EXHIBIT 10.10
                              *Omitted and filed separately with the Commission.

                                 RETAIL LICENSE
                         WARNER BROS. CONSUMER PRODUCTS
                                   #3775-WBLT

LICENSE AGREEMENT made MARCH 22, 1994, by and between Warner Bros., division of
Time Warner Entertainment, L.P., c/o Warner Bros. Consumer Products, a Time
Warner Entertainment Company, 4000 Warner Blvd., Burbank, CA 91522 (hereinafter
referred to as "LICENSOR") AND Ace Novelty, Inc., whose address is 13434
Northeast 16th Street, Bellevue, WA 98005 Attn: Saul Gamoran (hereinafter
referred to as "LICENSEE").


   The Parties hereto agree as follows:

1.    DEFINITIONS: As used in the Agreement, the following terms shall have the
      following respective meanings:

      (a)   "Name and Character": the representations, names and logos,
            movements, personalities, artwork, photographs and other material in
            connection with the following "LOONEY TUNES" characters: BUGS BUNNY,
            SYLVESTER, TWEETY, PEP LE PEW, PORKY PIG, DAFFY DUCK, SYLVESTER JR.,
            ELMER FUDD, YOSEMITE SAM, ROAD RUNNER, WILE COYOTE, SPEEDY GONZALES,
            WILE COYOTE, MARC ANTONY, TASMANIAN DEVIL, FOGHORN LEGHORN, HENERY
            HAWK, PEPE LE PEW AND MARVIN THE MARTIAN only.

      (b)   "Licensed Product(s)":

                        i)    Plush depictions of Characters

                        ii)   *REDACTED

                        iii)  *REDACTED

                        iv)   *REDACTED

                        v)    *REDACTED

                        vi)   *REDACTED

                        vii)  *REDACTED

                        viii) *REDACTED

                        ix)   *REDACTED

                        x)    *REDACTED

                        xi)   *REDACTED

                        xii)  *REDACTED

                        xiii) *REDACTED

                        ixx)  *REDACTED

                        xx)   *REDACTED

                        xxi)  *REDACTED

                        xxii) *REDACTED

                        xxiii)*REDACTED

                        xxiv) *REDACTED


            It is understood and agreed between the parties that the above
            mentioned Licensed Products shall be distributed to the Amusement
            Industry trade only. Sales through any other channel of distribution
            are specifically excluded from the rights granted to Licensee
            hereunder. It is further agreed that the Licensed Products are to be
            awarded as prizes in connection with games of skill and are not to
            be sold to the general public under any circumstances.

            *redacted
<PAGE>
                              *Omitted and filed separately with the Commission.

      **    The category of "Bean Bag Chairs" shall be distributed and sold only
            through the retail channel of distribution on a non-exclusive basis.

            This Agreement specifically excludes the following articles: Vinyl
            soft-stuffed balls, vinyl soft-stuffed figures and pillows,
            bean-filled footballs (hack sacks), caps, plastic mugs & squeeze
            bottles.

      *     Licensee recognizes that if figural prototype inflatables are
            submitted, Licensor may elect not to approve for Licensee production
            at any time during the Term of this Agreement.

      (c)   "Territory": United States

      (d)   "Marketing": June 1, 1994

      (e)   "Term": January 1, 1994 through *REDACTED

      (f)   "Royalty Rate": Licensee shall pay to Licensor the sum equal to
            *REDACTED of all net sales by Licensee of the Licensed Product(s)
            and *REDACTED of Licencee's net sales of the Licensed Product(s)sold
            to customers F.O.B. to a location in the Territory.

      (g)   "Guaranteed Consideration": The sum of *REDACTED payable as
            follows:

            *REDACTED payable simultaneously upon the execution hereof; and

            *REDACTED payable on or before *REDACTED

            *REDACTED payable on or before *REDACTED

            *REDACTED payable on or before *REDACTED

            *REDACTED payable on or before *REDACTED

            *REDACTED payable on or before *REDACTED

            *REDACTED payable on or before *REDACTED

            *REDACTED payable on or before *REDACTED

            *REDACTED payable on or before *REDACTED

2.     GRANT OF LICENSE.

      (a)   Upon the terms and conditions set forth in this Agreement, Licensor
            hereby grants to Licensee and Licenseee hereby accepts for the Term
            of this Agreement, a license to utilize the Name and Character
            solely on or in connection with the manufacture, distribution and
            sale of the Licensed Product(s) as specified above for the ultimate
            retail sale to the public throughout the Territory on an exclusive
            basis subject to Paragraph 1(b).

      (b)   For purposes of interpretation throughout this Agreement, every
            application and utilization of each enumerated Name and Character
            set forth above as to any given Licensed Product set forth above
            shall be considered as a separate grant, and as a separate Licensed
            Product.

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      (c)   Licensee specifically understands and agrees that no rights are
            granted herein with respect to the Warner Bros. "shield" logo or
            trademark, or any other trademark(s), logo(s) or copyrights owned by
            Licensor other than those specifically set forth above in the Name
            and Character, it being understood that all rights in and to said
            properties are reserved exclusively to Licensor for use and/or
            licensing as it deems appropriate to third party(s) of its choice.

