over the filing thereof. We have also assumed without undertaking
any investigation that the Company has good and enforceable title to the
Collateral.

     Whenever used in this opinion, the phrase "to the best of our actual
knowledge" or words of similar import mean to the actual conscious knowledge of
those attorneys in this Firm who have given substantive attention to the
transaction contemplated by the Transaction Documents.

     We are licensed to practice law only in the State of California. The
opinions set forth below apply only insofar as the substantive laws of the State
of California (without application of the principle of conflicts of laws) and
the United States' federal laws may be concerned, and we express no opinion with
respect to the laws of any other state or jurisdiction. Based on the foregoing
and subject to the assumptions, qualifications and limitations set forth herein,
it is our opinion that:

     1........The Company has been duly incorporated, is validly existing is in
good standing under the laws of the State of California, with the requisite
corporate power and corporate authority to own its properties and assets, to
conduct its business as presently conducted, to enter into and deliver the
Transaction Documents, and to perform its obligations under the Transaction
Documents.

     2........The execution, delivery and performance of the Transaction
Documents have been duly authorized by all necessary corporate action on the
part of the Company, and the Transaction Documents have been duly executed and
delivered by the Company.

     3........Each of the Transaction Documents constitutes the legally valid
and binding obligation of the Company, and except as otherwise provided in the
Senior Loan Documents, enforceable against the Company in accordance with its
terms.

     4........The Company's execution, delivery and performance of the
Transaction Documents do not violate the Restated Articles of Incorporation or
Bylaws of the Company.

     5........The execution, delivery and performance by the Company of the
Transaction Documents to which it is a party, to the best of our actual
knowledge, will not violate any law or

                                       49
<PAGE>

regulation, including, without limitation, any usury or similar law regulating
the rate of interest that may be charged to a borrower.

     6........Except as set forth on the schedules to the Loan Agreement, to the
best of our actual knowledge, no consent of, authorization from or registration
or filing with any governmental authority, agency or body is required in
connection with the execution, delivery and performance by the Company of the
Transaction Documents.

     7........Except for (i) any actions, suits or proceedings before any court,
arbitrator or governmental agency which may result in damages against the
Company in excess of $100,000 ("Legal Proceedings"), which are described on the
schedules to the Loan Agreement, and (ii) those Legal Proceeding that have been
represented to us will settle within thirty (30) days of the Closing as is set
forth on Exhibit B to the Representation Letter, we are not and have not
represented the Company in any currently pending Legal Proceedings.

     8........The Security Agreement creates a valid security interest in the
Collateral, and such security interest will be duly perfected upon the filing of
the Financing Statement with the Secretary of State of California to the extent
that a security interest in the Collateral may be perfected by the filing of a
financing statement.

     We   express no opinion with respect to:

     (i)  The applicability of Sections 547 and 548 of the Bankruptcy Code, 11
          U.S.C. Sections 547 and 548, Sections 500 et seq. of the California
          Corporations Code, or any other federal or state laws regarding
          fraudulent conveyances or preferences;

     (ii) Compliance by any party with state or federal securities laws
          including, without limitation, anti-fraud, disclosure or similar laws,
          rules or regulations relating to securities or the issuance and sale
          thereof;

     (iii) Compliance by any party with (A) antitrust laws including, but not
          limited to, the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
          or (B) the Employee Retirement Income Security Act of 1974, as
          amended;

     (iv) Compliance by any party, or any of the Transaction Documents, with any
          federal, state or local land use, subdivision, zoning, planning, tax,
          labor or communications law, ordinance or regulation;

     (v)  The fairness of any consideration given or received in connection with
          any of the Transaction Documents or any transaction contemplated
          thereby;

     (vi) The impact of local, state, federal or foreign tax laws on the
          transactions contemplated by any of the Transaction Documents,
          including, without limitation, the effect of any failure of the
          Company to pay any employment, withholding, sales or other taxes when
          due;

     (vii) Any provisions of the Transaction Documents which permit the
          enforcement of the remaining provisions of the Transaction Documents
          where some provision has been declared unenforceable, unless the
          unenforceable portion is not an essential part of the agreement
          therein contained;

                                       50
<PAGE>

     (viii) Any covenant not to compete, non-solicitation, confidentiality or
          similar provisions contained in any of the Transaction Documents;

     (ix) the validity of the Company's title to the Collateral or the priority
          of any liens or security interests therein;

     (x)  Any Legal Proceeding in which we are not counsel of record.

     This opinion is subject to, and limited by the following qualifications,
exceptions and reservations:

     (a)......The enforceability of the Transaction Documents may be limited or
affected by (i) bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally (including, without limitation,
fraudulent conveyance laws), (ii) general principles of equity including,
without limitation, concepts of materiality, reasonableness, good faith and fair
dealing and the possible unavailability of specific performance or injunctive
relief, regardless of whether considered in a proceeding in equity or at law,
and (iii) judicial discretion and the valid exercise of sovereign power of the
State of California and the constitutional powers of the United States of
America;

     (b)......Limitations imposed by equitable principles of California or
federal law upon the specific enforceability of any of the remedies, covenants,
or other provisions of the Transaction Documents and upon the availability of
injunctive relief or other equitable remedies;

     (c)......The unenforceability under certain circumstances, under any state
or federal law or court decision, of (i) provisions expressly or by implication
waiving broadly or vaguely stated rights, unknown future rights, defenses to
obligations or rights created by law, (ii) provisions indemnifying a party
against liability for its own negligent or wrongful acts, where such waivers or
indemnifications are against public policy or prohibited by law, and (iii)
provisions which impose late charges, default rates of interest or other similar
penalty terms, or restrict or condition prepayment;

     (d)......The effect of California court decisions invoking statutes or
principles of equity, which have held that certain covenants and provisions of
agreements are unenforceable where (i) the breach of such covenants or
provisions imposes restrictions or burdens upon an obligor, including the
acceleration of indebtedness due under such instruments, and it cannot be
demonstrated that the enforcement of such restrictions or burdens is reasonably
necessary for the protection of the creditor, or (ii) the creditor's enforcement
of such covenants or provisions under the circumstances would violate the
creditor's implied covenant of good faith and fair dealing.

