Document:

SVI HOLDINGS, INC.
                             (a Nevada Corporation)

                        INCENTIVE STOCK OPTION AGREEMENT

OPTIONEE:                                  NO. OF SHARES OF STOCK:

DATE OF GRANT:                             OPTION PRICE:

TERM OF OPTION:

         This Option Agreement is entered into between SVI Holdings, Inc., a
Nevada corporation ("Company") and the above-named Optionee ("Optionee").

1.       RECITALS
         --------

         1.1 The Board of Directors of the Company ("Board") authorized the
granting of this Option to Optionee who is an Employee of the Company pursuant
to the SVI Holdings, Inc. 1998 Incentive Stock Plan adopted October 5, 1998.

         1.2 This Option Agreement is intended to constitute an "incentive stock
option" within the meaning of Section 422 of Internal Revenue Code of 1986, as
amended ("Code").

2.       DEFINITIONS
         -----------

         In addition to those words and phrases defined above and unless
otherwise required by the context in which they appear, words and phrases having
their initial letters capitalized shall have the following meanings:

         "Affiliate" means any corporation defined as a "parent corporation" or
a "subsidiary corporation" within the meaning of Code Section 424(e) and (f)
respectively.

         "Agreement" means this Incentive Stock Option Agreement (including any
schedules, attachments, documents incorporated by reference or modifications
agreed to in writing by the Company and Optionee) which sets forth the parties'
rights and obligations with respect to the Option.

         "Board" means the Board of Directors of the Company. The reference in
this Agreement to the Board shall also include a committee to whom the Board has
delegated responsibility for administration of the Plan.

         "Date of Grant" means the Date of Grant set forth at the beginning of
this Agreement.

         "Disability" or "Disabled" means the condition of being totally and
permanently disabled" within the meaning of Code Section 22(e)(3).

<PAGE>

"Employee" means any salaried employee of the Company, or its Affiliates,
including those employees who are officers of the Company or its Affiliates.

         "ERISA" means the Employee Retirement Income Security Act or the rules
thereunder, as amended from time to time.

         "Fair Market Value" per share of Stock means the average of the high
and low sale prices per share of Stock on the American Stock Exchange, composite
tape or other recognized market source, as determined by the Board, on the
applicable date of reference hereunder, or if there is no sale on such date, the
average high and low sale prices on the last previous day on which a sale is
reported.

         "Option" means the right of Optionee to purchase the number of shares
of Stock set forth above at the beginning of this Agreement in accordance with
the terms and conditions of this Agreement.

         "Option Price" means the price per share of Stock to be paid by the
Optionee upon exercise of the Option which amount is set forth above at the
beginning of this Agreement.

         "Option Stock" means the shares of Stock Optionee shall be entitled to
purchase pursuant to this Agreement as set forth above at the beginning of this
Agreement.

         "Plan" means the SVI Holdings, Inc. 1998 Incentive Stock Plan adopted
October 5, 1998, as amended from time to time.

         "Reporting Person" shall mean an Optionee who is required to file
statements relating to his or her beneficial ownership of Stock with the
Securities and Exchange Commission pursuant to Section 16(a) of the Securities
Exchange Act of 1934, as amended.

         "Rule 16b-3" means Rule 16b-3 of the Securities Exchange Act of 1934,
as amended or any successor to Rule 16b-3, as in effect when discretion is being
exercised with respect to the Plan.

         "Stock" means the $0.0001 par value common stock of the Company.

         "Term" means the period commencing on the Date of Grant and continuing
until the earlier to occur of (a) the Expiration Date, or (b) the date this
Agreement is terminated pursuant to the Plan or the terms hereof.

3.       OPTION
         ------

         3.1 GRANT. The Company hereby grants to Optionee the Option to purchase
all or any part of the Option Stock on the terms and conditions set forth in
this Agreement.

<PAGE>

3.2 PURCHASE PRICE. The purchase price per share of Stock to be paid upon the
exercise of this Option shall be the Option Price. The Option Price is deemed by
the Board to be not less than the Fair Market Value of the Stock on the Date of
Grant.

         3.3 RESTRICTIONS ON TRANSFER. This Option shall not be transferable by
Optionee other than by will or the laws of descent and distribution. Upon any
attempt to sell, assign, encumber or otherwise transfer this Option in violation
of this Agreement, or upon the levy of any attachment or similar process upon
this Option, this Option shall immediately become null and void.

         3.4 CHANGES IN EQUITY STRUCTURE; RECAPITALIZATION. Upon the occurrence
of the capital and/or recapitalization transactions described in Section 13 of
the Plan, this Option (to the extent not previously exercised ) shall be
adjusted or modified as provided in Section 13 of the Plan.