      (d)   Licensee specifically understands and agrees that no rights are
            granted herein with respect to the Warner Bros. "LOONEY TUNES
            LOVABLES" infant property, it being understood that all rights in
            and to said property are reserved exclusively to Licensor for us
            and/or licensing as it deems appropriate to third party(s) of its
            choice.

      (e)   Without limiting any other approvals of Licensor as contained
            herein, no television commercials may be utilized under this License
            without specific prior written approval of Licensor.

3.     CONSIDERATION.

      (a)   The Guaranteed Consideration paid by Licensee as set forth above
            shall be applied against such royalties as are, or have become, due
            to Licensor. No part of such Guaranteed Consideration shall be
            repayable to Licensee. Royalties earned in excess of the Guaranteed
            Consideration applicable to the Term hereof shall not offset any
            Guaranteed Consideration required in respect of the succeeding
            renewal term (if any); likewise, royalties earned in excess of the
            Guaranteed Consideration applicable to the renewal term shall not
            offset any Guaranteed Consideration applicable to any prior terms.

      (b)   Royalty Payments: Licensee shall pay to Licensor a sum equal to the
            Royalty Rate as set forth above all net sales by Licensee of the
            Licensed Product(s) covered by this Agreement. The term "net sales:
            herein shall mean the gross invoice price billed customers, less
            actual quantity discounts and actual returns, but no deductions
            shall be made for uncollectible accounts and deductions shall be
            made for actual returns may not exceed 5% of total sales. No costs
            incurred in the manufacture, sale, distribution, advertisement, or
            exploitation of the Licensed Prodcut(s) shall be deducted from any
            royalties payable by Licensee.

      (c)   Royalties shall be payable concurrently with the periodic statements
            required in paragraph 5 hereof, except to the extent offset by
            Guaranteed Consideration theretofore remitted.

4.    RESERVATION OF RIGHTS; PREMIUMS.

      (a)   Licensor reserves all rights not expressly conveyed to Licensee
            hereunder, and Licensor may grant licenses to others to use the Name
            and Character, artwork and textual matter in connection with other
            products whether similar or identical to the Licensed Product(s) or
            otherwise. Notwithstanding anyting to the contrary in the foregoing
            paragraph or elsewhere set forth in this Agreement, Licensor
            specifically reserves the right without limitation throughout the
            world to itself use, or license any third party(s) of its choice for
            the manufacture, distribution and sale of products similar or
            identical to those licensed herein in Paragraph 1(b) above for sale
            through any catalogue(s) produced or distributed by or on behalf of
            Licensor or its affiliated companies, or for

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            sale or distribution in any motion picture theaters, or for sale or
            distribution in any retail stores operated by or on behalf of
            Licensor or its affiliated compaies, or for sale or distribution in
            any theme/amusement parks operated by or on behalf of Licensor and
            its affiliated companies. In addition, Licensor reserves the right
            to allow Six Flags Corporation to manufacture (or have manufactured
            by a third party) products similar or identical to those licensed
            herin for distribution or sale in theme and/or amusement parks owned
            or operated by Six Flags Corporation. Further, Licensor reserves the
            right to use, or license others to use, and/or manufacture products
            similar or identical to those licensed herein for use as premiums.

      (b)   Licensee agrees that it will not use, or knowingly permit the use
            of, and will exercise due care that its customers likewise will
            refrain from the use of, the Licensed Product(s) as a premium,
            except with the prior written consent of Licensor. Subject to
            Licensor's prior written approval as aforesaid, Licensee shall pay
            to Licensor a sum equal to TEN PERCENT (10%) of all premium sales.
            For purposes of this paragraph, the term "premium" shall be defined
            as including, but not necessarily limited to, combination sales,
            free or self-liquidating items offered to the public in conjunction
            with the sale or promotion of a product or service, including
            traffic building or continuity visits by the consumer/customer, or
            any similar scheme or device, the prime intenet of which is to
            promote, publicize and or sell the products, services or business
            image of the user of such item.

5.     PERIODIC STATEMENTS.

      (a)   Within THIRTY (30) days after the initial shipment of the Licensed
            Product(s) and promptly on the 15th day of every month thereafter,
            Licensee shall furnish to Licensor complete and accurate statements
            certified to be accurate by Licensee, or if a corporation, by an
            officer of Licensee, showing with respect to all Licensed Product(s)
            distributed and sold by Licensee during the preceding calendar month
            the number of units, description of items sold (specifiying the
            components of the Name and Character utilized and specifiying the
            nature of the Licensed Product(s), gross sales price and itemized
            deductions from gross sales price, and net sales price together with
            any returns make during the preceding calendar month. Such
            statements shall be furnished to Licensor whether or not any of the
            Licensed Product(s) have been sold during the calendar months to
            which such statements refer. Receipt or acceptance by Licensor of
            any of the statements furnished pursuant to this Agreement or of any
            sums paid hereunder shall not preclude Licensor from questioning the
            correctness thereof at any time, and in the event that any
            inconsistencies or mistakes are discovered in such statements or
            payments, they shall immediately be rectified and the appropriate
            payments made by Licensee. Upon demand of Licensor, Licensee shall
            at it's own expense, but not more than once in any twelve (12) month
            period, furnish to Licensor a detailed statement by an independent
            certified accountant showing the number, description of items sold
            specifying of the Name and Character utilized and nature of Licensed
            Product(s), gross sales price itemized deductions from gross sales
            price and net sales price of the Licensed Product(s) covered by this
            Agreement distributed and/or sold by Licensee up to and including
            the date upon which Licensor has made such demand.

