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                                                                 Exhibit 10.1


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                                LICENSE AGREEMENT

Date: June 4, 2002

Re:   CONSUMER PRODUCTS LICENSE -- DISNEY PROPERTIES

This license agreement, including one or more schedules ("Schedule") attached
hereto (such agreement and each such Schedule, individually and collectively,
depending on context, referred to herein as "Agreement"), is entered into by and
between Disney Enterprises, Inc. ("Disney"), with a principal place of business
at 500 South Buena Vista Street, Burbank, California 91521, and The First Years
Inc. ("Licensee"), with its principal place of business at 1 Kiddie Drive, Avon,
MA 02322. Disney and Licensee agree as follows:

1.       MEANING OF TERMS

For purposes of this Agreement, the following terms shall have the meaning
ascribed to them below:

         A.       "ADVANCE" means the non-refundable sum(s), not reduced by any
         applicable goods and services tax or other value added tax
         (collectively, "VAT"), stated in each Schedule, payable by the date(s)
         indicated therein, as an advance on Royalties to accrue in the
         period(s) stated in the applicable Schedule (as defined below.

         B.       "AFFILIATE" means, with regard to either party, any
         corporation or other entity which directly or indirectly controls, is
         controlled by, or is under common control with the party. "Control" of
         an entity shall mean possession, directly or indirectly, of power to
         direct or cause the direction of management or policies of such entity,
         whether through ownership of voting securities, by contract or
         otherwise.

         C.       "ARTICLES" means the items on or in connection with which the
         Licensed Material, the Trademarks, or both, are permitted to be
         reproduced or used, and includes each and every stock keeping unit
         ("SKU") of each Article as is specified on each Schedule attached
         hereto.

         D.       "ETAILER" means internet-based retailers that sell products to
         consumers and which have few or no physical store locations.

         E.       "GUARANTEE" means the sum(s), not reduced by any VAT, if
         applicable, which Licensee guarantees to pay as minimum Royalties on
         Licensee's cumulative sales of Articles, as stated in the applicable
         Schedule attached hereto, in the increments stated in the subject
         Schedule. Any shortfall shall be payable with the Royalty statement due
         at the end of the applicable Guarantee period. The Guarantee may be
         broken down into separate Guarantees for each of the Properties or
         individual product lines licensed thereunder, or as otherwise stated on
         the applicable Schedule.

         F.       "INTELLECTUAL PROPERTY" means:

                  (1)      "LICENSED MATERIAL", consisting of the graphic
         representations of the following:

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         Such characters and depictions of such characters, and such still
         scenes and accompanying design elements, as may be designated by
         Disney, from those Disney properties as are licensed hereunder (the
         "Properties") and are the subject of a written Schedule(s) attached
         hereto and incorporated herein by this reference, pursuant to such
         specifications as are set forth in the applicable Schedule(s) for the
         Properties licensed hereunder. At the time of execution of this
         Agreement, there is one (1) Schedule attached hereto; and

                  (2)      "TRADEMARKS" (which is deemed to read "Trade marks"
         if applicable) consisting of "WALT DISNEY", "DISNEY", the brand name(s)
         (if any) and logo(s) (if any) of the Properties in which Licensed
         Material included in Paragraph 1.F.(1) above appears, and such other
         marks as are licensed hereunder, pursuant to the specifications stated
         in the applicable Schedule. Licensee acknowledges and agrees that the
         "Disney" name may only be used as expressly approved by Disney under
         this Agreement.

         G.       "LAWS" means any and all applicable laws, rules, and
         regulations, including but not limited to, local and national laws,
         rules and regulations, treaties, voluntary industry standards,
         association laws, codes or other obligations pertaining to the grant
         and exercise of the license granted herein and to any of Licensee's
         activities under this Agreement, including but not limited to, those
         applicable to any tax, and to the manufacture, pricing, sale, or
         distribution of the Articles.

         H.       "MANUFACTURER" means any of Licensee's third-party
         manufacturers, factories, suppliers and facilities (and their
         sub-manufacturers, factories, suppliers and facilities), which
         reproduce or use the Licensed Material, the Trademarks, or both, on
         Articles, components of Articles, labels, hang-tags, packaging, or any
         other item related to the Articles, or which assemble the Articles, or
         which assemble a final product which includes one or more Articles.

         I.       "MARKETING DATE" means the date(s) specified on the applicable
         Schedule by which the specified Article(s) shall be available for
         purchase in commercial quantities by the public at the retail outlets
         authorized pursuant to Paragraph 2.A.

         J.       "NET INVOICED BILLINGS" constitute the basis upon which
         Royalties (as defined below) are calculated under this Agreement. Net
         Invoiced Billings do not include invoiced charges for transportation of
         Articles within the Territory which are separately identified on the
         sales invoice, or sales taxes, or any applicable VAT. Net Invoiced
         Billings is defined as actual invoiced billings (i.e., sales quantity
         multiplied by Licensee's selling price) for Articles sold, less
         Allowable Deductions. "Allowable Deductions" means:

                  (1)      volume discounts, defined as a lower initial selling
         price given solely in exchange for the purchase of Articles over a
         specified volume level; and

                  (2)      other discounts from the invoice price (or
         post-invoice credits) unilaterally imposed in the regular course of
         business by Licensee's customers, so long as Licensee documents such
         discounts (or credits) to Disney's satisfaction. In the event a
         documented unilateral discount (or credit) is taken with respect to
         combined


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         sales of Articles and other products not licensed by Disney, and
         Licensee cannot document the portion of the discount (or credit)
         applicable to the Articles, Licensee may apply only a pro rata portion
         of the discount (or credit) to the Articles. Unilateral discounts or
         credits are never deductible if they represent items referenced below
         in Paragraph 1.J.(3). Returns are not covered under this Paragraph 1.J.
         (see Paragraph 1.N.(6)).

                  (3)      No other discounts or allowances are permitted under
         this Agreement. The following list illustrates the types of discounts
         and allowances that are not Allowable Deductions, whether granted on
         sales invoices or unilaterally imposed as discounts or as post-invoice
         credits: cash discounts granted as terms of payment; early payment
         discounts; allowances or discounts relating to advertising; mark down
         allowances; new store allowances; defective goods allowances or
         allowances taken by customers in lieu of returning goods; shrinkage
         allowances, costs and expenses incurred, and allowances or discounts
         voluntarily given, in connection with manufacturing, importing, selling
         or advertising Articles; listing/slotting fees or allowances; retailer
         partnership agreements; promotion allowances; freight costs
         incorporated in the selling price; and uncollectible accounts. The
         foregoing is not an exhaustive list of disallowed deductions, and other
         allowances or discounts that are in the nature of, or similar to, the
         foregoing examples likewise shall not qualify as Allowable Deductions.
         The only Allowable Deductions are those set forth in Paragraphs 1.J.(1)
         and (2). If Licensee wishes to take a deduction not identified above,
         it is Licensee's obligation to obtain Disney's prior written approval
         of such item before taking it as a deduction under Paragraph 1.J.

         K.       "PROMOTION COMMITMENT" means the following sum(s) which
         Licensee agrees to spend in the following way(s), in accordance with
         the provisions of Paragraph 18.A.:

                  [     ]

         L.       "RENEWAL OPTION" means the option to extend this Agreement for
         a consecutive [    ] period, in accordance with Paragraph 2.F.

         M.       "RETAILER" means independent and chain retail outlets which
         have storefronts and business licenses, and which customers walk into,
         not up to. The following do not qualify as authorized sales outlets for
         Articles under this Agreement under any circumstances: swap meets, flea
         markets, street peddlers, unauthorized kiosks, and the like.

         N.       "ROYALTIES" means a copyright royalty (no royalty is
         chargeable for use of the Trademarks) in the amounts set forth below in
         Paragraphs 1.N.(l)(a) and (b), and Royalties shall be further governed
         by the provisions contained in Paragraphs 1.N.(2)-(8):

                  (1)      (a) Licensee agrees to pay Royalties at the rate set
         forth on the applicable Schedule based on Net Invoiced Billings for
         "Landed Sales" of Articles. Landed Sales occur when Licensee bears the
         cost of transportation and, if applicable, importation, of the Articles
         to and within the country of sale; and

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                           (b)      Licensee agrees to pay Royalties at the rate
         set forth on the applicable Schedule based on Net Invoiced Billings for
         "F.O.B. Sales" of Articles. F.O.B. Sales occur when Licensee's customer
         bears the cost of transportation and, if applicable, importation, of
         the Articles to and within the country of sale (e.g., the customer buys
         the Articles "F.O.B. Hong Kong", or "F.O.B. Manufacturer"); F.O.B.
         Sales also occur when the customer bears most of such cost, and
         Licensee bears a portion of such cost.

                  (2)      The sums paid to Disney as Royalties on any sales to
         Licensee's Affiliates shall be no less than the sums paid on sales to
         customers not affiliated with Licensee; however, if the Affiliate is
         authorized to sell and is selling the Article to consumers, or for
         resale to consumers, Disney's Royalties shall be calculated on the
         Affiliate's Net Invoiced Billings to customers.

                  (3)      All sales of Articles shipped to a customer outside
         the Territory pursuant to a distribution permission shall bear a
         Royalty at the rate for F.O.B. Sales. However, sales of Articles to
         Disney's Affiliates outside the Territory shall bear a Royalty at the
         rate for Landed Sales.

                  (4)      No Royalties are payable on the mere manufacture of
         Articles.

                  (5)      The full Royalty percentage shall be payable on
         close-out or other deep discount sales of Articles, including sales to
         employees.

                  (6)      Royalties reported on sales of Articles which have
         been returned to Licensee for credit or refund and on which a refund
         has been made or credit memo issued may be credited against Royalties
         due. The credit shall be taken in the Royalty Payment Period in which
         the refund is given or credit memo issued. Unused credits may be
         carried forward, but in no event shall Licensee be entitled to a refund
         of Royalties.

                  (7)      "ROYALTY PAYMENT PERIOD" means each calendar
         quarterly period during the Term and during the sell-off period, if
         granted.

                  (8)      Licensee shall report sales of Articles to Disney's
         licensees or Disney's Affiliates' licensees on Licensee's statement but
         Licensee will not be required to pay Disney Royalties on such sales, so
         long as the purchasing licensees are licensed to sell the Articles and
         are paying Disney royalties on the resales on such Articles. Double
         royalties are not owed to Disney on these sales.

         O.       "SAMPLES" means the number of samples stated in the applicable
         Schedule from the first production run of each supplier of each SKU of
         each Article.

         P.       "SCHEDULE" means each separate "Schedule to License Agreement"
         entered into between Disney and Licensee, the terms of each of which
         are hereby incorporated herein by reference and made a part hereof as
         though fully set forth. Each Schedule attached hereto shall state any
         and all contract terms as are specific to the Property(ies), Articles,
         Territory, or other matter set forth on each such Schedule.


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         Q.       "TERM" of this Agreement means the period commencing as of
         January 1, 2003, and ending upon the expiration of the latest Schedule
         entered into hereunder. The term applicable for each specific Schedule
         attached hereto shall be the period commencing as of the Effective Date
         and ending on the Termination Date stated on the applicable Schedule.

         R.       "TERRITORY" means the countries, regions or other geographic
         designations specified on each applicable Schedule.

         S.       "WHOLESALER" means a seller of products to retailers, not
         consumers, and includes the term "distributor".

2.       RIGHTS GRANTED

         A.       (1)      In consideration for Licensee's promise to pay and
         Licensee's payment of all monetary obligations required hereunder, and
         Licensee's performance of all obligations required of Licensee
         hereunder for each Schedule entered into between Disney and Licensee,
         Disney grants Licensee the non-exclusive rights during the term of the
         relevant Schedule, and only within the Territory to:

                           (a)      reproduce the subject Licensed Material only
         on or in connection with the Articles;

                           (b)      use the specified Trademarks in such manner
         as may be approved when each SKU of the Articles is approved hereunder,
         and only on or in connection with the Articles;

                           (c)      manufacture, distribute for sale and sell
         the Articles as authorized by this Paragraph 2; and

                           (d)      reproduce and use the approved Intellectual
         Property on containers, packaging and display material for the
         Articles, and in advertising for the Articles.

                  (2)      Licensee is authorized to sell the Articles only to
         authorized customers in the Territory as specified herein or in the
         relevant Schedule, as applicable.

                           (a)      Licensee also may sell the Articles to
         authorized customers for resale through the pre-approved mail order
         catalogs listed on the Catalog List(s) attached to this Agreement, and
         Licensee shall pay Royalties on such sales at the rate specified for
         Retailers in the applicable Schedule. If Licensee wishes to sell the
         Articles to customers for resale through mail order catalogs other than
         those listed on the Catalog List attached hereto, Licensee must obtain
         Disney's prior written consent in each instance. However, Licensee may
         sell to Retailers which sell predominantly at retail, but which include
         the Articles in their mail order catalogs.

                           (b)      Licensee also may sell the Articles to
         authorized Etailers for resale to consumers by computer online selling,
         and Licensee shall pay Royalties on such sales at the rate specified
         for Retailers in the applicable Schedule. From time to time, Licensee
         may request from Disney the then current list of pre-approved Etailers,



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         which are the only Etailers to which Licensee is automatically
         authorized to sell Articles. Authorized Etailers may display, promote
         and sell Articles on their online venues, subject to Disney's
         "eCommerce Guidelines", attached hereto and incorporated herein by this
         reference. Sales may only be made to consumers physically located in
         the Territory. Any Etailer which violates Disney's eCommerce Guidelines
         shall be deleted from the list of approved Etailers, and Licensee may
         not sell Articles to such Etailer after notice from Disney.

                           (c)      In addition to the online selling permitted
         by authorized Etailers, Articles approved by Disney may be displayed
         and promoted on Disney-controlled online venues, only within the
         Territory. Articles approved by Disney also may be displayed and
         promoted on Licensee's own online venue, and may be displayed, promoted
         and sold on authorized Retailers' online venues, subject to Disney's
         eCommerce Guidelines.

