EXHIBIT 10.34

                         RETAIL AND PROMOTIONAL LICENSE
                         WARNER BROS. CONSUMER PRODUCTS
                                 #13771-WBLT/BIA

PROMOTIONAL  LICENSE  AGREEMENT  made  NOVEMBER  20, 2002 by and between  WARNER
BROS., A DIVISION OF TIME WARNER ENTERTAINMENT  COMPANY,  L.P., c/o Warner Bros.
Consumer Products, a division of Time Warner  Entertainment  Company L.P., whose
address is 4000 Warner  Blvd.,  Burbank,  CA 91522  (hereinafter  referred to as
"LICENSOR") and POORE BROTHERS,  INC., whose address is 3500 S. La Cometa Drive,
Goodyear,  AZ  85338,   Attention:   Eric  Kufel  (hereinafter  referred  to  as
"LICENSEE").

                              W I T N E S S E T H:

The parties hereto mutually agree as follows:

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

     (a)  "CHANNELS  OF   DISTRIBUTION":   Licensee  may  conduct  the  Licensed
          Promotion and shall sell and distribute the Licensed  Products  and/or
          the Licensed  Premiums through the following  Channels of Distribution
          only (as such  channels are defined and numbered in Exhibit 1 attached
          hereto and incorporated herein by reference):

          CHANNEL                                               EXHIBIT 1 NUMBER

          [*]

          All other Channels of Distribution  defined in Exhibit 1 which are not
          specified above in this Paragraph l(a) are specifically  excluded from
          this Agreement.

          [*]

     (b)  "GUARANTEED CONSIDERATION": [*]

     (c)  "LICENSED  PREMIUM(S)":  Licensee  shall  have the  right  to  include
          premiums  incorporating  the Licensed Property in association with the
          Licensed Promotion.

          Any and all such  premiums  shall be  determined  by the  parties at a
          later date and shall be added to this License Agreement  pursuant to a
          written  amendment,  provided,  however,  that Licensor shall have the
          absolute  right to approve  in  writing  all the  elements  (i.e.  all
          premiums as well as all product packaging, advertising, etc.) prior to
          manufacture of said premiums.

          For purposes of this subparagraph, 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 intent of which is to use the premiums in
          such a way as to promote, publicize and or sell the products, services
          or business image of the user of such item.

     (d)  "LICENSED PRODUCTS":  Salted Snacks Category defined as: Potato Chips,
          Potato Crisps,  2-D Potato or Corn Snacks,  3-D Potato or Corn Snacks,
          Pretzels,  Cheese Puffs, Tortilla Chips, Pellet Fried Snacks, Extruded
          Fried Snacks.

          It is understood  and agreed that for the purposes of this  Agreement,
          Salted  Snacks  Category  shall  exclude  the  following:   pre-popped
          popcorn, nuts, crackers, and cookies.

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     (e)  "LICENSED  PROMOTION":  The right to utilize the Licensed  Property in
          connection with the advertising and promotion of the Licensed Products
          and with the manufacture,  distribution and  advertisement of Licensed
          Premiums as set forth below:

          (i)       Licensee shall commit to purchase [*] in national television
                    media  to  support  the  theatrical  release  of the  Motion
                    Picture.  It is understood  and agreed that such  television
                    support may not air earlier  than six (6) weeks prior to the
                    release of the Motion  Picture and shall air within an eight
                    (8) to twelve (12) week period (the  "Promotional  Window").
                    Such  television  media shall be  dedicated  exclusively  to
                    advertising the Licensed  Products and the products licensed
                    under  separate  license  agreement  #13770-WBLT  and  shall
                    include a Motion Picture in-theater communication integrated
                    into  the  spot  or  tagged  at the  end of the  spot.  Such
                    television  media  shall  include  but  not be  limited  to,
                    network primetime, network cable and spot buys;

          (ii)      Licensee shall run one dedicated FSI featuring  artwork from
                    the Motion  Picture on no less than fifty  percent  (50%) of
                    such FSI (the "Motion  Picture FSI") during the  Promotional
                    Window.  The  Motion  Picture  FSI  shall  also  include  an
                    in-theater  communication.  It is understood and agreed that
                    the Motion  Picture FSI shall run no earlier than  September
                    28,  2003 and no  later  than  November  8,  2003;  provided
                    however,  in the event the theatrical  release of the Motion
                    is prior to or after November 14, 2003 (the "New  Theatrical
                    Release  Date),  then the  Motion  Picture  FSI shall run no
                    earlier  than six (6) weeks  prior to and no later  than one
                    (1)  week  prior to the New  Theatrical  Release  Date.  The
                    Motion  Picture  FSI shall  fulfill  Licensee's  annual  FSI
                    requirement  for  the  calendar  year  2003  under  separate
                    license agreement #13770-WBLT;

          (iii)     Upon the  conclusion  of the  Licensed  Promotion,  Licensee
                    shall provide to Licensor  confirmation  of the actual value
                    and number of impressions for each component of the Licensed
                    Promotion. Within two (2) months after the completion of the
                    Licensed Promotion, Licensee will provide Licensor a written
                    report   substantially   in  the  form  attached  hereto  as
                    Attachment  B,  summarizing  the  results  of  the  Licensed
                    Promotion   (e.g.   increase   in  business  in  dollars  or
                    impressions).  Along with such report, Licensee shall return
                    to Licensor all remaining collateral marketing materials.