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<PAGE>
      (b)   The statements and payments required hereunder shall be delivered
            to:

            Warners Bros. Consumer Products
            Domestic Accounting
            4000 Warner Boulevard
            Tower - 11th Floor
            Burbank, California  91522

      (c)   Licensee agrees to provide, in the event of a material default in
            payment, at Licensor's request: (i) a letter of credit issued in
            favor of Licensor from a financial institution as approved by
            Licensor in an amount up to the Guaranteed Consideration; and /or
            (ii) such other form of security acceptable to Licensor. Licensee
            agrees to execute all docuemnentation as Licensor may require in
            connection with perfecting such security interests.

      (d)   Any payments which are made to Licensor hereunder after the due date
            required therefore, shall bear interest at the then current prime
            rate (or the minimum rate permissible by law, if less than the
            current prime rate) from the date such payments are due to the date
            of payment. Licensor's right hereunder to interest on late payments
            shall not preclude Licensor from exercising any of its rights or
            remedies pursuant to this Agreement or otherwise with regard to
            Licensee's failure to make timely remittances.

6.     BOOKS AND RECORDS.

      (a)   Licensee shall keep, maintain and preserve (in Licensee's principal
            place of business) for at least two (2) years following termination
            or expiration of the term of this Agreement or any renewal(s)
            hereof, complete and accurate records of accounts including, without
            limitation, invoices, correspondence, banking and financial and
            other records pertaining to the various items required to be
            submitted by Licensee. Such records and accounts shall be available
            for inspeciton and audit at any time or times during or after the
            term of this Agreement or any renewal(s) hereof during reasonable
            business hours and upon reasonable notice by Licensor or its
            nominees. Licensee agrees not to cause or permit any interference
            with Licensor or nominees of Licensor in the performance of their
            duties. During such inspections and audits, Licensor shall have the
            right to take extracts and/or make copies of Licensee's records as
            it deems necessary.

      (b)   The exercise by Licensor in whole or in part, at any time or the
            right to audit records and accounts or of any other right herein
            granted, or the acceptance by Licensor of any statement or
            statements or the receipt and/or deposit by Licensor, of any payment
            tendered on or on behalf of Licensee shall be without prejudice to
            any rights or remedies of Licensor and such acceptance, receipt
            and/or deposity shall not preclude or prevent Licensor from
            thereafter disputing the accuracy of any such statements or payment,

      (c)   If pursuant to its rights hereunder Licensor causes an audit and
            inspection to be instituted when thereafter discloses a deficiency
            between the amount found to be due to Licensor and the amount
            actually received or credited to Licensor, then Licensee shall be
            responsible for payment of the deficiency, together with interest
            thereon at the then current prime rate from the date such amount
            became due until the date of payment, and, if the

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<PAGE>
            deficiency is more than 5%, then Licensee shall pay the reasonable
            costs and expenses of such audit and inspection.

7.    INDEMNIFICATION.

      (a)   During the Term, and continuing after the expiration or termination
            of this Agreement, Licensor shall idemnify Licensee and shall hold
            it harmless from any loss, liability, damage, cost or expense
            arising out of any claims or suits which may be brought or made
            against Licensee by reason of the breach by Licensor of the
            warranties or representaions set forth in paragraph 12 hereof,
            provided that Licensee shall give prompt written notice, and full
            cooperation and assistance to Licensor relative to any such claim or
            suit and provided, further, that Licensor shall have the option to
            undertake and conduct the defense of any suit so brought. Licensee
            shall not, however, be entitled to recover for lost profits.
            Licensee shall cooperate fully in all respects with Licensor in the
            conduct and defense of said suit and/or proceedings related thereto.

      (b)   During the Term, and continuing after the expiration or termination
            of this Agreement, Licensee shall indemnify Licensor and shall hold
            it harmless from any loss, liability, damage, cost or expense
            arising out of any claims or suits which may be brought or made
            against Licensor by reason of: (i) any branch of Licensee's
            covenants and undertakings hereunder, including those set forth in
            paragraph 13 hereof; (ii) any unauthorized use of the Name and
            Character; (iii) any unauthorized use of any trademark, copyright,
            design, patent, process, method or device, except for those uses of
            the Name and Character that are specifically approved by Licensor
            pursuant to the terms of this Agreement; (iv) Licensee's
            non-compliance with any applicable federal, state or local laws or
            with any other applicable regulations; and (v) any alleged defects
            and/or inherent dangers (whether obvious or hidden) in the Licensed
            Product(s) or the use thereof.

