Document:

EXHIBIT 10.1
                                                                    ------------

                                    AGREEMENT

                              DATED APRIL 21, 2003

                                  US$4,150,000

                                 CREDIT FACILITY

                                       FOR

                             SIGNATURE EYEWEAR, INC.

                                   PROVIDED BY

                            BLUEBIRD FINANCE LIMITED

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                                    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

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         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

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         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

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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

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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
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     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
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     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
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     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
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     (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

                                       18EXHIBIT 10.2
                                                                    ------------

                            STOCK PURCHASE AGREEMENT
                              DATED APRIL 21, 2003
                                     BETWEEN

                            BLUEBIRD FINANCE LIMITED

                                       AND

                             SIGNATURE EYEWEAR, INC.

                        RELATING TO THE PURCHASE AND SALE

                                       OF

                     SERIES A 2% CONVERTIBLE PREFERRED STOCK

                                       OF

                             SIGNATURE EYEWEAR, INC.

<PAGE>

                                    CONTENTS

CLAUSE                                                                      PAGE

1.       Definitions..........................................................1
2.       Purchase and Sale....................................................4
3.       Representations and Warranties of the Corporation....................5
4.       Representations and Warranties of Buyer..............................9
5.       Covenants of the Corporation........................................10
6.       Covenants of Buyer and the Corporation..............................13
7.       Survival; Indemnification...........................................14
8.       Miscellaneous.......................................................15

Signatories..................................................................18

EXHIBITS

A.       Certificate of Determination........................................19
B.       Registration Rights.................................................33
C.       Legal Opinion of special counsel to the Corporation.................41

SCHEDULES

3.4      Non-Contravention...................................................47
3.5      Capitalization......................................................48
3.9      Material Adverse Change.............................................49
3.10     Litigation..........................................................50
3.12     Subsidiaries........................................................51
3.14     Compliance with Laws................................................52
3.14     Taxes...............................................................53
3.15     Trademarks..........................................................54

<PAGE>

                            STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (the "AGREEMENT") dated as of April 21, 2003

BETWEEN

(1) SIGNATURE EYEWEAR, INC., a California corporation (the "CORPORATION"), and
(2) BLUEBIRD FINANCE LIMITED, a British Virgin Island corporation ("BUYER").

WHEREAS, the Corporation desires to sell the Preferred Shares (as defined
herein) to Buyer, and Buyer desires to purchase the Preferred Shares from the
Corporation, upon the terms hereinafter set forth in this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual representations,
warranties, covenants and undertakings contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

1.   DEFINITIONS

1.1  DEFINITIONS

     (a) The following terms, as used herein, have the following meanings:

     10-DAY MARKET PRICE means the average of the daily Market Prices of the
     Common Stock for the 10 consecutive trading days ending the day prior to
     the date for which such value is to be computed.

     AFFILIATE means, with respect to any specified Person, any other Person
     that, directly or indirectly, controls, is controlled by or is under direct
     or indirect common control with, such specified Person. For the purposes of
     this definition, "control" when used with respect to any Person means the
     power to direct the management and policies of such Person, directly or
     indirectly, whether through the ownership of voting securities, by contract
     or otherwise, and the terms "affiliated," "controlling," and "controlled"
     have meanings correlative to the foregoing.

     BENEFICIAL OWNER has the meaning set forth in Rule 13d-3 under the Exchange
     Act, and derivative terms such as "beneficially own" shall be given
     corresponding meanings.

     BOARD OF DIRECTORS means the Board of Directors of the Corporation.

     BUSINESS DAY means any day except Saturday, Sunday and any day that is a
     legal holiday or a day on which banking institutions in Los Angeles,
     California generally are authorized or required by law or other
     governmental actions to close.

     CERTIFICATE OF DETERMINATION means the certificate of determination
     executed on or before the date of this Agreement substantially in the form
     attached as Exhibit A.

     CHANGE OF CONTROL means the occurrence of any of the following events: (i)
     any Person or COC Group (with the exception of the Buyer or any of its
     affiliates) is or becomes the beneficial owner (as defined herein, except
     that a Person shall be deemed to have "beneficial ownership" of all
     securities that such Person has the right to acquire, whether such right is
     exercisable immediately or only after the passage of time), directly or
     indirectly, of more than 50% of the total Voting Securities of the
     Corporation; or (ii) the Corporation consolidates with, or merges with or
     into, another Person or sells, assigns, conveys, transfers, leases or
     otherwise disposes of all or

                                       1
<PAGE>

     substantially all of its assets to any Person, or any Person consolidates
     with, or merges with or into the Corporation, in any such event pursuant to
     a transaction in which the outstanding Voting Securities of the Corporation
     are converted into or exchanged for cash, securities or other property,
     other than any such transaction where (A) the outstanding Voting Securities
     of the Corporation are converted into or exchanged for Voting Securities of
     the surviving or transferee corporation or its parent corporation and/or
     cash, securities or other property in an amount which could be paid by the
     Corporation under the terms of the Corporation's credit and financing
     agreements and (B) immediately after such transaction no Person or COC
     Group is the beneficial owner (as defined herein, except that a Person
     shall be deemed to have "beneficial ownership" of all securities that such
     Person has the right to acquire, whether such right is exercisable
     immediately or only after the passage of time), directly or indirectly, of
     more than 50% of the total Voting Securities of the surviving or transferee
     corporation, as applicable; or (iii) during any consecutive two-year
     period, individuals who at the beginning of such period constituted the
     Board of Directors (together with any new directors whose election by the
     Board of Directors or whose nomination for election by the stockholders of
     the Corporation was approved by a vote of a majority of the directors then
     still in office who were either directors at the beginning of such period
     or whose election or nomination for election was previously so approved)
     cease for any reason to constitute a majority of the Board of Directors
     then in office.

     CLOSING DATE means the date of the Closing.

     COC GROUP means a group within the meaning of Section 13(d)(3)
of the Exchange Act.

     COMMISSION means the Securities and Exchange Commission.

     COMMON EQUITY means shares of Common Stock, and Convertible Securities
     (including the Series A Preferred Stock).

     COMMON STOCK means the Corporation's common stock, par value $0.001 per
     share.

     CONVERSION SHARES means the shares of Common Stock issued upon conversion
     of the Series A Preferred Stock.

     CONVERTIBLE SECURITIES means any securities convertible into or
     exchangeable or exercisable for Common Stock.

     CONVERTIBLE VOTING SECURITIES means securities convertible into or
     exchangeable or exercisable for Voting Securities.

     CREDIT FACILITY AGREEMENT means the agreement to be executed by the Buyer
     and the Corporation on the same date as this Agreement.

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

     EXCHANGE ACT means the Securities Exchange Act of 1934, as amended, and the
     rules and regulations promulgated thereunder.

     FINANCE DOCUMENTATION means the Credit Facility Agreement, the Security
     Agreement, the Subordination Agreement.

     GAAP means the U.S. generally accepted accounting principles.

     GROUP means the Corporation and its Subsidiaries.

                                        2
<PAGE>

     LIEN means any mortgage, lien, pledge, charge, security interest or
     encumbrance of any kind.

     MARKET PRICE means, with respect to the Common Stock, on any given day, (i)
     the price of the last trade, as reported on the Nasdaq National Market, not
     identified as having been reported late to such system, or (ii) if the
     Common Stock is so quoted, but not so traded, the average of the last bid
     and ask prices, as those prices are reported on the Nasdaq National Market,
     or (iii) if the Common Stock is not listed or authorized for trading on the
     Nasdaq National Market or any comparable system, the average of the closing
     bid and asked prices as furnished by two members of the National
     Association of Securities Dealers, Inc. selected from time to time by the
     Corporation for that purpose; provided that, in connection with (i) or
     (ii), the Corporation may from time to time specify in advance the time at
     which the trade price or bid and ask prices, respectively, shall be
     determined for purposes of a particular calculation under this Agreement.
     If the Common Stock is not listed and traded in a manner that the
     quotations referred to above are available for the period required
     hereunder, the Market Price per share of Common Stock shall be deemed to be
     the fair value per share of such security as determined in good faith by
     the Board of Directors.

     MATERIAL ADVERSE EFFECT means a material adverse effect on:

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

     (b) the ability of the Corporation to perform its obligations under this
     Agreement or any of the Finance Documentation;

     (c) the validity or enforceability of this Agreement or any of the Finance
     Documentation; or

     (d) any right or remedy of the Buyer under this Agreement or any of the
     Finance Documentation.

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

     PERSON means an individual, corporation, partnership, limited liability
     company, association, trust and any other entity or organization, including
     a government or political subdivision or an agency or instrumentality
     thereof.

     PREFERRED SHARES means 1,200,000 shares of Series A Preferred Stock issued
     on the Closing Date.

     PREFERRED STOCK has the meaning set out in Section 3.5(a).

     RESTRICTED SECURITIES means (i) Common Equity and (ii) any other Voting
     Securities or Convertible Voting Securities.

     SEC REPORTS means all forms, reports and documents that the Corporation is
     required to file with the Commission.

     SECURITIES ACT means the Securities Act of 1933, as amended, and the rules
     and regulations promulgated thereunder.

     SECURITY AGREEMENT means the security agreement to be executed by the
     Corporation and Buyer on the same date as this Agreement.

                                        3
<PAGE>

     SERIES A PREFERRED STOCK means the Series A 2% Convertible Preferred Stock
     of the Corporation having the rights, preferences and restrictions as set
     forth in the Certificate of Determination.

     SUBORDINATION AGREEMENT means the subordination agreement to be executed
     between the Buyer, the Corporation and Home Loan and Investment Company on
     the same date as this Agreement.

     SUBSIDIARY means, with respect to any Person, any corporation or other
     entity (and any predecessor thereof) of which the securities or other
     ownership interests having ordinary voting power to elect a majority of the
     Board of Directors or other persons performing similar functions are
     directly or indirectly owned by such Person.

     VOTING SECURITIES means securities of the Corporation ordinarily having the
     power to vote for the election of directors of the Corporation other than
     the Series A Preferred Stock, provided that when the term "Voting
     Securities" is used with respect to any other Person it means the capital
     stock or other equity interests of any class or kind ordinarily having the
     power to vote for the election of directors or other members of the
     governing body of such Person.

     (b)  The following definitional provisions shall apply to this Agreement:

          (i)  The words "hereof", "herein", and "hereunder" and words of
               similar import, when used in this Agreement, shall refer to this
               Agreement as a whole and not to any particular provision of this
               Agreement.

          (ii) The terms defined in the singular shall have a comparable meaning
               when used in the plural, and vice versa.

          (iii) The terms "Dollars" and "$" shall mean United States Dollars.

          (iv) References herein to a specific Section, Subsection or paragraph
               shall refer, respectively, to Sections, Subsections or paragraph
               of this Agreement, unless the express context otherwise requires.

          (v)  Wherever the word "include," "includes," or "including" is used
               this Agreement, it shall be deemed to be followed by the words
               "without limitation".

2. PURCHASE AND SALE

2.1 PURCHASE AND SALE

Upon the terms of this Agreement, the Corporation agrees to sell to Buyer, and
Buyer agrees to purchase from the Corporation, 1,200,000 Preferred Shares at the
Closing. The purchase price (the PURCHASE PRICE) for the Preferred Shares is
$800,000 in cash. The Purchase Price shall be paid as provided in Section 2.2.

2.2 CLOSING.

The closing (the CLOSING) of the purchase and sale of the 1,200,000 Preferred
Shares hereunder shall take place at the offices of Jeffer, Mangels, Butler &
Marmaro LLP, 1900 Avenue of the Stars, 7th Floor, Los Angeles, CA 90067,
immediately upon execution of this Agreement and the Finance Documentation. At
the Closing:

     (a)  The Corporation shall deliver to Buyer:

          (i)  certificates for the Preferred Shares;

                                        4
<PAGE>

          (ii) confirmation that the Certificate of Determination has been filed
               in accordance with the laws of California;

          (iii) certified copies of the Articles of Incorporation and bylaws of
               the Corporation;

          (iv) a copy of the resolutions adopted by the Board of Directors,
               certified by the Secretary of the Corporation, authorizing this
               Agreement and issuance of the Preferred Shares and the Conversion
               Shares; and

          (v)  an opinion reasonably acceptable to Buyer from Jeffer, Mangels,
               Butter & Marmaro, LLP, special counsel to the Corporation, in the
               form of the attached Exhibit C.

     (b)  Buyer shall deliver to the Corporation the Purchase Price in
          immediately available funds by wire transfer to the account of the
          Corporation notified to Buyer.

2.3 CERTIFICATES.

     (a)  Each certificate for Preferred Shares or Restricted Securities issued
          to Buyer shall bear the following legend:

          "The securities represented hereby have not been registered under
          Securities Act of 1933, as amended, and may not be offered, sold,
          transferred or otherwise disposed of except in compliance such Act and
          other applicable laws."

     (b)  The Corporation agrees that, at the request of Buyer, it will remove
          from the certificates representing any Preferred Shares or Restricted
          Securities the legend contemplated by subsection (a) regarding the
          restriction under the Securities Act in the event that outside counsel
          for Buyer delivers to the Corporation a written opinion that the
          transfer of such Restricted Securities is no longer restricted by the
          Securities Act.

3. REPRESENTATIONS AND WARRANTIES OF THE CORPORATION

The Corporation represents and warrants to Buyer as of the date hereof (and if
different, as at the Closing Date) that: 3.1 CORPORATE EXISTENCE AND POWER.

The Corporation is a corporation duly incorporated, validly existing under the
laws of the State of California, and the Corporation and each of its
Subsidiaries has the powers required to own its assets and to carry on its
business as now conducted.

3.2 CORPORATE AUTHORIZATION.

     (a)  The execution, delivery and performance of this Agreement by the
          Corporation, including the issuance of the Preferred Shares and the
          Conversion Shares, is within the Corporation's powers and has been
          duly authorized by all necessary corporate action on the part of the
          Corporation.

     (b)  This Agreement constitutes a legal and binding agreement of the
          Corporation, enforceable against the Corporation in accordance with
          its terms, except (i) as such enforcement is limited by bankruptcy,
          insolvency and other similar laws affecting the enforcement of
          creditors' rights generally and (ii) for limitations imposed by
          general principles of equity.

                                        5
<PAGE>

3.3 AUTHORIZATION.

The execution, delivery and performance of this Agreement by the Corporation
requires no action by or in respect of, or filing with, any governmental or
non-governmental body, agency, official or authority other than (i) compliance
with any applicable requirements of the Exchange Act, (ii) with respect to the
Corporation's obligations under Section 6.4, compliance with any applicable
requirements of the Securities Act, (iii) the filing of the Certificate of
Determination and Notice of Transaction under Section 25102(f) of the California
Corporations Code in accordance with the laws of California, and (iv) other
filings, notifications and consents that are immaterial to the consummation of
the transactions contemplated hereby.

3.4 NON-CONTRAVENTION.

Assuming compliance with the matters referred to in Section 3.3, the execution,
delivery and performance of this Agreement by the Corporation do not and will
not conflict with (i) the articles of incorporation or bylaws of the Corporation
or any of its Subsidiaries, (ii) any applicable law or regulation or (iii) and
except as to matters which would be immaterial to the Corporation or as set
forth in Schedule 3.4, (y) constitute a default under, or give rise to any right
of termination, cancellation or acceleration of any right or obligation of the
Corporation or to a loss of any benefit to which the Corporation is entitled
under any provision of any agreement or other instrument binding upon the
Corporation or (z) result in the creation or imposition of any Lien on any asset
of the Corporation.

3.5 CAPITALIZATION.

     (a)  As of the date hereof, the authorized capital stock of the Corporation
          consists of 30,000,000 shares of common stock (COMMON STOCK), par
          value $.001 per share; and 5,000,000 shares of preferred stock, par
          value $.001 per share (PREFERRED STOCK), of which 1,360,000 shares are
          designated as "Series A 2% Convertible Preferred Stock". As of October
          31, 2002, there were issued and outstanding the following shares of
          such stock: 5,556,889 shares of Common Stock, no shares Preferred
          Stock. The Certificate of Determination has been duly filed with the
          California Secretary of State and remains unchanged and in effect.