     (f)  "LICENSED  PROPERTY":  The  names,  characters,   trademarks,   logos,
          likenesses,   environmental  settings,   costumes  and  plot  elements
          (collectively  the  "Elements")  contained in or  associated  with the
          released  version of the theatrical  motion picture  entitled  "LOONEY
          TUNES: BACK IN ACTION" (the "MOTION PICTURE"), excluding therefrom any
          elements  which are the property of third  parties.  In addition,  the
          Licensed  Property  shall also  include  the  representations,  names,
          logos,  movements,  personalities,   artwork,  photographs  and  other
          material in connection with the "Looney Tunes" animated  characters as
          depicted in the Motion  Picture:  BUGS BUNNY,  DAFFY DUCK,  SYLVESTER,
          TWEETY,  ROAD RUNNER,  WILE E. COYOTE,  TASMANIAN  DEVIL,  ELMER FUDD,
          PORKY PIG,  YOSEMITE SAM, PEPE LE PEW,  MARVIN THE MARTIAN and FOGHORN
          LEGHORN only. Collectively,  the Elements described above are referred
          to herein as the "LICENSED  PROPERTY".  Specifically  excluded herein,
          however, is the right to reproduce the names, likenesses,  autographs,
          signatures,  visual  representations,  audio recordings or voices (the
          "Name and Likeness") of the actors and actresses in the Motion Picture
          (the  "Performer(s)")  except  to the  extent  specifically  permitted
          otherwise  in  writing  by  Licensor  and then only to the  extent the
          Performer(s)   have   granted   merchandising   rights  to   Licensor.
          Notwithstanding  the  foregoing,  all uses of any of the  elements set
          forth  above,   including  the  Names  and  Likeness  of  any  of  the
          Performer(s)  afforded  hereunder  must be  specifically  approved  in
          writing by Licensor, pursuant to paragraph 9 herein.

          Licensee  acknowledges that the rights granted herein are limited only
          to the Elements  contained in the Motion  Picture and that any and all
          rights  in,  to or  associated  with any  previously  or  subsequently
          produced "LOONEY TUNES" style guides,  television or theatrical motion
          picture or television series, as well as with any sequels or spin-offs
          thereto  are  specifically  excluded  from this  Agreement  and may be

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          licensed  separately  to any third  party(s) of  Licensor's  choice at
          Licensor's sole discretion. Furthermore, no sound bites, voices, music
          or other audio is included herein.  If Licensee wishes to use any such
          elements,  Licensee must separately  procure the necessary  rights and
          any rights  clearance  or related  fees  arising from same shall be at
          Licensee's sole expense.

     (g)  "MARKETING DATE": October 1, 2003

          It is understood and agreed that Licensed  Products may not ship prior
          to September 15, 2003.

     (h)  "ROYALTY RATE": Licensee shall pay to Licensor the following sums:

          (i)       [*] of Net Sales of all Licensed Products; and

          (ii)      [*]  of  Net  Purchase   Price  of  all  Licensed   Premiums
                    distributed  by Licensee  hereunder.  The term "Net Purchase
                    Price" herein shall mean the price actually paid by Licensee
                    for  any  Licensed  Premium(s)  authorized  and  distributed
                    hereunder.  It is  understood  and agreed that any Royalties
                    paid to Licensor on Net Purchase  Price of Premiums shall be
                    in  addition   to  and  shall  not  offset  the   Guaranteed
                    Consideration hereunder.

     (g)  "STYLE  GUIDE":  Any materials  provided by Licensor to Licensee which
          sets  forth  the  style,  format,  characterization  and  any  artwork
          depicting the Licensed Property which has been approved by Licensor in
          writing

     (i)  "TERM": [*].

     (j)  "TERRITORY":  United States (fifty states), Puerto Rico, United States
          Virgin Islands, and United States Military Bases.

2.   GRANT OF LICENSE:

     (a)  Subject to the restrictions,  limitations, reservations and conditions
          and Licensor's  approval rights set forth in this Agreement,  Licensor
          hereby grants to Licensee and Licensee  hereby accepts for the Term of
          this Agreement,  a license to utilize the Licensed  Property solely on
          or in connection with the Licensed Promotion and the Licensed Products
          and/or  Licensed  Premiums  throughout  the  Territory on an exclusive
          basis in the Salted  Snack  Category  as defined  in  Paragraph  1(d),
          except that sales of Licensed  Products  and  Licensed  Premiums  sold
          through   Airport  Gift  and  Other  Airport  Stores  shall  be  on  a
          non-exclusive basis.

     (b)  [*]

     (c)  Without  limiting any other  approval  rights of Licensor as contained
          herein,  no  television  commercials  (animated or live action) may be
          utilized  under this  Agreement  without the  specific  prior  written
          approval of Licensor.

3.   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
          Licensed Property, artwork and textual matter in connection with other
          uses, services and products without limitation.

     (b)  Notwithstanding  anything to the contrary stated herein, Licensor, for
          itself and its affiliates,  specifically  reserves the right,  without
          limitation  throughout the world,  to itself use, or license any third
          party(s) of its choice to use the Licensed Property for the marketing,
          manufacture, distribution and sale of products and/or the promotion of
          services  similar or identical to those licensed  herein in Paragraphs
          l(c) and l(d)  above  for sale  through  any  catalogue(s)  or  online
          website  produced  or  distributed  by or on behalf of Licensor or its
          affiliated  companies,  or for sale or  distribution  in any theaters,
          arenas or restaurants or for sale or  distribution  in connection with
          any home video product, including DVD or other formats, or for sale or

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          distribution  in the  retail  stores  known as  "Warner  Bros.  Studio
          Stores"  and any  other  retail  stores  operated  by or on  behalf of
          Licensor or its affiliated  companies,  or for sale or distribution in
          any theme/amusement parks operated by or on behalf of Licensor and its
          affiliated companies,  including without limitation, the Six Flags and
          Movie World parks or its licensees,  Six Flags,  Movie World, or their
          affiliated  companies.  In  addition,  Licensor  reserves the right to
          allow Six Flags and Movie World to manufacture  (or have  manufactured
          by a third party)  products  similar or  identical  to those  licensed
          herein for  distribution or sale in theme and/or amusement parks owned
          or  operated  by Six  Flags  and/or  Movie  World.  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.  Nothing  contained herein shall be construed to mean
          that Licensee is granting a license to Licensor to utilize  Licensee's
          proprietary and/or patented technology.

     (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 Licensed
          Property,  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.
          Notwithstanding the foregoing Licensee may use the Warner Bros. shield
          logo in connection  with the legal line  referenced in Paragraph  8(d)
          below as instructed by Licensor's Brand Assurance Department.