      (c)   With regard to 7(b) above, Licensee agrees to obtain, at its own
            expense, product liability insurance providing adequate protection
            for Licensor and Licensee against any such claims or suits in
            amounts no less than three million dollars ($3,000,000) per
            occurrence, combined single limits. Simultaneously with the
            execution of this Agreement, Licensee undertakes to submit to
            Licensor a fully paid policy or certificate of insurance naming
            Licensor as an additional insured party and, requiring that the
            insurer shall not terminate or materially modify such without
            written notice to Licensor at least twenty (20) days in advance
            thereof.

8.    ARTWORK; COPYRIGHT AND TRADEMARK NOTICES.

      (a)   The Name and Character shall be displayed or used only in such form
            and in such manner as has been specifically approved in writing by
            Licensor in advance and Licensee undertakes to assure usage of the
            Trademark(s) and Character(s) solely as approved hereunder. Licensee
            further agrees and acknowledges that any and all artwork authorized
            for use hereunder by Licensor in connection with the Licensed
            Product(s) or which otherwise features or includes the Name and
            Character shall be owned in its entirety exclusively by Licensor.
            Licensor reserves for itself or its designees all rights to sue any
            and all artwork created, utilized and/or approved hereunder without
            limitation.

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      (b)   Licenses acknowledges that, as between Licensor and License, that
            Name and character and all copyrights, trademarks and other
            proprietary rights in and to the name and Character are owned
            exclusively by Licensor. Licensee acknowledges that Licensor shall
            have the right to terminate this Agreement in the event Licensee
            asserts any rights (other than those granted pursuant to the
            Agreement) in or to the Name and Character. Licensee further agrees
            and acknowledges that Licensor shall own the copyright and other
            proprietary rights in any and all artwork authorized for use
            hereunder that incorporates the Name and Character. At the request
            of Licensor, Licensee shall execute such form(s) of assignment of
            copyright in any amendments or derivative works based in whole or
            part on the Name and Character as Licensor may reasonably request.
            If any third party makes or has made any contribution to the
            creation of artwork authorized for use hereunder, Licensee agrees to
            obtain from such party a full assignment of rights so that the
            foregoing assignment by Licensee shall vest full rights in Licensor.

      (c)   Licensee shall, within thirty (30) days of receiving an invoice, pay
            Licensor for artwork executed by Licensor (or by third parties under
            contract to Licenser) for use in the development of the Licensed
            Product(s) and any related packaging, display and promotional
            materials at Licensor's prevailing commercial art rates. The
            foregoing shall include any artwork that, in Licensor'opinion, is
            necessary to modify artwork initially prepared by Licensee and
            submitted for approval. Estimates of artwork charges are available
            upon request.

      (d)   Licensee shall cause to be imprinted, irremovably and legibly on
            each Licensed Product(s) manufactured, distributed or sold under
            this Agreement, and all advertising, promotional packaging and
            wrapping material wherein the Name and Character appears, the
            following as directed by Licensor:

            (i)   The appropriate Copyright Notices, as directed and in each
                  instance specified by Licensor, including an encircled c, the
                  Name of Licensor, year date of first publication of the art
                  and/or textual material generally in the following form:

                  LOONET TUNES, names, characters and all related indicia are
                  trademarks of Warner Bros. C 199-. The year data shall be as
                  instructed by Licensor.

            (ii)  The appropriate Trademark, Notices with respect to the
                  Trademark(s) and Character(s) (and: any component thereof) as
                  specified in each instance by Licensor, including the initials
                  "TM", or the letter "R" encircled or "*"(asterisk), and/ or
                  any such legend(s) as may be required by Licensor, including
                  but not limited to a legend that the Name and Character (and
                  any component thereof) are trademarks of Licensor used under
                  license by Licensee.


      (e)   In no event shall Licensee use, in respect to the Licensed
            Product(s) and/or in relation to any advertising, promotional,
            packaging or wrapping material, any copyright or trademark notices
            which shall conflict with, be confusing with, or negate, any notices
            required hereunder by Licensor in respect to the Name and Character.

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      (f)   Licensee agrees to deliver to Licensor free of cost twelve(12) of
            each of the Licensed Product(s) together with their packaging and
            wrapping material for trademark registration purposes in compliance
            with applicable laws, simultaneously upon distribution to the
            public. Any copyrights or trademarks with respect to the Licensed
            Product(s) shall be procured by and for the benefit of Licensor and
            at Licensor's expense. Licensee further agrees to provide Licensor
            with the date of the first use of the Licensed Product(s) in
            intrastate commerce.

      (g)   Licensee shall assist Licensor, at Licensor's expense, in the
            procurement, protection, and maintenance of Licensor's rights to the
            Name and Character. Licensor may, in its sole discretion, commence
            or prosecute and effect the disposition of any claims or suits
            relative to the imitation, infringement and/or unauthorized use of
            the Name and Character either in its own name, or in the name of
            Licensee, or join as a party in the prosecution of such claims or
            suits. Licensee agrees to cooperate fully with Licensor in
            connection with any such claims or suits and undertakes to furnish
            full assistance to Licensor in the conduct of all proceedings in
            regard thereto. Licensee shall promptly notify Licensor in writing
            of any infringements or imitations or unauthorized uses by others or
            the Name and Character, on or in relation to products identical to
            similar to or related to the Licensed Product(s). Licensor shall in
            its sole discretion have the right to settle or effect compromises
            in respect thereof. Licensee shall not institute any suit or take
            any action on account of such infringements, imitations or
            unauthorized uses.