         Notwithstanding any provision of this Agreement, the Company reserves
the right to:

                  (a) Make or enter into any adjustments, reclassifications,
                  reorganizations or changes of its capital or business
                  structure;

                  (b) Merge or consolidate with other entities; or

                  (c) Dissolve, liquidate or sell or transfer any or all of its
                  business or assets.

         3.5 STOCKHOLDER'S RIGHTS. Optionee shall have no rights as a
stockholder with respect to any shares of Stock Optionee is entitled to purchase
under this Option until the date of the issuance of a certificate for the shares
of Stock. No adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distributions or other rights
for which the record date is prior to the date such certificate is issued,
except as provided in this Agreement or in the Plan.

4.       EMPLOYMENT CONDITIONS
         ---------------------

         4.1 EMPLOYMENT STATUS. Optionee shall be considered to be in the
continuous employment of the Company as long as Optionee remains an Employee of
the Company or its Affiliates. As provided in the Plan, the Board exclusively
shall determine whether or when there has been a termination of Optionee's
employment, if there has been a failure to comply with Optionee's covenant not
to compete obligations and the cause of such termination, which determination
shall be final.

         4.2 COVENANT TO DEVOTE PRODUCTIVE TIME AND SKILL. Unless otherwise
permitted in writing, Optionee shall devote his entire productive time, energy
and skill to the service of the Company or its Affiliates, subject to vacations,
sick leave and other approved absences. Failure of Optionee to comply with this
covenant shall be "for cause" grounds for termination of Employee's employment
with the Company.

<PAGE>

         4.3 TERMINATION FOR CAUSE. Unless otherwise agreed to by the Board if
Optionee's employment is terminated for cause, the right of Optionee to purchase
Option Stock shall terminate three (3) months following the date of termination
of employment without further notice or action by the Company.

5.       EXERCISE
         --------

         5.1 EXERCISE OF OPTION. Subject to the earlier termination of the right
to exercise this Option as provided under this Agreement, including Paragraphs
4.2 and 4.3 herein, during the Term, Optionee shall be entitled to exercise the
following cumulative percentages of his Option Stock in whole or in part as
follows:

            Period (in years)
          From Date of Grant                           Cumulative % of Option
    After             But on or Before              Stock Available for Exercise
-------------------------------------------         ----------------------------
  Date of Grant         1 year                                   0%
         1              2 years                                 20%
         2              3 years                                 40%
         3              4 years                                 60%
         4              5 years                                 80%
         5              Expiration Date                        100%

In no event shall this Option be exercisable after the Expiration Date or such
later date subsequently approved by the Board; provided, however, that this
Option shall expire and not be exercisable after the Expiration Date.

         5.2 ADDITIONAL ADJUSTMENTS. Notwithstanding the terms of Section 5.1 of
this Agreement (a) the Board in its sole and exclusive discretion may provide
for accelerated vesting upon the satisfaction of stated conditions; and (b) to
the extent that a six (6) month non-exercise period is required by Rule 16b-3 at
the time and under the circumstances of the exercise and Optionee is a Reporting
Person, then this Option shall not be exercisable for six (6) months after Date
of Grant, unless the death or Disability of the Optionee occurs before the
expiration of such six (6) month period.

         5.3 LIMITATION. This Option shall not be exercisable with respect to
any fractional shares of the Stock. The minimum number of shares with respect to
which this Option may be exercised at any time is one hundred (100). Upon the
final exercise of this Option this minimum shall not apply.

         5.4 EXERCISE PROCEDURE. The Option shall be exercised by the giving of
written notice to the Company (in a form designated by the Company) specifying
the number of shares of Stock to be purchased, accompanied by the payment (in
accordance with the terms of Section 6(c) of the Plan) of the aggregate Option
Price for the shares of Option Stock being purchased, such payment to be made in
any combination of:

<PAGE>

                  (a) United States cash currency;

                  (b) a cashier's or certified check to the order of the
                  Company;

                  (c) a personal check acceptable to the Company;

                  (d) to the extent permitted by the Board, shares of Stock
                  (including previously owned Stock or Stock issuable in
                  connection with the Option exercise), properly endorsed to the
                  Company; or

                  (e) to the extent agreed to by the Board, the Optionee's
                  entering into an agreement with the Company whereby a portion
                  of the Options are terminated;

provided, however, that the form of payment which Optionee selects shall be
permissible under Code Section 422.

         The Board may provide such assistance to the Optionee to facilitate the
exercise of the Option as it deems appropriate. Provided, however, that the
Board, as a prerequisite to providing such assistance, may require satisfaction
of any rules or conditions it deems appropriate. Shares of Stock used to pay the
Option Price shall be valued at their Fair Market Value on the date of exercise.