     (d)  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  Products as  premiums or the  Licensed
          Premiums as products  for retail sale,  except with the prior  written
          consent of Licensor.

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

     (f)  Licensee further understands and agrees that the rights granted herein
          are limited  only to the cartoon  characters  set forth above and that
          any and all rights in, to or  associated  with the  theatrical  motion
          picture entitled "SPACE JAM", as well as with any sequels thereto, are
          specifically excluded herefrom, it being understood that all rights in
          and to said  property  are  reserved  exclusively  to Licensor for use
          and/or  licensing  as it deems  appropriate  to third  parties  of its
          choice.

4.   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 (if any) shall not offset
          any Guaranteed Consideration applicable to any prior term.

     (b)  Royalty  Payments:  Licensee  shall pay to Licensor a sum equal to the
          Royalty  Rate as set forth  above of (i) all Net Sales by  Licensee of
          the Licensed  Products  and/or (ii) Net Purchase Price of the Licensed
          Premiums covered by this Agreement.  The term "net sales" herein shall
          mean [*]. No costs incurred in the  manufacture,  sale,  distribution,
          advertisement,  or  exploitation  of the  Licensed  Products  shall be
          deducted from any royalties payable by Licensee.

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

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5.   PERIODIC STATEMENTS:

     (a)  Within  thirty  (30) days  after the end of the first  fiscal  quarter
          after the date of execution of the License  Agreement  and promptly on
          the 25th day after the end of each fiscal quarter 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  the (i)  number of units;  (ii)  country  in which
          manufactured,   sold,  distributed  and/or  to  which  shipped;  (iii)
          Description  (as such term is defined below) of the Licensed  Products
          and/or Licensed Premiums; (iv) gross sales price or Net Purchase Price
          (if  applicable);  and (v) itemized  deductions from gross sales price
          and net sales price (if  applicable)  together  with any returns  made
          during the preceding fiscal quarter.  Such statements shall be in such
          formats as Licensor  shall  reasonably  require  (which formats may be
          amended  by  Licensor  from time to time) and  shall be  furnished  to
          Licensor  whether or not any of the Licensed  Products and/or Licensed
          Premiums have been  distributed  during fiscal  quarters 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 its own expense,
          but not more than once in any  twelve  (12) month  period,  furnish to
          Licensor a detailed  statement  by an officer of Licensee  showing the
          (i)  number  of  units;  (ii)  country  in which  manufactured,  sold,
          distributed and/or to which shipped; (iii) Description of the Licensed
          Products  and/or  Licensed  Premiums;  (iv) gross  sales  price or Net
          Purchase Price (if applicable); and (v) itemized deductions from gross
          sales  price  and net  sales  price (if  applicable)  of the  Licensed
          Products   and/or   Licensed   Premiums   covered  by  this  Agreement
          distributed  and/or sold by Licensee up to and including the date upon
          which  Licensor has made such demand.  For purposes of this  Paragraph
          5(a), the term "Description" shall mean a detailed  description of the
          Licensed  Products  and/or Licensed  Premiums  including the nature of
          each of the Licensed  Products and/or Licensed  Premiums,  any and all
          names and likenesses, whether live actors or animated characters, from
          the  Licensed  Property  utilized  on  the  Licensed  Products  and/or
          Licensed   Premiums  and/or  any  related  packaging  and/or  wrapping
          material,  and any other components of the Licensed  Property utilized
          on the Licensed  Products and/or Licensed  Premiums and/or any related
          packaging  and/or  wrapping   material.   In  the  event  Licensor  is
          responsible   for  the   payment  of  any   additional   third   party
          participations  based on Licensee not reporting by character  name and
          likeness  as  provided  above,   Licensee  shall  be  responsible  for
          reimbursing  Licensor  for the full  amount  of all such  third  party
          claims,   including  without  limitation  the  participation   itself,
          interest,  audit and reasonable  attorneys' fees. Licensee understands
          and agrees that it is a material term and condition of this  Agreement
          that Licensee include the Description on all statements.  In the event
          Licensee  fails to do so,  Licensor  shall have the right to terminate
          this  Agreement,  in  accordance  with the  provisions of Paragraph 14
          herein.

     (b)  For the statements  and payments  required  hereunder,  Licensee shall
          reference the contract  number(s) on all statements  and payments.  If
          the United States Postal Service is used deliver to the following:

          WARNER BROS. CONSUMER PRODUCTS
          21477 Network Place
          Chicago, IL 60673-1214

          If sent by Federal Express or any other Courier Service deliver to the
          following:

          BANK ONE
          Attention WBCP lockbox #21477
          525 West Monroe
          8th Floor Mail Room
          Chicago, IL 60661
          Telephone Number 312-732-5500

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     (c)  Any payments which are made to Licensor  hereunder  after the due date
          required therefor, shall bear interest at the then current prime rate,
          as published in The Wall Street Journal (New York edition), plus three
          (3%)  percent (or the maximum rate  permissible  by law, if less) 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 other 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  expiration or
          termination of the Term of this Agreement or any renewal(s) hereof (if
          applicable),  complete  and  accurate  records of accounts  including,
          without  limitation,  purchase orders,  inventory  records,  invoices,
          correspondence,  banking and financial and other records pertaining to
          the various  items  required to be submitted by Licensee as well as to
          ensure  Licensee's  compliance with local laws as required pursuant to
          Paragraph  13(k) hereof.  Such records and accounts shall be available
          for  inspection and audit up to two (2) times per year during or after
          the Term of this  Agreement or any renewal(s)  hereof (if  applicable)
          during  reasonable  business  hours  and  upon  reasonable  notice  by
          Licensor  or  its   nominees.   Licensee   agrees  not  to  cause  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
          relevant records as it deems reasonably necessary.  Licensor agrees to
          keep  confidential  all  information  and copies  obtained by Licensor
          pursuant  to this  Paragraph  other  than  with  respect  to  required
          disclosures  in  connection  with  disputes  between the parties or as
          otherwise required by law, court order or governmental process.