     (b)  All outstanding shares of Common Stock are duly authorized, validly
          issued and fully paid and nonassessable. There are no preemptive or
          other similar rights available to the existing holders of the capital
          stock of the Corporation. Except as contemplated by this Agreement or
          set forth in Schedule 3.5 hereto, there are no outstanding options,
          warrants, rights, puts, calls, commitments, or other contracts,
          arrangements, or understandings issued by or binding upon the
          Corporation requiring, and there are no outstanding debt or equity
          securities of the Corporation which upon the conversion, exchange or
          exercise thereof would require, the issuance, sale or transfer by the
          Corporation of any new or additional equity interests in the
          Corporation (or any other securities of the Corporation or any of its
          Subsidiaries which, whether after notice, lapse of time or payment of
          monies, are or would be convertible into or exercisable or
          exchangeable for equity interests in the Corporation). There are no
          voting trusts or other agreements or understandings to which the
          Corporation or any of its Subsidiaries is a party with respect to the
          voting of capital stock of the Corporation. There are no outstanding
          obligations pursuant to which the Corporation is or may become
          obligated to purchase or redeem any shares of capital stock.

3.6 AUTHORIZATION OF PREFERRED SHARES AND CONVERSION SHARES.

The issuance, sale and delivery of the Preferred Shares has been duly authorized
by all requisite corporate and stockholder action of the Corporation, and the
Preferred Shares issued to Buyer, when issued and delivered in accordance with
the terms of this Agreement, will be validly issued and outstanding, fully paid
and nonassessable, free and clear of any Liens and not subject to preemptive or
other similar rights of the stockholders of the Corporation. The Conversion
Shares have

                                        6
<PAGE>

been duly and validly reserved for issuance, and when issued upon conversion of
the Preferred Shares, will be validly issued, fully paid, and nonassessable,
free and clear of any Liens and not subject to preemptive or other similar
rights of the shareholders of the Corporation. The issuance of the Preferred
Shares and the Conversion Shares to Buyer is and will be in full compliance with
all applicable federal, foreign, and state securities laws., provided that by
making the representations contained in this section 3.6, the Corporation is not
making any representation concerning the ability of the Buyer to subscribe for
the Preferred Shares and the Conversion Shares pursuant to this Agreement.

3.7 FINDERS' FEES.

There is no investment banker, broker, finder or other intermediary that has
been retained by or is authorized to act on behalf of the Corporation who might
be entitled to any fee or commission in connection with the sale of the
Preferred Shares pursuant to this Agreement.

3.8 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 Corporation'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;

               (C)  and increase in the bad debt reserve,

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

     (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 Buyer:

          (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,

                                        7
<PAGE>

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

3.9 NO MATERIAL ADVERSE CHANGE.

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

     (a)  as set out in Schedule 3.9 (Material Adverse Change); or

     (b)  as otherwise known to the Buyer.

3.10 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 3.10 (Litigation); or

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

3.11 OFFERING OF PREFERRED SHARES.

Neither the Corporation nor any Person acting on its behalf has taken or will
take any action (including, without limitation, any offering of any securities
of the Corporation under circumstances that would require, under the Securities
Act, the integration of such offering with the offering and sale of the
Preferred Shares) that might subject the offering, issuance or sale of the
Preferred Shares to the registration requirements of Section 5 of the Securities
Act.

3.12 SUBSIDIARIES AND OTHER INTERESTS.

Except as set forth in Schedule 3.12, the Corporation does not have any
Subsidiaries and does not, directly or indirectly, own any capital stock or have
any equity interests of or in any other entity. 3.13 COMPLIANCE WITH LAW.

Except as disclosed in Schedule 3.13, the business of the Corporation has been
and is presently being conducted in compliance with applicable US and foreign
federal, state, and local governmental laws, rules, regulations and ordinances,
except for any such noncompliance that would not have a Material Adverse Effect
on the Corporation.

3.14 TAXES.

Except as disclosed in Schedule 3.14, the Corporation has timely filed or caused
to be filed all Tax Returns that are required to be filed by or with respect to
it, its operations and assets, and as of the time of filing, all such Tax
Returns were complete and correct. Except as disclosed in Schedule 3.14, the
Corporation has paid or caused to be paid all Taxes as shown on said returns and
on all assessments received by them to the extent that such Taxes have become
due. The federal income Tax Returns of the Corporation have been examined and
reported on by the Internal Revenue Service (or closed by applicable statutes)
and all tax liabilities including additional assessments have been satisfied for
all fiscal years prior to and including the fiscal year ended 31 October, 2001.
The Corporation has paid or caused to be paid, or have established reserves
which, in the reasonable judgment of the Corporation, are adequate in all
material respects, for all Tax liabilities applicable to the Corporation for all
fiscal years which have not been examined and reported on by the taxing
authorities (or closed by applicable statutes). The term TAXES shall mean all
taxes, charges, fees, levies or other assessments, including, without
limitation, all net income, gross income, gross receipts, premium, sales, use,
ad valorem,

                                        8
<PAGE>

transfer, franchise, profits, license, withholding, payroll, employment, excise,
estimated severance, stamp, occupation, property or other taxes, fees, custom
duties, assessments or charges of any kind whatsoever, together with any
interest and any penalties (including penalties for failure to file in
accordance with applicable information reporting requirements), and additions to
tax by any authority (domestic or foreign). The term TAX RETURN shall mean any
report, return, form, declaration or other document or information required to
be supplied to any authority in connection with Taxes.

3.15 TRADEMARKS, ETC.

Schedule 3.15 sets forth a true and complete list of all patents, trademarks,
trade names, service marks and copyrights and applications therefor
(collectively, INTELLECTUAL PROPERTY) owned by or licensed to the Corporation
which constitutes all the Intellectual Property necessary for use in the United
States and in such other jurisdictions as is necessary for the conduct of the
business of the Corporation as presently conducted. Except as disclosed on
Schedule 3.15, the Corporation owns or has the perpetual right to use, without
payment to or interference from any other party, all Intellectual Property
listed on Schedule 3.15 and has not authorized any person in any jurisdiction to
use any such Intellectual Property. All Intellectual Property listed on Schedule
3.15 which may be so registered or filed has been duly registered and filed in
or issued by the appropriate governmental agency in the jurisdictions indicated,
all necessary affidavits of continuing use have been filed, and all necessary
maintenance fees have been paid to continue all such rights in effect. Except as
set forth in Schedule 3.15, the Corporation has no notice or knowledge of any
objection or claim being asserted by any person with respect to the ownership,
validity, enforceability or use of any Intellectual Property listed on Schedule
3.15 or challenging or questioning the validity or effectiveness of any such
license.

4. REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to the Corporation as of the date hereof (and, if
different, as of the Closing Date) that:

4.1 CORPORATE EXISTENCE AND POWER.

Buyer is a corporation duly incorporated, validly existing and in good standing
under the laws of its jurisdiction of incorporation.

4.2 CORPORATE AUTHORIZATION.

The execution, delivery and performance of this Agreement by Buyer are within
Buyer's corporate powers and have been duly authorized by all necessary
corporate action on the part of Buyer. This Agreement constitutes a legal, valid
and binding agreement of Buyer, enforceable against Buyer in accordance with its
terms, except (a) as such enforcement is limited by bankruptcy, insolvency and
other similar laws affecting the enforcement of creditors' rights generally and
(b) for limitations imposed by general principles of equity. 4.3 AUTHORIZATION.

The execution, delivery and performance of this Agreement by Buyer requires no
action by or in respect of, or filing with, any governmental or non-governmental
body, agency or official or any other Person other than (i) compliance with any
applicable requirements of the Exchange Act, and (ii) other filings or
notifications that are immaterial to the consummation of the transactions
contemplated hereby.

4.4 NON-CONTRAVENTION.

Assuming compliance with the matters referred to in Section 4.3, the execution,
delivery and performance of this Agreement by Buyer does not and will not (i)
violate the certificate of incorporation or bylaws of Buyer, (ii) violate any
applicable law, rule, regulation, judgment, injunction, order or decree, except
for any such violations which would not have a material adverse effect on the
ability of Buyer to consummate the transactions contemplated hereby or (iii)
constitute a default under any agreement or other instrument binding upon Buyer
except as to matters which would not be material to Buyer.

                                        9
<PAGE>

4.5 PURCHASE FOR INVESTMENT.

     (a)  Buyer is an "accredited investor" as defined in Rule 501 of Regulation
          D promulgated under the Securities Act. Buyer is purchasing the
          Preferred Shares for investment for its own account and not with a
          view to, or for sale in connection with, any distribution thereof or
          of any Conversion Shares in violation of the Securities Act.

     (b)  Buyer understands that (i) the offering and sale of the Preferred
          Shares and the Conversion Shares by the Corporation is intended to be
          exempt from registration under the Securities Act pursuant to Section
          4(2) thereof and (ii) there is no existing public or other market for
          the Preferred Shares.

     (c)  The Buyer confirms that it (i) has been furnished with or has had
          access to all of the information that it considers necessary to make
          an informed investment decision with respect to the Preferred Shares
          and Conversion Shares, (ii) has had the opportunity to discuss with
          management of the Corporation the intended business and financial
          affairs of the Corporation (iii) (either alone or together with its
          advisors) has sufficient knowledge and experience in financial and
          business matters so as to be capable of evaluating the merits and
          risks of its investment in the Preferred Shares and the Conversion
          Shares, (iv) is capable of bearing the economic risks of such
          investment; and (v) it has not relied upon any oral representations of
          the Corporation in connection with its decision to invest in the
          Preferred Shares and the Conversion Shares.

     (d)  Buyer has not received any advertising or general solicitation in
          connection with the issuance of the Preferred Shares.

     (e)  Buyer understands that the Preferred Shares and the Conversion Shares
          will be issued in a transaction exempt from the registration or
          qualification requirements of the Securities Act and applicable state
          securities laws, and that such securities must be held indefinitely
          unless a subsequent disposition thereof is registered or qualified
          under the Securities Act and such state securities laws or is exempt
          from such registration or qualification.

4.6 FINDER'S FEES

There is no investment banker, broker, finder or other intermediary that has
been retained by or is authorized to act on behalf of the Buyer who might be
entitled to any fee or commission in connection with the transactions
contemplated by this Agreement.

5. COVENANTS OF THE CORPORATION

The Corporation agrees that:

5.1 CERTIFICATE OF DETERMINATION.

The Corporation has caused the Certificate of Determination set forth as Exhibit
A hereto to be filed as required pursuant to the law of California.

                                       10
<PAGE>
5.2 RESERVATION OF SHARES.

For so long as any of the Preferred Shares is outstanding, the Corporation shall
keep reserved for issuance a sufficient number of shares of Common Stock to
satisfy its conversion obligations under the Certificate of Determination.

5.3 OTHER TRANSFERS OF RESTRICTED SECURITIES.

The Corporation shall take all actions reasonably necessary to enable holders of
the Common Stock to sell such stock without registration under the Securities
Act pursuant to Rule 144 under the Securities Act or any successor rule or
regulation, subject in each case to the provisions of this Agreement and,
specifically, the filing on a timely basis of all reports required to be filed
under the Exchange Act.

5.4 PRO-RATA PARTICIPATION.

     (a)  If the Corporation shall issue (such issuance, including any Common
          Equity issued to Buyer pursuant to this Section 5.4, an ISSUANCE) any
          Common Equity (other than an issuance of Common Equity (i) pursuant to
          the Corporation's existing or future stock option plans or pursuant to
          any other existing or future director or employee compensation plan
          approved by the Board of Directors, (ii) as consideration for the
          acquisition of a business or of assets, (iii) to the Corporation's
          joint venture partners in exchange for interests in the relevant joint
          venture, (iv) upon conversion, exercise or exchange of Convertible
          Securities, (v) that would cause an adjustment under paragraph
          8(g)(iii) of the Certificate of Determination, (vi) pursuant to any
          shareholders' rights plan or (vii) as dividends on any class of
          preferred stock of the Corporation), Buyer shall have the right to
          purchase for cash up to an amount of such Common Equity (PRO-RATA
          SECURITIES) on the same terms and at the same price as the issue price
          of such Common Equity (such price to be agreed by the Corporation and
          Buyer if such Common Equity is to be issued for consideration other
          than cash, and if the parties cannot agree on such price, the price
          shall be determined as provided in paragraph (c) of this Section 5.4)
          so that, after the Issuance, Buyer would own the same proportional
          interest of Common Stock in the aggregate (assuming conversion,
          exercise or exchange of all Convertible Securities) as is owned by it
          prior to the Issuance (assuming conversion, exercise or exchange of
          all Convertible Securities). The Corporation shall deliver written
          notice (a PRO-RATA NOTICE) to Buyer with respect to any Issuance
          subject to the provisions of this Section 5.4 not less than 10 days
          before the anticipated date of such Issuance. Buyer's right to
          purchase Pro-Rata Securities with respect to any Issuance of Common
          Equity shall terminate 10 business days after delivery of the Pro-Rata
          Notice. If Buyer timely elects to exercise its right to purchase
          Pro-Rata Securities, such election will constitute a binding offer to
          purchase and may not be revoked by Buyer; provided, however, that
          Buyer's obligation to acquire the Pro-Rata Securities will be subject
          to terms and conditions at least as favorable as those applicable to
          the Issuance giving rise to Buyer's rights under this Section 5.4 and
          to receipt of any necessary governmental approvals (and the parties
          agree to expeditiously seek and cooperate with respect to obtaining
          such approvals). Notwithstanding anything in this Section 5.4 to the
          contrary, (x) if Buyer exercises its right to purchase any Pro-Rata
          Securities pursuant to an Pro-Rata Notice, but the Corporation does
          not consummate the issuance of Common Equity referred to in such
          notice (or reduces the size of such issuance), Buyer will not have the
          right to purchase such Pro-Rata Securities (or, in the event of a
          reduction in the size of the Issuance, have its right to purchase
          reduced pro rata), (y) if Buyer exercises its right to purchase any
          Pro-Rata Securities, the Corporation and Buyer agree that the Issuance
          giving Buyer such right shall not cause an adjustment under paragraph
          8(g)(ii) of the Certificate of Determination, and (z) if the
          Corporation issues securities (RIGHTS) the issuance of which, except
          for this paragraph, would cause an adjustment under paragraph
          8(g)(iii) of the Certificate of Determination, then (A) Buyer shall,
          in addition to any Rights it receives in respect of any Common Stock
          it owns, be entitled to receive Rights in respect of all Preferred
          Stock (as if such Preferred Stock had been converted into Common Stock
          immediately prior to the record date for the Issuance of such Rights)

                                       11
<PAGE>
          owned by Buyer, and (B) the Corporation and Buyer agree that the
          issuance of Rights shall not cause an adjustment under Section
          8(g)(iii) or 8(g)(iv) of the Certificate of Determination. Buyer
          agrees that it will not, directly or indirectly, sell, pledge,
          encumber or otherwise transfer or agree to sell, pledge, encumber or
          otherwise transfer, any Rights it receives pursuant to this Section
          5.4 in respect of Preferred Shares. The agreements between the
          Corporation and Buyer in this paragraph 5.4(a) not to make adjustments
          under paragraph 8(g) of the Certificate of Determination under the
          circumstances set forth in this paragraph 5.4(a) shall constitute
          agreements as referred to in, and for the purposes of, paragraph
          8(g)(vii) of the Certificate of Determination.

     (b)  The rights and agreements in paragraph (a) of this Section 5.4 shall
          terminate in their entirety if all shares of Series A Preferred Stock
          have been either redeemed by the Corporation or converted into Common
          Stock.