     9.      APPROVALS AND QUALITY CONTROLS.

      (a)   Licensee agrees to comply and maintain compliance with the quality
            standards and specifications of Licensor in respect to all usage of
            the Name and Character on or in relation to the licensed Product(s)
            throughout the Term of this Agreement and any renewals or extensions
            thereof. Licensee agrees to furnish to Licensor free of cost for its
            written approval as to quality and style, samples of each of the
            Licensed Product(s), together with their packaging, hangtags,
            wrapping material, as follows in the successive stages indicated (a)
            rough sketches/layout concepts; (b) finished artwork or final
            proofs; (C) preproduction samples or strike-offs; (d) finished
            products, including packaged samples.

      (b)   No Licensed Product(s) and no material whatever utilizing the Name
            and Character shall be manufactured, sold, distributed or promoted
            by Licensee without prior written approval. Licensee may, subject to
            Licensor's prior written approval, use textual and/or pictorial
            matter pertaining to the name and Character on such promotional,
            display and advertising material as may, in its reasonable judgment,
            promote the sale of the Licensed Product(s). All advertising and
            promotional material relating to the Licensed Product(s) must be
            submitted to the Licensor for its written approval at the following
            stages appropriate to the medium used. (a) rough concepts (b)
            layout, storyboard, script; and (C) finished materials.

      (c)   Approval or disapproval shall lie in Licensor's sole discretion. Any
            Licensed Product(s) not so approved in writing shall be deemed
            unlicensed and shall not be manufactured or sold. If any unapproved
            Licensed Product(s) are being sold, Licensor may, together with

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            other remedies available to it including, but not limited to,
            immediate termination of this Agreement, require such Licensed
            Product(s) to be immediately withdrawn from the market and to be
            destroyed, such destruction to be attested to in a certificate
            signed by an officer of Licensee.

      (d)   Any modification of a Licensed Product must be submitted in advance
            for Licensor's written approval as if it were a new Licensed
            Product. Approval of a Licensed Product which uses particular
            artwork does not imply approval of such artwork for use with a
            different Licensed Product.

      (e)   licensed Product(s) must conform in all material respects to the
            final production samples approved by Licensor. If in Licensor's
            reasonable judgment, the quality of a Licensed Product originally
            approved has deteriorated in later production runs, or if a Licensed
            product has otherwise been altered, Licensor may, in addition to
            other remedies available to it, require that such Licensed Product
            be immediately withdrawn from the market.

      (f)   licensee shall permit Licensor, upon reasonable notice, to impact
            Licensee's manufacturing operations and testing records (including
            those operations and records of any supplier or manufacturer
            approved pursuant to Paragraph 10 below) with respect to the
            Licensed Product(s).

      (g)   If any changes or modifications are required to be made to any
            material submitted to Licensor for its written approval in order to
            ensure compliance with Licensor's specifications or standards of
            quality, licensee agrees promptly to make such changes of
            modifications . Subsequent to final approval , no fewer than
            twenty-four (24) production samples of Licensed Product(s) will be
            sent to Licensor, to ensure quality control simultaneously upon
            distribution to the public. In addition, Licensor shall have the
            right to purchase any and all licensed Product(s) in any quantity at
            the price Licensee charges its customer at the maximum discount
            price.

      (h)   To avoid confusion of the public, licensee agrees not to associate
            other characters or licensed properties with the Name and Character
            on the Licensed Product(s) or in any packaging, promotional or
            display materials unless Licensee receives Licensor's prior written
            approval. Furthermore, Licensee agrees not to use the Name and
            Character (or any component thereof) on any business sign, business
            cards, stationery or forms, nor to use the Name and Character as
            part of the name of Licensee's business or any division thereof.

      (i)   Licensee shall use its best efforts to notify its customers of the
            requirement that Licensor has the right to approve all promotional,
            display and advertising material pursuant to this Agreement.

      (j)   It is understood and agreed that any animation used in electronic
            media, including but not limited to animation for television
            commercials and character voices for radio commercials, shall be
            produced by Warner Bros. Animation pursuant to a separate agreement
            between Licensee and Warner Bros. Animation, subject to Warner Bros.
            Animation customary rates. Any payment made to Warner Bros.
            Animation for such animation shall be in addition to and shall not
            offset the consideration set forth in paragraph 3.

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10.    DISTRIBUTION; SUB-LICENSEE MANUFACTURE

      (a)   Licensee shall sell the Licensed Product(s) either to jobbers,
            wholesalers, distributors or retailers for sale or resale and
            distribution directly to the public. If licensee sells or
            distributes the Licensed Product(s) at a special price, directly or
            indirectly, to itself, including without limitation, any subsidiary
            of Licensee or to any other person, firm, or corporation affiliated
            with Licensee or its officers, directors or major stockholders, for
            ultimate sale to unrelated third parties, Licensee shall pay
            royalties with respect to such sales or distribution, based upon the
            price generally charged the trade by Licensee.