     (e)......The effect of Section 1670.5 of the California Civil Code, which
provides, in substance, that if a court as a matter of law finds a contract or
any clause of a contract to have been "unconscionable" at the time it was made,
the court may refuse to enforce the contract, or the court may enforce the
remainder of the contract without the "unconscionable" clause or so as to avoid
an "unconscionable" result. That Section also permits parties to present
evidence as to the commercial setting, purpose and effect of any contract or
clause thereof claimed to be "unconscionable," to aid the court in making its
determination;

     (f)......The unenforceability under certain circumstances of provisions to
the effect that rights or remedies are not exclusive, that every right or remedy
is cumulative and may be exercised in addition to or with any other right or
remedy, that election of a particular remedy or remedies does not preclude
recourse to one or more other remedies or that failure to exercise or delay in
exercising rights or remedies will not operate as a waiver of any such right or
remedy;

                                       51
<PAGE>

     (g)......The unenforceability under certain circumstances of contractual
provisions which allow the exercise of self-help or summary remedies without
requiring notice or opportunity for hearing or correction;

     (h)......The effect of California law providing that, where a contract
permits one party to the contract to recover attorneys' fees, the prevailing
party in any action to enforce any provision of the contract shall be entitled
to recover its reasonable attorneys' fees;

     (i)......The effect of California Civil Code section 2924.5, and California
common law, on the ability to assess a late, default, or delinquency charge on
any delinquent payment of a loan installment without providing the borrower
written notice of the delinquency or default and the amount or method of
computing the amount of the charge to be imposed in the event of delinquency or
default and the date by which the delinquent payment must be made in order to
avoid such charge; and the effect of the unenforceability of any provision of
the Transaction Documents which constitutes or which is held by a court or
arbitrator to constitute an unlawful forfeiture or penalty, or an unenforceable
liquidation of damages, including, without limitation, provisions of the
Transaction Documents providing for any increase in the rate of interest or the
payment of a prepayment fee or any other amount upon or as a result or
consequence of any breach or default by Borrowers under the Transaction
Documents (refer to case citations set forth in paragraph (n) below);

     (j)......We note that the collectibility of interest under any of the
Transaction Documents, to the extent that interest computed at the rate set
forth in such Transaction Documents based upon a 360-day year exceeds interest
that would accrue at the same rate but computed upon a 365-day year, is subject
to certain judicial precedents in California, including but not limited to
Fletcher v. Security Pacific National Bank, 23 Cal.3d 442 (1979), and Chern v.
Bank of America, 15 Cal.3d 866 (1976), which indicate that a California court
may enjoin collection of such interest and award restitution thereof to a
borrower, if on the basis of the facts and circumstances then before the court,
the court determined that such relief was necessary to prevent the use or
employment of an unfair trade practice;

     (k)......The effect of Section 9-610 of the California Uniform Commercial
Code which places limitations on the circumstances under which a secured party
may purchase collateral at a private sale;

     (l)......The effect of the unenforceability of the Transaction Documents
due to a failure to file the Financing Statement, any defect or omission in the
title to the real or personal property therein described, any failure of
consideration, or any failure by Lender Parties to perfect the security interest
in the Collateral in the manner required by applicable law;

     (m)......The effect of the unenforceability of the Transaction Documents,
or any of them, based upon or resulting from the unenforceability to any extent
of any other instrument, agreement, document, or instruction executed or entered
into in connection with the Transaction Documents;

     (n)......The effect of California Civil Code section 1671, and California
common law, on the ability to assess a late, default, or delinquency charge on
any delinquent payment of a loan installment without providing the borrower
written notice of the delinquency or default and the amount or method of
computing the amount of the charge to be imposed in the event of delinquency or
default and the date by which the delinquent payment must be made in order to
avoid such charge; and the effect of the unenforceability of any provision of
the Transaction Documents which constitutes or which is held by a court or
arbitrator to constitute an unlawful forfeiture or penalty, or an unenforceable
liquidation of damages, including, without limitation, provisions of the
Transaction Documents providing for any increase in the rate of interest or the
payment of a prepayment fee or any other amount upon or as a result or

                                       52
<PAGE>

consequence of any breach or default by Borrowers under the Transaction
Documents (see Garrett v. Coast & Southern Federal Savings and Loan Association
(1973) 9 Cal.3d 731; Ridgley v. Topa Thrift and Loan Association (1998) 98 Daily
Journal D.A.R. 3991);

     (o)......The effect of Article XV, Section 1 of the California
Constitution, which limits the rate of interest upon any loan or forbearance of
money, to the extent applicable to the transactions contemplated by the Loan
Documents; and

     (p)......We express no opinion as to the provisions of the Transaction
Documents which (1) purport to waive, limit, or restrict various rights of the
Company except to the extent permitted by law, (2) permit a party to act as the
agent and attorney-in-fact of the Company after a default, (3) select the forum
for the resolution of any disputes or consent to the jurisdiction of any
jurisdiction (both as to personal jurisdiction and subject matter jurisdiction),
(4) attempt to change or waive rules of evidence or fix the method or quantum of
proof to be applied in litigation or similar proceedings, (5) provide for the
confession of judgment, (6) provide that time is of the essence, (7) permit the
enforcement of the remaining provisions of a Transaction Document, where some
provision has been declared unenforceable, unless the unenforceable portion is
not an essential part of the agreement therein contained, (8) provide for the
appointment of a receiver except in accordance with applicable laws, or (9)
provide the Lender with the right to establish reserves or limit advances based
upon its sole and unfettered discretion.

     This opinion is rendered only with respect to the laws, and the rules,
regulations and orders under those laws, that are in effect as of the date
hereof, and we disclaim any obligation to update this opinion for events
occurring after the date hereof. We assume no responsibility to advise you or
any other person or entity of changes which may hereafter be brought to our
attention.

     This opinion is rendered only to the Lender and is solely for its benefit
in connection with the above transaction. Except as provided above, this opinion
may not be quoted or used in whole or in part for any purpose, nor may copies be
provided to any person, without our prior written consent.

                                Very truly yours,

                                       53
<PAGE>

                                    EXHIBIT A

                             [Representation Letter]

                                       54
<PAGE>

                                   SCHEDULE 9

                                LETTER OF CREDIT

FROM: BANK OF AMERICA (ASIA) LIMITED

ADVISING BANK: BANK OF AMERICA N.A. USA

TO:  HOME LOAN INVESTMENT COMPANY
     145 N. 4th STREET,
     P.O. BOX 100
     GRAND JUNCTION, CO 81502
     U.S.A.