                           (d)      Licensee is expressly prohibited from
         selling, using or providing the Articles as follows:

                                    (i)      Licensee shall not sell the
         Articles by direct marketing methods, which includes but is not limited
         to, direct mail and door-to-door solicitation. Licensee shall not sell
         the Articles to Retailers selling merchandise on a duty-free basis, or
         to Wholesalers for resale to such Retailers, unless such Retailer or
         Wholesaler has a then current license agreement with Disney or any of
         Disney's Affiliates permitting it to make such duty-free sales.

                                    (ii)     Licensee shall not sell or
         otherwise provide Articles for use as premiums (including those in
         purchase-with-purchase promotions), promotions, giveaways,
         fund-raisers, or entries in sweepstakes, or through unapproved direct
         marketing methods, including but not limited to, home shopping
         television programs, or to customers for inclusion in another product.

                                    (iii)    Licensee shall not sell Articles to
         any customer which Licensee knows or reasonably should know engages in
         illegal business practices or ethically questionable distribution
         methods.

                                    (iv)     Licensee shall not give away or
         donate Articles to Licensee's accounts or other persons for the purpose
         of promoting sales of Articles, except for minor quantities or samples
         which are not for onward distribution, and in any case never exceed
         one-tenth of a percent (0.1%) of all Articles sold on an annual basis.

         B.       All rights not expressly granted to Licensee herein are
         reserved to Disney. Without limitation of the generality of the
         foregoing reservation of rights, and by way of example for the
         avoidance of doubt, nothing in this Agreement shall be deemed to
         restrict in any way (i) Disney's or its Affiliates' right to enter into
         promotional license agreements with third-party promotion partners for
         the manufacture, sale or distribution of premium items of merchandise
         that promote the Properties, and (ii) the rights of Disney's or its
         Affiliates' owned, operated or licensed retail stores and theme


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         parks to source and sell items of merchandise which may be similar or
         identical to the Articles licensed under this Agreement.

         C.       Nothing contained herein shall preclude Licensee from selling
         Articles to Disney or to any of Disney's Affiliates, or to Licensee's
         or Disney's employees, subject to the payment to Disney of Royalties on
         such sales.

         D.       Nothing contained in this Agreement shall be deemed to imply
         any restriction on Licensee's freedom and that of Licensee's customers
         to sell the Articles at such prices as Licensee or they shall
         determine.

         E.       Licensee recognizes and acknowledges the vital importance to
         Disney of the characters and other proprietary material Disney owns and
         creates, and the association of the Disney name with them. In order to
         prevent the denigration of Disney's products and the value of their
         association with the Disney name, and in order to ensure the dedication
         of Licensee's efforts to preserve and maintain that value, Licensee
         agrees that, during the Term and any extension hereof, Licensee will
         not manufacture or distribute any merchandise embodying or bearing any
         artwork or other representation which Disney determines, in Disney's
         reasonable discretion, is confusingly similar to Disney's characters or
         other proprietary material.

         F.       Provided that Royalties earned and paid to Disney during the
         period commencing January 1, 2003 through [ ], meet or exceed $[ ], and
         further provided that Licensee has complied with all terms and
         conditions of the Agreement, this Agreement shall be extended for [ ]
         commencing [ ] and ending [ ] (the "Renewal Period"), unless Licensee
         notifies Disney in writing by [ ] that it declines the Renewal Period.
         Certain of the terms and conditions for the Renewal Period are already
         set forth in this Paragraph 2.F. and sections 8 and 9 of Schedule 1;
         any new terms and conditions mutually agreed upon will be negotiated in
         a commercially reasonable manner and specified by amendment to the
         Agreement.

3.       ADVANCE

         A.       Licensee agrees to pay the Advance, which shall be on account
         of Royalties to accrue during the term for the relevant Schedule only,
         and only with respect to sales in the Territory; provided, however,
         that if any part of the Advance is specified as applying to any period
         less than the entire term of the subject Schedule, such part shall be
         on account of Royalties to accrue during such lesser period only. If
         said Royalties should be less than the Advance, no part of the Advance
         shall be repayable.

         B.       Royalties accruing during any sell-off period or extension of
         the Term or any term of any relevant Schedule shall not be offset
         against the Advance unless otherwise agreed in writing. Royalties
         accruing during any extension of the Term or any other term shall be
         offset only against an advance paid with respect to such extended term.

         C.       In no event shall Royalties accruing by reason of any sales to
         Disney or any of Disney's Affiliates or by reason of sales outside the
         Territory pursuant to a distribution permission be offset against the
         Advance for any given Schedule or any subsequent advance.

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4.       GUARANTEE

         A.       Licensee shall, with Licensee's statement for each Royalty
         Payment Period ending on a date indicated in Paragraph 1.E, hereof
         defining "Guarantee" and in each relevant Schedule, or upon termination
         if the Agreement or the relevant Schedule specifying a Guarantee is
         terminated prior to the end of the Term or the stated term of such
         Schedule, as applicable, pay Disney the amount, if any, by which
         cumulative Royalties paid with respect to sales in the Territory during
         any period or periods covered by the subject Guarantee provision, or
         any Guarantee provision contained in any agreement extending the Term
         hereof, fall short of the amount of the Guarantee for such period.

         B.       On each Schedule, Advances applicable to Royalties due on
         sales in the period to which the Guarantee relates shall apply towards
         meeting the Guarantee for that Schedule.

         C.       In no event shall Royalties paid with respect to sales to
         Disney or to any of Disney's Affiliates, or with respect to sales
         outside the Territory pursuant to a distribution permission, apply
         towards the meeting of any Guarantee or any subsequent guarantee. If
         any sell-off period is granted under this Agreement, Royalties
         generated from sales during such period may not be applied towards the
         meeting of any Guarantee.

5.       PRE-PRODUCTION APPROVALS

         A.       As early as possible, and in any case before commercial
         production of any Article, Licensee shall submit to Disney for Disney's
         review and written approval (to utilize such materials in preparing a
         pre-production sample) all concepts, all preliminary and proposed final
         artwork of the Intellectual Property, and all three-dimensional models
         which are to appear on or in any and all SKUs of the Article.
         Thereafter, Licensee shall submit to Disney for Disney's written
         approval a pre-production sample of each SKU of each Article. Disney
         shall endeavor to respond to such requests within a reasonable time,
         but such approvals should be sought as early as possible in case of
         delays. In addition to the foregoing, as early as possible, and in any
         case no later than sixty (60) days following written conceptual
         approval, Licensee shall supply to Disney for Disney's use for internal
         purposes, a mock-up, prototype or pre-production sample of each SKU of
         each Article on or in connection with which the Intellectual Property
         is used. Licensee acknowledges that Disney may not approve concepts or
         artwork submitted near the end of the term of the relevant Schedule, or
         concepts or artwork perceived to be for selling periods beyond the
         applicable Termination Date. Any pre-production approval Disney may
         give will not constitute or imply a representation or belief by Disney
         that such materials comply with any applicable Laws.

         B.       Approval or disapproval shall lie solely in Disney's
         discretion, and any SKU of any Article not so approved in writing shall
         be deemed unlicensed and shall not be manufactured or sold. If any
         unapproved SKU of any Article is being sold, Disney may, together with
         other remedies available to Disney, including but not limited to,
         immediate termination of this Agreement, by written notice require such
         SKU of such

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         Article to be immediately withdrawn from the market. Any modification
         of any approved SKU of an Article, including, but not limited to,
         change of materials, color, design or size of the representation of the
         Intellectual Property must be submitted in advance for Disney's written
         approval as if it were a new SKU of an Article. Approval of any SKU of
         an Article which uses particular artwork does not imply approval of
         such artwork for use with a different Article. The fact that artwork
         has been taken from a Disney publication or from a previously approved
         Article does not mean that its use will necessarily be approved in
         connection with an Article licensed hereunder.

         C.       If Licensee submits for approval artwork from an article or
         book manufactured or published by another licensee of Disney's or of
         any of Disney's Affiliates, Licensee must advise Disney in writing of
         the source of such artwork. If Licensee fails to do so, any approval
         which Disney may give for use by Licensee of such artwork may be
         withdrawn by giving Licensee written notice thereof, and Licensee may
         be required by Disney not to sell Articles using such artwork.

         D.       If Disney has supplied Licensee with forms for use in applying
         for approval of artwork, models, pre-production and production samples
         of Articles, Licensee shall use such forms when submitting anything for
         Disney's approval.

         E.       If and as applicable, the likenesses and product application
         of the characters used on or in connection with the Articles are
         subject to any third party approvals Disney deems necessary to obtain,
         Disney will act as the liaison with such third parties during the
         approval process.

6.       APPROVAL OF PRODUCTION SAMPLES

         A.       Before shipping an Article to any customer, Licensee agrees to
         furnish to Disney, from the first production run of each supplier of
         each of the Articles, for Disney's approval of all aspects of the
         Article in question, the number of Samples with packaging which is set
         forth on the Schedule(s) attached hereto, which shall conform to the
         approved artwork, three-dimensional models and pre-production sample.
         Approval or disapproval of the artwork as it appears on any SKU of the
         Article, as well as of the quality of the Article, shall lie in
         Disney's sole discretion and may, among other things, be based on
         unacceptable quality of the artwork or of the Article as manufactured.
         Any SKU of any Article not so approved shall be deemed unlicensed,
         shall not be sold and, unless otherwise agreed by Disney in writing,
         shall be destroyed. One of Licensee's officers shall attest to such
         destruction in a certificate, and shall provide Disney with a copy of
         each such certificate. Production samples of Articles for which Disney
         has approved a pre-production sample shall be deemed approved, unless
         within twenty (20) days of Disney's receipt of such production sample
         Disney notifies Licensee to the contrary. Any approval of a production
         sample by Disney will not constitute or imply a representation or
         belief by Disney that such production sample complies with any
         applicable Laws.

         B.       Licensee agrees to make available at no charge such additional
         samples of any or all SKUs of each Article as Disney may from time to
         time reasonably request for


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         the purpose of comparison with earlier samples, or for Disney's
         anti-piracy efforts, or to test for compliance with applicable Laws.

         C.       Licensee acknowledges that Disney may disapprove any SKU of an
         Article or a production run of any SKU of an Article because the
         quality is unacceptable to Disney, and accordingly, Disney recommends
         that Licensee submit production samples to Disney for approval before
         committing to a large original production run or committing to purchase
         a large shipment from a new supplier.

         D.       No modification of an approved production sample shall be made
         without Disney's further prior written approval. All SKUs of Articles
         being sold must conform in all respects to the approved production
         sample. It is understood that if in Disney's reasonable judgment the
         quality of any SKU of an Article originally approved has deteriorated
         in later production runs, or if the SKU has otherwise been altered,
         Disney may, in addition to other remedies available to Disney, by
         written notice require such SKU of the Article to be immediately
         withdrawn from the market.

         E.       The rights granted hereunder do not permit the sale of
         "seconds" or "irregulars". All Articles not meeting the standard of
         approved samples shall be destroyed or all Intellectual Property shall
         be removed or obliterated therefrom.

         F.       Licensee is responsible for the consistent quality and safety
         of the Articles and their compliance with applicable Laws. Disney will
         not unreasonably object to any change in the design of an Article or in
         the materials used in the manufacture of the Article or in the process
         of manufacturing the Articles which Licensee advises Disney in writing
         is intended to make the Article safer or more durable.

         G.       Disney shall have the right, by written notice to Licensee, to
         require modification of any SKU of any Article approved by Disney under
         this or any previous agreement between the parties pertaining to the
         Intellectual Property. Likewise, if the Term of this Agreement is
         extended by mutual agreement, Disney shall have the right, by written
         notice to Licensee, to require modification of any SKU of any Article
         approved by Disney under this Agreement. It is understood that there is
         no obligation upon either party to extend the Agreement.

         H.       If Disney notifies Licensee of a required modification under
         Paragraph 6.G. with respect to any SKU of a particular Article, such
         notification shall advise Licensee of the nature of the changes
         required, and Licensee shall not accept any order for any such Article
         until the subject SKU has been resubmitted to Disney with such changes
         and Licensee has received Disney's written approval of the Article as
         modified. However, Licensee may continue to distribute Licensee's
         inventory of the previously approved Articles until such inventory is
         exhausted (unless such Articles are dangerously defective or are
         alleged to be violative of any third party rights, as determined by
         Disney).

         I.       Upon Disney's request, Licensee agrees to give Disney written
         notice of the first ship date for each Article.

         J.       If Disney has inadvertently approved a concept, pre-production
         sample, or production sample of a product which is not included in the
         Articles under this


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         Agreement, or if Disney has inadvertently approved an Article using
         artwork or trademarks not included in the Agreement, such approval may
         be revoked at any time without any obligation whatsoever on Disney's
         part to Licensee. Any such product as to which Disney's approval is
         revoked shall be deemed unauthorized and shall not be further
         distributed or sold by or for Licensee.

7.       APPROVAL OF PACKAGING, PROMOTIONAL MATERIAL, AND ADVERTISING

         A.       All containers, packaging, display material, promotional
         material, catalogs, and press releases relating to the Articles, and
         all advertising relating to the Articles, including but not limited to,
         television, radio, or internet advertising, must be submitted to Disney
         and receive Disney's written approval before use. To avoid unnecessary
         expense if changes are required, Disney's approval thereof should be
         procured when such is still in rough or storyboard format. Disney shall
         endeavor to respond to requests for approval within a reasonable time.
         Approval or disapproval shall lie in Disney's sole discretion, and the
         use of unapproved containers, packaging, display material, promotional
         material, catalogs, advertising or press releases is prohibited.
         Disney's approval of any containers, packaging, display material,
         promotional material, catalogs, advertising or press releases under
         this Agreement will not constitute or imply a representation or belief
         by Disney that such materials comply with any applicable Laws, which
         compliance shall be solely Licensee's responsibility. Whenever Licensee
         prepares catalog sheets or other printed matter containing
         illustrations of Articles, Licensee will furnish to Disney five (5)
         copies thereof when they are published.