     (b)  The exercise by Licensor in whole or in part, at any time of 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 by or on
          behalf  of  Licensee  shall be  without  prejudice  to any  rights  or
          remedies of Licensor and such acceptance, receipt and/or deposit shall
          not  preclude  or  prevent  Licensor  from  thereafter  disputing  the
          accuracy of any such statement or payment.

     (c)  If  pursuant  to its  right  hereunder  Licensor  causes  an audit and
          inspection to be instituted  which  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, upon Licensor's
          demand, promptly pay 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 deficiency is more than five percent
          (5%) of all payments made by Licensee during the period covered by the
          audit,  then Licensee shall pay the  reasonable  costs and expenses of
          such audit and inspection.

7.   INDEMNIFICATIONS:

     (a)  During the Term, and continuing after the expiration or termination of
          this Agreement,  Licensor shall indemnify  Licensee and its affiliates
          and shall hold them harmless from any loss, liability, damage, cost or
          expense,  including  reasonable  attorneys'  fees,  arising out of any
          claims or suits which may be brought or made against  Licensee and its
          affiliates  by reason of the breach by Licensor of the  warranties  or
          representations  as 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,  Time  Warner
          Entertainment  Company,  L.P. ("TWE") and each of its affiliates,  and
          shall hold them harmless  from any loss,  liability,  damage,  cost or
          expense,  including  reasonable  attorneys'  fees,  arising out of any

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          claims or suits which may be brought or made against Licensor,  TWE or
          any of its  affiliates,  by reason of:  (i) any  breach of  Licensee's
          covenants and  undertakings  hereunder;  (ii) any  unauthorized use by
          Licensee of the Licensed  Property;  (iii) any use of any trademark or
          copyright on or in connection with the Licensed Products, the Licensed
          Premiums or the Licensed Promotion (except trademarks or copyrights in
          the  Licensed  Property  used in  accordance  with  the  terms of this
          Agreement),  design,  patent,  process,  method  or  device  on  or in
          connection with the Licensed  Products,  Licensed Premiums or Licensed
          Promotion; (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 Products and/or Licensed Premiums,  or the use
          thereof.  Provided,  however,  that Licensor shall give prompt written
          notice,  and full  cooperation and assistance to Licensee  relative to
          any claim or suit and provided,  further, that Licensee shall have the
          option to  undertake  and  conduct the defense of any suit so brought.
          Licensor  shall  cooperate  fully in all respects with Licensee in the
          conduct and defense of said suit and/or  proceedings  related thereto.
          Provided, however, that Licensor shall give prompt written notice, and
          full cooperation and assistance to Licensee relative to any such claim
          or suit and provided,  further, that Licensee shall have the option to
          undertake  and conduct  the  defense of any suit so brought.  Licensor
          shall cooperate fully in all respects with Licensee in the conduct and
          defense of said suit and/or proceedings related thereto.

     (c)  With regard to Paragraph 7(b) above, Licensee agrees to obtain, at its
          own expense, Commercial General Liability Insurance, including product
          liability  and  contractual   liability  coverage  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,  TWE and each
          of its affiliates as additional  insured  parties and,  requiring that
          the insurer shall not  terminate or  materially  modify such policy or
          certificate of insurance  without  written notice to Licensor at least
          thirty (30) days in advance thereof. Such insurance shall at all times
          be  primary  and  not  contributory  with  any  insurance  carried  by
          Licensor, TWE or any of their affiliates.  Further the delivery of the
          policy or certificate, as provided in this Paragraph 7(c) are material
          obligations of Licensee.

8.   ARTWORK; COPYRIGHT AND TRADEMARK NOTICES:

     (a)  The Licensed Property 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  (defined
          below) created, utilized, approved and/or authorized for use hereunder
          by Licensor which features or includes the Licensed  Property shall be
          owned exclusively by Licensor excluding  intellectual  property rights
          in and to any  elements  that are owned by  Licensee  or  licensed  by
          Licensee from a third party and do not include the Licensed  Property.
          "Artwork"  as used  herein  shall  include,  without  limitation,  all
          pictorial,  graphic, visual, audio,  audio-visual,  digital, literary,
          animated, artistic, dramatic, sculptural, musical or any other type of
          creations and applications,  whether finished or not,  including,  but
          not  limited  to,  animation,  drawings,  designs,  sketches,  images,
          tooling and tooling  aids,  illustrations,  film,  video,  electronic,
          digitized or computerized  information,  software, object code, source
          code,  on-line elements,  music,  text,  dialogue,  stories,  visuals,
          effects, scripts, voiceovers,  logos, one-sheets,  promotional pieces,
          packaging,   display  materials,   printed   materials,   photographs,
          interstitials,  notes, shot logs, character profiles and translations,
          produced  by  Licensee or for  Licensee,  pursuant to this  Agreement.
          Licensor  reserves for itself or its  designees  all rights to use any
          and all Artwork created,  utilized and/or approved  hereunder  without
          limitation  excluding  intellectual  property  rights  in  and  to any
          elements  that are owned by Licensee  or  licensed by Licensee  from a
          third  party  and  do  not  include  the  Licensed  Property.  Nothing
          contained  herein shall be construed to mean that Licensee is granting
          a license to  Licensor  to utilize  Licensee's  proprietary,  patented
          technology,  and/or  intellectual  property rights whether alone or in
          combination with the Licensed Property.

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("SEC") PURSUANT TO SEC RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>
     (b)  Licensee  acknowledges  that, as between  Licensor and  Licensee,  the
          Licensed  Property and Artwork and all derivative  works thereof,  and
          all copyrights,  trademarks and other  proprietary  rights therein are
          owned  exclusively  by Licensor and Licensee shall have no interest in
          or  claim  thereto,  except  for the  limited  right  to use the  same
          pursuant to this Agreement and subject to its terms and conditions.

          Licensor  acknowledges  that, as between  Licensor and  Licensee,  the
          Licensee's intellectual property and all derivative works thereof, and
          all copyrights,  trademarks and other  proprietary  rights therein are
          owned  exclusively by Licensee and Licensor shall have not interest in
          or claim thereto.