     (c)  If Buyer and the Corporation fail to agree on the price at which Buyer
          may purchase securities under paragraph (a) of this Section 5.4 within
          30 days following receipt by the Buyer of a Pro-Rata Notice, then the
          items in dispute shall be referred to a nationally recognized
          investment banking firm or other third party arbitrator selected
          jointly by Buyer and the Corporation. The determination of such
          investment banking firm or other third party arbitrator shall be
          rendered within 30 days of such referral. The Corporation and Buyer
          shall share equally in payment of all fees and expenses of such
          investment banking firm or other third party arbitrator. All
          determinations made pursuant to this paragraph (c) shall be final and
          binding on the Buyer and the Corporation.

5.5      CHANGE OF CONTROL.

     (a)  Subject to paragraphs 5.5(c) and (d) below, upon the occurrence of a
          Change of Control (the date of such occurrence being the CHANGE OF
          CONTROL DATE), the Corporation shall, to the extent funds are legally
          available therefor, make an offer (the CHANGE OF CONTROL OFFER) to
          Buyer to repurchase 100% of Buyer's shares of Series A Preferred Stock
          at a price per share in cash equal to (A) if the Change of Control
          Payment Date is prior to the First Call Date (as defined in the
          Certificate of Determination), 110% of the product of (i) one plus the
          number (or fraction) of shares of Series A Preferred Stock accrued and
          unpaid as dividends on such share to the Change of Control Payment
          Date, times (ii) the Conversion Ratio (as defined in the Certificate
          of Determination) in effect immediately prior to the Change of
          Control, times (iii) if the Change of Control is the result of a
          tender or exchange offer, merger or other form of business
          combination, the price paid per share of Common Stock in such tender
          or exchange offer, merger or other form of business combination (with
          the fair market value of any non-cash consideration being determined
          in good faith by the Board of Directors of the Corporation), or if the
          Change of Control is not the result of a tender or exchange offer,
          merger or other form of business combination, the 10-Day Market Price
          of the Common Stock on the Change of Control Date and (B) if the
          Change of Control Payment Date is on or after the First Call Date, the
          Redemption Price (as defined in the Certificate of Determination);
          provided, that Buyer shall not be entitled to tender any Series A
          Preferred Stock under this provision until such time as the
          Corporation has repurchased such debt securities as are required to be
          repurchased by the Corporation upon such event pursuant to the
          Corporation's credit and financing agreements. The Corporation shall
          promptly take all actions required to make such repurchases of debt
          securities.

     (b)  The Corporation shall make the Change of Control Offer not later than
          30 days following the Change of Control Date by giving notice to Buyer
          specifying a date, not less than 20 days nor more than 30 days after
          the date of such notice, on which the Corporation will purchase any
          shares of Series A Preferred Stock subject to such offer (the CHANGE
          OF CONTROL PAYMENT DATE). Not less than 2 Business Days prior to the
          Change of Control Payment Date, Buyer shall notify the Corporation (an
          ELECTION NOTICE) as to the number of shares of Series A Preferred
          Stock in respect of which Buyer is accepting the Change of Control
                                       12
<PAGE>

          Offer. If Buyer does not deliver the Election Notice by such date, its
          rights under this Section 5.5 will terminate. If Buyer does deliver an
          Election Notice by such date, then (i) such Election Notice will be a
          binding commitment of Buyer to sell to the Corporation on the Change
          of Control Payment Date the number of shares of Preferred Stock
          specified in such Election Notice, subject to Section 5.5(a) and (ii)
          on the Change of Control Payment Date, (A) the Corporation will
          deliver to Buyer an amount of cash equal to the purchase price for the
          Series A Preferred Stock to be purchased and (B) Buyer will deliver to
          the Corporation free and clear of any Liens one or more certificates
          representing the Series A Preferred Stock to be sold duly endorsed or
          accompanied by stock powers duly endorsed in blank, with any required
          transfer stamps affixed thereto.

     (c)  Notwithstanding the foregoing, the Corporation shall not be required
          to make a Change of Control Offer following a Change of Control if a
          third party makes the Change of Control Offer in the manner, at the
          price and at the times and otherwise in compliance with the
          requirements applicable to a Change of Control Offer made by the
          Corporation and purchases all shares of Series A Preferred Stock
          validly tendered under such Change of Control Offer.

     (d)  The Corporation's obligations under this Section 5.5 are subject to
          compliance with the California Corporations Code. If the Corporation
          is limited by the California Corporations Code from fully complying
          with its obligations hereunder, the Corporation agrees that: (i) it
          will comply with its obligations hereunder to the extent it is able to
          do so and (ii) it will use its best efforts to remove any such legal
          impediment. If, at any time, the Corporation is obligated to make a
          Change of Control Offer hereunder but is not able to fully perform its
          obligations hereunder because of a legal impediment, Buyer may elect
          to have the Corporation defer such Change of Control Offer until the
          Corporation is legally able to fully perform its obligations
          hereunder. The Series A Preferred Stock will continue to accrue
          dividends until repurchased, redeemed or converted.

6. COVENANTS OF BUYER AND THE CORPORATION

6.1 REQUIRED REGULATORY APPROVALS; REASONABLE BEST EFFORTS; FURTHER ASSURANCES.

Subject to the terms of this Agreement, Buyer and the Corporation will, and will
cause their Affiliates to, use their reasonable best efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things necessary or
desirable under applicable laws and regulations to consummate the transactions
contemplated by this Agreement. The Corporation and Buyer agree to execute and
deliver such other documents, certificates, agreements and other writings and to
take such other actions as may be necessary or desirable in order to consummate
or implement expeditiously the transactions contemplated by this Agreement.

6.2 CERTAIN FILINGS.

     (a)  The Corporation and Buyer will, and will cause their Affiliates to,
          cooperate with one another (i) in determining whether any action by or
          in respect of, or filing with, any governmental body, agency, official
          or authority is required, or any actions, consents, approvals or
          waivers are required to be obtained from parties to any material
          contracts, in connection with the consummation of the transactions
          contemplated by this Agreement or the conversion by Buyer of Series A
          Preferred Stock and (ii) in taking such actions or making any such
          filings, furnishing information required in connection therewith and
          seeking timely to obtain any such actions, consents, approvals or
          waivers. Each of the Corporation and Buyer shall (A) give the other
          party prompt notice of the commencement of any action, suit,
          litigation, arbitration, preceding or investigation by or before any
          governmental body with respect to the transactions contemplated by
          this Agreement, and (B) keep the other party informed as to the status
          of any such action, suit, litigation, arbitration, preceding or
          investigation.

                                       13
<PAGE>

     (b)  The Corporation and Buyer will, and will cause their Affiliates to,
          take such actions, make such payments or commitments, and agree to
          such amendments to any of their respective franchises, licenses,
          contracts or other agreements or authorizations, as shall be required
          in order to obtain a consent, approval or waiver from any other Person
          in connection with the transactions contemplated hereby and by the
          Certificate of Determination (including conversion of the Series A
          Preferred Stock).

6.3 PUBLIC ANNOUNCEMENTS.

Except as may be required by applicable law or any listing agreement with any
national securities exchange or quotation system, the parties agree to consult
with each other before issuing any press release or making any public statement
or completing any public filing with respect to this Agreement or the
transactions contemplated hereby and will not issue any such press release or
make any such public statement prior to such consultation.

6.4 REGISTRATION RIGHTS AGREEMENT.

The terms set forth in Exhibit B hereto are hereby incorporated by reference.
The registration rights set forth in Exhibit B may be assigned by a Holder (as
defined therein) to a transferee or assignee of the Preferred Shares or the
Registrable Securities, provided that such transferee or assignee agrees to be
bound to the terms of Exhibit B. The Corporation shall not, without the prior
written consent of the Holder owning a majority-in-interest of the Preferred
Shares or Registrable Securities, enter into an agreement which grants a Person
registration rights superior to those granted in Exhibit B.

6.5 SEC REPORTS

The Corporation hereby agrees that (a) the Corporation shall, within 90 days
after the Closing Date, have filed all required SEC Reports through such date
and delivered or made available to Buyer copies thereof, and as of the filing
date of such SEC Reports (b) the SEC Reports shall comply in all material
respects with all applicable requirements of the Exchange Act or the Securities
Act, as the case may be and (c) none of the SEC Reports shall contain any untrue
statement of a material fact or omit to state a material fact required to be
stated or incorporated by reference therein or necessary in order to make the
statements therein, in light of the circumstances under which they will be made,
not misleading.

7. SURVIVAL; INDEMNIFICATION

7.1 SURVIVAL OF REPRESENTATION AND WARRANTIES.

All representations and warranties contained in this Agreement and all claims
with respect thereto shall terminate upon the expiration of 24 months after the
date of this Agreement, except that the representations and warranties contained
in Sections 3.1, 3.2, 3.3, 3.6, 4.1, 4.2, and 4.3 shall survive indefinitely.
Notwithstanding the preceding sentence, any representation or warranty in
respect of which indemnity may be sought under this Agreement shall survive the
time at which it would otherwise terminate pursuant to the preceding sentence,
if notice of the inaccuracy or breach thereof giving rise to such right of
indemnity shall have been given in reasonable detail to the party against whom
such indemnity may be sought prior to such time.

7.2 INDEMNIFICATION.

     (a)  The Corporation hereby indemnifies Buyer against and agrees to hold
          Buyer harmless from any and all damage, loss, liability and expense
          (including, without limitation, reasonable expenses of investigation
          and reasonable attorneys' fees and expenses in connection with any
          action, suit or proceeding) (DAMAGES) incurred or suffered by Buyer
          arising out of any misrepresentation or breach of warranty, covenant
          or agreement made or to be performed by the Corporation pursuant to
          this Agreement; provided that the Corporation's maximum liability
          under this Section 7.2(a) shall not exceed US$800,000.

     (b)  Buyer hereby indemnifies the Corporation against and agrees to hold
          the Corporation harmless from any and all Damages incurred or suffered
          by the Corporation arising out of any misrepresentation or breach of
          warranty, covenant or agreement made or to be performed by Buyer
          pursuant to this Agreement.

7.3 PROCEDURES.

The party seeking indemnification under Section 7.2 (the INDEMNIFIED PARTY)
agrees to give prompt notice to the party against whom indemnity is sought (the
INDEMNIFYING PARTY) of the assertion of any claim, or the commencement of any
suit, action or proceeding in respect of which indemnity may be sought under
such Section. The Indemnifying Party may at its election participate in and
control the defense of any such suit, action or proceeding at its own expense.
The Indemnifying Party shall not be liable under Section 7.2 for any settlement
effected without its consent of any claim, litigation or proceeding in respect
of which indemnity may be sought hereunder.

8. MISCELLANEOUS

8.1 NOTICES.

All notices, requests and other communications to any party hereunder shall be
in writing and shall be deemed duly given, effective (i) two Business Days
later, if sent by international overnight courier, return receipt requested (ii)
when sent if sent by fax, provided that the receipt of the fax is promptly
confirmed by telephone confirmation thereof, and (iii) when served, if delivered
personally to the intended recipient, and in each case, addressed,

                if to Buyer, to:

                BlueBird Finance Limited
                P.O. Box 957
                Road Town
                Tortola
                British Virgin Islands
                Attention: The Directors

                if to the Corporation, to:

                Signature Eyewear, Inc.
                498 North Oak Street
                Inglewood, CA  90302
                Attention: Michael Prince
                Chief Financial Officer
                Fax: (310) 330-2770

                with a copy (not constituting notice) to:

                Jeffer, Mangels, Butler & Marmaro LLP
                1900 Avenue of the Stars
                7th Floor
                Los Angeles, CA  90067
                Attention: Joseph A. Eisenberg, PC
                Fax: (310) 785-5357

                                       15
<PAGE>

Any party may change the address to which notices or other communications
hereunder are to be delivered by giving the other party notice in the manner
herein set forth.

8.2 AMENDMENTS AND WAIVERS.

Any provision of this Agreement may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed, in the case of an amendment, by
each party to this Agreement, or in the case of a waiver, by the party against
whom the waiver is to be effective. No failure or delay by any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative.

8.3 EXPENSES.

All costs and expenses incurred in connection with this Agreement shall be paid
by the party incurring such cost or expense.

8.4 ASSIGNMENT.

The rights and obligations of the parties hereunder cannot be assigned or
delegated without the prior written consent of the other party, except that (i)
Buyer may assign all of its rights and obligations under this Agreement to an
Affiliate (provided that (A) any such Affiliate continues to be a Affiliate of
Buyer and (B) Buyer shall be responsible for any breach by such Affiliate) and
(ii) Buyer may assign its rights and obligations under Section 6.4 and Exhibit B
of this Agreement to the assignee of Series A Preferred Stock, provided such
assignee agrees to be bound to the terms of such provisions and Exhibit.

8.5 GOVERNING LAW.

This Agreement shall be governed by and construed in accordance with the law of
the State of California (excluding conflicts of law principles).

8.6 JURISDICTION.

Except as otherwise expressly provided in this Agreement, the parties hereto
agree that any suit, action or proceeding seeking to enforce any provision of,
or based on any matter arising out of or in connection with, this Agreement or
the transactions contemplated hereby may only be brought in a state or federal
court of competent jurisdiction sitting in Los Angeles County, California and
each of the parties hereby consents to the non-exclusive jurisdiction of such
courts (and of the appropriate appellate courts therefrom) in any such suit,
action or proceeding. Process in any such suit, action or proceeding may be
served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 8.1 shall be
deemed effective service of process on such party.

8.7 COUNTERPARTS; THIRD PARTY BENEFICIARIES.

This Agreement may be signed in any number of counterparts, each of which shall
be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument. This Agreement shall become effective when each
party hereto shall have received a counterpart hereof signed by the other party
hereto. No provision if this Agreement is intended to confer upon any Person
other than the parties hereto any rights or remedies.

                                       16
<PAGE>

8.8 ENTIRE AGREEMENT.

This Agreement (including the Exhibits hereto) and the Certificate of
Determination constitute the entire agreement between the parties with respect
to the subject matter of this Agreement and supersede all prior agreements and
understandings, both oral and written, between the parties with respect to the
subject matter of this Agreement.

8.9 HEADINGS.

The headings herein are included for convenience of reference only and shall be
ignored in the construction or interpretation hereof.

8.10 SEVERABILITY.

The provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof. If any provision of this
Agreement, or the application thereof to any person or entity or any
circumstance, is held by a court of competent jurisdiction to be invalid or
unenforceable, (a) a suitable and equitable provision shall be substituted
therefor in order to carry out, so far as may be valid and enforceable, the
intent and purpose of such invalid or unenforceable provision and (b) the
remainder of this Agreement and the application of such provision to other
persons, entities or circumstances shall not be affected by such invalidity or
unenforceability, nor shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof, in any
other jurisdiction.

8.11 SPECIFIC PERFORMANCE.

The parties hereto agree that the remedy at law for any breach of this Agreement
will be inadequate and that any party by whom this Agreement is enforceable
shall be entitled to specific performance in addition to any other appropriate
relief or remedy. Such party may, in its sole discretion, apply to any court of
competent jurisdiction for specific performance or injunctive or such other
relief as such court may deem just and proper in order to enforce this Agreement
or prevent any violation hereof and, to the extent permitted by applicable law,
each party waives any objection to the imposition of such relief.

8.12 NO RECOURSE.

Notwithstanding any of the terms or provisions of this Agreement, (a) the
Corporation agrees that neither it nor any Person acting on its behalf may
assert any claims or cause of action against any officer, director, partner,
member or stockholder of the Buyer or any of its Affiliates in connection with
or arising out of this Agreement or the transactions contemplated hereby and (b)
the Buyer agrees that neither it nor any Person acting on its behalf may assert
any claims or cause of action against any officer, director, partner, member or
stockholder of the Corporation or any of its Affiliates in connection with or
arising out of this Agreement or the transactions contemplated hereby.