         B.       If Disney has supplied Licensee with forms for use in applying
         for approval of materials referenced in this Paragraph 7, Licensee
         shall use such forms when submitting materials for Disney's approval.

         C.       Disney has designed character artwork or a brand name logo(s),
         or both, to be used by all licensees in connection with the packaging
         of all merchandise using the Intellectual Property, and, if applicable,
         on hang tags and garment labels for such merchandise. Disney will
         supply Licensee with reproduction artwork thereof, and Licensee agrees
         to use such artwork or logo(s) on the packaging of the Articles, and,
         if applicable, on hang tags and garment labels, which Licensee will
         have printed and attached to each Article at Licensee's cost. Disney
         recommends that Licensee source the hang tags and garment labels from
         Disney's authorized manufacturer (if any) of preapproved hang tags and
         garment labels, the name of which will be provided to Licensee upon
         request. However, Licensee may use another manufacturer for the
         required hang tags and garment labels if the hang tags and garment
         labels manufactured are of equivalent quality and are approved by
         Disney in accordance with Disney's usual approval process. The
         packaging may be different for different distribution channels, and
         Licensee agrees to use the packaging designated by Disney for the
         applicable distribution channel.

8.       ARTWORK

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         Licensee shall pay Disney, within thirty (30) days of receiving an
         invoice therefor, for Style Guides and for artwork done at Licensee's
         request by Disney or third parties under contract to Disney in the
         development and creation of Articles, display, packaging or promotional
         material (including any artwork which in Disney's opinion is necessary
         to modify artwork initially prepared by Licensee and submitted to
         Disney for approval, subject to Licensee's prior written approval for
         the modification to be done by Disney) at Disney's then prevailing
         commercial art rates, not reduced by any VAT, if applicable. Estimates
         of artwork charges are available upon request. While Licensee is not
         obligated to utilize the services of Disney's Art Department, Licensee
         is encouraged to do so in order to maximize the attractiveness of the
         Articles and to minimize delays which may occur if outside artists do
         renditions of which Disney cannot approve. Artwork will be returned to
         Licensee by overnight courier, at Licensee's cost (unless other
         arrangements are made).

9.       PRINT, RADIO, INTERNET OR TV ADVERTISING

         Licensee will obtain all approvals necessary in connection with print,
         radio, internet or television advertising, if any, which Disney may
         authorize. Licensee represents and warrants that all advertising and
         promotional materials shall comply with all applicable Laws. Disney's
         approval of copy or storyboards for such advertising will not
         constitute or imply a representation or belief by Disney that such copy
         or storyboards comply with any applicable Laws; ensuring their
         compliance with all applicable Laws shall be solely Licensee's
         responsibility. This Agreement does not grant Licensee any rights to
         use the Intellectual Property in animation. Licensee may not use any
         animation or live action footage from the Property from which the
         Intellectual Property comes without Disney's prior written approval in
         each instance. In the event Disney approves the use of film clips of
         the Property from which the Intellectual Property comes, for use in a
         television commercial, Licensee shall be responsible for any re-use
         fees which may be applicable, including SAG payments for talent. No
         reproduction of the film clip footage shall be made except for
         inclusion, as approved by Disney, in such commercial and there shall be
         no modifications of the film clip footage. All film clip footage shall
         be returned to Disney immediately after its inclusion in such
         commercial. Disney shall have the right to prohibit Licensee from
         advertising the Articles by means of television, billboards, or both.
         Such right shall be exercised within Disney's absolute discretion,
         including without limitation for reasons of overexposure of the
         Licensed Material.

10.      LICENSEE NAME AND ADDRESS ON ARTICLES

         A.       Licensee's name, trade name (or Licensee's trademark which
         Licensee has advised Disney in writing that Licensee is using) and
         Licensee's address (at least city and state or province) will appear on
         permanently affixed labeling on each Article and, if the Article is
         sold to the public in packaging or a container, printed on such
         packaging or a container so that the public can identify the supplier
         of the Article. On soft goods "permanently affixed" shall mean sewn on.
         RN or CA numbers do not constitute a sufficient label under this
         paragraph. Licensee also must ensure that the Articles comply with any
         labeling required by any applicable Customs Agency (e.g., country of
         origin).

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         B.       Licensee shall advise Disney in writing of all trade names or
         trademarks Licensee wishes to use on Articles being sold under this
         license. Licensee may sell the Articles only under mutually agreed upon
         trade names or trademarks.

11.      COMPLIANCE WITH APPROVED SAMPLES AND APPLICABLE LAWS AND STANDARDS

         A.       Licensee covenants that each Article and component thereof
         distributed hereunder shall be of good quality and free of defects in
         design, materials and workmanship, and shall comply with all applicable
         Laws, and such specifications, if any, as may have been specified in
         connection with this Agreement (e.g., Disney's Apparel Performance
         Specification Manual, if the Articles are items of apparel), and shall
         conform to the Sample thereof approved by Disney. Licensee covenants
         that it will comply with all applicable Laws in performing this
         Agreement, including but not limited to, those pertaining to the
         manufacture, pricing, sale and distribution of the Articles.

                  (1)      Both before and after Licensee puts Articles on the
         market, Licensee shall follow reasonable and proper procedures for
         testing that Articles comply with all applicable product safety Laws,
         and shall permit Disney's designees to inspect testing and quality
         control records and procedures, and to test the Articles for compliance
         with product safety and other applicable Laws; however, Disney shall
         not be required to conduct any such testing. Licensee agrees to
         promptly reimburse Disney for the actual costs of such testing.
         Licensee shall also give due consideration to any recommendations by
         Disney that Articles exceed the requirements of applicable Laws.
         Articles not manufactured, packaged or distributed in accordance with
         applicable Laws shall be deemed unapproved, even if previously approved
         by Disney, and shall not be shipped unless and until they have been
         brought into full compliance therewith.

         B.       Without limiting the foregoing, Licensee covenants on behalf
         of Licensee's own manufacturing facilities to comply with the Code of
         Conduct for Manufacturers, attached hereto and incorporated herein by
         this reference, in the manufacturing, packaging and distribution of the
         Articles. Licensee further agrees to require all Manufacturers to
         covenant to comply with the Code of Conduct for Manufacturers in the
         manufacturing, packaging and distribution of the Articles, by signing
         the Manufacturer's Agreement (referenced in Paragraph 12).

                  (1)      The Code of Conduct for Manufacturers shall not be
         interpreted to require Licensee or its Manufacturers to violate any
         applicable Law.

                  (2)      As provided in the Code of Conduct for Manufacturers,
         Licensee and the Manufacturers agree that Disney and its designated
         agents (including third parties) may engage in monitoring activities to
         confirm compliance with this Paragraph 11. Licensee agrees to promptly
         reimburse Disney for the reasonable cost of inspections performed
         pursuant to this Paragraph 11 when any of Licensee's manufacturing
         facilities or any Manufacturer does not pass the inspection(s). The
         amount reimbursed will not be prorated in the event the Manufacturer is
         also used by other licensees or vendors.

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                  (3)      Licensee agrees to be bound by the Code of Conduct
         for Licensees, attached hereto and incorporated herein by this
         reference. This includes, but is not limited to, taking appropriate
         steps, in consultation with Disney, and as required by Disney's
         Compliance Program for licensees, to develop, implement and maintain
         procedures to evaluate and monitor the Manufacturers it uses to
         manufacture the Articles or components thereof, and to ensure
         compliance with Paragraph 11. B., including but not limited to,
         unannounced on-site inspections of manufacturing, packaging and
         distribution facilities and employer-provided housing, reviews of books
         and records relating to employment matters and private interviews with
         employees. Licensee acknowledges that Disney may require a pre-approval
         compliance inspection of any Manufacturers Licensee wishes to use to
         produce the Articles, components, or related items.

12.      MANUFACTURE OF ARTICLES BY THIRD PARTY MANUFACTURERS

         A.       Licensee agrees to supply Disney with the names and addresses
         of all of its own manufacturing facilities for the Articles. If
         Licensee at any time desires to use a third-party Manufacturer to
         produce the Articles, components of Articles, or related items bearing
         Licensed Material, Trademarks, or both, whether the third party is
         located within or outside the Territory, Licensee must, as a condition
         to the continuation of this Agreement, notify Disney of the accurate
         name and complete address of such Manufacturer and the Articles,
         components, or related items, and obtain Disney's prior written
         permission to do so. If Disney is prepared to grant permission, Disney
         will do so if each of Licensee's Manufacturers signs a Manufacturer's
         Agreement in a form which Disney will furnish to Licensee, and Disney
         receives all such agreements properly signed. Disney also may require a
         pre-approval compliance inspection of a Manufacturer prior to the
         production of any Articles, components, or other items involved.
         Licensee must immediately notify Disney if Licensee is no longer using
         a Manufacturer to manufacture the Articles, components, or related
         items.

         B.       If any such Manufacturer utilizes Licensed Material or
         Trademarks for any unauthorized purpose, Licensee shall cooperate fully
         in bringing such utilization to an immediate halt. If, by reason of
         Licensee's not having supplied the above mentioned agreements to Disney
         or not having given Disney the name of any Manufacturer, Disney makes
         any representation or takes any action and is thereby subjected to any
         penalty or expense, Licensee will fully compensate Disney for any cost
         or loss Disney sustains (in addition to any other legal or equitable
         remedies available to Disney).

         C.       If any Manufacturer fails to pass a compliance inspection as
         referenced in Paragraph 11, and thereafter fails to remedy the cited
         failure(s) within the time designated by Disney, or if the Manufacturer
         otherwise breaches the Manufacturer's Agreement, the Manufacturer's
         Agreement for such Manufacturer may be terminated immediately by
         Disney, and Licensee shall not thereafter use such Manufacturer to
         manufacture Articles, components, or related items. In the case of a
         pre-approval compliance inspection, if a Manufacturer fails to pass the
         compliance inspection, and thereafter fails to remedy the cited
         failure(s) within the time designated by Disney, Licensee shall not use
         such Manufacturer to produce Articles, components or related items. If
         Licensee fails to notify Disney that it has ceased using a particular


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         Manufacturer, and Disney or its designated agent conducts a compliance
         inspection of such Manufacturer, Licensee remains obligated to work
         with the Manufacturer to remedy any cited failure(s), or, in the
         alternative, the Manufacturer's Agreement shall be deemed terminated
         for purposes of Paragraph 28.B. (11), and Licensee shall promptly
         reimburse Disney for the reasonable cost of the compliance inspection.

13.      DISNEY OWNERSHIP OF ALL RIGHTS IN LICENSED MATERIAL

         Licensee acknowledges that the copyrights and all other proprietary
         rights in and to Licensed Material are exclusively owned by and
         reserved to Disney or its licensors, if applicable to any Property.
         Licensee shall neither acquire nor assert copyright ownership or any
         other proprietary rights in the Licensed Material or in any derivation,
         adaptation, or variation thereof. Without limiting the foregoing,
         Licensee hereby assigns to Disney all of Licensee's worldwide right,
         title and interest in the Licensed Material and in any material objects
         containing, consisting of, or to the extent that they incorporate
         Licensed Material, or other adaptations, compilations, collective
         works, derivative works, or variations of Licensed Material, heretofore
         or hereafter created by or for Licensee or any of Licensee's
         Affiliates. All such new materials shall be included in the definition
         of "Licensed Material" under this Agreement. The foregoing assignment
         to Disney of material objects shall not include that portion of
         Licensee's displays, catalogs, or promotional material not containing
         Licensed Material, or the physical items constituting the Articles,
         unless such items are in the shape of the Licensed Material. If any
         third party makes or has made any contribution to the creation of any
         new materials which are included in the definition of Licensed Material
         under this Paragraph 13, Licensee agrees to obtain from such party a
         full assignment of rights so that the foregoing assignment by Licensee
         shall vest full rights to such new materials in Disney. Licensee
         further covenants that any such new materials created by Licensee or by
         any third party Licensee has engaged are original to Licensee or such
         third party and do not violate the rights of any other person or
         entity; this covenant regarding originality shall not extend to any
         materials Disney supplies to Licensee, but does apply to all materials
         Licensee or Licensee's third party contractors may add thereto. With
         regard to any molds, plates and other items used to reproduce the
         Intellectual Property, Licensee agrees that it will never sell or
         transfer such molds, plates, or other items to any third party without
         Disney's prior written consent.

14.      COPYRIGHT NOTICE

         As a condition to the grant of rights hereunder, each Article and any
         other matter containing Licensed Material shall bear a properly located
         permanently affixed copyright notice in Disney's name (e.g., "(C)
         Disney"), or such other notice as Disney specifies to Licensee in
         writing. Licensee will comply with such instructions as to form,
         location and content of the notice as Disney may give from time to
         time. Licensee will not, without Disney's prior written consent, affix
         to any Article or any other matter containing Licensed Material a
         copyright notice in any other name. If through inadvertence or
         otherwise a copyright notice on any Article or other such matter should
         appear in Licensee's name or the name of a third party, Licensee hereby
         agrees to assign to Disney the copyright represented by any such
         copyright notice in Licensee's name and, upon request, cause the
         execution and delivery to Disney of

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         whatever documents are necessary to convey to Disney that copyright
         represented by any such improper copyright notice. If by inadvertence
         or otherwise, an improper copyright notice appears on, or if a proper
         copyright notice is omitted from, any Article or other matter
         containing Licensed Material, Licensee agrees at Licensee's expense to
         use all reasonable efforts to correct the error on all such Articles or
         other matter in process of manufacture or in distribution. Licensee
         agrees to advise Disney promptly and in writing of the steps being
         taken to correct any such error and to make the corrections on existing
         Articles which can be located.