          Licensee agrees and acknowledges  that any Artwork created by Licensee
          or for Licensee hereunder is a "work made for hire" for Licensor under
          the U.S.  Copyright  Act,  and any and all similar  provisions  of law
          under  other  jurisdictions,  and that  Licensor is the author of such
          works for all purposes,  and that  Licensor is the exclusive  owner of
          all the rights comprised in the undivided  copyright and all renewals,
          extensions and reversions  therein, in and to such works in perpetuity
          and  throughout the universe.  Licensee  hereby waives and releases in
          favor of Licensor all rights (if any) of "droit  moral," rental rights
          and similar rights in and to the Artwork (the "Intangible Rights") and
          agrees  that  Licensor  shall  have  the  right to  revise,  condense,
          abridge,  expand,  adapt,  change,  modify,  add  to,  subtract  from,
          re-title,  re-draw, re-color, or otherwise modify the Artwork, without
          the consent of Licensee. Licensee hereby irrevocably grants, transfers
          and  assigns to  Licensor  all right,  title and  interest,  including
          copyrights,  trademark  rights,  patent  rights and other  proprietary
          rights, it may have in and to the Artwork and all derivative works, in
          perpetuity  and throughout the universe.  Licensee  acknowledges  that
          Licensor shall have the right to terminate this Agreement in the event
          Licensee  asserts any rights  (other than those  specifically  granted
          pursuant to this Agreement) in or to the Licensed Property or Artwork.

          Licensee  hereby  warrants  that any and all work  created by Licensee
          under this Agreement apart from the materials  provided to Licensee by
          Licensor  is and shall be wholly  original  with or fully  cleared  by
          Licensee  and shall not copy or  otherwise  infringe the rights of any
          third parties,  and Licensee hereby indemnifies Licensor and will hold
          Licensor  harmless  from any such claim of  infringement  or otherwise
          involving  Licensee's  performance  hereunder,   under  the  terms  of
          Paragraph  7(b).  At the request of Licensor,  Licensee  shall execute
          such  form(s) of  assignment  of copyright or other papers as Licensor
          may  reasonably  request in order to confirm and vest in Licensor  the
          rights in the properties as provided for herein. In addition, Licensee
          hereby appoints Licensor as Licensee's  Attorney-in-Fact  to take such
          actions and to make, sign,  execute,  acknowledge and deliver all such
          documents  as may  from  time to  time  be  necessary  to  confirm  in
          Licensor,  its successors and assigns,  all rights granted herein.  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  confirmation  and  assignment of rights so that the
          foregoing  rights  shall  vest fully in  Licensor,  in the form of the
          Contributor's  Agreement  attached  hereto  as  Exhibit  2 and by this
          reference made a part hereof, prior to commencing work, and subject to
          the prior  written  approval of Licensor,  ensuring that all rights in
          the  Artwork  and  Licensed  Property  arise  in and are  assigned  to
          Licensor.   Promptly  upon  entering  into  each  such   Contributor's
          Agreement,  Licensee shall give Licensor a copy of such  Contributor's
          Agreement.  Licensee assumes all  responsibility  for such parties and
          agrees that  Licensee  shall bear any and all risks  arising out of or
          relating to the performance of services by them and to the fulfillment
          of their obligations under the Contributor's Agreement.

     (c)  Upon  expiration or termination  of this Agreement for any reason,  or
          upon demand by Licensor at any time,  Licensee shall promptly  deliver
          to Licensor all Artwork or Licensed Property, whether finished or not,
          including drawings,  drafts, sketches,  illustrations,  screens, data,
          digital files and information,  copies or other items,  information or
          things  created  in the course of  preparing  the  Licensed  Property,
          excluding  any  elements  that are owned by  Licensee  or  licensed by
          Licensee from a third party and all materials  provided to Licensee by
          Licensor  hereunder,  or, at Licensor's option and instruction,  shall
          destroy some or all of the  foregoing and shall confirm to Licensor in
          writing that Licensee has done so. Licensee shall not use such Artwork
          or Licensed Property,  items, information or things, material, for any
          purpose other than is permitted under this Agreement. For any Licensee
          elements and/or  intellectual  property that utilize Licensed Property
          or Artwork in whole or in part,  Licensee  shall destroy such elements

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("SEC") PURSUANT TO SEC RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>
          and/or  intellectual  property upon  expiration or termination of this
          Agreement for any reason and shall confirm to Licensor in writing that
          Licensee has done so.

     (d)  Licensee shall,  within thirty (30) days of receiving an invoice,  pay
          Licensor  for Artwork  executed  for Licensee by Licensor (or by third
          parties under contract to Licensor) for use in the  development of the
          Licensed Products and/or Licensed Premiums and any related  packaging,
          display and promotional  materials at Licensor's prevailing commercial
          art rates. The foregoing shall include any Artwork that, in Licensor's
          opinion,  and subject to Licensee's written approval,  is necessary to
          modify  Artwork  initially  prepared by  Licensee  and  submitted  for
          approval.  Estimates of Artwork  charges are  available  upon request.
          Licensor shall submit to Licensee,  for Licensee's prior approval, any
          increases of ten percent  (10%) or more above the estimate  originally
          approved by Licensee,  and Licensee  shall not be obligated to pay for
          such increased cost if Licensee has not provided its approval thereof.

     (e)  Licensee shall cause to be imprinted,  irremovably  and legibly on the
          packaging  of  each   Licensed   Product   and/or   Licensed   Premium
          manufactured,  distributed  or  sold  under  this  Agreement,  and all
          printed  and/or  televised  advertising,  promotional,  packaging  and
          wrapping material wherein the Licensed Property appears, the following
          copyright  and/or  trademark  notice(s) or such other notice as may be
          approved by Licensor:

          LOONEY TUNES, CHARACTERS, NAMES AND ALL RELATED INDICIA ARE TRADEMARKS
          OF AND (C) WARNER BROS.
          (S02)

          (The year date shall be as instructed by Licensor.)