8.13 CALIFORNIA COMMISSIONER OF CORPORATIONS

THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN
QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND
THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION FOR SUCH SECURITIES PRIOR TO SUCH QUALIFICATION IS UNLAWFUL,
UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100,
25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO
THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED,
UNLESS THE SALE IS SO EXEMPT.

                                       17
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

                                             SIGNATURE EYEWEAR, INC.

                                             BY: ______________________________
                                             NAME: MICHAEL PRINCE
                                             TITLE: CHIEF FINANCIAL OFFICER

                                             BLUEBIRD FINANCE LIMITED

                                             BY: ______________________________
                                             NAME:
                                             TITLE:

                                       18
<PAGE>

                                    EXHIBIT A

                          CERTIFICATE OF DETERMINATION

                                       OF

                     SERIES A 2% CONVERTIBLE PREFERRED STOCK

                                       OF

                             SIGNATURE EYEWEAR, INC.

The undersigned hereby certify that:

1.   They are the President and Secretary, respectively, of Signature Eyewear,
     Inc., a California corporation (CORPORATION).

2.   The authorized number of shares of this Corporation's Preferred Stock is
     5,000,000, and the number of shares of the Series A Preferred Stock (which
     is the series created by this Certificate of Determination) is 1,360,000.
     None of the shares of the Series A Preferred Stock has been issued.

3.   Pursuant to authority granted by Article IV of this Corporation's Restated
     Articles of Incorporation, the following resolutions have been duly adopted
     and approved by this Corporation's Board of Directors:

     "WHEREAS, the Restated Articles of Incorporation of this Corporation
     provide for a class of shares known as Preferred Stock, issuable from time
     to time in one or more series; and

     WHEREAS, the Board of Directors of this Corporation is authorized to
     determine or alter the rights, preferences, privileges, and restrictions
     granted to or imposed on any wholly unissued series of Preferred Stock, to
     fix a number of shares constituting any such series, and to determine the
     designation of that series, or any of them; and

     WHEREAS, the Board of Directors of this Corporation has determined it to be
     in the best interests of this Corporation and its shareholders to issue a
     Series A Preferred Stock and to fix the rights, preferences, privileges,
     and restrictions relating to that Series A Preferred Stock and the number
     of shares constituting that series;

     NOW, THEREFORE, BE IT HEREBY RESOLVED, THAT pursuant to Article IV of the
     Articles of Incorporation which authorizes 5,000,000 shares of preferred
     stock, $0.001 par value (PREFERRED STOCK), the Board of Directors hereby
     fixes the powers, designations, preferences and relative, participating,
     optional and other special rights, and the qualifications, limitations and
     restrictions, of a series of Preferred Stock.

     RESOLVED FURTHER, that each share of such series of Preferred Stock shall
     rank equally in all respects and shall be subject to the following
     provisions:

1. NUMBER AND DESIGNATION. 1,360,000 shares of the Preferred Stock of the
Corporation shall be designated as Series A 2% Convertible Preferred Stock (the
SERIES A PREFERRED STOCK) (including 160,000 shares of Series A Preferred Stock
reserved exclusively for the payment of dividends pursuant to paragraph 4 and
referred to therein as "Additional Shares"). After the initial issuance of
1,200,000 shares of Series A Preferred Stock, the Corporation may not issue
additional shares of Series A Preferred Stock except as Additional Shares issued
in lieu of payment of dividends on outstanding shares of Series A Preferred
Stock or upon the transfer, exchange or replacement of existing shares of
Preferred Stock.

                                       19
<PAGE>

2. DEFINITIONS. Unless the context otherwise requires, when used herein the
following terms shall have the meaning indicated.

10 DAY MARKET PRICE means the average of the daily Market Prices of the Common
Stock for the 10 consecutive trading days ending the day prior to the date for
which such value is to be computed

30 DAY MARKET PRICE means the average of the daily Market Prices of the Common
Stock for the 30 consecutive trading days ending the day prior to the date for
which such value is to be computed.

AFFILIATE means, with respect to any specified Person, any other Person that,
directly or indirectly, controls, is controlled by or is under direct or
indirect common control with, such specified Person. For the purposes of this
definition, "control" when used with respect to any Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "affiliated," "controlling," and "controlled" have meanings
correlative to the foregoing.

BOARD OF DIRECTORS means the Board of Directors of the Corporation.

BUSINESS DAY means any day except Saturday, Sunday and any day that is a legal
holiday or a day on which banking institutions in Los Angeles, California
generally are authorized or required by law or other governmental actions to
close.

CAPITAL STOCK means, with respect to any Person, any and all shares, interests,
participations, rights in, or other equivalents (however designated and whether
voting and/or non-voting) of such Person's capital stock, whether outstanding on
the Issue Date or issued after the Issue Date, and any and all rights (other
than any evidence of indebtedness), warrants or options exchangeable for or
convertible into such capital stock.

CHANGE OF CONTROL means the occurrence of any of the following events: (a) any
Person or Group is or becomes the beneficial owner (as defined in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that a Person shall be deemed to have
"beneficial ownership" of all securities that such Person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 50% of the total Voting Stock of
the Corporation; or (b) the Corporation consolidates with, or merges with or
into, another Person or sells, assigns, conveys, transfers, leases or otherwise
disposes of all or substantially all of its assets to any Person, or any Person
consolidates with, or merges with or into the Corporation, in any such event
pursuant to a transaction in which the outstanding Voting Stock of the
Corporation is converted into or exchanged for cash, securities or other
property, other than any such transaction where (i) the outstanding Voting Stock
of the Corporation is converted into or exchanged for Voting Stock of the
surviving or transferee corporation or its parent corporation and/or cash,
securities or other property in an amount which could be paid by the Corporation
under the terms of the Corporation's credit and financing agreements and (ii)
immediately after such transaction no Person or Group is the beneficial owner
(as defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that a
Person shall be deemed to have "beneficial ownership" of all securities that
such Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more
than 50% of the total Voting Stock of the surviving or transferee corporation,
as applicable; or (c) during any consecutive two-year period, individuals who at
the beginning of such period constituted the Board of Directors (together with
any new directors whose election by the Board of Directors or whose nomination
for election by the stockholders of the Corporation was approved by a vote of a
majority of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors then in office.

COMMON STOCK means the Corporation's common stock, par value $0.001 per share.

                                       20
<PAGE>

EXCHANGE ACT means the Securities Exchange Act of 1934, as amended, or any
successor statute, and the rules and regulations promulgated thereunder.

FIRST CALL DATE means April 21, 2005.

GROUP means a group within the meaning of Section 13(d)(3) of the Exchange Act.

ISSUE DATE means the first date of issuance of shares of Series A Preferred
Stock.

HOLDER means a person who owns Series A Preferred Stock.

LIQUIDATION PREFERENCE is an amount equal to US$0.67 per share plus accrued but
unpaid dividends per share of Series A Preferred Stock.

MARKET PRICE means, with respect to the Common Stock, on any given day, (i) the
price of the last trade, as reported on the Nasdaq National Market, not
identified as having been reported late to such system, or (ii) if the Common
Stock is so quoted, but not so traded, the average of the last bid and ask
prices, as those prices are reported on the Nasdaq National Market, or (iii) if
the Common Stock is not listed or authorized for trading on the Nasdaq National
Market or any comparable system, the average of the closing bid and asked prices
as furnished by two members of the National Association of Securities Dealers,
Inc. selected from time to time by the Corporation for that purpose; provided
that, in connection with (i) or (ii), the Corporation may from time to time
specify in advance the time at which the trade price or bid and ask prices,
respectively, shall be determined for purposes of a particular calculation . If
the Common Stock is not listed and traded in a manner that the quotations
referred to above are available for the period required hereunder, the Market
Price per share of Common Stock shall be deemed to be the fair value per share
of such security as determined in good faith by the Board of Directors.

OUTSTANDING, when used with reference to shares of stock, means issued shares,
excluding shares held by the Corporation or a subsidiary.

PERSON means an individual, corporation, partnership, limited liability company,
association, trust and any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.

REDEMPTION PREMIUM means US$450,000.

VOTING STOCK means, with respect to any Person, the Capital Stock of any class
or kind (other than the Series A Preferred Stock) ordinarily having the power to
vote for the election of directors or other members of the governing body of
such Person.

3. RANK.

(a) Any class or series of stock of the Corporation shall be deemed to rank:

     (i) prior to the Series A Preferred Stock, either as to the payment of
     dividends or as to distribution of assets upon liquidation, dissolution or
     winding up, or both, if the holders of such class or series shall be
     entitled by the terms thereof to the receipt of dividends and of amounts
     distributable upon liquidation, dissolution or winding up, in preference or
     priority to the holders of Series A Preferred Stock (SENIOR SECURITIES);

     (ii) on a parity with the Series A Preferred Stock, either as to the
     payment of dividends or as to distribution of assets upon liquidation,
     dissolution or winding up, or both, whether or not the dividend rates,
     dividend payment dates or redemption or liquidation prices per share
     thereof be different from those of the Series A Preferred Stock if the
     holders of the Series

                                       21
<PAGE>

     A Preferred Stock and of such class of stock or series shall be entitled by
     the terms thereof to the receipt of dividends or of amounts distributable
     upon liquidation, dissolution or winding up, or both, in proportion to
     their respective amounts of accrued and unpaid dividends per share or
     liquidation preferences (including, but not limited to preferences as to
     payment of dividends or other amounts distributable upon liquidation),
     without preference or priority one over the other and such class of stock
     or series is not a class of Senior Securities (PARITY SECURITIES); and

     (iii) junior to the Series A Preferred Stock, either as to the payment of
     dividends or as to the distribution of assets upon liquidation, dissolution
     or winding up, or both, if such stock or series shall be Common Stock or if
     the holders of the Series A Preferred Stock shall be entitled by the terms
     thereof to receipt of dividends, and of amounts distributable upon
     liquidation, dissolution or winding up, in preference or priority to the
     holders of shares of such stock or series (including, but not limited to
     preferences as to payment of dividends or other amounts distributable upon
     liquidation) (JUNIOR SECURITIES).

(b)  The respective definitions of Senior Securities, Junior Securities and
     Parity Securities shall also include any rights or options exercisable or
     exchangeable for or convertible into any of the Senior Securities, Junior
     Securities and Parity Securities, as the case may be.

(c)  The Series A Preferred Stock shall be subject to the creation of Junior
     Securities and Parity Securities.

4.   DIVIDENDS.

(a)  The holders of shares of Series A Preferred Stock shall be entitled to
     receive with respect to each share of Series A Preferred Stock, when, as
     and if declared by the Board of Directors, out of funds legally available
     for the payment of dividends, cumulative dividends at a rate per annum
     equal to two percent (2%) of the then effective Liquidation Preference per
     share, payable in (A) cash, (B) additional shares of Series A Preferred
     Stock (ADDITIONAL SHARES) or (C) any combination of the foregoing in
     accordance with the terms of this paragraph 4; provided, however, that
     dividends must be payable solely in cash unless, with respect to each
     Dividend Payment Date (as hereinafter defined) on which the Corporation
     elects to pay all or a portion of the applicable dividend in Additional
     Shares, the Corporation delivers to the holders a certified resolution of
     the Board of Directors of the Corporation finding that payment of the
     dividend solely in cash would materially adversely affect the financial
     condition of the Corporation; and provided, further, however that the
     Corporation may not issue Additional Shares in lieu of cash dividends
     unless sufficient shares of Series A Preferred Stock remain authorized and
     available for issuance. Such dividends shall be cumulative from the Issue
     Date regardless of when actually issued (except that dividends on
     Additional Shares shall accrue from the date such Additional Shares are
     issued), whether or not in any Dividend Period or Dividend Periods there
     shall be funds of the Corporation legally available for the payment of such
     dividends and whether or not dividends are declared, and shall be payable
     on April 21 of each year (unless such day is not a Business Day, in which
     event such dividends shall be payable on the next succeeding Business Day)
     (each such date being a DIVIDEND PAYMENT DATE and each such annual period
     being a DIVIDEND PERIOD). Each such dividend shall be payable to the
     holders of record of shares of the Series A Preferred Stock as they appear
     on the share register of the Corporation on the corresponding Record Date.
     As used herein, the term RECORD DATE means, with respect to the dividend
     payable on April 21 of each year, the date 45 days preceding April 21.
     Accrued and unpaid dividends for any past Dividend Periods may be declared
     and paid at any time, without reference to any Dividend Payment Date, to
     holders of record on such record date, not more than 45 days preceding the
     payment date thereof, as may be fixed by the Board of Directors. Dividends
     shall accumulate to the extent that they are not paid on the Dividend
     Payment Date for the Dividend Period to which they relate.

                                       22
<PAGE>

(b)  Holders of shares of Series A Preferred Stock shall not be entitled to any
     dividends, whether payable in cash, property or stock, in excess of
     cumulative dividends, as herein provided, on the Series A Preferred Stock.
     No interest, or sum of money in lieu of interest, shall be payable in
     respect of any dividend payment or payments on the Series A Preferred Stock
     that may be in arrears; provided that if dividends are not paid in full on
     any Dividend Payment Date, the amount so payable, to the extent not paid,
     shall be added to the then effective Liquidation Preference on such
     Dividend Payment Date.

(c)  So long as any shares of the Series A Preferred Stock are outstanding, no
     dividend, except as described in the next succeeding sentence, shall be
     declared or paid or set apart for payment on any Parity Securities, nor
     shall any Parity Securities be redeemed, purchased or otherwise acquired
     for any consideration (or moneys be paid to or made available for a sinking
     fund for the redemption of any shares of any such stock) by the
     Corporation, directly or indirectly, (except by conversion into or exchange
     for Junior Securities) unless in each case full cumulative dividends have
     been or contemporaneously are declared and paid or declared and
     consideration sufficient for the payment thereof set apart for such payment
     on the Series A Preferred Stock for all Dividend Periods terminating on or
     prior to the date of payment of the dividend on such class or series of
     Parity Securities or the redemption, purchase or other acquisition thereof.
     When dividends are not paid in full or consideration sufficient for such
     payment is not set apart, as aforesaid, all dividends declared upon shares
     of the Series A Preferred Stock and all dividends declared upon any other
     class or series of Parity Securities shall be declared ratably in
     proportion to the respective amounts of dividends accumulated and unpaid on
     the Series A Preferred Stock and accumulated and unpaid on such Parity
     Securities.

(d)  So long as any shares of the Series A Preferred Stock are outstanding, no
     dividends (other than dividends or distributions paid in shares of, or to
     effectuate a stock split on, or options, warrants or rights to subscribe
     for or purchase shares of, Junior Securities) shall be declared or paid or
     set apart for payment or other distribution declared or made upon Junior
     Securities, nor shall any Junior Securities be redeemed, purchased or
     otherwise acquired (other than a redemption, purchase or other acquisition
     of shares of Common Stock made for purposes of an employee incentive or
     benefit plan of the Corporation or any subsidiary) (any such dividend,
     distribution, redemption or purchase being hereinafter referred to as a
     JUNIOR SECURITIES DISTRIBUTION) for any consideration (or any moneys be
     paid to or made available for a sinking fund for the redemption of any
     shares of any such stock) by the Corporation, directly or indirectly
     (except by conversion into or exchange for Junior Securities), unless in
     each case (i) the full cumulative dividends on all outstanding shares of
     the Series A Preferred Stock and accrued and unpaid dividends on any other
     Parity Securities shall have been paid or set apart for payment for all
     past Dividend Periods with respect to the Series A Preferred Stock and all
     past dividend periods with respect to such Parity Securities and (ii)
     sufficient consideration shall have been paid or set apart for the payment
     of the dividend for the current Dividend Period with respect to the Series
     A Preferred Stock and the current dividend period with respect to such
     Parity Securities.

