AGREEMENT, entered into as of October 10, 1997
(the "Agreement"), among Arlene Scanlan ("Scanlan"),  Lancit
Media Entertainment, Ltd. ("Lancit") and The Strategy
Licensing Company, Inc. ("Strategy").
                  WHEREAS, pursuant to a Stock Exchange Agreement between Lancit
and Scanlan,  dated  October 1, 1993,  Lancit  acquired  85% of the  outstanding
shares of capital  stock of  Strategy  from  Scanlan and  Scanlan  retained  the
remaining 15% of the stock;
                  WHEREAS,  in connection  with the sale of the stock to Lancit,
Scanlan  and Lancit  entered  into an  Employment  Agreement  pursuant  to which
Scanlan acted as President of Strategy and,  among other things,  to a provision
restricting  her ability to compete with Strategy  after the  termination of her
employment;
                  WHEREAS,  the employment period under the Employment Agreement
expired and Scanlan continued her employment with Strategy after the expiration;
and
                  WHEREAS,  Lancit, Strategy and Scanlan now desire to terminate
Scanlan's  employment  with Strategy and Lancit desires to acquire the remaining
15% of the Strategy stock.
                  NOW THEREFORE,  in  consideration  of the mutual covenants and
representations herein set forth the parties agree as follows:

<PAGE>

                  1.       Definitions.
                           "Affiliate" means a Person that directly, or
indirectly through one or more intermediaries,  controls, is controlled by or is
under common control with the Person specified. For purposes of this definition,
the term  "control"  (including  the terms  "controlling,"  "controlled  by" and
"under  common  control  with")  of a Person  means  the  possession,  direct or
indirect,  of the  power  to (i) vote  50% or more of the  Voting  Stock of such
Person or (ii) direct or cause the direction of the  management  and policies of
such Person, whether by contract or otherwise.
                           "Claims" means any and all actions, causes of
action, suits, debts, dues, sums of money, accounts,  reckonings,  bonds, notes,
bills, specialities, covenants, contracts, controversies, variances, trespasses,
damages, judgments, executions, claims (including without limitation, claims for
indemnity,  contribution,  costs or attorneys's  fees),  demands and any and all
proceedings whatsoever, whether in law, admiralty, equity or otherwise.
                           "Employment Agreement" means the Employment
Agreement between Strategy and Scanlan, dated July 1, 1993.
                           "Person" means any individual, corporation,
partnership,  firm, joint venture,  association,  joint-stock  company,  limited
liability company, trust, estate,  unincorporated organization,  governmental or
regulatory body or other entity.

<PAGE>

                           "Shareholders Agreement" means the
Shareholders  Agreement among Strategy,  Lancit and Scanlan,  dated December 14,
1993.
                           "Strategy Related Entities" means Strategy
and its Affiliates  (including without limitation Lancit),  Affiliates hereafter
created, predecessors,  representatives,  heirs, successors and assigns, and the
officers, directors, employees, shareholders, partners and agents, past, present
and  future,  and  the  heirs,  executors,   administrators,   insurers,   legal
representatives, predecessors, successors and assigns of each of the foregoing.
                  2. Stock Transfer.  In consideration  for all of the covenants
and agreements  contained herein,  and in complete  redemption of all her right,
title and  interest to all of the shares of capital  stock of  Strategy  held by
Scanlan (the  "Shares"),  concurrently  with the  execution  of this  Agreement,
Scanlan shall  transfer to Lancit,  all of the Shares by executing a stock power
in the form of Exhibit A hereto.
                  3.       Payment; Resignation.
                           3.1      Resignation.  Effective September 23,
1997 (the "Termination Date"),  Scanlan's employment is terminated and she is no
longer  President of Strategy or a member of the Board of Directors of Strategy,
and she no longer holds any other  positions with Strategy and/or Lancit and any
of their respective Affiliates. Scanlan has no