                                   STANDBY L/C

THE ADVISING BANK IS REQUESTED TO ADD CONFIRMATION ON THIS STANDBY LETTER OF
CREDIT WITH CONFIRMATION CHARGES FOR ACCOUNT OF [      ].

AT THE REQUEST OF [     ], WE HEREBY ESTABLISH OUR IRREVOCABLE STANDBY LETTER OF
CREDIT NO. [        ] UP TO AN AGGREGATE AMOUNT OF UNITED STATES DOLLARS ONE
MILLION AND TWO HUNDRED FIFTY THOUSAND ONLY (US$1,250,000) AVAILABLE WITH US BY
PAYMENT AGAINST YOUR WRITTEN STATEMENT THROUGH YOUR BANKER SPECIFYING THE AMOUNT
CLAIMED REPRESENTS PART OR ALL OF THE UNPAID BALANCE OF INDEBTEDNESS DUE TO YOU
IN CONNECTION WITH YOUR GRANTING CREDIT FACILITY TO SIGNATURE EYEWEAR, INC., 498
N. OAK ST., INGELWOOD, CA90302, UNITED STATES OF AMERICA IN RESPECT OF WHICH
SAID BORROWER IS IN DEFAULT.

THE STANDBY LETER OF CREDIT AMOUNT COVERS THE PRINCIPAL, INTEREST AND YOUR
CHARGES.

YOUR WRITTEN STATEMENT MUST REACH THE OFFICE OF THE CONFIRMING BANK ON OR BEFORE
[      ].

PARTIAL DRAWING ALLOWED, MULTIPLE PRESENTATION NOT ALLOWED.

ALL BANKING CHARGES ARE FOR ACCOUNT OF APPLICANT.

THIS STANDBY LETTER OF CREDIT WILL EXPIRE ONE YEAR AFTER DATE OF ISSUANCE AT THE
COUNTER OF THE CONFIRMING BANK.

THE CONFIRMING BANK IS ALLOWED TO DEBIT THE ACCOUNT OF ISSUING BANK IN
SETTLEMENT UPON RECEIPT OF A COMPLIED CLAIM. THE CONFIRMING BANK IS REQUIRED TO
SWIFT INFORM ISSUING BANK UPON RECEIPT OF A CLAIM.

                                       55
<PAGE>

THIS STANDBY LETTER OF CREDIT IS SUBJECT TO INTERNATIONAL CHAMBER OF COMMERCE
INTERNATIONAL STANDBY PRACTICE ISP98.

THIS IS THE OPERATIVE INSTRUMENT.

                                       56
<PAGE>
================================================================================

                               SECURITY AGREEMENT

                              DATED APRIL 21, 2003

                                     BETWEEN

                             SIGNATURE EYEWEAR, INC.

                                    AS DEBTOR

                                       AND

                            BLUEBIRD FINANCE LIMITED

                                AS SECURED PARTY

                                  ALLEN & OVERY
                                    NEW YORK
================================================================================
<PAGE>
                                    CONTENTS

CLAUSE                                                                      PAGE

1.  INTERPRETATION...........................................................  1
    1.1          UCC and Credit Agreement Defined Terms......................  1
    1.2          Other Definitions...........................................  1
    1.3          Construction................................................  3
2.  CREATION AND PERFECTION OF SECURITY INTEREST.............................  3
    2.1          Grant.......................................................  3
    2.2          Continuing security interest................................  3
    2.3          Filing of financing statements..............................  4
    2.4          No liability................................................  4
3.  REPRESENTATIONS AND WARRANTIES...........................................  4
    3.1          Representations and warranties..............................  4
    3.2          The Debtor..................................................  4
    3.3          The Collateral..............................................  5
    3.4          Security interest...........................................  5
    3.5          Intellectual Property Rights................................  6
    3.6          Times for making representations and warranties.............  7
    3.7          Survival....................................................  7
4.  UNDERTAKINGS.............................................................  7
    4.1          Undertakings................................................  7
    4.2          The Debtor..................................................  7
    4.3          The Collateral..............................................  8
    4.4          Security interest...........................................  8
    4.5          Notices.....................................................  9
5.  RIGHTS AND REMEDIES......................................................  9
    5.1          Events of Default...........................................  9
    5.2          Collections after an Event of Default.......................  9
    5.3          Secured Party's rights upon default......................... 10
    5.4          No marshaling............................................... 11
6.  MISCELLANEOUS............................................................ 11
    6.1          Further assurances.......................................... 11
    6.2          Costs and indemnity......................................... 12
    6.3          Successors.................................................. 12
    6.4          Amendments and waivers...................................... 13
    6.5          Rights cumulative........................................... 13
    6.6          Severability................................................ 13
    6.7          Counterparts................................................ 13
    6.8          Notices..................................................... 13
    6.9          Complete Agreement.......................................... 14
    6.10         Waiver of Jury Trial........................................ 14
    6.11         Governing Law............................................... 14

Signatories.................................................................. 15

SCHEDULES

1.  Commercial Tort Claims................................................... 16
2.  Intellectual Property.................................................... 17
3.  Countries and States in which Collateral consisting of goods is located.. 18
<PAGE>
THIS AGREEMENT is dated April 21, 2003

BETWEEN:

(1)  SIGNATURE EYEWEAR, INC., a corporation organized under the laws of the
     State of California (the DEBTOR); and

(2)  BLUEBIRD FINANCE LIMITED, as Lender under the Credit Agreement described
     below, a company organized under the laws of the British Virgin Islands (in
     that capacity the SECURED PARTY).

BACKGROUND:

(A)  The Debtor and the Secured Party are concurrently entering into the
     US$4,150,000 credit agreement dated the date of this Agreement (the CREDIT
     AGREEMENT).

(B)  It is a condition precedent to the obligations of the Secured Party under
     the Credit Agreement that the Debtor enter into this Agreement and grant
     the security described in this Agreement.

IT IS AGREED as follows:

1.   INTERPRETATION

1.1  UCC AND CREDIT AGREEMENT DEFINED TERMS

     Any term defined in the Uniform Commercial Code as in effect from time to
     time in the State of California (the UCC) and not defined in this Agreement
     has the meaning given to the term in the UCC. Any term defined in the
     Credit Agreement and not defined in this Agreement or the UCC has the
     meaning given to the term in the Credit Agreement.