(e)  The number of Additional Shares to be issued as dividends in lieu of cash
     will equal the quotient of (X) the cash amount of the dividend that
     otherwise would have been payable in cash and (Y) the then effective
     Liquidation Preference per share.

5. LIQUIDATION PREFERENCE.

(a)  In the event of any liquidation, dissolution or winding up of the
     Corporation, whether voluntary or involuntary, before any payment or
     distribution of the assets of the Corporation (whether capital or surplus)
     shall be made to or set apart for the holders of Junior Securities, the
     holders of the shares of Series A Preferred Stock shall be entitled to
     receive with respect to each share of Series A Preferred Stock an amount in
     cash equal to the Liquidation Preference per share plus an amount equal to
     all dividends accrued and unpaid thereon to the date of final distribution
     to such holders, but such holders shall not be entitled to any further
     payment. If, upon any liquidation, dissolution or winding up of the
     Corporation, the assets of the Corporation, or proceeds thereof, shall be
     insufficient to pay in full the preferential amount aforesaid and
     liquidating payments on the Series A Preferred Stock and all Parity
     Securities, then such assets, or the proceeds thereof, shall

                                       23
<PAGE>

     be distributed among the holders of shares of Series A Preferred Stock and
     any such other Parity Securities ratably in accordance with the respective
     amounts that would be payable on such shares of Series A Preferred Stock
     and any such other Parity Securities if all amounts payable thereon were
     paid in full.

(b)  Subject to the rights of the holders of any Parity Securities, after
     payment shall have been made in full to the holders of the Series A
     Preferred Stock, as provided in this paragraph 5, any other series or class
     or classes of Junior Securities shall, subject to the respective terms and
     provisions (if any) applying thereto, be entitled to receive any and all
     assets remaining to be paid or distributed, and the holders of the Series A
     Preferred Stock and any Parity Securities shall not be entitled to share
     therein.

6. REDEMPTION.

(a)  The Series A Preferred Stock shall not be redeemable by the Corporation
     prior to the First Call Date. On and after the First Call Date, to the
     extent the Corporation shall have funds legally available for such payment,
     the Corporation may redeem at its option all the shares of Series A
     Preferred Stock, at any time in whole only at a redemption price per share
     equal to the Liquidation Preference (which for the avoidance of doubt shall
     be deemed to include all accrued and unpaid dividends thereon) plus the
     Redemption Premium thereon to the date fixed for redemption (the REDEMPTION
     PRICE).

(b)  (i) Subject to paragraphs (iii) and (iv) below, upon the occurrence of a
     Change of Control (the date of such occurrence being the CHANGE OF CONTROL
     DATE), the Corporation shall, to the extent funds are legally available
     therefor, make an offer (the CHANGE OF CONTROL OFFER) to Holders to
     repurchase 100% of each Holder's share of Series A Preferred Stock at a
     price per share in cash equal to (A) if the Change of Control Payment Date
     is prior to the First Call Date, 110% of the product of (x) one plus the
     number (or fraction) of shares of Series A Preferred Stock accrued and
     unpaid as dividends on such share to the Change of Control Payment Date,
     times (y) the Conversion Ratio (as defined in paragraph 8) in effect
     immediately prior to the Change of Control, times (z) if the Change of
     Control is the result of a tender or exchange offer, merger or other form
     of business combination, the price paid per share of Common Stock in such
     tender or exchange offer, merger or other form of business combination
     (with the fair market value of any non-cash consideration being determined
     in good faith by the Board of Directors of the Corporation), or if the
     Change of Control is not the result of a tender or exchange offer, merger
     or other form of business combination, the 10-Day Market Price of the
     Common Stock on the Change of Control Date and (B) if the Change of Control
     Payment Date is on or after the First Call Date, the Redemption Price;
     provided, that a Holder shall not be entitled to tender any Series A
     Preferred Stock under this provision until such time as the Corporation has
     repurchased such debt securities as are required to be repurchased by the
     Corporation upon such event pursuant to the Corporation's credit and
     financing agreements. The Corporation shall promptly take all actions
     required to make such repurchases of debt securities.

     (ii) The Corporation shall make the Change of Control Offer not later than
     30 days following the Change of Control Date by giving notice to each
     Holder specifying a date, not less than 20 days nor more than 30 days after
     the date of such notice, on which the Corporation will purchase any shares
     of Series A Preferred Stock subject to such offer (the CHANGE OF CONTROL
     PAYMENT DATE). Not less than 2 Business Days prior to the Change of Control
     Payment Date, each Holder shall notify the Corporation (an ELECTION NOTICE)
     as to the number of shares of Series A Preferred Stock in respect of which
     it is accepting the Change of Control Offer. If a Holder does not deliver
     the Election Notice by such date, its rights under this paragraph 6(b) will
     terminate. If a Holder does deliver an Election Notice by such date, then
     (A) such Election Notice will be a binding commitment of such Holder to
     sell to the Corporation on the Change of Control Payment Date the number of
     shares of Preferred Stock specified in such Election Notice, subject to
     paragraph 6(b)(i) and (B) on the Change of Control Payment Date, (x) the
     Corporation will deliver to such Holder an amount of cash equal to the
     purchase price for the Series A Preferred

                                       24
<PAGE>
     Stock to be purchased and (y) such Holder will deliver to the Corporation
     free and clear of any Liens one or more certificates representing the
     Series A Preferred Stock to be sold duly endorsed or accompanied by stock
     powers duly endorsed in blank, with any required transfer stamps affixed
     thereto.

     (iii) Notwithstanding the foregoing, the Corporation shall not be required
     to make a Change of Control Offer following a Change of Control if a third
     party makes the Change of Control Offer in the manner, at the price and at
     the times and otherwise in compliance with the requirements applicable to a
     Change of Control Offer made by the Corporation and purchases all shares of
     Series A Preferred Stock validly tendered under such Change of Control
     Offer.

     (iv) The Corporation's obligations under this paragraph 6(b) are subject to
     compliance with the California Corporations Code. If the Corporation is
     limited by the California Corporations Code from fully complying with its
     obligations hereunder, the Corporation agrees that: (A) it will comply with
     its obligations hereunder to the extent it is able to do so and (B) it will
     use its best efforts to remove any such legal impediment. If, at any time,
     the Corporation is obligated to make a Change of Control Offer hereunder
     but is not able to fully perform its obligations hereunder because of a
     legal impediment, each Holder may elect to have the Corporation defer such
     Change of Control Offer until the Corporation is legally able to fully
     perform its obligations hereunder. The Series A Preferred Stock will
     continue to accrue dividends until repurchased, redeemed or converted.

(c)  If the Shares of Series A Preferred Stock are purchased or redeemed, then
     they shall (upon compliance with any applicable provisions of the laws of
     the State of California) have the status of authorized and unissued shares
     of the class of Preferred Stock undesignated as to series and may be
     redesignated and reissued as part of any series of the Preferred Stock;
     provided that no such issued and reacquired shares of Series A Preferred
     Stock shall be reissued or sold as Series A Preferred Stock.

7. PROCEDURE FOR REDEMPTION.

(a)  In the event the Corporation shall elect to redeem shares of Series A
     Preferred Stock, notice of such redemption (the REDEMPTION NOTICE) shall be
     given by international overnight courier or first class mail, postage
     prepaid, mailed not less than 30 days nor more than 60 days prior to the
     redemption date (the REDEMPTION DATE), to each Holder of record of the
     shares to be redeemed at such Holder's address as the same appears on the
     stock register of the Corporation. Each Redemption Notice shall state: (i)
     the Redemption Date (which shall be a date on or after the First Call
     Date); (ii) the number of shares of Series A Preferred Stock to be
     redeemed, which shall be all the shares held by such holder; (iii) the
     Redemption Price; (iv) that on the Redemption Date, the Redemption Price,
     will become due and payable upon each such share of Series A Preferred
     Stock to be redeemed and that dividends thereon will cease to accrue on and
     after said date; (v) (if the Redemption Date is stated to be at any time
     after 30 days following the First Call Date) the Conversion Ratio, the date
     on which the right to convert shares of Series A Preferred Stock to be
     redeemed will terminate and the place or places where such shares of Series
     A Preferred Stock may be surrendered for conversion; and (vi) the place or
     places where certificates for such shares are to be surrendered for payment
     of the redemption price.

(b)  Prior to such Redemption Date, the Corporation, in its capacity acting as
     its own paying agent, shall segregate and hold in trust an amount of
     consideration sufficient to pay the Redemption Price of all the shares of
     Series A Preferred Stock that are to be redeemed on the Redemption Date. If
     the Redemption Date is stated to be at any time after 30 days following the
     First Call Date and any share of Series A Preferred Stock called for
     redemption is converted, any consideration so segregated and held in trust
     for the redemption of such share of Series A Preferred Stock shall be
     discharged from such trust.

(c)  Redemption Notice having been mailed as aforesaid, from and after the
     Redemption Date, dividends on the shares of Series A Preferred Stock so
     called for redemption shall cease to accrue, and all rights of the holders
     thereof as
                                       25
<PAGE>

     stockholders of the Corporation (except the right to receive from the
     Corporation the Redemption Price) shall cease. Upon surrender in accordance
     with said notice of the certificates for any shares so redeemed (properly
     endorsed or assigned for transfer, if the Board of Directors of the
     Corporation shall so require and the notice shall so state), such share
     shall be redeemed by the Corporation at the Redemption Price aforesaid.

8. CONVERSION.

(a)(i) Subject to the provisions of this paragraph 8, (A) a holder of shares
     of Series A Preferred Stock shall have the right, on or after the date
     which is 30 days after the First Call Date (or, in the event that a Change
     of Control has occurred, at any time), at such holder's option, to convert
     any or all outstanding shares (and fractional shares) of Series A Preferred
     Stock held by such holder, in whole or in part, into fully paid and
     non-assessable shares of Common Stock.

(ii) The number of shares of Common Stock deliverable upon conversion of a share
     of Series A Preferred Stock (including the Additional Shares), subject to
     adjustment as hereinafter provided, shall be 1.0 (the CONVERSION RATIO). In
     the event that at the time of conversion of a share of Series A Preferred
     Stock there are accrued and unpaid dividends on such share with respect to
     which Additional Shares have not been issued (including, with respect to
     any interim period since the last Dividend Payment Date, the product of the
     full dividend payable for the current Dividend Period ending on the next
     Dividend Payment Date, multiplied by a fraction, the numerator of which is
     the number of days that have elapsed since the last Dividend Payment Date
     and the denominator of which is 360), then, upon such conversion, the
     holder thereof shall be entitled to receive such number of shares of Common
     Stock (in addition to the shares of Common Stock otherwise issuable upon
     the conversion of any such shares of Series A Preferred Stock and
     Additional Shares converted therewith) as would have been issued in
     accordance with the preceding sentence if Additional Shares had been issued
     in respect of such accrued and unpaid dividends and had been converted
     simultaneously therewith.

(b)(i) In connection with any Conversion pursuant to this paragraph 8, the
     holder of the shares of Series A Preferred Stock to be converted shall
     surrender the certificates representing such shares at the office of the
     Corporation with a written notice (a CONVERSION NOTICE) of election to
     convert completed and signed, specifying the number of shares to be
     converted. Unless the shares issuable on conversion are to be issued in the
     same name as the name in which such shares of Series A Preferred Stock are
     registered, each share surrendered for conversion shall be accompanied by
     instruments of transfer, in form satisfactory to the Corporation, duly
     executed by the holder or the holder's duly authorized attorney, and an
     amount sufficient to pay any transfer or similar tax.

(ii) As promptly as practicable after the surrender by a holder of certificates
     for shares of Series A Preferred Stock under paragraph 8(b)(i), the
     Corporation shall issue and shall deliver to such holder, or on the
     holder's written order to the holder's transferee, (w) a certificate or
     certificates for the whole number of shares of Common Stock issuable upon
     the conversion of such shares in accordance with the provisions of this
     paragraph 8, (x) any cash adjustment required pursuant to paragraph 8(f)
     and (y) in the event of a conversion in part, a certificate or certificates
     for the whole number of Series A Preferred Stock not being so converted.

(iii) Each conversion shall be deemed to have been effected (the EFFECTIVE TIME)
     immediately prior to the close of business on the date of delivery of the
     Conversion Notice. At the Effective Time, the Person in whose name or names
     any certificate or certificates for shares of Common Stock shall be
     issuable upon such conversion shall be deemed to have become the holder of
     record of the shares of Common Stock represented thereby at such time on
     such date and such conversion shall be into a number of whole shares of
     Common Stock in the aggregate equal to the product of the number of shares
     of Series A Preferred Stock surrendered and the Conversion Ratio in effect
     at such time on such date. All shares of Common Stock delivered upon
     conversion of the Series A Preferred Stock

                                       26
<PAGE>

     will upon delivery be duly and validly issued and fully paid and
     non-assessable, free of all liens and charges and not subject to any
     preemptive rights. At the Effective Time, the shares to be so converted
     shall no longer be deemed to be outstanding and all rights of a holder with
     respect to such shares surrendered for conversion shall immediately
     terminate except the right to receive the Common Stock and other amounts
     payable pursuant to this paragraph 8 and a certificate or certificates
     representing the shares of Series A Preferred Stock not converted.

(c)(i) Upon delivery to the Corporation of a Conversion Notice by a holder of
     shares of Series A Preferred Stock, the right of the Corporation to redeem
     such shares of Series A Preferred Stock shall terminate, regardless of
     whether a notice of redemption has been mailed pursuant to paragraph 7.

(ii) Except as provided above and in paragraph 8(g), the Corporation shall make
     no payment or adjustment for accrued and unpaid dividends on shares of
     Series A Preferred Stock, whether or not in arrears, on conversion of such
     shares or for dividends in cash on the shares of Common Stock issued upon
     such conversion.

(d)(i) The Corporation covenants that it will at all times reserve and keep
     available, free from preemptive rights, such number of its authorized but
     unissued shares of Common Stock as shall be required for the purpose of
     effecting conversions of the Series A Preferred Stock.

(ii) Prior to the delivery of any securities which the Corporation shall be
     obligated to deliver upon conversion of the Series A Preferred Stock, the
     Corporation shall comply with all applicable federal and state laws and
     regulations which require action to be taken by the Corporation.

(e)  The Corporation will pay any and all documentary stamp or similar issue or
     transfer taxes payable in respect of the issue or delivery of shares of
     Common Stock on conversion of the Series A Preferred Stock pursuant hereto;
     provided that the Corporation shall not be required to pay any tax which
     may be payable in respect of any transfer involved in the issue or delivery
     of shares of Common Stock in a name other than that of the holder of the
     Series A Preferred Stock to be converted and no such issue or delivery
     shall be made unless and until the Person requesting such issue or delivery
     has paid to the Corporation the amount of any such tax or has established,
     to the satisfaction of the Corporation, that such tax has been paid.

(f)  In connection with the conversion by a holder of any shares of Series A
     Preferred Stock, no fractions of shares of Common Stock shall be required
     to be issued to such holder, but in lieu thereof the Corporation shall pay
     a cash adjustment in respect of such fractional interest in an amount equal
     to such fractional interest on the business day on which such shares of
     Series A Preferred Stock are deemed to have been converted.