<PAGE>

right  to   reinstatement  as  an  employee  of  Strategy  and  shall  not  seek
reemployment, or employment by Lancit or any of its Affiliates.
                           3.2      Severance Payment.  Strategy shall pay
Scanlan $30,788.43 (the "Severance  Payment").  Except for the Payment,  Scanlan
has no right to receive any money from  Strategy or any of the Strategy  Related
Entities.
                           3.3      Termination of Shareholders Agreement.
Effective  as of the  date  hereof  the  parties  agree  that  the  Shareholders
Agreement shall be deemed terminated.
                           3.4      Exercise of Options.  As of the date
hereof,   Scanlan  holds  15,000  options  to  purchase   Lancit  common  stock.
Notwithstanding  anything  herein to the  contrary,  Scanlan shall have 3 months
from the Termination Date to exercise such options.
                  4.       Releases and Exceptions to the Noncompete.
                           4.1      Exception to the Noncompete.  Effective
as of the date hereof,  Strategy hereby waives its rights under the Covenant Not
to Compete (the "Noncompete") contained in Section 7 of the Employment Agreement
with respect to the properties  and/or entities listed on Schedule A hereto.  It
is  expressly  agreed by the parties  hereto that Scanlan  shall  continue to be
bound by the  terms of the  Noncompete  in all  other  respects,  as well as the
provisions of Sections 8 and 9 of the Employment Agreement. Scanlan acknowledges
that except as provided on Schedule A hereto,

<PAGE>

the obligations created by the Noncompete expire on September 23, 1999, and that
until  such time she is bound by the terms  thereof  with the  exception  of the
provisions of the first sentence of this Section 4.1.
                           4.2      Scanlan Release of the Strategy Related
Entities.  Effective as of the date hereof, except for any Claims arising out of
the  obligations  under this  Agreement,  Scanlan  hereby  releases  and forever
discharges the Strategy  Related Entities from any and all Claims against any of
the Strategy Related  Entities,  whether or not well-founded in fact or law, and
whether or not known to Scanlan,  which Scanlan ever had, now has, or might have
in the future, upon or by reason of any matter, cause or thing, or any action or
inaction,  whatsoever  from the beginning of the world to and including the date
of this Agreement,  including,  without  limitation,  all Claims relating to her
employment,  the  Employment  Agreement or the  Shareholders  Agreement  and all
Claims  which could arise  under Title VII of the Civil  Rights Act of 1964,  as
amended, the New York Human Rights Law, the Age Discrimination in Employment Act
of 1967,  and any and all other laws or  obligations  regulating  the employment
relationship between the parties.
                           4.3      The Strategy Related Entities Release of
Scanlan.  Scanlan represents that she is not aware of any
Claims that the Strategy Related Entities may have against
her as of the date of this Agreement and that she is not

<PAGE>

aware  that she has acted or failed to act in a manner  giving  rise to any such
Claims.  Based upon and subject to such  representations,  except for any rights
they may have under this Agreement  (including without limitation the provisions
of the Employment  Agreement  referred to in Section 4.1), the Strategy  Related
Entities  forever release and discharge  Scanlan from any and all Claims against
Scanlan, her heirs, successors and assigns,  whether or not well-founded in fact
or law, which they ever had, now have, or may have against Scanlan in the future
upon or by  reason of any  matter,  cause or thing,  or any  action or  inaction
whatsoever  from the  beginning of the world to and  including  the date of this
Agreement,  except  for any  Claims (i)  caused by  Scanlan's  gross  neglect or
intentional  misconduct,  and (ii) arising out of the obligations created by the
Agreement.
                  5.  Settlement a  Compromise;  Not an  Admission.  The parties
hereto, and each of them,  understand and agree that the settlement  effectuated
by this Agreement is a compromise of disputed Claims, and is not intended nor is
it to be construed as an admission of liability by any party hereto.
                  6. Irreparable  Harm.  Scanlan  acknowledges  that a breach of
Sections  4.1 and 8 hereof could cause  irreparable  injury and harm to Strategy
and Lancit and would cause damage for which a remedy at law would be inadequate.
Therefore, the parties agree that Strategy and Lancit will