15.      TRADEMARK RIGHTS AND OBLIGATIONS

         A.       All uses of the Trademarks by Licensee hereunder shall inure
         to Disney's benefit. Licensee acknowledges that Disney (or its
         licensors, if applicable) is the exclusive owner of all the Trademarks,
         and of any trademark incorporating a Trademark or any Licensed
         Material, and the trademark rights created by such uses. Without
         limiting the foregoing, Licensee hereby assigns to Disney all the
         Trademarks, and any trademark incorporating a Trademark or any Licensed
         Material, and the trademark rights created by such uses, together with
         the goodwill attaching to that part of the business in connection with
         which such Trademarks or trademarks are used. Licensee agrees to follow
         Disney's instructions for proper use of the Trademarks and trademarks,
         and to execute and deliver to Disney such documents as Disney requires
         to protect and register the Trademarks and trademarks.

         B.       Licensee agrees not to use any Licensed Material or
         Trademarks, or any trademark incorporating a Trademark or of any
         Licensed Material, on any business sign, business cards, stationery or
         forms (except as licensed herein), or to use any Licensed Material or
         Trademark as the name of Licensee's business or any division thereof,
         unless otherwise agreed by Disney in writing.

         C.       Nothing contained herein shall prohibit Licensee from using
         Licensee's own trademarks (as mutually agreed with Disney) on the
         Articles, or Licensee's copyright notice on the Articles when the
         Articles contain independent material which is Licensee's property.
         Nothing contained herein is intended to give Disney any rights to, and
         Disney shall not use, any trademark, copyright or patent owned by
         Licensee or used by Licensee under license in connection with the
         Articles which is not derived or adapted from Licensed Material,
         Trademarks, or other materials owned by Disney (or its licensors, if
         applicable).

16.      NON-ASSOCIATION OF OTHER MATERIAL WITH LICENSED MATERIAL

         To preserve Disney's identification with Disney's Licensed Material and
         to avoid confusion of the public, Licensee agrees not to associate
         other characters or licensed properties with the Licensed Material or
         the Trademarks either on the Articles or in their packaging, or,
         without Disney's written permission, on advertising, promotional or
         display materials. If Licensee wishes to use a character which
         constitutes Licensee's trademark on the Articles or their packaging, or
         otherwise in connection with the Articles, Licensee agrees to obtain
         Disney's prior written permission.

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17.      ACTIVE MARKETING OF ARTICLES

         Licensee agrees to manufacture (or have manufactured for Licensee) and
         actively offer for sale all the Articles and to actively exercise the
         rights granted herein. Licensee agrees that by the Marketing Date
         applicable to a particular Article or, if such a date is not specified
         in Paragraph 1.I., by six (6) months from the commencement of the term
         of the applicable Schedule or the date of any applicable amendment,
         shipments to customers of such Article will have taken place in
         sufficient time that such Article shall be available for purchase in
         commercial quantities by the public at the retail outlets in all
         distribution channels authorized pursuant to Paragraph 2.A. In any case
         in which such sales have not taken place or when the Article is not
         then and thereafter available for purchase in commercial quantities by
         the public, Disney may either invoke Disney's remedies under Paragraph
         28, or withdraw such Article from the list of Articles licensed in this
         Agreement, or withdraw the applicable distribution channel, or withdraw
         such Article from the applicable Schedule, without obligation to
         Licensee other than to give Licensee written notice thereof.

18.      PROMOTION COMMITMENT

         A.       Licensee agrees to carry out the Promotion Commitment, as
         defined in Paragraph 1.K. The advertising and promotion activities
         required thereunder to promote the sale of the Articles shall include
         one or more of the following activities:

                  -        point of purchase displays (not including packaging
                           or other individual product costs)

                  -        media advertising

                  -        measurable public relations programs

                  -        sampling

                  -        contests and games approved in advance in writing by
                           Disney

                  -        trade shows, catalog or trade activities, fashion
                           shows

                  -        participation in group promotions organized by Disney

                  -        other activities as agreed in advance in writing with
                           Disney

                  All promotional material is subject to the approval provisions
         of Paragraph 7 hereof.

         B.       For purposes of determining Licensee's satisfaction of the
         Promotion Commitment, all consumer advertising and merchandising costs
         associated with the above-listed activities for the Articles, but not
         including packaging or other individual product costs, will be counted
         toward the requirement; provided, however, that any advertising
         discounts given in connection with cooperative advertising may not be
         included in the calculation.

         C.       One time during each twelve (12) month period during the Term,
         Licensee also shall provide Disney with a statement describing the
         funds theretofore spent and consumer exposure provided as required in
         this Paragraph, together with a description of the manner in which such
         funds were spent, all of which information shall be broken down by
         country within the Territory, and provided in such detail as Disney may
         specify from time to time. Amounts spent in excess of the Promotion


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         Commitment during any Royalty Payment Period may be credited against
         the Promotion Commitment for any other Royalty Payment Period occurring
         in the same twelve month period during the Term. If in any Royalty
         Payment Period Licensee has not satisfied the Promotion Commitment,
         Licensee (i) may carry forward such shortfall into the next succeeding
         Royalty Payment Period (other than in the case of a shortfall in the
         final Royalty Payment Period hereunder, in which case no carry forwards
         shall be permitted), or (ii) shall pay Disney the amount of such
         shortfall as liquidated damages; provided, however, no shortfall (or
         fraction thereof) may be carried forward more than twelve months.
         Licensee acknowledges that its expenditure of the Promotion Commitment
         as provided for herein increases the value of the business from which
         Disney benefits as licensor. Licensee and Disney agree that it is
         impracticable and extremely difficult to fix the actual damages which
         may proximately result from Licensee's failure to fulfill its
         obligation as provided for herein, and Licensee's liability for failure
         to do so shall, for each Royalty Payment Period, be limited to and
         fixed at the sum of an amount equal to the shortfall between the amount
         Licensee actually spends on the Promotion Commitment during such
         Royalty Payment Period as theretofore reported to Disney and the amount
         required to be expended hereunder. Such cumulative amount shall be
         considered liquidated damages and not a penalty.

19.      REGISTRATIONS

         Except with Disney's written consent, neither Licensee nor any of
         Licensee's Affiliates will register or attempt in any country to
         register copyrights in, or to register as a trademark, service mark,
         design patent or industrial design, or business designation, any of the
         Intellectual Property or derivations or adaptations thereof, or any
         word, symbol or design which is so similar thereto as to suggest
         association with or sponsorship by Disney or any of Disney's
         Affiliates. In the event of breach of the foregoing, Licensee agrees,
         at Licensee's expense and at Disney's request, immediately to terminate
         the unauthorized registration activity and promptly to execute and
         deliver, or cause to be delivered, to Disney such assignments and other
         documents as Disney may require to transfer to Disney all rights to the
         registrations, patents or applications involved.

20.      UNLICENSED USE OF LICENSED MATERIALS

         A.       Licensee agrees that Licensee will not use the Licensed
         Material, or the Trademarks, or any other material the copyright to
         which is owned by Disney in any way other than as herein authorized (or
         as is authorized in any other written contract in effect between the
         parties). In addition to any other remedy Disney may have, Licensee
         agrees that all revenues from any unauthorized use thereof, and all
         revenues from the use of any other copyrighted material of Disney's (or
         its licensors, if applicable), without written authorization from
         Disney, shall be immediately payable to Disney.

         B.       Licensee agrees that it will give Disney prompt written notice
         of any unlicensed use by third parties of the Intellectual Property,
         and that Licensee will not, without Disney's written consent, bring or
         cause to be brought any criminal prosecution, lawsuit or administrative
         action for infringement, interference with or

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         violation of any rights to the Intellectual Property. Because of the
         need for and the high costs of an effective anti-piracy enforcement
         program, Licensee agrees to cooperate with Disney, and, if necessary,
         to be named by Disney as a sole complainant or co-complainant in any
         action against an infringer of the Intellectual Property and,
         notwithstanding any right of Licensee to recover same, legal or
         otherwise, Licensee agrees to pay to Disney, and hereby waives all
         claims to, all damages or other monetary relief recovered in such
         action by reason of a judgment or settlement whether or not such
         damages or other monetary relief, or any part thereof, represent or are
         intended to represent injury sustained by Licensee as a licensee
         hereunder. In any such action against an infringer, Disney agrees to
         reimburse Licensee for reasonable expenses incurred at Disney's
         request, including reasonable attorney's fees if Disney has requested
         Licensee to retain separate counsel.

21.      STATEMENTS AND PAYMENTS OF ROYALTIES

         A.       Licensee agrees to furnish to Disney by the 25th day after
         each Royalty Payment Period full and accurate statements on statement
         forms Disney designates for Licensee's use, showing all information
         requested by such forms separately for each Property licensed
         hereunder, including but not limited to, the name of the subject
         Property, the quantities, Net Invoiced Billings (reported in U.S.
         Dollars and, if the Territory includes any country other than the U.S.,
         Net Invoiced Billings also should be reported in the currency invoiced
         to customers) and applicable Royalty rate(s) of Articles using
         Intellectual Property from such Property invoiced during the preceding
         Royalty Payment Period, and the quantities and invoice value of
         Articles returned for credit or refund in such period, as well as sales
         forecasts (if requested), and the country of sale. At the same time
         Licensee will pay Disney all Royalties not reduced by any VAT (if
         applicable) due on billings shown by such statements. All monies owed
         to Disney shall be sent to the address identified in Paragraph 21.D.,
         or, if requested by Disney, by electronic transfer to such account as
         Disney may designate. To the extent that any monies owed to Disney
         under this Agreement are not paid, Licensee authorizes Disney to offset
         any amount(s) which is due at any time against any sums which Disney or
         any of Disney's Affiliates may owe to Licensee or any of Licensee's
         Affiliates. No deduction or withholding from Royalties payable to
         Disney shall be made by reason of any tax. Any applicable tax on the
         manufacture, distribution and sale of the Articles shall be borne by
         Licensee. All payments are to be made in U.S. Dollars. In the event
         that an exchange rate is necessary, Licensee shall use the official
         buying rate of exchange as published in the Wall Street Journal, New
         York Edition, on the last business day of the applicable Royalty
         Payment Period, and Licensee shall identify such exchange rate on the
         Royalty reporting forms.

         B.       The statement forms Disney designates for Licensee's use may
         be changed from time to time, and Licensee agrees to use the most
         current form designated by Disney (including, for example, forms to be
         sent by electronic transmission). If it is necessary for Licensee to
         adapt its system to be able to report statements by electronic
         transmission, or to make payments by electronic transfer, all costs of
         such adaptation shall be borne entirely by Licensee. Licensee agrees to
         fully comply with all instructions supplied by Disney for completing
         any reporting forms, or adhering to any required format.


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         C.       Sales of items licensed under contracts with Disney other than
         this Agreement shall not be reported on the same statement as sales of
         Articles under this Agreement.

         D.       Licensee's payments, including all Royalties, shall be wire
         transferred to [ ]; or delivered to such address as Disney designates;
         currently, Disney designates the following address: Disney Enterprises,
         Inc., [ ] Los Angeles, California 90074-5988. If Licensee wire
         transfers payments, including Royalties, Licensee shall send the
         corresponding statement to the foregoing address. If Licensee wishes to
         send statements and payments by overnight courier, the current address
         is: Bank of America Lockbox Services, [ ], Ground Level, 1000 W. Temple
         Street, Los Angeles, California 90012. However, Advances should be
         mailed directly to Disney at 500 South Buena Vista Street, Burbank,
         California 91521-6835, to the attention of the Contract Administrator
         or Legal Department, Consumer Products Division. Acceptance of any
         payment from Licensee, whether by wire transfer or otherwise, is not a
         waiver of any rights on the part of Disney.

         E.       From time to time, upon request by Disney, Licensee shall
         furnish to Disney's Credit Department, no later than seven days after
         such request, such financial reports, including balance sheets,
         statements of income and cash flows, as Disney deems necessary to
         evaluate Licensee's ongoing creditworthiness and ability to perform
         this Agreement.

22.      INTEREST

         Royalties or any other payments due to Disney hereunder which are
         received after the due date shall bear interest at the rate of 18% per
         annum from the due date (or the maximum permissible by law if less than
         18%).

23.      CONFIDENTIALITY

         Licensee represents and warrants that Licensee did not disclose to any
         third party the prospect of a license from Disney, and that Licensee
         did not trade on the prospect of a license from Disney, prior to full
         execution of this Agreement. Licensee agrees not to issue any press
         release regarding this Agreement or Disney without obtaining Disney's
         prior written consent. Licensee agrees to keep the terms and conditions
         of this Agreement confidential, and Licensee shall not disclose such
         terms and conditions to any third party without obtaining Disney's
         prior written consent; provided, however, that this Agreement may be
         disclosed on a need-to-know basis to Licensee's attorneys and
         accountants who agree to be bound by this confidentiality provision. In
         addition, Licensee may have access to information concerning Disney's
         or its Affiliates' business and operations, or information concerning
         works in progress, artwork, plots, characters or other matters relating
         to Disney's or its Affiliates' artistic creations, which information
         may not be accessible or known to the general public. Licensee agrees
         not to use or disclose such information to any third party without
         obtaining Disney's prior written consent. In the event Licensee is
         required to disclose this Agreement, or any part thereof, pursuant to
         any law, court order or process, the rules and regulations of any
         governmental department, agency or authority (including, but not
         limited to, the Securities and Exchange Commission) or any generally
         accepted accounting rules mandating disclosure in Licensee's financial


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         statements, Licensee agrees to give Disney prior written notice and to
         use its best efforts to obtain confidential treatment of this
         Agreement. Upon Disney's request, Licensee agrees to incorporate
         Disney's comments into Licensee's request for confidential treatment,
         provided such request and comments are received in writing by Licensee
         within five (5) business days after Disney's receipt of the notice
         referred to in the preceding sentence.

24.      AUDITS AND MAINTAINING RECORDS

         A.       Licensee agrees to keep accurate records of all transactions
         relating to this Agreement and any prior agreement with Disney
         regarding the Licensed Material, including, without limitation,
         shipments to Licensee of Articles and components thereof, inventory
         records, records of sales and shipments by Licensee, and records of
         returns, and to preserve such records for the lesser of two (2) years
         after the expiration or termination of this Agreement or a period of
         seven (7) years.