(g)(i) In case the Corporation shall at any time after the date of issue of
     the Series A Preferred Stock (A) declare a dividend or make a distribution
     on Common Stock payable in Common Stock, (B) subdivide or split the
     outstanding Common Stock, (C) combine or reclassify the outstanding Common
     Stock into a smaller number of shares, (D) issue any shares of its Capital
     Stock in a reclassification of Common Stock (including any such
     reclassification in connection with a consolidation or merger in which the
     Corporation is the continuing corporation) or, (E) consolidate with, or
     merge with or into, any other Person, or engage in any reorganization,
     recapitalization, sale of all or substantially all of the Corporation's
     assets to any entity or any other transaction which, in the case of any of
     the transactions referred in this subclause (E), is effected in such a
     manner that the holders of Common Stock are entitled to receive stock,
     securities or assets with respect to or in exchange for Common Stock (any
     such transaction described in this subclause (E), an ORGANIC CHANGE), the
     Conversion Ratio in effect at the time of the record date for such dividend
     or distribution or of the effective date of such subdivision, split,
     combination, consolidation, merger, reclassification or Organic Change
     shall be proportionately adjusted, or other provision shall be made, so
     that the conversion of the Series A Preferred Stock after such time shall
     entitle the holder to receive the aggregate number of shares of Common
     Stock, or other securities of the Corporation (or shares of any security or
     cash or other property into which such shares of Common Stock have

                                       27
<PAGE>

     been combined, consolidated, merged, reclassified or changed, or which were
     otherwise receivable with respect to or in exchange for shares of Common
     Stock, pursuant to paragraph 8(g)(i)(C), 8(g)(i)(D) or 8(g)(i)(E) above)
     which, if the Series A Preferred Stock had been converted immediately prior
     to such time, such holder would have owned upon such conversion and been
     entitled to receive by virtue of such dividend, distribution, subdivision,
     split, combination, consolidation, merger, reclassification or Organic
     Change, assuming such holder of Common Stock of the Corporation (x) is not
     a Person with which the Corporation consolidated or into which the
     Corporation merged or which merged into the Corporation or in connection
     with which such reclassification or Organic Change was made, as the case
     may be (CONSTITUENT PERSON), or an affiliate of a Constituent Person and
     (y) failed to exercise any rights of election as to the kind or amount of
     securities, cash and other property receivable upon such reclassification,
     change, consolidation, merger or Organic Change (provided, that if the kind
     or amount of securities, cash and other property receivable upon such
     reclassification, change, consolidation, merger or Organic Change, is not
     the same for each share of Common Stock of the Corporation held immediately
     prior to such reclassification, change, consolidation, merger or Organic
     Change by other than a Constituent Person or an affiliate thereof and in
     respect of which such rights of election shall not have been exercised
     (NON-ELECTING share), then for the purpose of this paragraph 8(g) the kind
     and amount of securities, cash and other property receivable upon such
     reclassification, change, consolidation, merger or Organic Change by each
     non-electing share shall be deemed to be the kind and amount so receivable
     per share by a plurality of the non-electing shares). Such adjustment shall
     be made successively whenever any event listed above shall occur.

(ii) In case the Corporation shall issue or sell any Common Stock (other than
     Common Stock issued (A) pursuant to the Corporation's existing or future
     stock option plans or pursuant to any other existing or future Common
     Stock-related director or employee compensation plan of the Corporation
     approved by the Board of Directors, (B) as consideration for the
     acquisition of a business or of assets, (C) in a firmly committed
     underwritten public offering, (D) to the Corporation's joint venture
     partners in exchange for interests in the relevant joint venture, (E) upon
     conversion of shares of any series of Preferred Stock or (F) upon exercise
     or conversion of any security the issuance of which caused an adjustment
     under paragraph 8(g)(i), 8(g)(iii) or 8(g)(iv) hereof or the issuance of
     which did not require adjustment hereunder) without consideration or for a
     consideration per share less than the 30 Day Market Price on the date of
     such issuance, or shall issue securities convertible into Common Stock
     (other than such securities paid as dividends on any class of Preferred
     Stock) having a conversion price per share less than the 30 Day Market
     Price at the date of issuance of such convertible security, the Conversion
     Ratio to be in effect after such issuance or sale shall be determined by
     multiplying the Conversion Ratio in effect immediately prior to such
     issuance or sale by a fraction, (1) the numerator of which shall be the sum
     of the number of shares of Common Stock outstanding immediately prior to
     such issuance or sale and the number of additional shares of Common Stock
     to be issued or sold (or, in the case of convertible securities, issued on
     conversion), and (2) the denominator of which shall be the sum of (x) the
     number of shares of Common Stock outstanding immediately prior to such
     issuance or sale and (y) the number of shares of Common Stock which the
     aggregate consideration receivable by the Corporation for the total number
     of additional shares of Common Stock so issued or sold (or issuable on
     conversion) would purchase at the 30 Day Market Price in effect on the date
     of such issuance or sale. In case any portion of the consideration to be
     received by the Corporation shall be in a form other than cash, the fair
     market value of such noncash consideration shall be utilized in the
     foregoing computation. Such fair market value shall be determined in good
     faith by the Board of Directors.

(iii) In case the Corporation shall fix a record date for the issuance of
     rights, options or warrants to the holders of its Common Stock or other
     securities entitling such holders to subscribe for or purchase shares of
     Common Stock (or securities convertible into shares of Common Stock) at a
     price per share of Common Stock (or having a conversion price per share of
     Common Stock, if a security convertible into shares of Common Stock) less
     than the 30 Day Market Price on such record date, the maximum number of
     shares of Common Stock issuable upon exercise of such rights, options or
     warrants (or conversion of such convertible securities) shall be deemed to
     have been issued and outstanding as of such record date and the Conversion
     Ratio shall be adjusted pursuant to paragraph 8(g)(ii) hereof, as though
     such maximum number of shares of Common Stock had been so issued for an

                                       28
<PAGE>
     aggregate consideration payable by the holders of such rights, options,
     warrants or convertible securities prior to their receipt of such shares of
     Common Stock. In case any portion of such consideration shall be in a form
     other than cash, the fair market value of such noncash consideration shall
     be determined as set forth in paragraph 8(g)(ii) hereof. Such adjustment
     shall be made successively whenever such record date is fixed. In the event
     that after fixing a record date such rights, options or warrants are not so
     issued, the Conversion Ratio shall be readjusted to the Conversion Ratio
     that would then be in effect if such record date had not been fixed. In the
     event that such rights, options or warrants expire in whole or in part
     unexercised or in the event of a change in the number of shares of Common
     Stock to which the holders of such rights, options or warrants are entitled
     (other than pursuant to adjustment provisions therein comparable to those
     contained in this paragraph 8(g)), the Conversion Ratio shall again be
     adjusted as follows: (A) in the event that all of such rights, options or
     warrants expire unexercised, the Conversion Ratio shall be the Conversion
     Ratio that would then be in effect if such record date had not been fixed;
     (B) in the event that less than all of such rights, options or warrants
     expire unexercised, the Conversion Ratio shall be adjusted pursuant to
     paragraph 8(g)(ii) to reflect the maximum number of shares of Common Stock
     issuable upon exercise of such rights, options or warrants that remain
     outstanding (without taking into effect shares of Common Stock issuable
     upon exercise of rights, options or warrants that have lapsed or expired);
     and (C) in the event of a change in the number of shares of Common Stock to
     which the holders of such rights, options or warrants are entitled, the
     Conversion Ratio shall be adjusted to reflect the Conversion Ratio which
     would then be in effect if such holder had initially been entitled to such
     changed number of shares of Common Stock. Notwithstanding anything herein
     to the contrary, no further adjustment to the Conversion Ratio shall be
     made upon the issuance or sale of Common Stock upon the exercise of any
     rights, options or warrants to subscribe for or purchase Common Stock, if
     any adjustment in the Conversion Ratio was made or required to be made upon
     the record date for the issuance or sale of such rights, options or
     warrants under this clause 8(g)(iii).

(iv) In case the Corporation shall fix a record date for the making of a
     distribution to holders of Common Stock (including any such distribution
     made in connection with a consolidation or merger in which the Corporation
     is the continuing corporation) of evidences of indebtedness, assets or
     other property (other than dividends or distributions for which an
     adjustment is made pursuant to paragraph 8(g)(i) or 8(g)(iii) hereof), the
     Conversion Ratio to be in effect after such record date shall be determined
     by multiplying the Conversion Ratio in effect immediately prior to such
     record date by a fraction, (A) the numerator of which shall be the 30 Day
     Market Price on such record date, and (B) the denominator of which shall be
     the 30 Day Market Price on such record date, less the fair market value
     (determined as set forth in paragraph 8(g)(ii) hereof) of the portion of
     the assets, other property or evidence of indebtedness so to be distributed
     which is applicable to one share of Common Stock. Such adjustments shall be
     made successively whenever such a record date is fixed; and in the event
     that such distribution is not so made, the Conversion Ratio shall again be
     adjusted to be the Conversion Ratio which would then be in effect if such
     record date had not been fixed.

(v)  No adjustment to the Conversion Ratio pursuant to paragraphs 8(g)(ii),
     8(g)(iii) or 8(g)(iv) above shall be required unless such adjustment would
     require an increase or decrease of at least 1% in the Conversion Ratio;
     provided however, that any adjustments which by reason of this paragraph
     8(g)(v) are not required to be made shall be carried forward and taken into
     account in any subsequent adjustment. All calculations under this paragraph
     8(g) shall be made to the nearest four decimal points.

(vi) In the event that, at any time as a result of the provisions of this
     paragraph 8(g), a holder of Series A Preferred Stock upon subsequent
     conversion shall become entitled to receive any shares of Capital Stock of
     the Corporation other than Common Stock, the number of such other shares so
     receivable upon conversion of Series A Preferred Stock shall thereafter be
     subject to adjustment from time to time in a manner and on terms as nearly
     equivalent as practicable to the provisions contained herein.

(h)  All adjustments pursuant to this paragraph 8 shall be notified to the
     holders of the Series A Preferred Stock and such notice shall be
     accompanied by a schedule of computations of the adjustments.
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<PAGE>

(i)  In the event that any adjustment is made to the Conversion Ratio, a
     corresponding adjustment shall be made to the number of shares of Common
     Stock issuable upon conversion in respect of accrued and unpaid dividends,
     pursuant to the second sentence of paragraph 8(a)(ii).

9.   VOTING RIGHTS.

(a)  The holders of Series A Preferred Stock shall not be entitled to vote with
     the holders of Common Stock except with respect to shares of the Series A
     Preferred Stock that have been converted into Common Stock.

(b)  If and whenever two dividends payable on the Series A Preferred Stock have
     not been paid in full, the number of directors then constituting the Board
     of Directors shall be increased by two and the holders of shares of Series
     A Preferred Stock, voting as a single class, shall be entitled to elect the
     additional directors to serve on the Board of Directors at any annual
     meeting of stockholders or special meeting held in place thereof, or at a
     special meeting of the holders of the Series A Preferred Stock called as
     hereinafter provided. Whenever all arrears in dividends on the Series A
     Preferred Stock then outstanding shall have been paid and dividends thereon
     for the current dividend period shall have been paid or declared and set
     apart for payment, then the right of the holders of the Series A Preferred
     Stock to elect such additional directors shall cease (but subject always to
     the same provisions for the vesting of such voting rights in the case of
     any similar future arrearage in two dividends), and the term of office of
     any person elected as director by the holders of the Series A Preferred
     Stock shall forthwith terminate and the number of the Board of Directors
     shall be reduced accordingly. At any time after voting power to elect a
     director shall have become vested and be continuing in the holders of
     Series A Preferred Stock pursuant to this paragraph, or if a vacancy shall
     exist in the office of a director elected by the holders of Series A
     Preferred Stock, a proper officer of the Corporation may, and upon the
     written request of the holders of record of at least ten percent (10%) of
     the shares of Series A Preferred Stock then outstanding addressed to the
     Secretary of the Corporation shall, call a special meeting of the holders
     of Series A Preferred Stock for the purpose of electing the director which
     such holders are entitled to elect. If such meeting shall not be called by
     a proper officer of the Corporation within twenty (20) days after personal
     service of said written request upon the Secretary of the Corporation, or
     within twenty (20) days after mailing the same within the United States by
     certified mail, addressed to the Secretary of the Corporation at its
     principal executive offices, then the holders of at least ten percent (10%)
     of the outstanding shares of Series A Preferred Stock may designate in
     writing one of their number to call such meeting at the expense of the
     Corporation, and such meeting may be called by the person so designated
     upon the notice required for the annual meeting of stockholders of the
     Corporation and shall be held at the place for holding the annual meetings
     of stockholders. Any holder of Series A Preferred Stock so designated shall
     have, and the Corporation shall provide, access to the lists of
     stockholders to be called pursuant to the provisions hereof.

(c)  Without either (i) the written consent of holders of a majority of the
     outstanding shares of Series A Preferred Stock or (ii) the vote of holders
     of a majority of the outstanding shares of Series A Preferred Stock which
     vote is taken at a meeting of the holders of Series A Preferred Stock
     called for such purpose, the Corporation will not amend, alter or repeal
     any provision of the Articles of Incorporation or this Certificate of
     Determination (including by way of merger), so as to adversely affect the
     preferences, rights or powers of the Series A Preferred Stock; provided
     that any such amendment that changes the dividend payable on or the
     Liquidation Preference of the Series A Preferred Stock shall require either
     (i) the written consent of holders of two-thirds of the outstanding shares
     of Series A Preferred Stock (ii) or the vote of holders of two-thirds of
     the outstanding shares of Series A Preferred Stock which vote is taken at a
     meeting of the holders of Series A Preferred Stock called for such purpose.

(d)  Without either (i) the written consent of holders of a majority of the
     outstanding shares of Series A Preferred Stock or (ii) the vote of holders
     of a majority of the outstanding shares of Series A Preferred Stock which
     vote is

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<PAGE>

     taken at a meeting of such holders called for such purpose, the Corporation
     will not create, authorize or issue any Senior Securities nor split or
     combine the Preferred Stock.

(e)  The Corporation shall not, in a single transaction or series of related
     transactions, consolidate or merge with or into, or sell, assign, transfer,
     lease, convey or otherwise dispose of all or substantially all of its
     assets to, any Person or adopt a plan of liquidation unless: either (1) the
     Corporation is the surviving or continuing Person and the Series A
     Preferred Stock shall remain outstanding without any amendment that would
     adversely affect the preferences, rights or powers of the Series A
     Preferred Stock or (2) (i) the Person (if other than the Corporation)
     formed by such consolidation or into which the Corporation is merged or the
     Person which acquires by conveyance, transfer or lease the properties and
     assets of the Corporation substantially as an entirety or in the case of a
     plan of liquidation, the Person to which assets of the Corporation have
     been transferred, shall be a corporation, partnership or trust organized
     and existing under the laws of the United States or any State thereof or
     the District of Columbia and (ii) the Series A Preferred Stock shall be
     converted into or exchanged for and shall become shares of such successor,
     transferee or resulting Person, having in respect of such successor,
     transferee or resulting Person, the same powers, preferences and relative
     participating, optional or other special rights and the qualifications,
     limitations or restrictions thereon, that the Series A Preferred Stock had
     immediately prior to such transaction except as provided in paragraph
     8(g)(i).

(f)  In exercising the voting rights set forth in Clauses (b), (c) and (d) of
     this paragraph 9, each shares of Series A Preferred Stock shall have one
     vote per share.

(g)  The consent or votes required above shall be in addition to any approval of
     stockholders of the Corporation which may be required by law or pursuant to
     any provision of the Corporation's articles of incorporation or bylaws,
     which approval shall be obtained by vote of the stockholders of the
     Corporation or as otherwise required by applicable law or the Corporation's
     Articles of Incorporation or bylaws.

10.  REPORTS.

     So long as any of the Series A Preferred Stock is outstanding, in the event
     the Corporation is not required to file quarterly and annual financial
     reports with the Securities and Exchange Commission pursuant to Section 13
     or Section 15(d) of the Exchange Act, the Corporation will furnish the
     holders of the Series A Preferred Stock with reports containing the same
     information as would be required in such reports at the same time such
     reports would be required to be filed if the Corporation were required to
     file reports with the Securities and Exchange Commission.

11.  GENERAL PROVISIONS.

     The headings of the paragraphs, subparagraphs, clauses and subclauses of
     this Certificate of Determination are for convenience of reference only and
     shall not define, limit or affect any of the provisions hereof."

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<PAGE>

We further declare under penalty of perjury under the laws of the State of
California that the matters set forth in this certificate are true and correct
of our own knowledge.