         If Stock used to pay the Option Price is subject to any prior
restrictions imposed in connection with any stock option or stock purchase plan
or agreement of the Company, an equal number of the shares of Stock acquired on
exercise shall be made subject to such prior restrictions in addition to any
further restrictions imposed on such Stock by the terms of the Agreement or by
the Plan.

         5.5 EXERCISE DURING LIFE. Subject to the provisions of Sections 4.2,
4.3, and 5.7, during Optionee's lifetime, this Option shall be exercisable only
by Optionee either:

                  (a) While Optionee is employed by the Company or its
                  Affiliates;

                  (b) Within one (1) year after the date on which Optionee's
                  employment terminates for reasons other than termination for
                  cause, including breach of Optionee's covenants set forth in
                  Section 4.2;

                  (c) Within three (3) months following the date of termination
                  if Optionee's employment is terminated for cause, including
                  the breach of Optionee's covenants set forth in Section 4.2;
                  or

                  (d) Within one (1) year after the date on which the Optionee's
                  employment terminates due to a Disability;
<PAGE>

Despite the preceding, in no event shall the period of exercise be extended
beyond the Expiration Date or such later dates subsequently approved by the
Board. Unless the Board otherwise agrees, if Optionee is entitled to purchase
shares of Stock after the termination of Optionee's employment the number of
shares of Stock Optionee may so purchase shall be limited to the number of
shares of Stock Optionee was entitled to purchase as of the date of such
termination.

         If during any part of the one (1) year period referred to in Section
5.5(b) the Option is not exercisable solely because of the condition set forth
in Section 7, the Option shall not terminate until the earlier of the Expiration
Date or until it shall have been exercisable for an aggregate period of one (1)
year after the termination of employment.

         5.6 EXERCISE AFTER DEATH. Subject to the provisions of Section 5.2, if
Optionee dies while employed by the Company or its Affiliates or within a period
of three (3) months after the date such employment terminates, but prior to the
complete exercise of this Option, the Option may be exercised within one (1)
year from the date of Optionee's death, but:

                  (a) Only by the personal representative of Optionee's estate
                  or by such person or persons who acquire the Option pursuant
                  to Optionee's will, testamentary substitute, or the laws of
                  descent and distribution; and

                  (b) Only as to the number of shares of Stock that Optionee was
                  entitled to purchase under this Option on the date of
                  Optionee's death.

         5.7 CONSULTANCY TO THE COMPANY AFTER TERMINATION OF EMPLOYMENT OR
CORPORATE OFFICE. If Optionee acts as a consultant for the Company or its
Affiliates after the termination of his employment, then Optionee shall not be
deemed to have terminated his employment for the Company or its Affiliates for
purposes of Paragraph 5.5 of this Agreement until he ceases to be a consultant
for the Company or its Affiliates, provided he does not violate any
non-competition covenant, non-solicitation covenant or covenant of
confidentiality contained in any agreement between Optionee and the Company or
its Affiliates. Notwithstanding Optionee's not being deemed to have terminated
his employment for the Company or its Affiliates pursuant to the terms of the
preceding sentence, this Option which is an incentive stock option shall
automatically convert into a non-statutory stock option three (3) months after
the date which Optionee's actually terminates his employment with the Company or
its Affiliates (one (1) year if the Optionee is Disabled on the date of
termination).

         5.8 NON-SEQUENTIAL EXERCISE PERMITTED. Subject to the exercise
limitations set forth herein, this Option shall be exercisable even if there is
outstanding any incentive stock option or non-statutory stock option for the
purchase of Stock of the Company which was granted before this Option was
granted, and no subsequently granted incentive stock option shall fail to be
exercisable solely because this Option remains outstanding.

<PAGE>

5.9 LEGENDS. Certificates representing Stock acquired upon exercise of this
Option may contain such legends and transfer restrictions as the Company shall
deem necessary or desirable to assure the satisfaction of any liability that the
Company may or will have incurred for any withholding of federal, state or local
income, employment or other taxes, to facilitate compliance by the Company with
any federal or state laws or regulations, including, without limitation, legends
restricting transfer of the Stock until there has been compliance with federal
and state securities laws or such other restrictions as may be imposed on the
Stock under the terms of this Agreement.

5.10 OPTIONEE COVENANTS

                  By exercising this Option, Optionee agrees that:

                  (a) the Company may require Optionee to enter an arrangement
                  providing for the cash payment by Optionee to the Company of
                  any tax withholding obligation of the Company arising by
                  reason of: (1) the exercise of this Option; (2) the lapse of
                  any substantial risk of forfeiture to which the shares are
                  subject at the time of exercise; or (3) the disposition of
                  shares acquired upon such exercise; and

                  (b) Optionee will notify the Company in writing within fifteen
                  (15) days after the date of any disposition of any of the
                  shares of Stock issued upon exercise of this Option that
                  occurs within two (2) years after the date of this Option
                  grant or within one (1) year after the shares of Stock are
                  transferred upon exercise of this Option.