         B.       Disney, or Disney's representatives, shall have the right from
         time to time, during Licensee's normal business hours, but only for the
         purpose of confirming Licensee's performance hereunder, to examine and
         make extracts and photocopies from all such records, including the
         general ledger, invoices and any other records which Disney reasonably
         deems appropriate to verify the accuracy of Licensee's statements or
         Licensee's performance hereunder, including records of Licensee's
         Affiliates and unaffiliated sublicensees or other subcontractors if
         they are involved in activities which are the subject of this
         Agreement. In particular, Licensee's invoices shall identify the
         Articles separately from goods which are not licensed hereunder.
         Licensee acknowledges that Disney may furnish Licensee with an audit
         questionnaire, and Licensee agrees to fully and accurately complete
         such questionnaire, and return it to Disney within the designated time.
         Disney's use of an audit questionnaire shall not limit Disney's ability
         to conduct any on-site audit(s) as provided above. Licensee
         acknowledges that an audit conducted by Disney or its representatives,
         may involve one or more license agreements at a time.

C.       If in an audit of Licensee's records it is determined that there is a
         short fall of five percent (5%) or more in Royalties reported for any
         Royalty Payment Period, Licensee shall upon request from Disney
         reimburse Disney for the full out-of-pocket costs of the audit,
         including the costs of employee auditors calculated at U.S. $100 per
         hour per person for travel time during normal working hours and actual
         working time.

D.       If Licensee has failed to keep adequate records for one or more Royalty
         Payment Periods, Disney will assume that the Royalties owed to Disney
         for such Royalty Payment Period(s) are equal to a reasonable amount,
         determined in Disney's absolute discretion, which may be up to but will
         not exceed the highest Royalties owed to Disney in a Royalty Payment
         Period for which Licensee has kept adequate records; if Licensee has
         failed to keep adequate records for any Royalty Payment Period, Disney
         will assume a reasonable amount of Royalties which Licensee will owe to
         Disney, based on the records Licensee has kept and other reasonable
         assumptions Disney deems appropriate.

25.      INDEMNITY

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         A.       Licensee shall indemnify Disney during and after the term
         hereof against all claims, demands, suits, judgments, losses,
         liabilities and expenses of any nature (including reasonable attorneys'
         fees) arising out of Licensee's activities under this Agreement,
         including but not limited to, any actual or alleged: (1) negligent acts
         or omissions on Licensee's part, (2) defect (whether obvious or hidden
         and whether or not present in any Sample approved by Disney) in an
         Article, (3) personal injury, (4) infringement of any rights of any
         other person by the manufacture, sale, possession or use of Articles,
         (5) breach on Licensee's part of any covenant, representation or
         warranty contained in this Agreement, or (6) failure of the Articles or
         by Licensee to comply with applicable Laws. The parties indemnified
         hereunder shall include Disney Enterprises, Inc., its licensors, if
         applicable, and its and their Affiliates and successors, and its and
         their officers, directors, employees and agents. The indemnity shall
         not apply to any claim or liability relating to any infringement of the
         copyright of a third party caused by Licensee's utilization of the
         Licensed Material and Trademarks in accordance with the provisions
         hereof, unless such claim or liability arises out of Licensee's failure
         to obtain the full assignment of rights referenced in Paragraph 13.

         B.       Disney shall indemnify Licensee during and after the term
         hereof against all claims, demands, suits, judgments, losses,
         liabilities and expenses of any nature (including reasonable attorneys'
         fees) arising out of any claim that Licensee's use of any
         representation of the Licensed Material and Trademarks approved in
         accordance with the provisions of this Agreement infringes the
         copyright of any third party or infringes any right granted by Disney
         to such third party, except for claims arising out of Licensee's
         failure to obtain the full assignment of rights referenced in Paragraph
         13. Licensee shall not, in any case, be entitled to recover for lost
         profits.

         C.       Additionally, if by reason of any claims referred to in
         Paragraph 25.B., Licensee is precluded from selling any stock of
         Articles or utilizing any materials in Licensee's possession or which
         come into Licensee's possession by reason of any required recall,
         Disney shall be obligated to purchase such Articles and materials from
         Licensee at their out-of-pocket cost to Licensee, excluding overheads,
         but Disney shall have no other responsibility or liability with respect
         to such Articles or materials.

         D.       Disney gives no warranty or indemnity with respect to any
         liability or expense arising from any claim that use of the
         Intellectual Property on or in connection with the Articles hereunder
         or any packaging, advertising or promotional material infringes on any
         trademark right of any third party or otherwise constitutes unfair
         competition by reason of any prior rights acquired by such third party,
         other than rights acquired from Disney. It is expressly agreed that it
         is Licensee's responsibility to carry out such investigations as
         Licensee may deem appropriate to establish that Articles, packaging,
         and promotional and advertising material which are manufactured or
         created hereunder, including any use made of the Intellectual Property
         therewith, do not infringe such right of any third party, and Disney
         shall not be liable to Licensee if such infringement occurs.

         E.       With regard to any indemnified claims under this Paragraph 25,
         the party entitled to indemnification shall give written notice to the
         other party of the claim. The indemnifying party shall select mutually
         agreeable counsel, and shall consult in a

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         meaningful fashion with the indemnified party in the conduct of the
         defense of the claim. Promptly upon request, the indemnified party
         shall provide reasonable assistance in the defense of such claims at
         the expense of the indemnifying party. If the indemnified party desires
         to be represented by separate counsel, it shall be responsible for all
         fees and costs associated therewith. Alternatively, the indemnified
         party may choose to be represented by the indemnifying party's counsel,
         in which case the indemnifying party shall be entirely and solely
         responsible for all fees and costs associated therewith. The
         indemnifying party and the indemnified party may enter into good faith
         settlement(s) of the claim, with the consent of the other party, not to
         be unreasonably withheld.

         F.       Without limiting the foregoing, Licensee agrees to give Disney
         written notice of any product liability claim made or suit filed with
         respect to any Article, any investigations or directives regarding the
         Articles issued by the U.S. Consumer Product Safety Commission ("CPSC")
         or other federal, state, provincial, or local consumer safety agency,
         and any notices sent by Licensee to, or received by Licensee from, the
         CPSC or other consumer safety agency regarding the Articles within
         fourteen (14) days of Licensee's receipt or promulgation of the claim,
         suit, investigation, directive, or notice.

26.      INSURANCE

         Licensee shall maintain in full force and effect at all times while
         this Agreement and any Schedule(s) entered into hereunder are in effect
         and for three years thereafter commercial general liability insurance
         on a per occurrence form, including broad form coverage for contractual
         liability, property damage, products liability and personal injury
         liability (including bodily injury and death), waiving subrogation,
         with minimum limits of no less than two million dollars (US
         $2,000,000.00) per occurrence, and naming as an additional "insured"
         each party indemnified in Paragraph 25 hereof. Licensee also agrees to
         maintain in full force and effect at all times while this Agreement and
         any Schedule(s) entered into hereunder are in effect such Worker's
         Compensation Insurance as is required by applicable provincial or state
         law and, if Licensee is a U.S.-based licensee, Employer's Liability
         Insurance with minimum limits of one million dollars (US $1,000,000.00)
         per occurrence. All insurance shall be primary and not contributory.
         Licensee shall deliver to Disney a certificate or certificates of
         insurance evidencing satisfactory coverage and indicating that Disney
         shall receive thirty (30) days unrestricted prior written notice of
         cancellation, non-renewal or of any material change in coverage.
         Licensee's insurance shall be carried by an insurer with a BEST Guide
         rating of B + VII or better. Compliance herewith in no way limits
         Licensee's indemnity obligations, except to the extent that Licensee's
         insurance company actually pays Disney amounts which Licensee would
         otherwise pay Disney.

27.      WITHDRAWAL OF LICENSED MATERIAL

         Licensee agrees that Disney may, without obligation to Licensee other
         than to give Licensee written notice thereof, withdraw from the scope
         of this Agreement any Licensed Material which by the Marketing Date or,
         if such a date is not specified in Paragraph 1.I., by six (6) months
         from the commencement of the term of the


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         applicable Schedule or the date of any applicable amendment, is not
         being used on or in connection with the Articles. Disney may also
         withdraw any Licensed Material or Articles the use or sale of which
         under this Agreement would infringe or reasonably be claimed to
         infringe the rights of a third party, other than rights granted by
         Disney, in which case Disney's obligations to Licensee shall be limited
         to the purchase at cost of Articles and other materials utilizing such
         withdrawn Licensed Material which cannot be sold or used. In the case
         of any withdrawal under the preceding sentence, the Advances and
         Guarantees shall be adjusted to correspond to the time remaining in the
         term of the affected Schedule(s), or the number of Articles remaining
         under such Schedule(s), at the date of withdrawal.

28.      TERMINATION

         Without prejudice to any other right or remedy available to Disney:

         A.       Disney shall have the right at any time to terminate this
         Agreement (or any Schedule(s) entered into hereunder) by giving
         Licensee written notice thereof, if Licensee (i) fails to manufacture,
         sell or distribute the Articles in accordance with this Agreement, (ii)
         fails to timely furnish statements and timely pay Royalties or any
         other amounts due to Disney hereunder, (iii) fails to notify Disney of
         the accurate name and complete address of Licensee's manufacturing
         facilities or any Manufacturer of the Articles, (iv) fails to have any
         such Manufacturer execute the Manufacturer's Agreement, or (v)
         otherwise fails to comply with or perform any other obligation or
         covenant hereunder or breaches any other term of this Agreement (other
         than those set forth in Paragraph 28.B. below); provided that Licensee
         shall have thirty (30) days (or, in the case of non-payment of any
         monetary obligations due Disney under the Agreement within fifteen (15)
         days) after Disney sends Licensee written notice of termination to
         correct any such failure or breach capable of being corrected and avoid
         termination.

         B.       Disney shall have the right at any time to terminate this
         Agreement immediately upon giving Licensee written notice thereof if
         one or more of the following events occur (provided, however, that with
         respect to clause (6) below such termination shall occur automatically
         and immediately without the need for any notice):

                  (1)      if Licensee delivers to any customer without Disney's
         written authorization merchandise containing representations of
         Intellectual Property or other material the copyright or other
         proprietary rights to which are owned by Disney other than Articles
         licensed herein and approved in accordance with the provisions hereof;

                  (2)      if Licensee delivers Articles outside the Territory
         or knowingly sells Articles to a third party when Licensee knows or
         should know in the exercise of prudent business judgment that such
         sales ultimately will result in delivery outside the Territory, unless
         pursuant to a written distribution permission or separate written
         license agreement with Disney or any of Disney's Affiliates;


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                  (3)      if a breach occurs which is of the same nature, and
         which violates the same provision of this Agreement, as a breach of
         which Disney has previously given Licensee written notice;

                  (4)      if Licensee breaches any material term of any other
         license agreement between the parties, and Disney terminates such
         agreement for cause;

                  (5)      if Licensee breaches any surviving obligation under
         any other license agreement between the parties, even if such agreement
         has expired;

                  (6)      if Licensee shall generally not pay its debts as such
         debts become due, or shall make a general assignment for the benefit of
         creditors; or any proceeding shall be instituted by or against Licensee
         seeking to adjudicate it as bankrupt or insolvent, or seeking
         liquidation, winding up, reorganization, arrangement, adjustment,
         protection, relief or composition of it or its debts under any law
         relating to bankruptcy, insolvency or reorganization or relief of
         debtors, or seeking the entry of any order for relief or the
         appointment of a receiver, trustee or other similar official for all or
         for any substantial part of its property or assets;

                  (7)      if Licensee is not permitted or is unable to operate
         Licensee's business in the usual manner, or is not permitted or is
         unable to provide Disney with assurance satisfactory to Disney that
         Licensee will so operate Licensee's business, as debtor in possession
         or its equivalent;

                  (8)      if any event shall occur or condition shall exist
         under any agreement or instrument relating to institutional
         indebtedness or financial obligations owed by Licensee, including the
         failure to pay principal or interest thereon, and such event or
         condition shall continue after any applicable grace period specified in
         such agreement or instrument, and the effect of such event or condition
         is to accelerate, or to permit the acceleration of, the maturity of
         such indebtedness or obligations or otherwise cause, or to permit the
         holder thereof to cause, such indebtedness or obligations to mature;

                  (9)      if Licensee, due to material changes in its financial
         position, or for other reasons, is unable to meet Licensee's
         obligations under this Agreement, or is unable to provide Disney with
         assurance satisfactory to Disney that Licensee will be able to meet
         such obligations;

                  (10)     if Licensee breaches any covenant set forth in
         Paragraph 11 of this Agreement; or

                  (11)     if more than three Manufacturer's Agreements are
         terminated in any twelve-month period by Disney for the Manufacturers'
         failure to pass compliance inspections as referenced in Paragraphs 11
         and 12; or

                  (12)     if Licensee breaches any material term of this
         Agreement and the breach is not reasonably capable of being cured or
         otherwise corrected to Disney's satisfaction.


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         C.       If Disney terminates this Agreement pursuant to this Paragraph
         28, Licensee shall not be permitted to seek injunctive relief to
         contest Disney's determination that a termination event has occurred or
         to otherwise affect Disney's full and absolute control of the Licensed
         Material and the Trademarks; provided however, Licensee may bring an
         action for damages, but prior to and during any such action, Disney
         shall have full and absolute control over the Licensed Material and the
         Trademarks.