1.2  OTHER DEFINITIONS

     In this Agreement:

     COLLATERAL means all personal property, wherever located, in which the
     Debtor now has or later acquires any right title or interest, including
     all:

     (a)  accounts,
          chattel paper (including tangible chattel paper and
            electronic chattel paper),
          goods (including equipment, inventory and fixtures),
          health-care-insurance receivables,
          instruments (including promissory notes),
          investment property,
          documents,
          deposit accounts,
          letter-of-credit rights,
          general intangibles (including payment intangibles),
          software,
          supporting obligations,

                                        1
<PAGE>
          other assets (including any and all proprietary and intellectual
          property rights of any kind or nature whatsoever, anywhere in the
          world, including any and all inventions, discoveries, trade secrets,
          intellectual property rights, patents, trademarks, trade names,
          service marks and copyrights, all registrations of and applications
          relating to any of the foregoing, and all associated goodwill); and

     (b)  Intellectual Property Rights and any associated Contracts,

     and to the extent not listed above as original Collateral, proceeds and
     products of, and accessions to, the foregoing.

     The term COLLATERAL also includes all existing commercial tort claims of
     the Debtor as described in Schedule 1 (Commercial Tort Claims).

     Notwithstanding the foregoing, COLLATERAL shall not include:

     (a)  any property, right or interest in which a security interest may not
          be granted under applicable law or under enforceable contractual
          restrictions binding on the Debtor; or

     (b)  Eyewear Licenses but not any inventory derived from such Eyewear
          Licenses.

     CONTRACTS means any contract, indenture, mortgage, deed of trust, note,
     instrument, lease, license, arrangement or other agreement, whether oral or
     written, including without limitation, all acquisition, development,
     production, distribution, exploitation and/or licensing agreements.

     EVENT OF DEFAULT has the meaning given to that term in Clause 5.1 (Events
     of Default).

     EYEWEAR LICENSES means the licenses held today or hereafter acquired by the
     Debtor pursuant to which a person licenses to the Debtor the right to
     manufacture, market, sell and/or distribute eyeglass frames and related
     eyewear accessories using trademarks, tradenames and other intellectual
     property owned by such person.

     INTELLECTUAL PROPERTY RIGHTS means any inventions, discoveries, patent and
     patent applications, trademarks, trade names, service marks and
     registrations and applications in respect thereto, and copyrights,
     copyright registrations and copyright applications including those
     described in Schedule 2 (Intellectual Property) and those created or
     acquired after the date of this Agreement.

     LIEN means any security interest, lien, mortgage, pledge, encumbrance,
     charge, assignment, hypothecation, agreement or arrangement having the
     effect of conferring security, adverse claim, claim, or restriction on
     assignment, transfer or pledge.

     RELEVANT STATES means the State of the Debtor's incorporation, the State
     where the Debtor has its chief executive office and the States in which
     Collateral consisting of goods is located.

     SECURED OBLIGATIONS means:

     (a)  the Credits and all other amounts payable or owing to the Secured
          Party under the Finance Documents;

     (b)  all other obligations of the Debtor under the Finance Documents;

                                        2
<PAGE>
     (c)  all obligations of the Debtor under this Agreement;

     (d)  all amounts owed under any modifications, renewals or extensions of
          any of the foregoing obligations; and

     (e)  any of the foregoing that arises after the filing of a petition by or
          against the Debtor under the U.S. Bankruptcy Code, even if the
          obligations do not accrue because of the automatic stay under U.S.
          Bankruptcy Code ss. 362 or otherwise.

1.3  CONSTRUCTION

     (a)  No reference to PROCEEDS in this Agreement authorizes any sale,
          transfer, or other disposition of Collateral by the Debtor.

     (b)  INCLUDES and INCLUDING are not limiting.

     (c)  OR is not exclusive.

     (d)  ALL includes ANY and ANY includes ALL.

     (e)  The term LAW includes any law, statute, regulation, regulatory
          requirement, rule, ordinance, ruling, decision, treaty, directive,
          order, guideline, regulation, policy, writ, judgment, injunction or
          request of any court or other governmental, inter-governmental or
          supranational body, fiscal or monetary authority, or other ministry or
          public entity (and their interpretation, administration and
          application), whether or not having the force of law.

     (f)  A reference to a law is a reference to that law as amended or
          re-enacted.

     (g)  A reference to an agreement is a reference to that agreement as
          amended, supplemented, restated or novated.

     (h)  Clause headings used in this Agreement are for convenience only. They
          are not a part of this Agreement and shall not be used in construing
          it.

2.   CREATION AND PERFECTION OF SECURITY INTEREST

2.1  GRANT

     As security for the prompt and complete payment and performance of the
     Secured Obligations when due (whether due because of stated maturity,
     acceleration, mandatory prepayment, or otherwise) and to induce the Secured
     Party to make the Credits, the Debtor grants to the Secured Party a
     continuing security interest in the Collateral.

2.2  CONTINUING SECURITY INTEREST

     (a)  This Agreement creates a continuing security interest in the
          Collateral and will remain in full force and effect until the
          irrevocable and indefeasible payment in full of the ultimate balance
          of the Secured Obligations, regardless of any intermediate payment or
          discharge in whole or in part.

                                        3
<PAGE>
     (b)  If, at any time for any reason (including the bankruptcy, insolvency,
          receivership, reorganization, dissolution or liquidation of the Debtor
          or the appointment of any receiver, intervenor or conservator of, or
          agent or similar official for, the Debtor or any of its properties),
          any payment received by the Secured Party in respect of the Secured
          Obligations is rescinded or avoided or must otherwise be restored or
          returned by the Secured Party, that payment shall not be considered to
          have been made for purposes of this Agreement, and this Agreement will
          continue to be effective or will be reinstated, if necessary, as if
          that payment had not been made.

2.3  FILING OF FINANCING STATEMENTS

     (a)  The Debtor authorizes the Secured Party to prepare and file, at the
          Debtor's expense, financing statements describing the Collateral, as
          well as continuation statements and amendments in respect of those
          financing statements. The Debtor expressly authorizes the Secured
          Party, if it so elects, to file financing statements with the
          collateral description "all assets of the Debtor", "all personal
          property of the Debtor" or other words to that effect.