      (b)   Licensee shall not be entitled to sub-license and of its rights
            under this Agreement. In the event licensee is not the manufacturer
            of the Licensed Product(s), Licensee shall be, subject to the prior
            written approval of Licensor (which approval shall not be
            unreasonably withheld), be entitled to utilize a third party
            manufacturer in connection with the manufacture and production of
            the Licensed Product(s) provided that such manufacturer shall
            execute a letter in the form of Exhibit 1 attached hereto and by
            this reference made a part hereof. In such event, Licensee shall
            remain primarily obligated under all of the provisions of this
            agreement. In no event shall any such sub-license agreement include
            the right to grant any further sublicenses.

11.    GOOD WILL.

            Licensee recognizes the great value of the publicity and good will
      associated with the Name and Character and, acknowledges (I) such goodwill
      is exclusively that of the Licensor and (ii) that the Name and Character
      have acquired a secondary meaning as Licensor's trademarks and/or
      identifications in the mind of the purchasing public. Licensee further
      recognizes and acknowledges that a breach by licensee of any of its
      covenants, agreements or undertakings hereunder will cause Licensor
      irreparable damage, which cannot be readily remedied in damages in an
      action at law, and may, in addition thereto, constitute an infringement of
      Licensor's copyrights, trademarks and other proprietary rights in, and to
      the Name and Character, thereby entitling Licensor to seek equitable
      remedies and costs.

12.    LICENSOR'S WARRANTIES AND REPRESENTATIONS.

      Licensor represents and warrants to Licensee that:

      (a)   It has, and will have throughout the term of this Agreement, the
            right to license the Name and Character to Licensee in accordance
            with the terms and provisions of this Agreement, and,

      (b)   The making of this Agreement by Licensor does not violate any
            agreements, rights or obligations existing between Licensor and any
            other person, firm or corporation.

13.    SPECIFIC UNDERTAKINGS OF LICENSEE.

       During the Term and thereafter, Licensee agrees that:

      (a)   It will not attack the title of Licensor or its Grantors in and to
            the Name and Character or any copyright or trademark pertaining
            thereto, nor will it attack the validity of the license granted
            hereunder:

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      (b)   It will not harm, misuse or bring into disrepute the Name and
            Character, but on the contrary, will maintain the value and
            reputation thereof to the best of its ability;

      (c)   It will manufacture, sell, promote and distribute the Licensed
            Product(s) in an ethical manner and in accordance with the terms and
            intent of this Agreement, and in compliance with all applicable
            government regulations and industry standards;

      (d)   It will not create any expenses chargeable to Licensor without the
            prior written approval of Licensor;

      (e)   It will protect to the best of its ability its right to manufacture,
            sell, promote, and distribute the Licensed Product(s) hereunder;

      (f)   It will at all times comply with all government laws and
            regulations, including but not limited to product safety, food,
            health, drug, cosmetic, sanitary or other similar laws, and all
            voluntary industry standards relating or pertaining to the
            manufacture, sale, advertising or use of the Licensed Product(s),
            and shall maintain its appropriate customary high quality standards.
            It shall comply with any regulatory agencies which shall have
            jurisdiction over the Licensed Product(s) and shall procure and
            maintain in force any and all permissions, certifications and/or
            other authorizations from governmental and/or other official
            authorities that may be required in relation thereto. Each Licensed
            Product and component thereof distributed hereunder shall comply
            with all applicable laws, regulations and voluntary industry
            standards. Licensee shall follow reasonable and proper procedures
            for testing that all Licensed Product(s) comply with such laws,
            regulations and standards. Upon reasonable notice, Licensee shall
            permit Licensor or its designees to inspect testing records and
            procedures with respect to the Licensed product(s) for compliance.
            Licensed Product(s) that do not comply with all applicable laws,
            regulations and standards shall automatically be deemed unapproved;

      (g)   It shall, upon Licensor's request, provide credit information to
            Licensor including, but not limited to, fiscal year-end financial
            statements (profit-and-loss statement and balance sheet) and
            operating statements.

      (h)   It will provide Licensor with the date(s) of first use of the
            Licensed Product(s) in interstate and intrastate commerce, where
            appropriate; and

      (i)   It will pursuant to Licensor's instructions, duly take any and all
            necessary steps to secure execution of all necessary documentation
            for the recordation of itself as user of the Name and Character in
            any jurisdiction where this is required or where Licensor reasonably
            requests that such recordation shall be effected. Licensee further
            agrees that it will at its own expense cooperate with Licensor in
            cancellation of any such recordation at the expiration of this
            Agreement or upon termination of Licensee's right to use the Name
            and Character. Licensee hereby appoints Licensor its
            Attorney-in-fact for such purpose.