<PAGE>

be entitled,  in addition to any other remedies that it may have, to a temporary
restraining order, preliminary injunction,  and/or permanent injunction or other
equitable relief in any court of competent  jurisdiction to prevent or otherwise
to  restrain  a breach,  or to  compel  specific  performance,  of any or all of
Sections  4.1 and 8 of  this  Agreement.  Nothing  in this  Section  6 shall  be
construed to prohibit or restrain  Strategy  and Lancit from  pursuing any other
remedies  or rights  available  to  Strategy  and  Lancit for any breach of this
Agreement, including the remedy of damages and right of set-off.
                  7.       Representations and Warranties.
                           7.1      Representations and Warranties of
Scanlan.  Scanlan makes the following representations and
warranties to the Strategy Related Entities:
                                    7.1.1  No Assignment of Claims.  Scanlan
has not assigned or otherwise transferred any of the Claims
being released herein.
                                    7.1.2  Possession of Documents.  Scanlan
does not  have in her  possession,  custody  or  control,  any  books,  records,
videotapes, memoranda, papers, reports, correspondence, data, lists or documents
of any  description  (whether in hard copy or on computer  disks,  computer hard
drives or in other  embodiments)  which belong to Strategy or Lancit, or contain
information relating to Strategy or Lancit.

<PAGE>

                                    7.1.3  Authority. Scanlan has the
authority  to  enter  into  this  Agreement  and  to  perform  the  transactions
contemplated  hereby. This Agreement when executed and delivered will constitute
the valid and binding obligation of Scanlan,  enforceable in accordance with its
terms.
                                    7.1.4   No Representations by Strategy.
Scanlan  acknowledges  that none of the Strategy  Related  Entities has made any
representations   or  warranties  in  connection  with  this  Agreement  or  the
transactions  contemplated  herein  except those  expressly set forth in Section
7.2.
                                    7.1.5  Knowledge; No Reliance.  Scanlan
is a sophisticated investor,  familiar with the licensing industry generally and
the business of Strategy in  particular,  and is being advised by, or has access
to advice from, an experienced financial advisor. Scanlan has been a shareholder
and the President of Strategy since its  inception.  Scanlan is aware of and has
made full  investigation of the operations,  condition and prospects of Strategy
and discussed and is familiar with the business,  management,  financial affairs
and  prospects of Strategy.  Scanlan has,  independently  (or together  with her
financial  advisor) and based upon such  documents  and  information  as she has
available,  made her own analysis and decision to enter into this Agreement.  In
connection with that

<PAGE>

decision,  neither  Strategy nor any of the Strategy  Related  Entities has made
(and has no  responsibility  with respect to), and Scanlan is not relying  upon,
any representation or warranty, express or implied, or any duty of disclosure by
Strategy as to any matter,  including without limitation matters relating to the
Shares.
                           7.2      Representations and Warranties of
Strategy and Lancit. Each of Strategy and Lancit has the authority to enter into
this  Agreement  and to  perform  the  transactions  contemplated  hereby.  This
Agreement  when executed and  delivered  will  constitute  the valid and binding
obligation of each of Strategy and Lancit,  enforceable  in accordance  with its
terms.
                  8.       Confidentiality; Nondisparagement.  Neither
party, nor anyone acting on such party's behalf, shall
publish, disseminate or communicate to any person
whatsoever, directly or indirectly (except as required by
law and to such parties' attorneys, accountants or tax
advisors), information concerning this Agreement.  Scanlan
shall not make or cause to be made, any statement or
communicate any information that disparages the reputation
of the Strategy Related Entities or any business or property
in which such entities have an interest.  Strategy and
Lancit shall use reasonable efforts to cause their officers,
directors, shareholders and employees not to make or cause

<PAGE>

to be made, any statement or communicate any information
that disparages the reputation of Scanlan.
                  9.       Return of Property; Cooperation.
                           9.1      Return of Property.  Strategy shall
deliver to Scanlan at the  address  listed in Section  11, all of the  furniture
listed on Schedule B hereto. Upon receipt of the furniture listed on Schedule B,
Scanlan  shall have  received  from the  Strategy  Related  Entities  all of her
personal property.
                  10.      Taxes.  All payments hereunder are subject to
all applicable federal state and local tax, FICA and other
withholding requirements.
                  11.  Notices.   All  notices,   requests,   demands  or  other
communications  required by or otherwise with respect to this Agreement shall be
in  writing  and  shall be deemed  to have  been  duly  given to any party  when
delivered  personally  (by courier  service or  otherwise),  when  delivered  by
facsimile (and receipt thereof has been confirmed by return facsimile),  in each
case to the applicable  addresses set forth below;  provided that delivery shall
be deemed complete when delivered to the address  designated below and shall not
require actual receipt by the individual to whom the  communication's  attention
has been marked:

<PAGE>

                  If to Scanlan:

                  Arlene Scanlan
                  15 Summer Hill Road
                  Westport, Connecticut
                  Facsimile No.:  (203) 259-4432

                  with a copy to:

                  Tenzer Greenblatt LLP
                  405 Lexington Avenue
                  New York, New York  10174
                  Attn:  Michael Mullman, Esq.
                  Facsimile No.:  (212) 885-5001

                  If to Lancit or Strategy, to each at:

                  601 West 50th Street
                  New York, New York  10019
                  Attn:  Jane M. Abernethy, Esq.
                  Facsimile No.:  (212) 977-9164

                  with a copy to:

                  Friedman Kaplan & Seiler LLP
                  875 Third Avenue
                  New York, NY  10022
                  Attn.:  Lisa Gersh Hall, Esq.
                  Facsimile No.:  (212) 355-6401

                  12.  Arbitration.  The parties agree that all disputes arising
hereunder  shall be settled by  arbitration  to be held in New York, New York in
accordance with the applicable rules of the American Arbitration  Association or
any successor  thereto.  The arbitrator may grant injunctions or other relief in
such dispute.  The decision of the  arbitrator  shall be final,  conclusive  and
binding on the  parties  to the  arbitration.  Nothing  contained  herein  shall
prevent any party from seeking  injunctive  relief, if necessary from a court of
competent jurisdiction.

<PAGE>

                  13.  Cooperation  between  the  Parties.  At  the  request  of
Strategy or Lancit,  Scanlan shall provide reasonable  cooperation in connection
with any matters  relating  to tax issues of either  Strategy or Lancit and will
execute all documents necessary to effectuate the terms of this Agreement.
                  14. New York Law. This  Agreement is entered into in the State
of New York and shall be interpreted in accordance with the internal laws of the
State of New York, without regard to New York's choice-of-law rules.
                  15. Binding Nature.  This Agreement shall inure to the benefit
of, and be  binding  upon,  and  enforceable  against,  the  successors,  heirs,
personal representatives and permitted assigns of the parties hereto.
                  16. Amendments. This Agreement may not be modified, amended or
terminated  except  by a  writing  signed  by the  parties  against  which  such
modification, amendment or termination is sought to be enforced.
                  17. Blue Penciling.  If any court  determines that any portion
of this  Agreement is  unenforceable  because of scope or  duration,  such court
shall  have the power to reduce  the  duration  or scope of such  portion of the
Agreement, and, in its reduced form, the Agreement shall then be enforceable.
                  18.      Counterparts.  This Agreement may be executed
in counterparts, each executed counterpart constituting an

<PAGE>

original but all together only one agreement among the
parties hereto.
                  19. Delay.  No course of dealing and no delay on the part of a
party in exercising any right, power or remedy conferred by this Agreement shall
operate as a waiver thereof or otherwise  prejudice such party's rights,  powers
or  remedies.  No single or partial  exercise of any rights,  powers or remedies
shall  preclude  any other or further  exercise  thereof or the  exercise of any
other right, power or remedy.
                  20.  Assignment.  No party may assign or  transfer  any of its
rights or obligations  under this Agreement  without the express written consent
of the  others,  which  consent may be withheld  for any  reason.  However,  the
Strategy  Related Parties may transfer their  respective  rights and obligations
under this  Agreement  as part of a larger  transfer  of  respective  rights and
obligations  by operation of law to a successor in  connection  with any merger,
reorganization,  liquidation  or  amalgamation  involving  any of  the  Strategy
Related Entities.
                  21. Advice of Counsel.  In connection with the negotiation and
execution of this Agreement (including the ADEA Waiver appended hereto), Scanlan
has been advised by Tenzer Greenblatt LLP, counsel of her own choosing.  Scanlan
has read this Agreement in its entirety, fully understands

<PAGE>

its terms and is signing it voluntarily of her own free
will.
                  IN  WITNESS  WHEREOF,  the  parties  hereto,  intending  to be
legally  bound,  have caused this  Agreement to be executed and delivered at New
York, New York as of the date first written above.
                                            THE STRATEGY LICENSING
                                                      COMPANY, INC.