29.      RIGHTS AND OBLIGATIONS UPON EXPIRATION OR TERMINATION

         A.       Upon the expiration or termination of this Agreement, all
         rights herein granted to Licensee shall revert to Disney, any unpaid
         portion of the Guarantee for the entire Term shall be immediately due
         and payable (together with the Royalty statement due at such time), and
         Disney shall be entitled to retain all Royalties and other things of
         value paid or delivered to Disney. Notwithstanding the foregoing, if
         this Agreement expires or terminates prior to the renewal period, no
         portion of the Guarantee applicable to the Renewal Period shall be
         payable to Disney. Licensee agrees that the Articles shall be
         manufactured during the term of each applicable Schedule in quantities
         consistent with anticipated demand therefor so as not to result in an
         excessive inventory build-up immediately prior to the end of the term
         thereof. Licensee agrees that from the expiration or termination of
         this Agreement Licensee shall neither manufacture nor have manufactured
         for Licensee any Articles, that Licensee will deliver to Disney any and
         all artwork (including Style Guides, animation cells and drawings)
         which may have been used or created by Licensee in connection with this
         Agreement, that Licensee will at Disney's option either sell to Disney
         at cost or destroy or efface any molds, plates and other items used to
         reproduce the Intellectual Property, and that, except as hereinafter
         provided, Licensee will cease selling Articles. Any unauthorized
         distribution of Articles after the expiration or termination of this
         Agreement or any applicable Schedule shall constitute copyright
         infringement.

         B.       If Licensee has any unsold Articles in inventory on the
         expiration or termination date of the applicable Schedule, Licensee
         shall provide Disney with a full statement of the kinds and numbers of
         such unsold Articles. If such statement has been provided to Disney and
         if Licensee has fully complied with the terms of this Agreement,
         including the payment of all Royalties due and the Guarantee, upon
         notice from Disney, Licensee shall have the right for a limited period
         of two (2) calendar months from such expiration or earlier termination
         date to sell off and deliver such Articles as authorized under
         Paragraph 2.A. Licensee shall furnish Disney statements covering such
         sales and pay Disney Royalties in respect of such sales. Such Royalties
         shall not be applied against the applicable Advance or towards meeting
         the applicable Guarantee. If the sell-off period is extended by Disney
         to a date which is not the last day of the Royalty Payment Period,
         Licensee's statement and Royalties for such sell-off period shall be
         due twenty-five (25) days after the last day of the sell-off period.
         All rights and remedies available to Disney during the Term shall be
         equally available to Disney during the sell-off period.

         C.       In recognition of Disney's interest in maintaining a stable
         and viable market for the Articles during and after the Term and any
         sell-off period, Licensee agrees to refrain from "dumping" the Articles
         in the market during the Term and any sell-off

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         period granted to Licensee. "Dumping" shall mean the distribution of
         product at volume levels significantly above Licensee's prior sales
         practices with respect to the Articles, and at price levels so far
         below Licensee's prior sales practices with respect to the Articles as
         to disparage the Articles; provided, however, that nothing contained
         herein shall be deemed to restrict Licensee's ability to set product
         prices at Licensee's discretion.

         D.       Except as otherwise agreed by Disney in writing, any inventory
         of Articles in Licensee's possession or control after the expiration or
         termination of the term of the applicable Schedule hereof and of any
         sell-off period granted hereunder shall be destroyed, or all Licensed
         Material and Trademarks removed or obliterated therefrom.

         E.       If Disney supplies Licensee with forms regarding compliance
         with this Paragraph 29, Licensee agrees to complete, execute and return
         such forms to Disney expeditiously. Licensee acknowledges that this
         will be necessary at the end of the term of each Schedule entered into
         under this Agreement.

         F.       Notwithstanding any provision to the contrary, in the case of
         termination under Paragraph 28.B. (6) or (7), in order to protect the
         value of the Articles and to avoid any disparagement of the Articles
         which could occur as a result of the circumstances of termination,
         Disney shall have the option, in Disney's absolute discretion, to
         purchase any or all unsold Articles in Licensee's inventory on the
         termination date at 20% over Licensee's cost of goods for such Articles
         (not including overhead).

30.      WAIVERS

         A waiver by either party at any time of a breach of any provision of
         this Agreement shall not apply to any breach of any other provision of
         this Agreement, or imply that a breach of the same provision at any
         other time has been or will be waived, or that this Agreement has been
         in any way amended, nor shall any failure by either party to object to
         conduct of the other be deemed to waive such party's right to claim
         that a repetition of such conduct is a breach hereof.

31.      PURCHASE OF ARTICLES BY DISNEY

         If Disney wishes to purchase Articles, Licensee agrees to sell such
         Articles to Disney or any of Disney's Affiliates at as low a price as
         Licensee charges for similar quantities sold to Licensee's regular
         customers and to pay Disney Royalties on any such sales.

32.      NON-ASSIGNABILITY

         A.       This Agreement, and the rights granted hereunder to Licensee,
         are personal to Licensee, who was specifically chosen by Disney to be
         licensed hereunder because of Licensee's and certain employees'
         particular expertise and ability to design, produce and sell the
         Articles in ways which maximize the value of the Articles, and to
         otherwise perform the Agreement. Licensee shall not voluntarily or by
         operation of law assign, sub-license, transfer, encumber or otherwise
         dispose of all or any part of


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         Licensee's interest in this Agreement (including, but not limited to,
         any encumbrance of the Articles) without Disney's prior written
         consent, to be granted or withheld in Disney's absolute discretion. Any
         attempted assignment, sub-license, transfer, encumbrance or other
         disposal without such consent shall be void and shall constitute a
         material default and breach of this Agreement. "Transfer" within the
         meaning of this Paragraph 32 shall include any merger or consolidation
         involving Licensee or any directly or indirectly controlling
         Affiliate(s) of Licensee ("Controlling Affiliate"); any sale or
         transfer of all or substantially all of Licensee's or its Controlling
         Affiliate(s)' assets; any transfer of Licensee's rights, obligations,
         or both, under this Agreement, to a division, business segment or other
         entity different from the one specifically referenced on page 1 hereof
         (or any sale or attempted sale of Articles under a trademark or trade
         name of such division, business segment or other entity); any public
         offering, or series of public offerings, whereby a cumulative total of
         thirty-three and one-third percent (33 1/3%) or more of the voting
         stock of Licensee or its Controlling Affiliate(s) is offered for
         purchase; and any acquisition, or series of acquisitions, by any person
         or entity, or group of related persons or entities, of a cumulative
         total of thirty-three and one-third percent (33-1/3%) or more of the
         voting stock of Licensee or its Controlling Affiliate(s), or the right
         to vote such percentage (or, if Licensee is a partnership, resulting in
         the transfer of thirty-three and one-third percent (33-1/3%) or more of
         the profit and loss participation in Licensee, or the occurrence of any
         of the foregoing with respect to any general partner of Licensee; or,
         if Licensee is a legal entity other than a corporation or partnership,
         resulting in the transfer of thirty-three and one-third percent
         (33-1/3%) or more of the control of Licensee, or the occurrence of any
         of the foregoing with respect to any manager or administrator of the
         legal entity).

         B.       Licensee agrees to provide Disney with at least thirty (30)
         days prior written notice of any desired assignment of this Agreement
         or other transfer as defined in Paragraph 32.A. At the time Licensee
         gives such notice, Licensee shall provide Disney with the information
         and documentation necessary to evaluate the contemplated transaction.
         Disney's consent (if given) to any assignment of this Agreement or
         other transfer as defined in Paragraph 32.A. shall be subject to such
         terms and conditions as Disney deems appropriate, including but not
         limited to, payment of a transfer fee. The amount of the transfer fee
         shall be determined by Disney based upon the circumstances of the
         particular assignment or transfer, taking into account such factors as
         the estimated value of the license being assigned or otherwise
         transferred; the risk of business interruption or loss of quality,
         production or control Disney may suffer as a result of the assignment
         or other transfer; the identity, reputation, creditworthiness,
         financial condition and business capabilities of the proposed assignee
         or other entity involved in the transfer; and Disney's internal costs
         related to the assignment or other transfer; provided, however, in no
         event shall the transfer fee be in an amount less than U.S. $[ ] for
         each Disney license (or Schedule), brands and/or Property(ies) (as
         applicable) involved in an assignment or other transfer, up to a
         maximum total fee of U.S. $[ ] per transfer for all affected Disney
         licenses (or Schedules), brands and/or Properties (as applicable)
         within the Territory and Canada at the time of the subject transfer.
         The foregoing transfer fee shall not apply if this Agreement is
         assigned to one of Licensee's Affiliates as part of a corporate
         reorganization exclusively among some or all of the entities existing
         in Licensee's corporate structure when this Agreement is signed;
         provided, however,

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         that Licensee must give Disney written notice of such assignment and a
         description of the reorganization. Notwithstanding the foregoing, a
         transfer fee will not be triggered by any of the following transfers of
         voting stock or other beneficial interest in Licensee, unless occurring
         as part of or in conjunction with a transaction that would trigger a
         transfer fee: (1) distribution(s) in the ordinary course of Licensee's
         business on employee or director stock option plans; or (2) transfers
         for estate planning purposes among the current shareholders of Licensee
         who are members of the Sidman family (including their spouses and
         children) as their interests appear when this Agreement is signed; or
         (3) repurchases of its own stock by Licensee as part of a corporate
         stock repurchase program but not including any issuer tender offer
         which exceeds thirty-three and one-third percent (33-1/3%) of the then
         outstanding stock or exchange offer; provided, however, that Licensee
         shall maintain substantially the same management and continue to
         operate in substantially the same fashion as prior to any of the
         transfers described above, and provided further, that in any event, any
         of the transfers described above shall remain subject to Disney's
         consent as set forth in Paragraph 32.A. The provisions of this
         Paragraph 32 shall supersede any conflicting provisions on this subject
         in any merchandise license agreement previously entered into between
         the parties for this Territory.

         C.       Licensee acknowledges that it has read and understands the
         Transfer Fee Policy attached hereto, which governs transfer fee
         procedures under this Agreement. The Transfer Fee Policy is
         incorporated herein by this reference.

         D.       Licensee may, upon Disney's prior written consent, sublicense
         Licensee's rights, obligations, or both, under this Agreement, to any
         of Licensee's Affiliates, provided that each such Affiliate agrees to
         be bound by all of the terms and conditions of this Agreement, and
         further provided that Licensee and each such Affiliate agree to provide
         Disney with satisfactory documentation of such agreement(s),
         guarantee(s), and indemnification upon Disney's request therefor, and
         in a form satisfactory to Disney. Licensee hereby represents and
         irrevocably and unconditionally guarantees that any and all Affiliates
         sublicensed hereunder will observe and perform all of Licensee's
         obligations under this Agreement, including, but not limited to, the
         provisions governing approvals, and compliance with approved samples,
         applicable Laws, indemnification and all other provisions hereof, and
         that they will otherwise adhere strictly to all of the terms hereof and
         act in accordance with Licensee's obligations hereunder. Any
         involvement of an

         Affiliate in the activities which are the subject of this Agreement
         shall be deemed carried on pursuant to such a sublicense and thus
         covered by such guarantee; however, unless Licensee has obtained
         Disney's consent to sublicense an Affiliate in each instance, such
         Affiliate shall be deemed to be included in the term "Licensee" for all
         purposes under this Agreement, and Disney may treat such unapproved
         involvement of the Affiliate as a breach of the Agreement.

33.      RELATIONSHIP

         This Agreement does not provide for a joint venture, partnership,
         agency or employment relationship between the parties, or any other
         relationship than that of licensor and licensee.

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34.      CONSTRUCTION

         The language of all parts of this Agreement shall in all cases be
         construed as a whole, according to its fair meaning and not strictly
         for or against any of the parties. Headings of paragraphs herein are
         for convenience of reference only and are without substantive
         significance.

35.      MODIFICATIONS OR EXTENSIONS OF THIS AGREEMENT

         Except as otherwise provided herein, this Agreement can only be
         extended or modified by a writing signed by authorized representatives
         of both parties; provided, however, that certain modifications shall be
         effective if signed by the party to be charged and communicated to the
         other party.

36.      NOTICES

         All notices which either party is required or may desire to serve upon
         the other party shall be in writing, addressed to the party to be
         served at the address set forth on page 1 of this Agreement, and may be
         served personally or by depositing the same addressed as herein
         provided (unless and until otherwise notified), postage prepaid, in the
         United States mail. Such notice shall be deemed served upon personal
         delivery or upon the date of mailing; provided, however, that Disney
         shall be deemed to have been served with a notice of a request for
         approval of materials under this Agreement only upon Disney's actual
         receipt of the request and of any required accompanying materials. Any
         notice sent to Disney hereunder shall be sent to the attention of
         "President, Consumer Products Licensing", with a copy to "Corporate
         Legal, Consumer Products," unless Disney advises Licensee in writing
         otherwise.

37.      MUSIC

         Music is not licensed hereunder. Any charges, fees or royalties payable
         for music rights or any other rights not covered by this Agreement
         shall be additional to the Royalties and covered by separate agreement.

38.      PREVIOUS AGREEMENTS

         This Agreement, and any confidentiality agreement Licensee may have
         signed pertaining to any of the Intellectual Property, contains the
         entire agreement between the parties concerning the subject matter
         hereof and supersedes any pre-existing or contemporaneous agreement and
         any oral or written communications between the parties.

39.      CHOICE OF LAW AND FORUM

         This Agreement shall be deemed to be an executory agreement entered
         into in California and shall be governed and interpreted according to
         the laws of the State of California applicable to contracts made and to
         be fully performed in California. Any legal actions pertaining to this
         Agreement shall be commenced within the State of


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         California and within either Los Angeles or Orange Counties, and
         Licensee consents to the jurisdiction of the courts located in Los
         Angeles or Orange Counties.

40.      EQUITABLE RELIEF

         Licensee acknowledges that Disney will have no adequate remedy at law
         if Licensee continues to manufacture, sell, advertise, promote or
         distribute the Articles upon the expiration or termination of the term
         of any applicable Schedule under this Agreement. Licensee acknowledges
         and agrees that, in addition to any and all other remedies available to
         Disney, Disney shall have the right to have any such activity by
         Licensee restrained by equitable relief, including, but not limited to,
         a temporary restraining order, a preliminary injunction, a permanent
         injunction, or such other alternative relief as may be appropriate,
         without the necessity of Disney posting any bond.