     (b)  Promptly after the filing of an initial financing statement in respect
          of the Collateral, the Debtor shall provide the Secured Party with an
          official report from the Secretary of State of each Relevant State
          indicating that the Secured Party's security interest is prior to all
          other security interests or other interests reflected in the report
          other than any security interests referred to in clause 17.5(b)
          (Negative pledge) of the Credit Agreement.

2.4  NO LIABILITY

     The Debtor represents, warrants and agrees that:

     (a)  its liabilities and obligations under contractual obligations that
          constitute part of the Collateral shall not be affected by this
          Agreement or the exercise by the Secured Party of its rights under
          this Agreement;

     (b)  unless it expressly agrees in writing, the Secured Party shall not
          have any liabilities or obligations under any contractual obligation
          that constitutes part of the Collateral as a result of this Agreement,
          the exercise by the Secured Party of its rights under this Agreement
          or otherwise; and

     (c)  the Secured Party does not and shall not have any obligation to
          collect upon or enforce any contractual obligation or claim that
          constitutes part of the Collateral, or to take any other action with
          respect to the Collateral.

3.   REPRESENTATIONS AND WARRANTIES

3.1  REPRESENTATIONS AND WARRANTIES

     The Debtor makes the representations and warranties set out in this Clause
     3 to the Secured Party.

3.2  THE DEBTOR

     (a)  The Debtor is incorporated in the State of California.

                                        4
<PAGE>
     (b)  The Debtor's exact legal name, as it appears in the public records of
          its jurisdiction of incorporation, is Signature Eyewear, Inc. The
          Debtor has not changed its name, whether by amendment of its charter,
          reorganization, merger or otherwise, since its date of incorporation.

     (c)  The Debtor's organizational identification number, as issued by its
          jurisdiction of incorporation, is 01209237.

     (d)  The Debtor's chief executive office is located at 498 North Oak
          Street, Inglewood, CA 90302, USA. The Debtor has not changed its chief
          executive office within the past four months.

     (e)  The Debtor keeps its corporate records and all records, documents and
          instruments relating to or evidencing Collateral at its address
          indicated in Clause 6.8 (Notices) below.

3.3  THE COLLATERAL

     (a)  The Debtor has exclusive possession and control of all Collateral.

     (b)  Except as permitted under the Credit Agreement:

          (i)  the Debtor has good and marketable title to, and is the sole
               legal and beneficial owner of, and has the power to transfer and
               grant a security interest in, the Collateral;

          (ii) none of the Collateral is subject to any Lien other than the
               Secured Party's security interest;

          (iii) Debtor has not agreed or committed to sell, assign, pledge,
               transfer, license, lease or encumber any of the Collateral, or
               granted any option, warrant or right with respect to any of the
               Collateral; and

          (iv) no effective mortgage, deed of trust, financing statement,
               security agreement or other instrument similar in effect is on
               file or of record with respect to any Collateral, except for
               those that create, perfect or evidence the Secured Party's
               security interest.

     (c)  All Collateral consisting of goods is located solely in the countries
          and States of the United States listed in Schedule 3 (Countries and
          States in which Collateral consisting of goods is located).

3.4  SECURITY INTEREST

     (a)  This Agreement confers the security interest it purports to confer
          over the Collateral in favor of the Secured Party, and, subject to the
          provisions of section 552 of the U.S. Bankruptcy Code, that security
          interest is not liable to avoidance on liquidation or bankruptcy,
          composition or any other similar insolvency proceedings.

     (b)  The description of the Collateral contained in this Agreement is true,
          correct, and complete and is sufficient to describe the Collateral for
          the purpose of creating, attaching, and perfecting the security
          interest in favor of the Secured Party intended to be created by this
          Agreement.

     (c)  As of the first Utilization Date, all necessary and appropriate
          deliveries, notices, recordings, filings, and registrations have been
          effected to perfect a first-priority (except as described in the
          Credit Agreement) security interest in the Collateral in favor of the
          Secured Party in all relevant jurisdictions, and the Secured Party has
          as of the first Utilization Date, and will continue to have until the
          Secured Obligations have been repaid in full and the Secured Party's
          security interest has been released, a duly and validly created,
          attached, perfected and enforceable (except as described in the Credit
          Agreement) security interest in the Collateral in all relevant
          jurisdictions.
                                        5
<PAGE>
3.5  INTELLECTUAL PROPERTY RIGHTS

     (a)  All the Debtor's Intellectual Property Rights as at the date of this
          Agreement are listed in Schedule 2 (Intellectual Property).
          Comprehensive details of all Intellectual Property Rights acquired by
          the Debtor after the date of this Agreement have been notified to the
          Secured Party.

     (b)  All Intellectual Property Rights forming part of the Collateral are,
          and at all times have been, valid, subsisting, enforceable, and in
          full force and effect.

     (c)  All Intellectual Property Rights forming part of the Collateral are
          solely and exclusively held by the Debtor and the Debtor is the sole
          and exclusive owner of all such Intellectual Property Rights.

     (d)  No Intellectual Property Rights forming part of the Collateral have
          lapsed or fallen into the public domain or been abandoned.

     (e)  To the Debtor's best knowledge, no third party is violating,
          infringing or misappropriating any of the Intellectual Property Rights
          forming part of the Collateral.

     (f)  All items of Collateral which are subject to copyright protection
          constitute original works of authorship and, to the extent created by
          parties other than the Debtor or the Debtor's
          predecessor(s)-in-interest, were created pursuant to valid
          work-for-hire arrangements or agreements which were not and/or have
          not been breached by any party thereto.

     (g)  Any item of Collateral which is subject to copyright protection, and
          which was published prior to March 1, 1989, was published with a
          copyright notice in full compliance with the U.S. Copyright Act.

     (h)  The chain-of-title with respect to each item of Collateral is clear
          and complete, and there are no gaps with respect thereto.

     (i)  All material items of Collateral which are subject to copyright
          protection have been registered in the U.S. Copyright Office.

     (j)  All material items of Collateral which constitute trademarks or
          service marks have been registered in the United States Patent and
          Trademark Office.

     (k)  No Intellectual Property Rights forming part of the Collateral have
          been declared invalid, null or void, or been cancelled, rejected or
          refused, or have been the subject of any challenge, dispute,
          opposition or cancellation, in any judicial or administrative
          proceeding.

     (l)  Exploitation of the Collateral does not and will not violate, infringe
          or misappropriate the patent, inventorship, trademark, service mark,
          trade name, copyright, droit morale, privacy, publicity, trade secret,
          or other proprietary or intellectual property rights, of any kind or
          nature whatsoever, of any third person or entity.