Dated: ______________, 2003
                                         _____________________________

                                         __________________, President

                                         _____________________________

                                         __________________, Secretary

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<PAGE>

                                    EXHIBIT B

                               REGISTRATION RIGHTS

This constitutes Exhibit B to the Stock Purchase Agreement (as it may be amended
from time to time, the STOCK PURCHASE AGREEMENT) dated as of April 21, 2003
between Signature Eyewear, Inc., a California corporation (the CORPORATION), and
Bluebird Finance Limited, a British Virgin Islands corporation (BUYER).

ARTICLE 1

DEFINITIONS

Definitions. Terms defined in the Stock Purchase Agreement are used herein as
therein defined. In addition, the following terms, as used herein, have the
following meanings:

COMMISSION means the Securities and Exchange Commission.

CONVERSION SHARES means shares of Common Stock issued upon conversion of the
Series A Preferred Stock.

HOLDER means a person who owns Registrable Securities and is either Buyer or a
transferee of the Buyer who has agreed in writing to be bound by the terms of
Sections 2.3 and 6.4 of the Stock Purchase Agreement and this Exhibit B.

PIGGYBACK REGISTRATION means a piggyback registration as defined in Section 2.02
of this Exhibit B.

REGISTRABLE SECURITIES means (i) shares of Common Stock constituting Conversion
Shares, (ii) shares of Common Stock acquired under Section 5.4 of the Stock
Purchase Agreement, and (iii) any additional shares of Common Stock issued in
respect of the shares referred to in (i) and (ii) in connection with a stock
split, stock dividend or similar event with respect to the Common Stock. As to
any particular Registrable Securities, such Registrable Securities shall cease
to be Registrable Securities as soon as they (i) have been sold or otherwise
disposed of pursuant to a registration statement that was filed with the
Commission and declared effective under the Securities Act, (ii) are eligible
for sale pursuant to Rule 144 without being subject to applicable volume
limitations thereunder, (iii) have been otherwise sold, transferred or disposed
of by a Holder to any Person that is not a Holder, or (iv) have ceased to be
outstanding.

RULE 144 means Rule 144 (or any successor rule of similar effect) promulgated
under the Securities Act.

SELLING HOLDER means any Holder who is selling Registrable Securities pursuant
to a public offering registered hereunder.

UNDERWRITER means a securities dealer who purchases any Registrable Securities
as principal and not as part of such dealer's market-making activities.

SECTION 1.02. Internal References. Unless the context indicates otherwise,
references to Articles, Sections and paragraphs shall refer to the corresponding
articles, sections and paragraphs in this Exhibit B, and references to the
parties shall mean the parties to the Stock Purchase Agreement.

ARTICLE 2

REGISTRATION RIGHTS

SECTION 2.01. Demand Registration. (a) Buyer, on its own behalf and on behalf of
the other Holders, may make up to two written requests for registration under
the Securities Act of all or any part of the Registrable Securities held by the

                                       33
<PAGE>
Holders (each, a DEMAND REGISTRATION). Such request will specify the aggregate
number of shares of Registrable Securities proposed to be sold and will also
specify the intended method of disposition thereof. A registration will not
count as a Demand Registration until it has become effective. Should a Demand
Registration not become effective due to the failure of a Holder to perform its
obligations under this Exhibit B or the inability of the requesting Holders to
reach agreement with the Underwriters for the proposed sale on price or other
customary terms for such transaction, or in the event the requesting Holders
withdraw or do not pursue the request for the Demand Registration (in each of
the foregoing cases, provided that at such time the Corporation is in compliance
in all material respects with its obligations under this Exhibit B), then such
Demand Registration shall be deemed to have been effected (provided that if the
Demand Registration does not become effective because of a material adverse
change in the condition (financial or otherwise), business, assets or results of
operations of the Corporation and its subsidiaries taken as a whole that occurs
subsequent to the date of the written request made by the requesting Holders,
then the Demand Registration shall not be deemed to have been effected).

(b) In the event that the requesting Holders withdraw or do not pursue a request
for a Demand Registration and, pursuant to Section 2.01(a) hereof, such Demand
Registration is deemed to have been effected, the Holders may reacquire such
Demand Registration (such that the withdrawal or failure to pursue a request
will not count as a Demand Registration hereunder) if the Holders reimburse the
Corporation for any and all Registration Expenses incurred by the Corporation in
connection with such request for a Demand Registration; provided that the right
to reacquire a Demand Registration may be exercised a maximum of two times.

(c) If the Selling Holders so elect, the offering of such Registrable Securities
pursuant to such Demand Registration shall be in the form of an underwritten
offering. A majority in interest of the Selling Holders shall have the right to
select the managing Underwriters and any additional investment bankers and
managers to be used in connection with such offering, subject to the
Corporation's approval, which approval shall not be unreasonably withheld.

(d) The Selling Holders will inform the Corporation of the time and manner of
any disposition of Registrable Securities, and agree to reasonably cooperate
with the Corporation in effecting the disposition of the Registrable Securities
in a manner that does not unreasonably disrupt the public trading market for the
Common Stock.

(e) The Corporation will have the right to preempt any Demand Registration with
a primary registration by delivering written notice (within five business days
after the Corporation has received a request for such Demand Registration) of
such intention to the Selling Holders indicating that the Corporation has
identified a specific business need and use for the proceeds of the sale of such
securities and the Corporation shall use commercially reasonable efforts to
effect a primary registration within 60 days of such notice. In the ensuing
primary registration, the Holders will have such piggyback registration rights
as are set forth in Section 2.02 hereof. Upon the Corporation's preemption of a
requested Demand Registration, such requested registration will not count as a
Demand Registration; provided that a Demand Registration will not be deemed
preempted if the Holders are permitted to sell all requested securities in
connection with the ensuing primary offering by exercising their piggyback
registration rights as set forth in Section 2.02 hereof. The Corporation may
exercise the right to preempt only twice in any 360-day period; provided, that
during any 360 day period there shall be a period of at least 120 consecutive
days during which the Selling Holders may effect a Demand Registration.

(f) Subject to Section 2.03 hereof, the Corporation will be entitled to include
in a Demand Registration shares of Common Stock for its own account or for the
account of other Persons.

(g) Notwithstanding anything to the contrary contained herein, the Corporation
shall be entitled to (i) postpone the filing of the Registration Statement
required to be prepared and filed by it hereunder or (ii) withdraw the
Registration Statement after its filing but before it has been declared
effective, if, in either case, the Corporation in its good faith discretion
determines that there has occurred or is occurring a material non-public event
which such registration would interfere with or which cannot at such time be
disclosed in the registration statement or if such registration statement would
interfere in any material respect with any proposal or plan by the Corporation
to engage in any financing or any material

                                       34
<PAGE>
acquisition or disposition by the Corporation or any subsidiary thereof of the
capital stock or substantially all of the assets of any other Person (other than
in the ordinary course of business), any tender offer or any offering, merger,
consolidation, corporate reorganization or restructuring (MATERIAL EVENT). In
the event the filing of the Registration Statement is postponed or withdrawn in
accordance with this section 2.01(g), the Corporation shall file or refile the
Registration Statement within ten (10) Business Days after the Corporation, in
its good faith discretion, determines that the Material Event has been completed
or terminated.

(h) The Corporation shall disclose to the Selling Holders the nature of any
Material Event for which it has delayed or withdrawn the Registration Statement
or suspended the use of the Prospectus, provided the Selling Holders agree in
writing to keep any information so disclosed confidential and not complete any
trades of Common Stock until the Corporation informs the Selling Holders the
information is considered public information or is no longer material, such
notification to the Selling Holders to be given promptly after the information
is considered public or is no longer material.

SECTION 2.02. Piggyback Registration. If the Corporation proposes to file a
registration statement under the Securities Act with respect to an offering of
Common Stock for its own account or for the account of another Person (other
than a registration statement on Form S-4 or S-8 or pursuant to Rule 415 (or any
substitute form or rule, respectively, that may be adopted by the Commission)),
the Corporation shall give written notice of such proposed filing to the Holders
at the address set forth in the share register of the Corporation as soon as
reasonably practicable (but in no event less than 10 days before the anticipated
filing date), and such notice shall offer each Holder the opportunity to
register on the same terms and conditions such number of shares of Registrable
Securities as such Holder may request (A PIGGYBACK REGISTRATION). Each Holder
will have five business days after receipt of any such notice to notify the
Corporation as to whether it wishes to participate in a Piggyback Registration;
provided that should a Holder fail to provide timely notice to the Corporation,
such Holder will forfeit any rights to participate in the Piggyback Registration
with respect to such proposed offering. In the event that the registration
statement is filed on behalf of a Person other than the Corporation, the
Corporation will use its best efforts to have the shares of Registrable
Securities that the Holders wish to sell included in the registration statement.
If the Corporation shall determine in its sole discretion not to register or to
delay the proposed offering, the Corporation may, at its election, provide
written notice of such determination to the Holders and (i) in the case of a
determination not to effect the proposed offering, shall thereupon be relieved
of the obligation to register such Registrable Securities in connection
therewith, and (ii) in the case of a determination to delay a proposed offering,
shall thereupon be permitted to delay registering such Registrable Securities
for the same period as the delay in respect of the proposed offering. As between
the Corporation and the Selling Holders, the Corporation shall be entitled to
select the Underwriters in connection with any Piggyback Registration.

SECTION 2.03. Reduction of Offering. Notwithstanding anything contained herein,
if the managing Underwriter of an offering described in Section 2.01 or 2.02
hereof states in writing that the size of the offering that Holders, the
Corporation and any other Persons intend to make is such that the inclusion of
the Registrable Securities would be likely to materially and adversely affect
the price, timing or distribution of the offering, then the amount of
Registrable Securities to be offered for the account of Holders shall be reduced
to the extent necessary to reduce the total amount of securities to be included
in such offering to the amount recommended by such managing Underwriter;
provided that in the case of a Piggyback Registration, if securities are being
offered for the account of Persons other than the Corporation, then the
proportion by which the amount of Registrable Securities intended to be offered
for the account of Holders is reduced shall not exceed the proportion by which
the amount of securities intended to be offered for the account of such other
Persons (other than any Person exercising a demand registration right) is
reduced; provided further that in the case of a Demand Registration, the amount
of Registrable Securities to be offered for the account of the Holders making
the Demand Registration shall be reduced only after the amount of securities to
be offered for the account of the Corporation and any other Persons has been
reduced to zero. In the event of a reduction pursuant to this Section 2.03 of
Registrable Securities to be offered for the account of Holders, such reduction
shall be pro rata among such Holders based on the number of Registrable
Securities each Holder had proposed to sell.

                                       35
<PAGE>

SECTION 2.04. Preservation of Rights. The Corporation will not grant any
registration rights to third parties that contravene or are inconsistent with
the rights granted hereunder.

ARTICLE 3

REGISTRATION PROCEDURES

SECTION 3.01. Filings; Information. In connection with a Demand Registration
pursuant to Section 2.01 hereof, the Corporation will use its reasonable best
efforts to effect the registration of such Registrable Securities as promptly as
is reasonably practicable, and in connection with any such request:

(a) The Corporation will expeditiously prepare and file with the Commission a
registration statement on any form for which the Corporation then qualifies and
which counsel for the Corporation shall deem appropriate and available for the
sale of the Registrable Securities to be registered thereunder in accordance
with the intended method of distribution thereof, and use its reasonable best
efforts to cause such filed registration statement to become and remain
effective for such period, not to exceed 60 days, as may be reasonably necessary
to effect the sale of such securities; and provided that if (i) the effective
date of any registration statement filed pursuant to a Demand Registration would
otherwise be at least 45 calendar days, but fewer than 90 calendar days, after
the end of the Corporation's fiscal year, and (ii) the Securities Act requires
the Corporation to include audited financials as of the end of such fiscal year,
the Corporation may delay the effectiveness of such registration statement for
such period as is reasonably necessary to include therein its audited financial
statements for such fiscal year.

(b) The Corporation will, if requested, prior to filing such registration
statement or any amendment or supplement thereto, furnish to the Selling
Holders, and each applicable managing Underwriter, if any, copies thereof, and
thereafter furnish to the Selling Holders and each such Underwriter, if any,
such number of copies of such registration statement, amendment and supplement
thereto (in each case including all exhibits thereto and documents incorporated
by reference therein) and the prospectus included in such registration statement
(including each preliminary prospectus) as the Selling Holders or each such
Underwriter may reasonably request in order to facilitate the sale of the
Registrable Securities by the Selling Holders.

(c) After the filing of the registration statement, the Corporation will
promptly notify the Selling Holders of any stop order issued or, to the
Corporation's knowledge, threatened to be issued by the Commission and take all
reasonable actions required to prevent the entry of such stop order or to remove
it if entered.

(d) The Corporation will use its reasonable best efforts to qualify the
Registrable Securities for offer and sale under such other securities or blue
sky laws of such jurisdictions in the United States as the Selling Holders
reasonably request; provided that the Corporation will not be required to (i)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this paragraph 3.01(d), (ii) subject
itself to taxation in any such jurisdiction or (iii) consent to general service
of process in any such jurisdiction.

(e) The Corporation will as promptly as is practicable notify the Selling
Holders, at any time when a prospectus relating to the sale of the Registrable
Securities is required by law to be delivered in connection with sales by an
Underwriter or dealer, of the occurrence of any event requiring the preparation
of a supplement or amendment to such prospectus so that, as thereafter delivered
to the purchasers of such Registrable Securities, such prospectus will not
contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading and
promptly make available to the Selling Holders and to the Underwriters any such
supplement or amendment. Upon receipt of any notice from the Corporation of the
occurrence of any event of the kind described in the preceding sentence, the
Selling Holders will forthwith discontinue the offer and sale of Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until receipt by the Selling Holders and the Underwriters of the
copies of such supplemented or

36
<PAGE>

amended prospectus and, if so directed by the Corporation, the Selling Holders
will deliver to the Corporation all copies, other than permanent file and then
in the possession of Selling Holders, of the most recent prospectus covering
such Registrable Securities at the time of receipt of such notice. In the event
the Corporation shall give such notice, the Corporation shall extend the period
during which such registration statement shall be maintained effective as
provided in Section 3.01(a) hereof by the number of days during the period from
and including the date of the giving of such notice to the date when the
Corporation shall make available to the Selling Holders such supplemented or
amended prospectus.

(f) The Corporation will enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the sale of such
Registrable Securities.

(g) At the request of any Underwriter in connection with an underwritten
offering, the Corporation will furnish (i) an opinion of counsel, addressed to
the Underwriters, covering such customary matters as the managing Underwriter
may reasonably request and (ii) a comfort letter or comfort letters from the
Corporation's independent public accountants covering such customary matters as
the managing Underwriter may reasonably request.

(h) The Corporation will make generally available to its security holders, as
soon as reasonably practicable, an earnings statement covering a period of 12
months, beginning within three months after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.

(i) The Corporation will use commercially reasonable efforts to cause all such
Registrable Securities to be listed on each securities exchange or quoted on
each inter-dealer quotation system on which the Common Stock is then listed or
quoted.

SECTION 3.02. Selling Holder Information. The Corporation may require Selling
Holders promptly to furnish in writing to the Corporation such information
regarding such Selling Holders, the plan of distribution of the Registrable
Securities and other information as the Corporation may from time to time
reasonably request or as may be legally required in connection with any Demand
Registration or Piggyback Registration.