41.      GOODWILL

         Licensee acknowledges that the rights and powers retained by Disney
         hereunder are necessary to protect Disney's (or its licensors', if
         applicable) copyrights and property rights, and, specifically, to
         conserve Disney's (and its licensors', if applicable) goodwill and good
         name, and the name "Disney", and therefore Licensee agrees that
         Licensee will not allow the same to become involved in matters which
         will, or could, detract from or impugn the public acceptance and
         popularity thereof, or impair their legal status.

42.      POWER TO SIGN

         The parties warrant and represent that their respective representatives
         signing this Agreement have full power and proper authority to sign
         this Agreement and to bind the parties.

43.      SURVIVAL OF OBLIGATIONS
         The respective obligations of the parties under this Agreement, which
         by their nature would continue beyond the termination, cancellation or
         expiration of this Agreement, including but not limited to
         indemnification, insurance, payment of Royalties, audits, and Paragraph
         29, shall survive termination, cancellation or expiration of this
         Agreement.

44.      SEVERABILITY OF PROVISIONS

         The terms of this Agreement are severable and the invalidity of any
         term of this Agreement shall not affect the validity of any other term.

Please sign below under the word "Agreed". When signed by both parties, when any
required security (e.g., a letter of credit) has been posted, and when the fully
executed contract has been delivered to Licensee, this shall constitute an
agreement between Disney and Licensee.


AGREED:

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DISNEY ENTERPRISES, INC.

By: /s/ J.D. Edwards
    ---------------------------
    Title: Vice President
    Date: 9/18/02



THE FIRST YEARS, INC.

By: /s/ Ronald J. Sidman
    ---------------------------
    Title: President



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Schedule #1 to License Agreement

1.       Schedule #1 to License Agreement Dated June 4, 2002 between Disney
Enterprises, Inc. and THE FIRST YEARS, INC. ("Agreement").

2.       Effective date of this Schedule: January 1, 2003.

3.       Termination date of this Schedule: [     ] of the Agreement.

4.       Properties:

         A.       Disney Standard Characters (i.e., MICKEY MOUSE, MINNIE MOUSE,
DONALD DUCK, DAISY DUCK, PLUTO and GOOFY), but only depictions of such
characters, and accompanying design elements, as may be designated by Disney.

         B.       Winnie the Pooh characters (i.e., WINNIE THE POOH, CHRISTOPHER
         ROBIN, PIGLET, RABBIT, EEYORE, TIGGER, OWL, GOPHER, KANGA AND ROO), all
         in the style as designed by Disney, but only depictions of such
         characters, and accompanying design elements, as may be designated by
         Disney.

         C.       DISNEY CLASSICS, comprised of the following individual
         Properties (collectively, the "Disney Classics Properties"):

                  (1)      WALT DISNEY'S BAMBI characters, but only such
         characters and depictions of such characters, and accompanying design
         elements, as may be designated by Disney;

                  (2)      WALT DISNEY'S SLEEPING BEAUTY characters, but only
         such characters and depictions of such characters, and accompanying
         design elements, as may be designated by Disney;

                  (3)      WALT DISNEY'S SNOW WHITE AND THE SEVEN DWARFS
         characters, but only such characters and depictions of such characters,
         and accompanying design elements, as may be designated by Disney;

                  (4)      WALT DISNEY'S THE JUNGLE BOOK characters, but only
         such characters and depictions of such characters, and accompanying
         design elements, as may be designated by Disney;

                  (5)      WALT DISNEY'S CINDERELLA characters, but only such
         characters and depictions of such characters, and accompanying design
         elements, as may be designated by Disney;

                  (6)      WALT DISNEY'S DUMBO characters, but only such
         characters and depictions of such characters, and accompanying design
         elements, as may be designated by Disney;

                  (7)      WALT DISNEY'S LADY AND THE TRAMP characters, but only
         such characters and depictions of such characters, and accompanying
         design elements, as may be designated by Disney;


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                  (8)      WALT DISNEY'S PINOCCHIO characters, but only such
         characters and depictions of such characters, and accompanying design
         elements, as may be designated by Disney;

                  (9)      WALT DISNEY'S ALICE IN WONDERLAND characters, but
         only such characters and depictions of such characters, and
         accompanying design elements, as may be designated by Disney;

                  (10)     WALT DISNEY'S PETER PAN characters, but only such
         characters and depictions of such characters, and accompanying design
         elements, as may be designated by Disney;

                  (11)     WALT DISNEY'S THE ARISTOCATS characters, but only
         such characters and depictions of such characters, and accompanying
         design elements, as may be designated by Disney;

                  (12)     DISNEY'S ALADDIN characters, but only such characters
         and depictions of such characters, and accompanying design elements, as
         may be designated by Disney;

                  (13)     DISNEY'S BEAUTY AND THE BEAST characters, but only
         such characters and depictions of such characters, and accompanying
         design elements, as may be designated by Disney.

5.       Articles:

         A.       FEEDING AND SOOTHING:

                  (1)      Bottles

                  (2)      Bibs (vinyl only)

                  (3)      Cups

                  (4)      Pacifiers and attachers

                  (5)      Bowls

                  (6)      Dishes

                  (7)      Feeding utensils

                  (8)      Placemats

                  (9)      Floor mats

                  (10)     Toddler sports bottles

         B.       CARE AND SAFETY:

                  (1)      Carriers (front and back)

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                  (2)      Handheld showers

                  (3)      Spout guards

                  (4)      Shampoo visors

                  (5)      Non-activity crib lights

                  (6)      Combs and brushes

                  (7)      Night lights

                  (8)      Car shades

                  (9)      Tub thermometers

                  (10)     Tub organizers

                  (11)     Infant bath tubs

                  (12)     Baby bathers (fits in sink or tub to cradle newborns)

                  (13)     Step stools

                  (14)     Bed rails

                  (15)     Booster seats

                  (16)     Monitors

                  (17)     Scratch mitts

                  (18)     Hampers

                  (19)     Hot and cold packs

                  (20)     Infant support cushions

                  (21)     Plush with soothing womb sounds

                  (22)     Infant toothbrushes and toothcare organizers

                  (23)     Sleep positioners

                  (24)     Changing pads

         C.       PLAYTHINGS:

                  (1)      Hand-held rattles

                  (2)      Teethers


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                  (3)      Suction toys

                  (4)      Linking toys

                  (5)      Electronic hand-held toys (with rattles or squeaker
                           functions)

                  (6)      Bath toys

                  (7)      Crib toys

                  (8)      Foot rattles and wrist rattles

                  (9)      Squeeze toys

                  (10)     Infant rings

                  (11)     Chime balls

                  (12)     Jumpster harness

         No graphic design may be kept in the product line for longer than two
         years without prior written consent by Disney.

         All three dimensional SKUs of the Articles shall be refreshed or
         renewed based on a two-year cycle as mutually agreed upon by Disney and
         Licensee during their mutually designated planning meetings, to be held
         on a quarterly basis during the term of this Schedule.

6.       Territory: The United States, United States PX's wherever located, and
United States territories and possessions, excluding Puerto Rico. However, if
sales are made to chain stores in the United States which have stores in Puerto
Rico, such chain stores also may supply Articles to such stores in Puerto Rico.

7.       Royalty rate:

         LANDED SALES:

         A.       [    ] percent ([    ]%) of Licensee's Net Invoiced Billings
         to authorized customers for sales of Articles B.11, B.13 through B.16,
         B.18, B.20, B.21 and C.12;

         B.       [    ] percent ([   ]%) of Licensee's Net Invoiced Billings to
         authorized customers for sales of Articles B.23;

         C.       [   ] percent ([    ]%) of Licensee's Net Invoiced Billings to
         authorized customers for sales of Articles A.1 through A.10, B.l
         through B.4, B.9, B.10, B.l2, B.17, B.l9, B.24, C.l, and C.3 through
         C.l 1;

         D.       [   ] percent ([   ]%) of Licensee's Net Invoiced Billings to
         authorized customers for sales of Articles B.5 through B.8, B.22, and
         C.2.

         FOB SALES:

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         A.       [   ] percent ([   ]%) of Licensee's Net Invoiced Billings to
         authorized customers for sales of Articles B.11, B.13 through B.16,
         B.18, B.20, B.21 and C.12;

         B.       [   ] percent ([   ]%) of Licensee's Net Invoiced Billings to
         authorized customers for sales of Articles B.23;

         C.       [   ] percent ([  ]%) of Licensee's Net Invoiced Billings to
         authorized customers for sales of Articles A.l through A.l0, B.1
         through B.4, B.9, B.10, B.l2, B.l7, B.l9, B. 24, C.1, and C.3 through
         C.l1;

         D.       [   ] percent ([   ]%) of Licensee's Net Invoiced Billings to
         authorized customers for sales of Articles B.5 through B.8, B.22, and
         C.2.

8.       Advance payment(s) and due date(s):

         A.       [   ]

         B.       [   ]

         C.       [   ]

9.       Guarantee increments during the term of this Schedule:

         A.       [   ]

         B.       [   ]

         C.       [   ]

10.      Samples: Six (6) of each SKU of each Article.

11.      Marketing Date(s): By January 1, 2003 for all Articles except A.8, B.2,
B.5, B.9, B.13, B.15, B.18, B.19, B.20, B.23, C.3, C4, C.5, C.9, C.10 and C.12;
by March 31, 2003, for Articles Numbers B.19, B23, and C.12; by June 1, 2003 for
Articles Number B.18; and by December 31, 2003 for Articles Numbers A.8, B.2.,
B.5, B.9., B.13, B.15, B.20, C.3, C.4, C.5, C.9 and C.10.

12.      Distribution Channels:

         A.       Licensee will sell the Articles only to the following
         Retailers in the Territory for resale to the public in the Territory,
         or to Wholesalers in the Territory for resale to such Retailers: (1)
         mass market Retailers (including such Retailers as Target, Toys R Us,
         WalMart and Kmart), (2) value-oriented department stores (including
         such Retailers as Sears and Mervyn's), (3) value-oriented specialty
         stores, (4) drug store chains, (5) supermarkets and food chains, and
         (6) warehouse clubs. Articles Numbers A.1 through A.4, A.10, B.l, B.3,
         B.10, B.22, C.1, C.2, C.5 through C.8 and C.l1 also may be sold to the
         following Retailers in the Territory for resale to the public in the
         Territory, or to Wholesalers in the Territory for resale to such
         Retailers: (1) upscale Retailers (including such Retailers as
         Robinsons-May, Nordstrom's and Bloomingdale's), (2) better specialty
         stores, and (3) mid-tier department stores (including such Retailers as
         J.C. Penney and Kohl's). Licensee will not sell the

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         Articles to unauthorized Retailers or Wholesalers, or to convenience
         stores or gas stations. If there is a question as to whether a
         particular customer falls within any of the categories specified
         herein, Disney's determination shall be binding. Licensee may sell the
         Articles utilizing the Property set forth in section 4 above to
         customers for resale through the mass catalogs listed on the Mass
         Catalog List to the Agreement, subject to Paragraph 2.A.(2)(a) of the
         Agreement and this Schedule 1. In addition, Articles Numbers A.l
         through A.4, A.10, B.1, B.3, B.10, B.22, C.l, C.2, C.5 through C.8 and
         C.11 may be sold to customers for resale through the upscale catalogs
         listed on the Upscale Catalog List to the Agreement, subject to
         Paragraph 2.A.(2)(a) of the Agreement and this Schedule 1.

13.      Special provisions:

         Without limiting the provisions of Paragraph 14 of the Agreement, for
         Articles utilizing the Winnie the Pooh Property, Licensee agrees to
         include on such Articles, or the packaging for such Articles, or the
         hang tag for such Articles (if applicable), the following language:
         Based on the "Winnie the Pooh" works by A.A. Milne and E.H. Shepard.


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                                CATALOG SCHEDULE

                         (LIST OF PRE-APPROVED CATALOGS)

                           HOME FURNISHINGS/HOUSEWARES

                                     UPSCALE

Ballard Design
Casual Living
Celebration Fantastic
Chambers
Charles Keath
Chef's Catalog
Faith Mountain
Garnett Hill
Hand-in-Hand
Horchow
Kitchen & Home
Kitchen Kaboodle
Linda Anderson
Metropolitan Museum of Art
Museum of Fine Arts, Boston
Norm Thompson
Nursery Works
One Step Ahead
Potpourri
Reader's Digest Home Life
Ross-Simons
Seasons
Sensational Beginnings
Signals




This Catalog Schedule is subject to change. Disney reserves the right to add
catalogs to or delete catalogs from the Catalog Schedule without prior notice to
Licensee. Licensee agrees to cease selling Articles to a deleted catalog within
sixty (60) days after written notice of the deletion. Disney will consider new
catalogs requested by Licensee on a case-by-case basis.

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                                CATALOG SCHEDULE

                         (LIST OF PRE-APPROVED CATALOGS)

                           HOME FURNISHINGS/HOUSEWARES

                                     UPSCALE
                                   (CONTINUED)

Smithsonian
Spiegel
Sugar Hill
The Cotton Gin
The Linen Source
The Paragon
The Right Start
The Wish List
Touch of Class
Touchstone
Trifles
Wireless























This Catalog Schedule is subject to change. Disney reserves the right to add
catalogs to or delete catalogs from the Catalog Schedule without prior notice to
Licensee. Licensee agrees to cease selling Articles to a deleted catalog within
sixty (60) days after written notice of the deletion. Disney will consider new
catalogs requested by Licensee on a case-by-case basis.


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                                CATALOG SCHEDULE

                         (LIST OF PRE-APPROVED CATALOGS)

                           HOME FURNISHINGS/HOUSEWARES

                                      MASS

Apple Creek
Armchair Shopper
Avon (EXCL. PERSONAL CARE)
Domestications
Fingerhut
Lillian Vernon
Miles Kimball
Popular Club



























This Catalog Schedule is subject to change. Disney reserves the right to add
catalogs to or delete catalogs from the Catalog Schedule without prior notice to
Licensee. Licensee agrees to cease selling Articles to a deleted catalog within
sixty (60) days after written notice of the deletion. Disney will consider new
catalogs requested by Licensee on a case-by-case basis.