14.     TERMINATION BY LICENSOR.

      (a)   Licensor shall have the right to terminate this Agreement without
            prejudice to any rights which it may have in the premises, whether
            pursuant to the provisions of this

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            Agreement, in law, or in equity, or otherwise, upon the occurrence
            of any one or more of the following events (herein called
            "defaults"):

            (i)   If Licensee defaults in the performance of any of its
                  obligations provided for in this Agreement; or

            (ii)  Licensee shall have failed to deliver to Licensor or to
                  maintain in full force and effect the insurance referred to in
                  subparagraph 7(c) hereof; or

            (iii) If Licensee shall fail to make any payments due hereunder on
                  the date due; or

            (iv)  If Licensee shall fail to deliver any of the statements
                  hereinabove referred to or to give access to the premises
                  and/or license records pursuant to the provisions hereof to
                  Licensor's authorized representatives for the purposes
                  permitted hereunder; or

            (v)   If Licensee shall fail to comply with any laws, regulations or
                  voluntary industry standards as provided in Paragraph 13(f) or
                  if any governmental agency or other body, office or official
                  vested with appropriate authority finds that the Licensed
                  Product(s) are harmful or defective in any way, manner or
                  form, or are being manufactured, sold or distributed in
                  contravention of applicable laws, regulations or standards, or
                  in a manner likely to cause harm; or

            (vi)  If Licensee shall be unable to pay its debts when due, or
                  shall make any assignment for the benefit of creditors, or
                  shall file any petition under the bankruptcy or insolvency
                  laws of any jurisdiction, country or place, or shall have or
                  suffer a receiver or trustee to be appointed for its business
                  or property, or be adjudicated a bankrupt or an insolvent; or

            (vii) In the event that Licensee does not commence in good faith to
                  manufacture, distribute and sell each Licensed Product(s) and
                  utilize each Character set forth in the Name and Character
                  within the Territory on or before the Marketing Date and
                  thereafter fails to diligently and continuously manufacture,
                  distribute and sell each of the Licensed Products and utilize
                  each Character within the Territory. Such default and
                  Licensor's resultant right of termination (or recapture)
                  shall only apply to the specific Character(s) and/or the
                  specific Licensed Product(s), which or wherein Licensee fails
                  to meet said Marketing Date requirement; or

           (viii) If Licensee shall manufacture, sell or distribute, whichever
                  first occurs, any of the Licensed Products(s) without the
                  prior written approval of Licensor as provided in paragraph 9
                  hereof; or

            (ix)  If Licensee undergoes a substantial change of management; or

            (x)   If a manufacturer approved pursuant to subparagraph 10(b)
                  hereof shall engage in conduct, which conduct if engaged in by
                  Licensee would entitle Licensor to terminate this Agreement;
                  or

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<PAGE>
            (xi)  If Licensee delivers or sells Licensed Product(s) outside the
                  Territory or knowingly sells Licensed Products(s) to a third
                  party for delivery outside the Territory; or

            (xii) If Licensee shall breach any other agreement in effect between
                  Licensor or any other client or Warner Bros. Consumer Products
                  on the other.

      (b)   In the event any of these defaults occur, Licensor shall give notice
            of termination in writing to Licensee by certified mail. Licensee
            shall have ten (10) days from the date of receiving notice in which
            to correct any of these defaults (except subdivisions (vi) and
            (viii) above which are not curable), and failing such, this
            Agreement shall thereupon immediately terminate and any and all
            payments then or later due from Licensee hereunder (including
            Guaranteed Consideration) shall then be promptly due and payable and
            no portion of prior payments shall be repayable to Licensee.

15.   FINAL STATEMENT UPON TERMINATION OR EXPIRATION.

            Licensee shall deliver, as soon as practicable, but not later than
      thirty (30) days following expiration or termination, a statement
      indicating the number and description of Licensed Product(s) on hand
      together with a description of all advertising and promotional materials
      relating thereto. Following expiration or termination, Licensee shall not
      continue to manufacture the Licensed Product(s). However, if Licensee has
      complied with all the terms of this Agreement, including, but not limited
      to, complete and timely payment of the Guaranteed Consideration then,
      Licensee may continue to distribute and sell its remaining inventory on a
      non-exclusive basis for a period not to exceed SIXTY (60) days following
      such termination or expiration, subject to payment of applicable royalties
      thereto. In no event, however, may Licensee distribute and sell during
      such period an amount of Licensed Product(s) that exceeds the average
      amount of Licensed Product(s) sold during a consecutive SIXTY (60) day
      period during the Term. If Licensee has any remaining inventory of the
      Licensed Product(s) following such SIXTY (60) day period, Licensee shall,
      at Licensor's option, make available such inventory to Licensor for
      purchase at cost, deliver up to Licensor for destruction said remaining
      inventory or furnish to Licensor an affidavit attesting to the destruction
      of said remaining inventory. Licensor shall have the right to conduct a
      physical inventory in order to ascertain or verify such inventory and/or
      physical inventory. In the event this Agreement is terminated by Licensor
      for cause, Licensee shall be deemed to have forfeited its sell-off rights
      hereunder. In addition to the forfeiture, Licensor shall have recourse to
      all other legal remedies available to it.

16.   NOTICES.

            Except as otherwise specifically provided herein, all notices which
      either party hereto is required or may desire to give to the other shall
      be given by addressing the same to the other at the address set forth
      above, or at such other address as may be designated in writing by any
      such party in a notice to the other given in the manner prescribed in this
      paragraph. All such notices shall be sufficiently given when the same
      shall be deposited so addressed, postage prepaid, in the United States
      mail and/or when the same shall have been delivered, so addressed to a
      facsimile or over-night delivery

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<PAGE>
      service and the date of said mailing shall be the date of the giving of
      such notice and/or transmitted via facsimile with receipt of a confirming
      copy.