     (f)  In no event shall  Licensee  use, in respect to the Licensed  Products
          and/or  Licensed  Premiums  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
          Licensed Property.

     (g)  Licensee agrees to deliver to Licensor free of cost six (6) of each of
          the  Licensed  Premiums  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  Promotion or
          Licensed  Products and/or  Licensed  Premiums 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  Products  and/or  Licensed  Premiums in  interstate  and
          intrastate commerce.

     (h)  Licensee  shall  assist  Licensor,   at  Licensor's  expense,  in  the
          procurement,  protection,  and maintenance of Licensor's rights to the
          Licensed Property.  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 Licensed
          Property  either in its own name, or in the name of Licensee,  or join
          Licensee  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 known  infringements
          or imitations or unauthorized uses by others of the Licensed Property,
          on or in relation to promotions  similar to the Licensed  Promotion or
          products  identical to similar to or related to the Licensed  Products
          and/or Licensed  Premiums.  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.

     (i)  Licensee acknowledges receipt of Licensor's Style Guide and undertakes
          to utilize the depictions of the Licensed Property (and, if authorized
          by Licensor,  any emblems and/or devices associated  therewith) in the
          form  as set  forth  therein  on all  Licensed  Products  as  well  as
          advertising,  promotional,  packaging  or wrapping  materials.  In the
          event that  Licensee  desires to  utilize  renditions  which vary from
          those as set forth in the Style Guide,  Licensee  shall make a request
          to  Licensor  in that  connection,  and if the  request  is  approved,
          Licensor  shall  prepare  appropriate  Artwork  and  deliver  same  to

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("SEC") PURSUANT TO SEC RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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          Licensee.  Licensee  shall  utilize  such  Artwork  solely in the form
          furnished  by  Licensor,  if Licensee  decides to use such  Artwork in
          Licensee's sole discretion,  shall pay a reasonable fee to Licensor in
          respect  thereof  not later than one month after  delivery  thereof by
          Licensor  to  Licensee,  and such fee shall be  additional  to and not
          offset by any Guaranteed  Consideration  referred to in Paragraph 1(b)
          hereinabove.

     (j)  If Licensee is unable or unwilling to use artwork from the  Licensor's
          Style Guide and if Licensor is unable or unwilling to provide Licensee
          with Artwork as described  in  subparagraph  (h) above and if Licensor
          expressly consents in writing, which consent shall not be unreasonably
          withheld,  but may be subject to such conditions as Licensor may elect
          in its sole discretion,  then and only then may the Licensee create or
          procure the creation of Artwork.  In any event,  Licensee shall assign
          or procure  the  assignment  in writing of all rights,  copyright  and
          otherwise,  in and to  any  Artwork,  and  it is  intended  that  this
          provision shall take effect as an assignment of prospective copyrights
          in  Artwork  yet  to  be  created  by or  for.  The  Licensee  further
          undertakes  to take all and any steps  necessary  for the  recordal or
          registration of the assignment(s) referred to hereinabove.

9.   APPROVALS AND QUALITY CONTROLS:

     (a)  Licensee  agrees to strictly  comply and maintain  compliance with the
          quality  standards,  specifications and rights of approval of Licensor
          in  respect  to any and all usage of the  Licensed  Property  on or in
          relation to the Licensed Products and/or Licensed Premiums  throughout
          the Term of this Agreement and any renewals or extensions  thereof (if
          applicable).  Licensee  agrees to furnish to Licensor free of cost for
          its written  approval as to quality and style,  samples of each of the
          Licensed  Products  and/or  Licensed  Premiums,  together  with  their
          packaging,   hangtags,  and  wrapping  material,  as  follows  in  the
          successive stages indicated: (i) rough sketches/layout  concepts; (ii)
          finished  artwork or final  proofs;  (iii)  pre-production  samples or
          strike-offs; and (iv) finished products, including packaged samples.

     (b)  No  Licensed   Products  and/or  Licensed  Premiums  and  no  material
          utilizing  the  Licensed   Property  shall  be   manufactured,   sold,
          distributed or promoted by Licensee without prior written approval. In
          addition to the foregoing,  Licensee understands that it shall furnish
          to Licensor,  scripts and storyboards of any proposed media use of the
          Licensed Property as may be authorized  hereunder,  in sufficient time
          for  Licensee  to  make  all  revisions  which  Licensor  in its  sole
          discretion  may request.  Licensee may,  subject to  Licensor's  prior
          written  approval,  use textual and/or pictorial matter  pertaining to
          the Licensed Property on promotional, display and advertising material
          as may, in its reasonable  judgment,  promote the sale of the Licensed
          Products  and/or  Licensed  Premiums.  All advertising and promotional
          materials  relating to the Licensed  Promotion  and Licensed  Products
          and/or  Licensed  Premiums  must be  submitted to the Licensor for its
          written  approval at the following  stages  appropriate  to the medium
          used. For print materials, submissions are to be made at the following
          stages: (a) rough sketches or layout concepts; (b) finished artwork or
          final proofs; and (c) finished materials.  For television commercials,
          if approved by Licensor,  submissions  are to be made at the following
          stages: (a) initial concept;  (b) storyboard,  including written text;
          (c) pencil tests and  voice-overs  for animation  and/or  selection of
          performers  for  live  action;  and  (d) a  cassette  of the  finished
          commercial prior to air date. For radio or other audio  materials,  if
          approved  by  Licensor,  submissions  are to be made at the  following
          stages: (a) initial concept;  (b) script;  (c) voice-overs;  and (d) a
          cassette of the finished commercial prior to the air date.