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                                DISNEY LICENSING
                              E COMMERCE GUIDELINES

GENERAL POLICIES:
----------------

-        Disney licensed product ("Articles") may not be sold on a Licensee's
         Website. (Articles being sold by Licensee may, however, be sold through
         a Retailer's or Etailer's Website.)

-        Licensee Websites may be used for promotion of Articles only, and not
         to promote any Disney characters or any film property.

-        When initially developing Website pages containing the use of any
         Disney Articles, marketing, or promotional material, review and
         written approval must be obtained from Disney Licensing prior to
         publication on the Website. (Please refer to your approval process
         guidelines.)

-        Websites cannot feature or advertise any Disney Articles, brands,
         properties, characters or logos as the sole means to drive visitors to
         the Website. The Website should contain content balance so that the
         consumer knows it is the Licensees' Website and not a Disney Website.
         However, creating a Disney section within the Website is encouraged.

-        A Retailer's or Etailer's Website cannot position Disney Articles for
         sale on a "limited availability" or "last time available" basis, of by
         other similar descriptions that may imply collectibility, deep
         discounting or closeouts.

-        Disney Articles, brands or logos should not be featured on your "Home
         Page" without prior written consent from Disney.

-        You must adhere to all Disney copyright and trademark notice
         requirements (i.e., (C) Disney, or as otherwise designated). Please
         note: when showing any Disney Articles, Disney logos, art, or other
         Disney design elements, you must always include (C) Disney on each Web
         page (or such other copyright or trademark as Disney designates).

-        Disney character art, likeness, animation, or music may not be used.

-        Any content or pages related to Disney should "hot-link" to
         www.Disney.com. Please utilize the Disney.com icon provided for this
         link.

-        Disney Articles cannot be distributed or re-purposed for sale or resale
         outside of the territory set forth in the license agreement.


COPY AND LAYOUT:

-        All copy and layout must be approved in accordance with the approval
         process guidelines.


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-        When using any Disney brand or property, correct titles and logo
         identification must be used.

-        When referring to any Disney film property, always use "Disney's" in
         reference to each film. For example, "Disney's The Little Mermaid."

-        The character's name or the film title should not be used in the
         possessive form when referring to a product. For example, do not use,
         "Lilo's Shoes" or "Shoes from Disney's Lilo & Stitch." When referring
         to product, always use, "Inspired by Disney's Lilo & Stitch" or
         "Featuring characters from Disney's Lilo & Stitch."


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                            LICENSEE APPROVAL PROCESS
                        FOR RETAILER OR ETAILER WEBSITES

To gain initial approval for Disney content on a Retailer's or Etailer's
Website, submit the below information on a `Standard Disney Approval Form' to
your Product Development Coordinator.

Retailers and Etailers should provide Disney with:

-        Directory of Website content

-        Site map or flow chart where the Disney pages/section will be featured
         within the Website. Creating a separate Disney section within the
         Website is encouraged.

Each Licensee will be responsible for ensuring adherence to the following simple
guidelines:

         1.       The eCommerce Guidelines must be observed when developing
                  Website pages with a Retailer or Etailer.

         2.       Each Disney Licensee will be responsible for providing the
                  Retailer or Etailer with the following:

                  -        Disney approved product samples/photography and
                           product descriptions/copy.

                  -        Disney brand logos and property identification. These
                           may be obtained through your Product Development
                           Coordinator.

                  -        Utilize the Disney Online icon to hot-link all pages
                           related to Disney to Disney.com.

         3.       Retailer or Etailer should work with their designated contact
                  in developing and approving marketing and promotional related
                  events and information. Disney promoted marketing
                  events/information cannot be used without prior written
                  consent.



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                            LICENSEE APPROVAL PROCESS
                             FOR LICENSEE'S WEBSITE


Licensees are not permitted to sell Disney Articles on their Websites. The main
focus is to promote Disney Articles on the Website of a Retailer or Etailer, or
on Disney.com.

To gain initial approval for any Disney content on a Licensee's Website, the
Licensee must strictly adhere to the eCommerce Guidelines in developing Website
pages containing Disney product, and submit the following information on a
standard Disney approval form to the Product Development Coordinator:

         1.       A synopsis/overview of Website content and pages.

         2.       A site map or flow chart to show where the Disney Articles
                  will be featured within the Website and include proposed
                  launch date. A separate Disney section within the Website is
                  encouraged.

         3.       A list of each Article that will be featured.

         4.       Proposed page layout.

         5.       Headlines.

         6.       Product samples or photography of product to be featured. (All
                  Articles must be approved through the product approval
                  process).

         7.       Product descriptions and copy to be featured.

         8.       Brand and property logos or any property related icons/artwork
                  that will be featured.

         The correct brand logos and proper property identification may be
         obtained through your Product Development Coordinator.

         All pages related to Disney should hot-link to Disney.com. Utilize the
         Disney Online icon provided for this link.

         Disney promoted marketing events/information cannot be used without
         prior written consent. Please contact your Category Manager to discuss
         proposed marketing and promotional content.


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                               TRANSFER FEE POLICY

As provided in Paragraph 32.B. of the License Agreement, it is Disney's policy
to charge a transfer fee in connection with any permitted assignment of the
license or other "transfer," as that term is defined in Paragraph 32.A. The
amount of the transfer fee is based on the circumstances of the particular
assignment or transfer, taking into account such factors as:

         -        the estimated value of the license being assigned or involved
                  in the transfer

         -        the risk of business interruption

         -        the risk of loss of quality, production or control

         -        the identity, reputation, creditworthiness, financial
                  condition and business capabilities of the proposed assignee
                  or entity involved in the transfer

         -        Disney's internal costs related to the assignment or transfer

At a minimum, the transfer fee will be U.S. $[   ] for each license or Schedule
(or Property, where a given Schedule includes more than one Property), and it
could be as high as [               ] depending on the circumstances of the
particular case. No Licensee or any company involved with a Licensee in an
assignment or transfer situation should rely upon any express or implied verbal
representations that are purported to be made on Disney `s behalf as to the
amount of any given fee to be assessed. Disney Licensing's Finance Department
will communicate the actual amount of the fee calculated in each approved
transaction.

In any prospective assignment or transfer situations, Licensees must inform the
persons and companies with which they are dealing that no assignment or transfer
may occur without Disney `s prior written consent, to be granted or withheld in
Disney's absolute discretion, and that any approved transaction will also entail
a transfer fee. Licensees must give Disney at least 30 days prior written notice
of any desired assignment or other transfer, together with any information and
documentation necessary to evaluate the contemplated transaction. Licensees
should not endanger the closing of their desired transactions by failing to
comply with these provisions of the License Agreement.

If Disney grants consent to a proposed transaction subject to the payment of a
transfer fee, and the transaction is concluded but the transfer fee is not paid
within the designated time, the subject License Agreement(s) shall automatically
terminate and any Guarantee shortfall(s) shall be immediately due and payable to
Disney. If Disney does not grant consent to a proposed assignment or transfer
and the Licensee nevertheless closes the transaction, the subject License
Agreement(s) shall automatically terminate and any Guarantee shortfall(s) shall
be immediately due and payable to Disney.

Disney `s consent to any assignment or other transfer should in no way be
understood to be a guarantee or promise by Disney of a grant of any future
license(s), as those determinations will continue to be made on a contract by
contract basis.

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Licensees must keep confidential all of the terms and conditions of Disney `s
determinations regarding any transfer, including but not limited to, the amount
of any transfer fee required.

                        CODE OF CONDUCT FOR MANUFACTURERS

At The Walt Disney Company, we are committed to:

         -        a standard of excellence in every aspect of our business and
                  in every corner of the world;

         -        ethical and responsible conduct in all of our operations;

         -        respect for the rights of all individuals; and

         -        respect for the environment.

We expect these same commitments to be shared by all manufacturers of Disney
merchandise. At a minimum, we require that all manufacturers of Disney
merchandise meet the following standards:

CHILD LABOR                Manufacturers will not use child labor.

                           The term "child" refers to a person younger than 15
                           (or 14 where local law allows) or, if higher, the
                           local legal minimum age for employment or the age for
                           completing compulsory education.

                           Manufacturers employing young persons who do not fall
                           within the definition of "children" will also comply
                           with any laws and regulations applicable to such
                           persons.

INVOLUNTARY LABOR          Manufacturers will not use any forced or involuntary
                           labor, whether prison, bonded, indentured or
                           otherwise.

COERCION AND               Manufacturers will treat each employee with dignity
HARASSMENT                 and respect, and will not use corporal punishment,
                           threats of violence or other forms of physical,
                           sexual, psychological or verbal harassment or abuse.

NONDISCRIMINATION          Manufacturers will not discriminate in hiring and
                           employment practices, including salary, benefits,
                           advancement, discipline, termination or retirement,
                           on the basis of race, religion, age, nationality,
                           social or ethnic origin, sexual orientation, gender,
                           political opinion or disability.

ASSOCIATION                Manufacturers will respect the rights of employees to
                           associate, organize and bargain collectively in a
                           lawful and peaceful manner, without penalty or
                           interference.

HEALTH AND SAFETY          Manufacturers will provide employees with a safe and
                           healthy workplace in compliance with all applicable
                           laws and

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                           regulations, ensuring at a minimum, reasonable access
                           to potable water and sanitary facilities, fire
                           safety, and adequate lighting and ventilation.

                           Manufacturers will also ensure that the same
                           standards of health and safety are applied in any
                           housing that they provide for employees.

COMPENSATION               We expect manufacturers to recognize that wages are
                           essential to meeting employees' basic needs.
                           Manufacturers will, at a minimum, comply with all
                           applicable wage and hour laws and regulations,
                           including those relating to minimum wages, overtime,
                           maximum hours, piece rates and other elements of
                           compensation, and provide legally mandated benefits.
                           If local laws do not provide for overtime pay,
                           manufacturers will pay at least regular wages for
                           overtime work. Except in extraordinary business
                           circumstances, manufacturers will not require
                           employees to work more than the lesser of (a) 48
                           hours per week and 12 hours overtime or (b) the
                           limits on regular and overtime hours allowed by local
                           law or, where local law does not limit the hours of
                           work, the regular work week in such country plus 12
                           hours overtime. In addition, except in extraordinary
                           business circumstances, employees will be entitled to
                           at least one day off in every seven-day period.

                           Where local industry standards are higher than
                           applicable legal requirements, we expect
                           manufacturers to meet the higher standards.

PROTECTION OF THE          Manufacturers will comply with all applicable
ENVIRONMENT                environmental laws and regulations.

OTHER LAWS                 Manufacturers will comply with all applicable laws
                           and regulations, including those pertaining to the
                           manufacture, pricing, sale and distribution of
                           merchandise.

                           All references to "applicable laws and regulations"
                           in this Code of Conduct include local and national
                           codes, rules and regulations as well as applicable
                           treaties and voluntary industry standards.

SUBCONTRACTING             Manufacturers will not use subcontractors for the
                           manufacture of Disney merchandise or components
                           thereof without Disney's express written consent, and
                           only after the subcontractor has entered into a
                           written commitment with Disney to comply with this
                           Code of Conduct.

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MONITORING AND             Manufacturers will authorize Disney and its
COMPLIANCE                 designated agents (including third parties) to engage
                           in monitoring activities to confirm compliance with
                           this Code of Conduct, including unannounced on-site
                           inspections of manufacturing facilities and
                           employer-provided housing; reviews of books and
                           records relating to employment matters; and private
                           interviews with employees. Manufacturers will
                           maintain on site all documentation that may be needed
                           to demonstrate compliance with this Code of Conduct.

PUBLICATION                Manufacturers will take appropriate steps to ensure
                           that the provisions of this Code of Conduct are
                           communicated to employees, including the prominent
                           posting of a copy of this Code of Conduct, in the
                           local language and in a place readily accessible to
                           employees, at all times.



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                          CODE OF CONDUCT FOR LICENSEES

At The Walt Disney Company, we are committed to:

         -        a standard of excellence in every aspect of our business and
                  in every corner of the world;

         -        ethical and responsible conduct in all of our operations;

         -        respect for the rights of all individuals; and

         -        respect for the environment.


We expect these same commitments to be shared by all Disney licensees and the
manufacturers with which they work in the production of Disney merchandise. At a
minimum, we require that all Disney licensees meet the following standards:

CONDUCT OF                 Licensees that engage directly in the manufacturing
MANUFACTURING              of Disney merchandise will comply with all of the
                           standards set forth in Disney's Code of Conduct for
                           Manufacturers, a copy of which is attached.

                           Licensees will ensure that each manufacturer other
                           than the licensee also enters into a written
                           commitment with Disney to comply with the standards
                           set forth in Disney's Code of Conduct for
                           Manufacturers.

                           Licensees will prohibit manufacturers from
                           subcontracting the manufacture of Disney merchandise
                           or components thereof without Disney's express
                           written consent, and only after the subcontractor has
                           entered into a written commitment with Disney to
                           comply with Disney's Code of Conduct for
                           Manufacturers.

MONITORING AND             Licensees will take appropriate steps, in
COMPLIANCE                 consultation with Disney, to develop, implement and
                           maintain procedures to evaluate and monitor
                           manufacturers of Disney merchandise and ensure
                           compliance with Disney's Code of Conduct for
                           Manufacturers, including unannounced on-site
                           inspections of manufacturing facilities and
                           employer-provided housing; review of books and
                           records relating to employment matters; and private
                           interviews with employees.

                           Licensees will authorize Disney and its designated
                           agents (including third parties) to engage in similar
                           monitoring activities to confirm Licensees'
                           compliance with this Code of Conduct. Licensees will
                           maintain on site all documentation that may be needed
                           to demonstrate such compliance.