17.   NO PARTNERSHIP, ETC.

            This Agreement does not constitute and shall not be construed as
      constitution of a partnership or joint venture between Licensor and
      Licensee. Neither party shall have any right to obligate or bind the other
      party in any manner whatsoever, and nothing herein contained shall give,
      or is intended to give, any rights of any kind to any third persons.

18.   NON-ASSIGNABILITY.

            This Agreement shall bind and inure to the benefit of Licensor, its
      successors and assigns. This Agreement is personal to Licensee, and
      Licensee shall not sub-license nor franchise its rights hereunder, and
      neither this Agreement nor any of the rights of Licensee hereunder shall
      be sold, transferred or assigned by Licensee and no rights hereunder shall
      devolve by operation of law or otherwise upon any receiver, liquidation,
      trustee or other party.

19.   CONSTRUCTION.

            This Agreement shall be construed in accordance with the laws of the
      State of California and of the United States of America.

20.   WAIVER, MODIFICATION ETC.

            No waiver, modification or cancellation of any term or condition of
      this Agreement shall be effective unless executed in writing by the party
      charged therewith. No written waiver shall excuse the performance of any
      acts other than those specifically referred to therein. The fact that the
      Licensor has not previously insisted upon Licensee expressly complying
      with any provision of this Agreement shall not be deemed to be a waiver of
      Licensor's future right to require compliance in respect thereof and
      Licensee specifically acknowledges and agrees that the prior forbearance
      in respect of any act, term or condition shall not prevent Licensor from
      subsequently requiring full and complete compliance thereafter. If any
      term or provision of this Agreement is held to be invalid or unenforceable
      by any court of competent jurisdiction or any other authority vested with
      jurisdiction, such holding shall not affect the validity or enforceability
      of any other term or provision hereto and this Agreement shall be
      interpreted and construed as if such term or provision, to the extent the
      same shall have been held to be invalid, illegal or unenforceable, had
      never been contained herein. Headings of paragraphs herein are for
      convenience only and are without substantive significance.

21.   ACCEPTANCE BY LICENSOR.

            This instrument, when signed by Licensee shall be deemed an
      application for license and not a binding agreement unless and until
      accepted by Warner Bros. Consumer Products, a Time Warner Entertainment
      Company by signature of a duly authorized officer and the delivery of such
      a signed copy to Licensee. The receipt and/or deposit by Warner Bros.
      Consumer Products, a Time Warner Entertainment Company of any check or
      other consideration given by Licensee and/or delivery of any material by
      Warner Bros. Consumer Products, a Time Warner

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<PAGE>
      Entertainment Company to Licensee shall not be deemed an acceptance by
      Warner Bros. Consumer Products, a Time Warner Entertainment Company of
      this application. The foregoing shall apply to any documents relating to
      renewals or modifications hereof.

            This Agreement shall be of no force or effect unless and until it is
      signed by all of the parties listed below:

AGREED AND ACCEPTED                             AGREED AND ACCEPTED:

LICENSOR:                                       LICENSEE:

WARNER BROS. CONSUMER PRODUCTS, A               ACE NOVELTY COMPANY, INC.
TIME WARNER ENTERTAINMENT COMPANY
As Agent for Warner Bros. a
division of Time Entertainment
Company, L.F.

By: /s/ GARY R. SIMON                           By: /s/ SAUL GAMORAN
        Gary R. Simon                                   Saul Gamoran
        Vice President, Legal Affairs                   Executive Vice President

Date: 3/22/97                                   Date: 3-17-97

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<PAGE>
                              EXHIBIT 1 #3775-WBLT

                                     Dated

Warner Bros. Consumer Products, a
Time Warner Entertainment Company
4000 Warner Boulevard
Burbank, CA  91522

Gentlemen:

      This letter will serve as notice to you that pursuant to subparagraph
10(b) of the License Agreement between your client WARNER BROS. and ACE NOVELTY
COMPANY, INC., we have been engaged as the manufacturer for ACE NOVELTY COMPANY,
INC. in connection with the manufacture of the Licensed Product(s) as defined in
the aforesaid License Agreement. We hereby acknowledge that we have received a
copy and are cognizant of the terms and conditions set forth in said License
Agreement and hereby agree to observe those provisions of said License Agreement
which are applicable to our function as manufacturer of the Licensed Product(s).
It is understood that this engagement is on a royalty free basis.

      We understand that our engagement as the manufacturer for ACE NOVELTY
COMPANY, INC. is subject to your written approval. We request, therefore, that
you sign in the space below, thereby showing your acceptance of our engagement
as aforesaid.

                                                Very truly yours,

                                                (MANUFACTURER)

                                                By: ____________________________
                                                    Signature

                                                    ____________________________
                                                    Printed name

                                                    ____________________________
                                                    Address

                                                    ____________________________

                                                    ____________________________
                                                    Dated

AGREED TO AND ACCEPTED;

WARNER BROS. CONSUMER PRODUCTS, A
TIME WARNER ENTERTAINMENT COMPANY

By: _____________________________
        Gary R. Simon
        Vice President, Legal Affairs

Date: __________________

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