                                          By /s/LAURENCE A. LANCIT




                                                     LANCIT MEDIA
                                                      ENTERTAINMENT, LTD.




                                          By /s/SUSAN L. SOLOMON



                                            /s/ ARLENE SCANLAN
                                                Arlene Scanlan

<PAGE>

                                                                       Exhibit A

                                   STOCK POWER

For value received,  ARLENE SCANLAN,  does hereby sell, assign and transfer unto
LANCIT  MEDIA  ENTERTAINMENT,  LTD.,  fifteen (15) shares of Common Stock of The
Strategy  Licensing  Company,  Inc.  standing  in her name on the  books of said
corporation,  and  does  hereby  irrevocably  constitute  and  appoint  JANE  M.
ABERNETHY  attorney to transfer the said stock on the books of said  corporation
with full power of substitution in the premises.

Dated:  October 10, 1997





By/s/ ARLENE SCANLAN
  Arlene Scanlan



<PAGE>

                                                                      Schedule A


Properties and/or Entities from which Scanlan
is released from Non-Compete


1.       "America's Dumbest Criminals"

2.       "WORLD WILDLIFE FUND," and the marks "WWF" and the
         Panda design.

3.       Except  as set  forth in item 2 above,  all  properties  owned by World
         Wildlife Fund, Inc., a Delaware corporation, but such release shall not
         be effective
         until after July 31, 1998.

4.       "Love Letters"

5.       "The American Experience"

6.       Except  as set  forth in item 5  above,  all  properties  owned by WGBH
         Educational   Foundation,   a   non-profit   charitable   Massachusetts
         corporation,  but such release shall not be effective  until after July
         31, 1998.

7.       "Sonic the Hedgehog"

8.       "Bedtime Buddies"

9.       "Class of 2000" and all properties owned by the owner
         thereof.

10.      "Psycho Chihuahua"/Wrench, L.L.C.




<PAGE>

                                                                      Schedule B


Furniture to be Returned to Scanlan.


Two burgundy  lamps with shades 
Four small black chairs 
Six burgundy  chairs 
One desk/conference room table


<PAGE>

                    WAIVER OF CLAIMS UNDER AGE DISCRIMINATION
                            IN EMPLOYMENT ACT (ADEA)


This statement is attached to and made a part of the Agreement dated October 10,
1997.  By signing  this  statement,  I am waiving any claims that I may now have
against the Strategy Related Entities under the Age Discrimination in Employment
Act  (ADEA).  My  signature  below  acknowledges  that I  have  read  and  fully
understand  this  waiver  and  the  terms  of the  appended  severance  proposal
(collectively, the "Agreement"), that I have had the opportunity to consult with
an attorney  regarding the terms of the  Agreement,  that I have had at least 21
days to consider this waiver,  that I am entering into this Agreement freely and
without coercion,  not in reliance on any  representation or promises other than
those contained in the Agreement,  and that I intend to be bound by the terms of
the Agreement.  I understand that the benefits  provided under the Agreement are
conditioned upon this waiver.

I agree that I have had seven days to consider the terms of the Agreement and to
consider  whether  to revoke my  acceptance  of the terms of this  Agreement.  I
understand  that I shall be bound by all of the terms of the Agreement if I have
not so revoked my acceptance as described in the preceding sentence.

ACCEPTED AND AGREED TO:



/s/ ARLENE SCANLAN
Arlene Scanlan


<PAGE>

                                   STOCK POWER

For value received,  ARLENE SCANLAN,  does hereby sell, assign and transfer unto
LANCIT  MEDIA  ENTERTAINMENT,  LTD.,  fifteen (15) shares of Common Stock of The
Strategy  Licensing  Company,  Inc.  standing  in her name on the  books of said
corporation,  and  does  hereby  irrevocably  constitute  and  appoint  JANE  M.
ABERNETHY  attorney to transfer the said stock on the books of said  corporation
with full power of substitution in the premises.

Dated:  October 10, 1997





By /s/ARLENE SCANLAN
  Arlene Scanlan