                                        6
<PAGE>
     (m)  Exploitation of the Collateral does not and will not violate any laws,
          rules, statutes or regulations, including those related to obscenity,
          morals, health, welfare or safety, or those related to the broadcast,
          transmission, distribution or exhibition of audiovisual works.

     (n)  Except as described in the Credit Agreement, all Contracts are valid,
          subsisting, enforceable, and in full force and effect, and no party to
          any such Contract is in breach or violation thereof.

     (o)  The Debtor has secured all consents, permissions, releases,
          authorizations and waivers necessary for the full and continued
          exploitation of the Collateral, and has fully performed all
          obligations with respect thereto.

     (p)  The Debtor is in compliance with all union, guild, collective
          bargaining, performance rights society and similar agreements and
          obligations arising out of or related or applicable to any
          exploitation of the Collateral.

3.6  TIMES FOR MAKING REPRESENTATIONS AND WARRANTIES

     The representations and warranties set out in this Clause 3:

     (a)  are made on the date of this Agreement; and

     (b)  are deemed to be repeated by the Debtor on the date of each Request
          and the first day of each Term with reference to the facts and
          circumstances then existing.

3.7  SURVIVAL

     The representations and warranties of the Debtor contained in this
     Agreement or made by the Debtor in any certificate, notice or report
     delivered under the Finance Documents will survive each Utilization Date,
     the making and repayment of the Credits, and any novation, transfer or
     assignment of the Credits.

4.   UNDERTAKINGS

4.1  UNDERTAKINGS

     The Debtor covenants and agrees that, so long as the Secured Party has any
     commitment under the Credit Agreement and until payment in full of the
     Secured Obligations, it will perform and observe each of the undertakings
     in this Clause 4.

4.2  THE DEBTOR

     (a)  The Debtor will preserve its corporate existence and will not, in one
          transaction or a series of related transactions, merge into or
          consolidate with any other entity, or sell all or substantially all of
          its assets.

     (b)  The Debtor will not change the jurisdiction of its incorporation.

     (c)  The Debtor will not change its name without providing the Secured
          Party with 30 days' prior written notice.

                                        7
<PAGE>
     (d)  The Debtor will keep its corporate records and all records, documents
          and instruments relating to or evidencing Collateral at its address
          indicated in Clause 6.8 (Notices) below.

     (e)  The Debtor agrees to permit the Secured Party and its agents and
          representatives (at the Debtor's expense), during normal business
          hours, to inspect the Collateral, to examine and make copies of and
          abstracts from the records referred to in paragraph (d) above, and to
          discuss matters relating to the Collateral directly with the Debtor's
          officers and employees and relevant third parties (including account
          debtors).

     (f)  Upon request, the Debtor shall provide the Secured Party with such
          information concerning the Collateral as the Secured Party shall
          reasonably request, including the current list of names and addresses
          of all account debtors.

4.3  THE COLLATERAL

     (a)  Except as permitted by the Credit Agreement:

          (i)  the Debtor will maintain good and marketable title to, and sole
               legal and beneficial ownership of, the Collateral;

          (ii) the Debtor will not permit any Collateral to be subject to any
               Lien other than the Secured Party's security interest and will at
               all times and at its own cost warrant and defend the Secured
               Party's security interest in the Collateral against all other
               Liens; and

          (iii) the Debtor will not, and is not authorized to, sell, assign,
               transfer, pledge, license, lease or encumber, or grant any
               option, warrant, or right with respect to, any of the Collateral,
               or agree or contract to do any of the foregoing.

(b)  The Collateral shall remain personal property at all times. The Debtor
     shall not affix any of the Collateral to any real property in any manner
     which would change its nature from that of personal property to real
     property or to a fixture.

(c)  The Debtor shall mark conspicuously all Collateral consisting of chattel
     paper with a legend, in form and substance satisfactory to the Secured
     Party, indicating that the Secured Party has a security interest in the
     chattel paper.

(d)  The Debtor shall pay when due (and in any case before any penalties are
     assessed or any Lien is imposed on any Collateral) all taxes, assessments
     and charges imposed on or in respect of Collateral and all claims against
     the Collateral, including claims for labor, materials and supplies.

(e)  In any suit, legal action, arbitration or other proceeding involving the
     Collateral or the Secured Party's security interest, the Debtor will take
     at its own cost all lawful action necessary or desirable to avoid
     impairment of the Secured Party's security interest or the Secured Party's
     rights under this Agreement or the imposition of a Lien on any Collateral.

4.4  SECURITY INTEREST

     The Debtor shall take all actions necessary or desirable to ensure that the
     Secured Party has and continues to have in all relevant jurisdictions a
     duly and validly created, attached, perfected and enforceable

                                        8
<PAGE>
     first-priority (except as described in the Credit Agreement) security
     interest in the Collateral (including after-acquired Collateral).

4.5  NOTICES

     The Debtor will give the Secured Party prompt notice of the occurrence of
     any of the following events:

     (a)  any pending or threatened claim, suit, legal action, arbitration or
          other proceeding involving or affecting the Debtor or any Collateral
          which could reasonably be expected to impair the Secured Party's
          security interest or the Secured Party's rights under this Agreement
          or result in the imposition of a Lien on any Collateral;

     (b)  any loss or damage to any material portion of the Collateral; or

     (c)  any representation or warranty contained in this Agreement is or
          becomes untrue, incorrect or incomplete in any material respect.

     In each notice delivered under this Clause, the Debtor will include
     reasonable details concerning the occurrence that is the subject of the
     notice as well as the Debtor's proposed course of action, if any. Delivery
     of a notice under this Clause will not affect the Debtor's obligations to
     comply with any other provision of this Agreement.

5.   RIGHTS AND REMEDIES

5.1  EVENTS OF DEFAULT

     EVENT OF DEFAULT for the purposes of this Agreement means:

     (a)  failure to comply with Clause 4.3(a) (The Collateral) above;

     (b)  failure to comply with any other provision of this Agreement if the
          failure continues for 14 days after the earlier of:

          (i)  notice from the Secured Party; and

          (ii) the Debtor becoming aware of the non-compliance;

     (c)  failure, in any material respect, of any representation or warranty
          contained in this Agreement to be true and correct on the date made or
          deemed to be repeated;

     (d)  any attachment, execution or levy on any of the Collateral; or

     (e)  an "Event of Default", as that term is defined in the Credit
          Agreement.