SECTION 3.03. Registration Expenses. In connection with any Demand Registration,
the Corporation shall pay the following expenses incurred in connection with
such registration (the REGISTRATION EXPENSES): (i) registration and filing fees
with the Commission and the National Association of Securities Dealers, Inc.,
(ii) fees and expenses of compliance with securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection with blue sky
qualifications of the Registrable Securities), (iii) printing expenses, (iv)
fees and expenses incurred in connection with the listing or quotation of the
Registrable Securities, (v) fees and expenses of counsel to the Corporation and
the reasonable fees and expenses of independent certified public accountants for
the Corporation (including fees and expenses associated with the special audits
or the delivery of comfort letters) and (vi) the reasonable fees and expenses of
any additional experts retained by the Corporation in connection with such
registration. In connection with any Piggyback Registration, the Corporation
shall pay the Registration Expenses set forth in clauses (ii) through (vi) of
the preceding sentence. The Selling Holders shall pay (A) any underwriting fees,
discounts or commissions attributable to the sale of Registrable Securities, (B)
fees and expenses of counsel for the Selling Holders and (C) any out-of-pocket
expenses of the Selling Holders. In connection with any Piggyback Registration,
the Selling Holders shall pay, in addition to items (A) through (C) of the
preceding sentence, registration and filing fees with the Commission and
National Association of Securities Dealers Inc., in proportion to the ratio that
the number of shares of Registrable Securities being registered for the account
of the Selling Holders bears to the aggregate number of shares of Common Stock
being included in the applicable registration statement.

                                       37
<PAGE>

ARTICLE 4

INDEMNIFICATION AND CONTRIBUTION

SECTION 4.01. Indemnification by the Corporation. The Corporation agrees to
indemnify and hold harmless each Selling Holder and its Affiliates and their
respective officers, directors, partners, stockholders, members, employees,
agents and representatives and each Person (if any) which controls a Selling
Holder within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act, from and against any and all losses, claims, damages,
liabilities, costs and expenses (including reasonable attorneys' fees) caused
by, arising out of, resulting from or related to any untrue statement or alleged
untrue statement of a material fact contained in any registration statement or
prospectus relating to the Registrable Securities (as amended or supplemented if
the Corporation shall have furnished any amendments or supplements thereto) or
any preliminary prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by or contained in or based upon any
information furnished in writing to the Corporation by or on behalf of such
Selling Holder or any Underwriter expressly for use therein or by the Selling
Holder or Underwriter's failure to deliver a copy of the registration statement
or prospectus or any amendments or supplements thereto after the Corporation has
furnished the Selling Holders or Underwriter with copies of the same. The
Corporation also agrees to indemnify any Underwriters of the Registrable
Securities, their officers and directors and each person who controls such
Underwriters on substantially the same basis as that of the indemnification of
the Selling Holders provided in this Section 4.01.

SECTION 4.02. Indemnification by a Selling Holder. Each Selling Holder agrees to
indemnify and hold harmless the Corporation, its officers and directors, and
each Person, if any, which controls the Corporation within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Corporation to each Selling Holder,
but only (a) with reference to information furnished in writing by or on behalf
of such Selling Holder expressly for use in any registration statement or
prospectus relating to the Registrable Securities, or any amendment or
supplement thereto, or any preliminary prospectus or (b) as a result of the
Selling Holder's failure to deliver any registration statement or prospectus
relating to the Registrable Securities, or any amendment or supplement thereto,
or any preliminary prospectus. Each Selling Holder also agrees to indemnify and
hold harmless any Underwriters of the Registrable Securities, their officers and
directors and each person who controls such Underwriters on substantially the
same basis as that of the indemnification of the Corporation provided in this
Section 4.02.

SECTION 4.03. Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation) shall be instituted involving any
Person in respect of which indemnity may be sought pursuant to Section 4.01 or
Section 4.02 hereof, such Person (the INDEMNIFIED PARTY) shall promptly notify
the Person against whom such indemnity may be sought (the INDEMNIFYING PARTY) in
writing and the Indemnifying Party, upon the request of the Indemnified Party,
shall retain counsel reasonably satisfactory to such Indemnified Party to
represent such Indemnified Party and any others the Indemnifying Party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any Indemnified
Party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party unless (i) the
Indemnifying Party and the Indemnified Party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the Indemnified Party and the
Indemnifying Party and, in the written opinion of counsel for the Indemnified
Party, representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood
that the Indemnifying Party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) at any time for all such Indemnified Parties, and that all such fees
and expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Indemnified Parties, such firm shall be designated in
writing by the Indemnified Parties. The Indemnifying Party shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent (not to be unreasonably withheld), or if there be a
final judgment for the plaintiff, the Indemnifying Party shall indemnify and
hold harmless such Indemnified Parties from and against any loss or liability
(to the extent stated above) by reason of such settlement or judgment.

                                       38
<PAGE>
SECTION 4.04. Contribution. If the indemnification provided for in this Article
4 is unavailable to an Indemnified Party in respect of any losses, claims,
damages or liabilities in respect of which indemnity is to be provided
hereunder, then each such Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall to the fullest extent permitted by law contribute to
the amount paid or payable by such Indemnified Party as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate to reflect
the relative fault of such party in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative fault of the Corporation,
a Selling Holder and the Underwriters shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by such party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.

The Corporation and each Selling Holder agrees that it would not be just and
equitable if contribution pursuant to this Section 4.04 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Article 4, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and each Selling
Holder shall not be required to contribute any amount in excess of the amount by
which the net proceeds of the offering (before deducting expenses) received by
such Selling Holder exceeds the amount of any damages which such Selling Holder
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.

ARTICLE 5

MISCELLANEOUS

SECTION 5.01. Participation in Underwritten Registrations. No Person may
participate in any underwritten registered offering contemplated hereunder
unless such Person (a) agrees to sell its securities on the basis provided in
any underwriting arrangements approved by the Persons entitled hereunder to
approve such arrangements, (b) completes and executes all questionnaires, powers
of attorney, custody arrangements, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements and this Exhibit B and (c) furnishes in writing to the Corporation
such information regarding such Person, the plan of distribution of the
Registrable Securities and other information as the Corporation may from time to
time request or as may be legally required in connection with such registration.

SECTION 5.02. Rule 144. Subject to Section 6.5 of the Stock Purchase Agreement,
the Corporation covenants that it will file any reports required to be filed by
it under the Securities Act and the Exchange Act and that it will take such
further action as the Holders may reasonably request to the extent required from
time to time to enable the Holders to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144 under the Securities Act, as such Rule 144 may be amended
from time to time, or any similar rule or regulation hereafter adopted by the
Commission. Upon the request of Buyer, the Corporation will deliver to Buyer a
written statement as to whether it has complied with such reporting
requirements.

SECTION 5.03. Holdback Agreements. Each Holder agrees, in the event of an
underwritten offering for the Corporation (whether for the account of the
Corporation or otherwise) not to offer, sell, contract to sell or otherwise
dispose of any                         39
<PAGE>

Registrable Securities or other Common Stock or Class B Stock, or any securities
convertible into or exchangeable or exercisable for any of the foregoing,
including any sale pursuant to Rule 144 under the Securities Act (except as part
of such underwritten offering), during the 14 days prior to, and during the
180-day period (or such lesser period as the lead or managing Underwriter may
agree) beginning on, the effective date of the registration statement for such
underwritten offering (or, in the case of an offering pursuant to an effective
shelf registration statement pursuant to Rule 415, the pricing date for such
underwritten offering).

SECTION 5.04. Termination. The registration rights granted under this Exhibit B
will terminate on the tenth anniversary of the Closing Date.

SECTION 5.05. Holder Determinations. In the event any determination is to be
made by the Holders or the Selling Holders as a group, such determination shall
be made by Holders or Selling Holders holding a majority in interest of the
Registrable Securities or the Registrable Securities being sold, respectively.

                                       40
<PAGE>

                                    EXHIBIT C

               LEGAL OPINION OF SPECIAL COUNSEL TO THE CORPORATION

                                 APRIL ___, 2003

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

     Re:  Bluebird Finance Limited - Sale of Series A Preferred Stock

Ladies and Gentlemen:

              We have acted as special counsel to Signature Eyewear, Inc., a
     California corporation (the "Company"), in connection with the issuance and
     sale of up to 1,200,000 shares of the Company's Series A 2% Convertible
     Preferred Stock (the "Shares"), pursuant to the Stock Purchase Agreement
     (the "Purchase Agreement"), of even date, between the Company and Bluebird
     Finance Limited (the "Buyer"). 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 Purchase 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 Purchase Agreement;

     (2)  The Certificate of Determination (the "Certificate")

     (3)  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");

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

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

     (6)  The Credit Facility Agreement between Buyer and the Company dated of
          even date with the Purchase Agreement, and related documents and
          agreements (collectively, the "Bluebird Loan Agreement") and

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

                                       41
<PAGE>

Except as set forth above, the documents listed in clauses (1) and (2) 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 (referred to collectively with
the Bluebird Loan Documents as 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; and (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 Document
constitutes the legally valid and binding obligation of such Other Party,
enforceable against such party in accordance with its terms.

     (c) The representations and warranties of the Company and the Buyer in the
Transaction Documents are true and correct;

     (d) The choice of California law in the Purchase Agreement will be
enforced; and

     (e) Value has been given by the Buyer.

                                       42
<PAGE>

     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. Specifically and without
limiting the foregoing, we express no opinion as to any law of the British
Virgin Islands. 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 and 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 Articles or Bylaws of the Company.

     5. To the best of our actual knowledge, the execution, delivery and
performance by the Company of the Transaction Documents and the consummation of
the transactions contemplated therein, do not and will not violate any law or
regulation applicable to the Company.

     6. Except as set forth in the schedules to the Purchase 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. The Preferred Shares issued in connection with the Stock Purchase
Agreement and the Conversion Shares issuable upon conversion of the Preferred
Shares have been duly authorized by all necessary corporate action on the part
of the Company and, upon payment for and delivery of the Preferred Shares in
accordance with the Stock Purchase Agreement and the countersigning of the
certificate or certificates representing the Preferred Shares by a duly
authorized officer of the Company, the Preferred Shares will be validly issued,
fully paid and nonassessable.

     8. Assuming the Company has sufficient authorized and unissued shares of
common stock available at such time, the Conversion Shares, when issued and
delivered upon conversion of the Securities in accordance with the terms thereof
as such terms exist on the date hereof and the countersigning of the certificate
or certificates representing the Conversion Shares by a duly authorized officer
of the Company, will be duly and validly issued, fully paid and nonassessable.

     9. 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 in the
schedules to the Stock Purchase Agreement, and (ii) those Legal Proceeding that
have been represented

                                       43
<PAGE>

to us will settle within thirty (30) days of the Closing and are set forth on
Exhibit E to the Representation Letter, we are not and have not represented the
Company in connection with any currently pending Legal Proceedings.

     10. Assuming the accuracy of the representations made in Section 4.5 of the
Purchase Agreement by the Buyer, the sale of the Securities to Buyer is exempt
from the registration and qualification requirements of the Securities Act of
1933, as amended, and the securities laws of the State of California.

     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 any anti-fraud, disclosure or
               similar law, rule 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, including, without limitation, the fair
               value of consideration for issuance of the Preferred Shares and
               the Conversion Shares;

          (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;

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

          (ix) 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;

                                       44
<PAGE>

     (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;

     (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; and

     (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) 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, or (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.

     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.

                                       45
<PAGE>

     This opinion is rendered only to the Buyer 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,

                                       46
<PAGE>

                                  SCHEDULE 3.4

                                NON-CONTRAVENTION

(z)  Liens
     -----

1.   Both the Buyer and Home Loan and Investment Company ("Home") will have
     Liens on the assets of the Corporation pursuant to their respective loan
     agreements.

2.   The Security Interest granted by the Corporation 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 Corporation's obligations under the promissory note dated on
     or about March 26, 2003.

3.   The Security Interest granted by the Corporation to Axwood Investments
     Limited with respect to certain inventory pursuant to a security agreement
     dated February 4, 2003 to secure the Corporation's obligations under the
     promissory note dated February 4, 2003.

4.   The Security Interests granted by the Corporation 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 Corporation in its
     business.

                                       47
<PAGE>

                                  SCHEDULE 3.5

                                 CAPITALIZATION

1.   As of March 31, 2003, the Corporation has the following options
     outstanding:

     (a)  options to purchase 191,500 shares of Common Stock at $10,00 per
          share; and

     (b)  options to purchase 84,700 shares of Common Stock at $4.00 per share.

2.   In addition, in connection with its loan transaction with Home, the
     Corporation has granted Home warrants to purchase up to 100,000 shares of
     Common Stock at an exercise price of $0.67 per share.

                                       48
<PAGE>

                                  SCHEDULE 3.9

                             MATERIAL ADVERSE CHANGE

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

                                       49
<PAGE>

                                  SCHEDULE 3.10

                                   LITIGATION

1.   The Chapter 7 trustee in bankruptcy of an optical company which holds a
     disputed claim against the Corporation of approximately $58,000 contacted
     the Corporation 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 Corporation 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
     $25,000.

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

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

5.   The Corporation 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 Corporation and
     thereby curing certain outstanding defaults. The Corporation has previously
     delivered to the Lender a schedule of the pending or threatened claims that
     the Corporation intends to settle using the proceeds from these
     transactions. The Corporation 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 Corporation's current financial condition and cash flow,
     the Corporation is in actual or technical default with most of the
     companies and entities with which the Corporation has, or currently does,
     transact its business. Some of these parties have asserted, or may assert,
     claims against the Corporation and some of these claims will be in excess
     of $100,000 in the aggregate.

                                       50
<PAGE>

                                  SCHEDULE 3.12

                                  SUBSIDIARIES

In June 1999, the Corporation acquired all of the outstanding shares of a
Canadian corporation in connection with its acquisition of California Design
Studio. The Corporation liquidated that subsidiary by the end of 1999 and since
2000, the subsidiary has not had any assets, liabilities or operations.

                                       51
<PAGE>

                                  SCHEDULE 3.14

                              COMPLIANCE WITH LAWS

The Corporation is delinquent in its SEC filings for fiscal years 2002 and 2003.

                                       52
<PAGE>

                                  SCHEDULE 3.14

                                      TAXES

The Corporation received notice from the California Franchise Tax Board ("FTB")
that the FTB intends to assess a deficiency for the 1998 and 1999 tax years. The
proposed assessments from the FTB for 1998 and 1999 are $2,918.38 and
$64,797.70, respectively. The Corporation intends to contest both of these
proposed assessments.

The Corporation filed for an extension for its federal and state tax returns for
the fiscal year ended October 31, 2002.

                                       53
<PAGE>

                                  SCHEDULE 3.15

                                   TRADEMARKS

LICENSES

The Corporation is party to the following License Agreements:

1.   License Agreement dated June 24, 1997 between the Corporation and Eddie
     Bauer, Inc., as amended, for use of the "Eddie Bauer" mark and related
     logos.

2.   License Agreement dated January 12, 1996 between the Corporation and Hart
     Schaffner & Marx, as amended, for use of the "Hart Schaffner & Marx" mark
     and related logos.

3.   License Agreement dated May 28, 1991 between the Corporation (as successor
     in interest to USA Optical Distributors, Inc.) and Laura Ashley Limited, as
     amended, for use of the "Laura Ashley" mark and related logos.

4.   License Agreement dated September 23, 1999 between the Corporation and bebe
     stores, inc., as amended, for use of the "bebe" mark and related logos.

5.   License Agreement dated April 1, 1993 between the Corporation (as successor
     in interest to California Design Studio, Inc.) and Kobra International,
     Ltd., T/A Nicole Miller, as amended, for use of the "Nicole Miller" mark
     and related logos.

6.   License Agreement dated February 4, 2003 between the Corporation and Axwood
     Investments Limited for the use of the "Dakota Smith" mark and related
     logos.

As a result of the Corporation's current financial condition, the Corporation is
in contravention of certain of the financial covenants contained in the above
license agreements and is accordingly in technical or actual default under such
licenses. The Corporation has not received any written notices of default from
any of the licensors under such license agreements.

TRADEMARKS

1.   Intuition

2.   Bravado

3.   Latitudes

4.   Lifescape

5.   Search

6.   Small Print

7.   Kensington & James Riding Club and Design

                                       54

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