6.       CONFLICT BETWEEN PLAN AND AGREEMENT
         -----------------------------------

         This Agreement, including the Option and Optionee's rights hereunder,
is subject to and governed by the Plan. Any conflict between the terms and
provisions of this Agreement and the terms and provisions of the Plan shall be
governed by the terms and provisions of the Plan.

7.       INVESTMENT INTENT
         -----------------

         This Option is granted on the condition that Optionee's purchase of
Option Stock shall be for investment purposes and not with a view to resale or
distribution. This Option may not be exercised unless the shares issuable upon
exercise of this Option are then registered under the Act or, if such shares are
not then registered under the Act, the Company has determined that such exercise
and issuance would be exempt from the registration requirements of the Act.

8.       NOTICES
         -------

         8.1 IN WRITING. All notices, demands, requests, or other communications
permitted or required under this Agreement or applicable law shall be in
writing.

<PAGE>

         8.2 DELIVERY. All such communications may be served personally or may
be sent by registered or certified mail, return receipt requested, postage
prepaid and addressed to either Optionee or the Company at the addresses
appearing beneath the respective party's signature to this Agreement, or at such
other address as either party shall have communicated to the other pursuant to
this Section. All such communications shall be deemed effectively delivered upon
personal service or three (3) days after deposit in the United States Mail.

9.       MISCELLANEOUS
         -------------

         9.1 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, this
Agreement shall inure to the benefit of only the Company, Optionee and their
respective successors or assigns.

         9.2 STATUS. Nothing contained in this Agreement shall be construed as
giving Optionee any right to be retained as an Employee of the Company or its
Affiliates.

         9.3 SEVERABILITY. If any provision or provisions of this Agreement are
adjudged to be for any reason unenforceable, illegal or void, the remainder of
its provisions shall remain in full force and effect.

         9.4 INTEGRATION. This Agreement constitutes the entire understanding of
the parties concerning the Option granted hereby. Except as otherwise provided,
any changes, modifications, or variations to this Agreement or the Option are
invalid unless stated in writing and executed by the Company and Optionee.

         9.5 GOVERNING LAW. This Agreement and the Option granted hereby shall
be governed by the laws of the State of California.

         9.6 ATTORNEYS FEES. If either party brings an action or seeks to
enforce or interpret any of the terms or provisions of this Agreement, the
prevailing party shall be entitled to recover its reasonable attorneys' fees and
costs in addition to any other remedy it may be awarded.

         9.7 COUNTERPARTS. This Agreement may be executed in counterparts which
shall constitute the whole instrument.

9.8 TITLES FOR CONVENIENCE; GENDER AND PLURALS. Titles of articles and paragraph
headings are for convenience only and shall not affect the construction or
interpretation of this Incentive Stock Option Agreement, or any portion thereof.
Whenever required by the context hereof, the singular shall include the plural,
and vice versa; the masculine gender shall include the feminine and neuter, and
vice versa.

<PAGE>

         Executed to be effective as of the Date of Grant set forth above at the
beginning of this Agreement.

                                    OPTIONEE:

                                    --------------------------------------
                                         Signature

                                    --------------------------------------
                                         Address

                                    --------------------------------------
                                    City             State   Zip Code

                                    SVI HOLDINGS, INC

                                    By:
                                       -----------------------------------
                                       Barry M. Schechter

                                    Its:  Chief Executive Officer and Chairman
                                          12707 High Bluff Drive, Suite 335
                                          San Diego, CA 92130CERTIFICATE OF TRUST
                                    OF
                         MERRY LAND CAPITAL TRUST

     THIS  Certificate  of Trust of Merry Land Capital Trust (the "Trust"),
dated as of September ___,  1999,  is  being duly executed and filed by the
undersigned,  as  trustee,  to form a business  trust  under  the  Delaware
Business Trust Act (12 DEL. C. Section 3801 ET SEQ.).

     1. NAME. The name of the  business  trust  formed hereby is Merry Land
Capital Trust.

     2. DELAWARE TRUSTEE. The name and business address  of  the trustee of
     the Trust with a principal place of business in the State  of Delaware
     is  William J. Reif, The Corporation Trust Company, Corporation  Trust
     Center, 1209 Orange Street, Wilmington, Delaware 19801.

     3. EFFECTIVE  DATE.  This Certificate of Trust shall be effective upon
     filing.

     IN WITNESS WHEREOF, the  undersigned,  being the trustee of the Trust,
has executed this Certificate of Trust as of the date first written above.

                         _____________________________________
                         William J. Reif, not in his individual capacity
                         but solely a trustee of the Trust

D:\America Online 4.0a\download\Certificate of Trust #1.wpd             REH

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