5.2  COLLECTIONS AFTER AN EVENT OF DEFAULT

     Subject to the Subordination Agreement, after the occurrence and during the
     continuation of an Event of Default, the Debtor will hold all funds and
     other property received or collected in respect of the Collateral in trust
     for the Secured Party, and will keep those funds and that other property
     separate and apart from all other funds and property so as to be capable of

                                        9
<PAGE>
     identification. The Debtor will deliver those funds and that other property
     to the Secured Party in the identical form received, properly endorsed or
     assigned when required to enable the Secured Party to complete collection.
     After the occurrence and during the continuation of an Event of Default,
     the Debtor shall not settle, compromise, adjust, discount or release any
     claim in respect of Collateral and shall not accept any returns of
     merchandise.

5.3  SECURED PARTY'S RIGHTS UPON DEFAULT

     (a)  Upon the occurrence and during the continuation of an Event of
          Default, the Secured Party may, in its sole discretion, take any of
          the following actions, in each case at the Debtor's expense, and
          without prior notice to the Debtor except as required under applicable
          law:

          (i)  transfer or assign to, or register in the name of, the Secured
               Party or its nominees any of the Collateral;

          (ii) exercise all consent and other rights relating to any Collateral;

          (iii) perform or comply with any contractual obligation that
               constitutes part of the Collateral;

          (iv) receive, endorse, negotiate, execute and deliver or collect upon
               any check, draft, note, acceptance, chattel paper, account,
               instrument, document, letter of credit, contract, agreement, bill
               of lading, invoice, assignment, bill of sale, deed, security,
               share certificate, stock power, proxy, or instrument of
               conveyance or transfer constituting or relating to any
               Collateral;

          (v)  assert, institute, file, defend, settle, compromise, adjust,
               discount or release any suit, action, claim, counterclaim or
               right of set-off relating to any Collateral;

          (vi) execute and deliver acquittances, receipts and releases in
               respect of Collateral; and

          (vii) exercise any other right or remedy available to the Secured
               Party under applicable law, the other Finance Documents, or any
               other agreement between the parties.

     (b)  The Debtor agrees that the Secured Party will have, with respect to
          the Collateral, in addition to the rights and remedies described in
          this Agreement, all of the rights and remedies available to a secured
          party under applicable law and under the UCC (whether or not the UCC
          applies to the affected Collateral and regardless of whether or not
          the UCC is the law of the jurisdiction where the rights or remedies
          are asserted) as if those rights and remedies were fully set forth in
          this Agreement.

     (c)  The Secured Party may exercise the rights and remedies described in
          this Agreement and those available under applicable law in such order,
          at such times and in such manner as the Secured Party may, in its sole
          discretion, determine from time to time. The Secured Party may at any
          time and from time to time release or relinquish any right, remedy, or
          security interest it has with respect to a particular item of
          Collateral without releasing, relinquishing, or in any way affecting
          its rights, remedies, or security interests with respect to any other
          item of Collateral.

     (d)  The Debtor irrevocably constitutes and appoints the Secured Party,
          with full power of substitution, as the Debtor's true and lawful
          attorney-in-fact, in the Debtor's name or in the Secured Party's name
          or otherwise, and at the Debtor's expense, to take any of the actions

                                       10
<PAGE>
          authorized by this Agreement or permitted under applicable law upon
          the occurrence and during the continuation of an Event of Default,
          without notice to, or the consent of, the Debtor. This power of
          attorney is a power coupled with an interest and cannot be revoked.
          The Debtor ratifies and confirms all actions taken by the Secured
          Party or its agents under this power of attorney.

     (e)  The Secured Party may comply with any applicable state or federal law
          requirements in connection with a disposition of Collateral and
          compliance will not be considered adversely to affect the commercial
          reasonableness of any sale of Collateral.

     (f)  The grant to the Secured Party under this Agreement of any right or
          power does not impose upon the Secured Party any duty to exercise that
          right or power. The Secured Party will have no obligation to take any
          steps to preserve any claim or other right against any person or with
          respect to any Collateral.

     (g)  All risk of loss, damage, diminution in value, or destruction of the
          Collateral will be borne by the Debtor.

     (h)  The Debtor agrees that the sale, transfer or other disposition under
          this Agreement of any right, title, or interest of the Debtor in any
          item of Collateral will operate to permanently divest the Debtor and
          all persons claiming under or through the Debtor of that right, title,
          or interest, and will be a perpetual bar, both at law and in equity,
          to any claims by the Debtor or any person claiming under or through
          the Debtor with respect to that item of Collateral.

5.4  NO MARSHALING

     The Secured Party has no obligation to attempt to satisfy the Secured
     Obligations by collecting them from any other person liable for them and
     the Secured Party may release, modify or waive any collateral provided by
     any other person to secure any of the Secured Obligations, all without
     affecting the Secured Party's rights against the Debtor. The Debtor waives
     any right it may have to require Secured Party to pursue any third person
     for any of the Secured Obligations. Except to the extent required by
     applicable law, the Secured Party will not be required to marshal any
     Collateral or any guaranties of the Secured Obligations, or to resort to
     any item of Collateral or any guaranty in any particular order, and the
     Secured Party's rights with respect to the Collateral and any guaranties
     will be cumulative and in addition to all other rights, however existing or
     arising. To the extent permitted by applicable law, the Debtor irrevocably
     waives, and agrees that it will not invoke or assert, any law requiring or
     relating to the marshaling of Collateral or any other law which might cause
     a delay in or impede the enforcement of the Secured Party's rights under
     this Agreement or any other agreement.

6.   MISCELLANEOUS

6.1  FURTHER ASSURANCES

     At any time and from time to time upon the request of the Secured Party,
     the Debtor will execute and deliver such further documents and instruments
     and do such other acts as the Secured Party may reasonably request in order
     to effect fully the purposes of this Agreement, to create, perfect,
     maintain, and preserve a first-priority (except as described in the Credit
     Agreement) security interest in the Collateral in favor of the Secured
     Party for the benefit of the Secured Party, to facilitate any sale,
     transfer or other disposition of Collateral and to make any sale, transfer
     or other disposition of Collateral valid, binding, and in compliance with
     applicable law.