     (c)  Approval  or  disapproval  shall lie in  Licensor's  sole  discretion.
          Licensor  shall  use  its  best  efforts  to  approve,  disapprove  or
          otherwise  comment upon any items  submitted to it for approval as may
          be required  hereunder  within ten (10) business days after receipt by
          it of such  item(s).  In the event  that  Licensor  fails to  approve,
          disapprove or otherwise  comment upon the item(s) so submitted  within
          said ten (10) business  days,  then  Licensee  shall have the right to
          notify  Licensor of such  failure by facsimile  (evidenced  by written
          confirmation of facsimile  transmittal)  and Licensor shall thereafter
          be required to  approve,  disapprove  or  otherwise  comment  upon the
          item(s) so submitted  within seven (7) business  days after receipt by
          it of said facsimile and failure to do so shall be deemed  approval of
          any  item(s) so  submitted.  Any  Licensed  Products  and/or  Licensed
          Premiums  not so approved in writing  shall be deemed  unlicensed  and
          shall not be  manufactured,  distributed  or sold.  If any  unapproved

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AMENDED.
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          Licensed  Products and/or Licensed  Premiums are being  distributed or
          sold,  Licensor  may,  together  with other  remedies  available to it
          including,   but  not  limited  to,  immediate   termination  of  this
          Agreement,  require such Licensed Products and/or Licensed Premiums 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  material  modification  of a  Licensed  Product  and/or  Licensed
          Premium must be submitted in advance for Licensor's  written  approval
          as if it were a new Licensed  Product  and/or  Licensed  Premium.  Any
          change  involving  the Artwork  appearing on a Licensed  Product shall
          constitute a material modification of such Licensed Product.  Approval
          of a Licensed  Product and/or  Licensed  Premium which uses particular
          artwork  does  not  imply  approval  of such  artwork  for use  with a
          different Licensed Product and/or Licensed Premium.

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

     (f)  Licensee  shall permit  Licensor to inspect  Licensee's  manufacturing
          operations, testing and manufacturing payroll records (including those
          operations  and  relevant  records  of any  supplier  or  manufacturer
          approved  pursuant  to  Paragraph  10 (b) below)  with  respect to the
          Licensed Products and/or Licensed Premiums.

     (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  or
          modifications.

     (h)  Subsequent  to  final  approval,   no  fewer  than   twenty-four  (24)
          production  samples of Licensed Products and/or Licensed Premiums 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  Products and/or Licensed Premiums in
          any quantity at the maximum  discount price Licensee  charges its best
          customer, assuming similar quantities and shipment terms.

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

     (j)  Pursuant  to  this  Agreement,   Licensee  shall  use  its  reasonable
          commercial  efforts to notify its  customers of the  requirement  that
          Licensor  has the  right  to  approve  all  promotional,  display  and
          advertising  materials that incorporate the Licensed  Property.  It is
          understood  and agreed that the use of images  featuring  the Licensed
          Product  and  its  approved  packaging  in  promotional,  display  and
          advertising  materials is excluded  from this  requirement,  provided,
          however, none of the Licensed Property is utilized separately from the
          Licensed Product and its packaging. .

     (k)  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.  pursuant to a separate  agreement  between
          Licensee  and  Warner  Bros.   Animation,   subject  to  Warner  Bros.
          Animation's   customary  rates.  Any  payment  made  to  Warner  Bros.
          Animation  for such  animation  shall be in  addition to and shall not
          offset the Guaranteed Consideration set forth in Paragraph 1(b).

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     (l)  Licensor's  approval of Licensed  Products  and/or  Licensed  Premiums
          (including,  without limitation, the Licensed Products and/or Licensed
          Premiums  themselves as well as  promotional,  display and advertising
          materials)  shall in no way  constitute or be construed as an approval
          by Licensor of Licensee's use of any trademark, copyright and/or other
          proprietary materials not owned by Licensor.

10   DISTRIBUTION; SUBLICENSE MANUFACTURE:

     (a)  Within  the  Channels  of  Distribution  set forth in  Paragraph  l(a)
          hereof, Licensee shall sell the Licensed Products/Licensed Premiums to
          wholesalers,   distributors  or  retailers  for  sale  or  resale  and
          distribution  directly to the public. If Licensee sells or distributes
          the Licensed  Products/Licensed  Premiums 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 (including any affiliated distributors) 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 sublicense  any of its rights under
          this Agreement.  In the event Licensee is not the  manufacturer of the
          Licensed Products and/or Licensed Premiums, Licensee shall, 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  Products  and/or  Licensed  Premiums,   provided  that  such
          manufacturer  shall execute a letter in the form of Exhibit 3 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  and  any  default  of  this  Agreement  by  such
          manufacturer  shall be deemed a default by Licensee  hereunder.  In no
          event shall any such third party  manufacturer  agreement  include the
          right to grant any rights to subcontractors.

11.  GOODWILL: Licensee recognizes the great value of the publicity and goodwill
     associated with the Licensed Property and  acknowledges:  (i) such goodwill
     is exclusively  that of Licensor;  and (ii) that the Licensed  Property has
     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 Licensed Property,  thereby entitling  Licensor to 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 Licensed  Property to Licensee in  accordance  with the
          terms and provisions of this Agreement; and

     (b)  The making of this  Agreement  by Licensor  and use by Licensor of the
          Licensed  Property  pursuant  to this  Agreement  does not violate any
          agreements, rights or obligations of any person, firm or corporation.

13.  LICENSEE'S WARRANTIES AND REPRESENTATIONS: Licensee represents and warrants
     to Licensor that, during the Term and thereafter:

     (a)  It will not attack the title of Licensor  (or third  parties that have
          granted  rights to Licensor)  in and to the  Licensed  Property or any
          copyright or  trademarks  pertaining  thereto,  nor will it attack the
          validity of the license granted hereunder;

     (b)  It will  not  harm,  misuse  or  bring  into  disrepute  the  Licensed
          Property;

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BRACKETS, HAS BEEN OMITTED AND FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
("SEC") PURSUANT TO SEC RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>
     (c)  It will conduct the Licensed Promotion as well as manufacture, promote
          and  distribute  the Licensed  Products  and/or  Licensed  Premiums in
          accordance  with the terms 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 in each and every instance. It will
          not cause or allow any liens or encumbrances to be placed against,  or
          grant any security interest (except to U.S. Bank National Association,
          a National banking  association) in, the Licensed Property,  and/or it
          will not intentionally  cause or allow any liens or encumbrances to be
          placed against,  or grant any security  interest  (except to U.S. Bank
          National  Association,  a National banking  association) in Licensee's
          inventory,   contract  rights  and/or  accounts  receivables,   and/or
          proceeds  thereof,  with  respect  to the  Licensed  Products  without
          Licensor's prior written consent;