                                       11
<PAGE>
6.2  COSTS AND INDEMNITY

     (a)  The Debtor will pay to the Secured Party all costs incurred by the
          Secured Party for the purpose of enforcing its rights under this
          Agreement, including:

          (i)  costs of foreclosure and of disposition and sale of the
               Collateral;

          (ii) costs of maintaining or preserving the Collateral or assembling
               it or preparing it for sale;

          (iii) costs of obtaining money damages; and

          (iv) fees and expenses of attorneys employed by the Secured Party for
               any purpose related to this Agreement or the Secured Obligations,
               including consultation, drafting documents, sending notices or
               instituting, prosecuting or defending litigation or arbitration.

     (b)  The Debtor agrees to indemnify the Secured Party and its respective
          affiliates, directors, officers, representatives and agents (each an
          INDEMNIFIED PARTY) from and against all claims, liabilities,
          obligations, losses, damages, penalties, judgments, costs and expenses
          of any kind (including attorney's fees and expenses) which may be
          imposed on, incurred by or asserted against any of them by any person
          in any way relating to or arising out of:

          (i)  this Agreement;

          (ii) the Collateral;

          (iii) the Secured Party's security interest in the Collateral;

          (iv) any Event of Default;

          (v)  any action taken or omitted by the Secured Party under this
               Agreement or any exercise or enforcement of rights or remedies
               under this Agreement; or

          (vi) any sale or other disposition of, or any realization on,
               Collateral,

          but the Debtor will not be liable to an indemnified party to the
          extent any liability results from that indemnified party's gross
          negligence or willful misconduct. Payment by an indemnified party will
          not be a condition precedent to the obligations of the Debtor under
          this indemnity.

     (c)  This Clause 6.2 (Costs and indemnity) will survive the initial
          Utilization Date, the making and repayment of the Credits and any
          novation, transfer or assignment of the Credits.

6.3  SUCCESSORS

     This Agreement shall be binding upon and inure to the benefit of the Debtor
     and the Secured Party and their respective successors and assigns, except
     that the Debtor may not assign or transfer all or any part of its rights or
     obligations under this Agreement without the prior written consent of the
     Secured Party, and any assignment by the Debtor in violation of this
     provision shall be void and of no effect. The Debtor waives and will not
     assert against any assignee of the Secured Party any claims, defenses or
     set-offs which the Debtor could assert against the Secured Party except for
     defenses which cannot be waived under applicable law.

                                       12
<PAGE>
6.4  AMENDMENTS AND WAIVERS

     Any term of this Agreement may be amended or waived only by the written
     agreement of the Debtor and the Secured Party.

6.5  RIGHTS CUMULATIVE

     The rights and remedies of the Secured Party under this Agreement:

     (a)  may be exercised as often as necessary;

     (b)  are cumulative and not exclusive of its rights under applicable law;
          and

     (c)  may be waived only in writing and specifically.

     The Secured Party's delay in exercising, or failure to exercise, any right
     or remedy under this Agreement is not a waiver of that right or remedy.

6.6  SEVERABILITY

     If any provision of this Agreement is or becomes illegal, invalid or
     unenforceable in any jurisdiction, that shall not affect:

     (a)  the legality, validity or enforceability in that jurisdiction of any
          other provision of this Agreement; or

     (b)  the legality, validity or enforceability in any other jurisdiction of
          that or any other provision of this Agreement.

6.7  COUNTERPARTS

     This Agreement may be executed in counterpart, and this has the same effect
     as if the signatures on the counterparts were on a single copy of this
     Agreement.

6.8  NOTICES

     (a)  All notices or other communications under or in connection with this
          Agreement shall be given in writing. Any such notice will be deemed to
          be given:

          (i)  if by mail or courier, when delivered; and

          (ii) if by facsimile, when sent with confirmation of transmission,

          except that a notice given on a non-working day or after business
          hours in the place of receipt will only be deemed to be given on the
          next working day in that place.

     (b)  The address and facsimile number of the Debtor are:

          Address:         498 North Oak Street
                           Inglewood, CA  90302
                           USA

                                       13
<PAGE>
          Fax number:      +1 310 330 2764
          Attention:       Chief Executive Officer

     (c)  The address and facsimile number of the Secured Party are:

          Address:         PO Box 957
                           Road Town, Tortola
                           British Virgin Islands

          Attention:       The Directors

     (d)  Either party may change its address or facsimile number for notices by
          a notice to the other party given in accordance with this Clause 6.8.

6.9  COMPLETE AGREEMENT

     This Agreement contains the complete agreement between the parties on the
     matters to which it relates and supersedes all prior commitments,
     agreements and understandings, whether written or oral, on those matters.

6.10 WAIVER OF JURY TRIAL

     THE DEBTOR AND THE SECURED PARTY WAIVE ANY RIGHTS THEY MAY HAVE TO A JURY
     TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED ON OR ARISING FROM THIS
     AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. In the event
     of litigation, this Agreement may be filed as a written consent to a trial
     by the court.

6.11 GOVERNING LAW

     This Agreement is governed by the laws of the State of California, except
     to the extent that the validity, perfection or enforcement of any security
     interest granted under this Agreement or any remedy in respect of any
     particular Collateral is mandatorily governed by the law of another
     jurisdiction.

The undersigned, intending to be legally bound, have executed and delivered this
Agreement on the date stated at the beginning of this Agreement.

                                       14
<PAGE>
                                   SIGNATORIES

DEBTOR

SIGNATURE EYEWEAR, INC.

By:
   ---------------------------------

Name:    Michael Prince
     -------------------------------

Title:   Chief Financial Officer
      -------------------------------

SECURED PARTY

BLUEBIRD FINANCE LIMITED

By:
   ---------------------------------

Name:
     -------------------------------

Title:
      ------------------------------

                                       15
<PAGE>

                                   SCHEDULE 1

                             COMMERCIAL TORT CLAIMS

None.

                                       16
<PAGE>

                                   SCHEDULE 2

                              INTELLECTUAL PROPERTY

TRADEMARKS

1.       Intuition

2.       Bravado

3.       Latitudes

4.       Lifescape

5.       Search

6.       Small Print

7.       Kensington & James Riding Club and Design

                                       17
<PAGE>

                                   SCHEDULE 3

     COUNTRIES AND STATES IN WHICH COLLATERAL CONSISTING OF GOODS IS LOCATED

1.       Belgium

2.       California

3.       Texas

                                       18

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