     (e)  It will use  reasonable  commercial  efforts to  protect  its right to
          manufacture,  promote and  distribute  the  Licensed  Products  and/or
          Licensed Premiums 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 relating or pertaining to the
          conduct  of  the  Licensed  Promotion  as  well  as  the  manufacture,
          distribution,  advertising  or  use of the  Licensed  Products  and/or
          Licensed Premiums,  and shall maintain its appropriate  customary high
          quality  standards  during the Term  hereof.  It shall comply with any
          regulatory  agencies which shall have  jurisdiction  over the Licensed
          Promotion  or Licensed  Products  and/or  Licensed  Premiums 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 response  thereto.  Each Licensed
          Product  and/or  Licensed  Premium and component  thereof  distributed
          hereunder  shall  comply  with all  applicable  laws and  regulations.
          Licensee  shall follow  reasonable  and proper  procedures for testing
          that all Licensed  Products and/or Licensed  Premiums comply with such
          laws, regulations and standards. Licensee shall permit Licensor or its
          designees to inspect  testing  records and procedures  with respect to
          the  Licensed   Products  and/or  Licensed  Premiums  for  compliance.
          Licensed Products and/or Licensed Premiums that do not comply with all
          applicable  laws,  regulations  and standards shall  automatically  be
          deemed unapproved and immediately taken off the market;

     (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
          Products  and/or  Licensed   Premiums  in  interstate  and  intrastate
          commerce, where appropriate;

     (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  Licensed  Property  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 Licensed
          Property.  Licensee hereby appoints Licensor its  Attorney-in-Fact for
          such purpose;

     (j)  It will not deliver or sell Licensed Products and/or Licensed Premiums
          outside the Territory or knowingly  deliver or sell Licensed  Products
          and/or  Licensed  Premiums to a third party for  delivery  outside the
          Territory;

     (k)  It will  not  use any  labor  that  violates  any  local  labor  laws,
          including all wage and hour laws, laws against discrimination and that
          it will not use prison,  slave or child labor in  connection  with the
          manufacture of the Licensed Products and/or Licensed Premiums;

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BRACKETS, HAS BEEN OMITTED AND FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
("SEC") PURSUANT TO SEC RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>
     (l)  It shall not send, share with or otherwise disclose any Artwork to any
          third party,  including licensees of Licensor,  but with the exception
          of approved  third party  manufacturers  hereunder,  without the prior
          written consent of Licensor;

     (m)  It  shall  at  all  times  comply  with  all  commercially  reasonable
          manufacturing,  sales, distribution, retail and marketing policies and
          strategies  promulgated in writing by Licensor from time-to-time,  and
          provided  the  same  shall  not  materially   increase  the  costs  of
          manufacturing,  sales, distribution, retail and marketing the Licensed
          Products; and

     (n)  If requested by Licensor to do so, it will use  reasonable  efforts to
          utilize specific design elements of the Licensed  Property provided to
          Licensee by  Licensor  on any  promotional  or  advertising  materials
          and/or  hangtags,  labels  or  other  materials  with  respect  to the
          Licensed Products and/or Licensed Premiums.

14.  TERMINATION BY LICENSOR:

     (a)  Licensor  shall have the right to  terminate  this  Agreement  without
          prejudice  to any rights  which it may have,  whether  pursuant to the
          provisions of this  Agreement,  or otherwise in law, or in equity,  or
          otherwise,  upon the  occurrence  of anyone  or more of the  following
          events (herein called "defaults"):

          (i)       Licensee  materially  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 Paragraph 7(c) hereof; or

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

          (iv)      Licensee  shall  fail  to  deliver  any  of  the  statements
                    required  herein 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)       Licensee shall fail to comply in all material  respects with
                    any laws, or regulations  as provided in Paragraph  13(f) or
                    any  governmental  agency or other body,  office or official
                    vested with  appropriate  authority  finds that the Licensed
                    Products and/or  Licensed  Premiums 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)      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, county 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)     Licensee  does not  commence  in good faith to  execute  the
                    Licensed  Promotion (i.e.  manufacture,  distribute and sell
                    the Licensed Products and/or Licensed Premiums) on or before
                    the  Marketing  Date or thereafter  fails to diligently  and
                    continuously execute the Licensed Promotion; or

          (viii)    Licensee  shall  execute  the  Licensed   Promotion   and/or
                    manufacture, sell or distribute (whichever first occurs) any
                    of the Licensed  Products and/or Licensed  Premiums  without
                    the prior  written  approval  of  Licensor  as  provided  in
                    Paragraph 9 hereof; or

          (ix)      Licensee  undergoes  a  change  of  control  as  defined  in
                    Attachment A,  attached  hereto and  incorporated  herein by
                    reference,  provided that Licensor must give written  notice
                    of  termination,  if at all,  within  thirty (30) days after
                    written notice of the change in control is given to Licensor
                    by Licensee; or

                                     Page 14

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BRACKETS, HAS BEEN OMITTED AND FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
("SEC") PURSUANT TO SEC RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>
          (x)       Licensee  uses  Artwork  which  has  not  been  approved  by
                    Licensor in  compliance  with the  provisions  of  Paragraph
                    8(h), (i) or (j) hereof; or

          (xi)      A manufacturer  approved  pursuant to Paragraph 10(b) hereof
                    shall sell Licensed  Products  and/or  Licensed  Premiums to
                    parties  other than  Licensee  or engage in  conduct,  which
                    conduct if engaged in by Licensee would entitle  Licensor to
                    terminate this Agreement; or

          (xii)     Licensee delivers or sells Licensed Products and/or Licensed
                    Premiums  outside the Territory or knowingly  sells Licensed
                    Products  and/or  Licensed  Premiums(s) to a third party who
                    Licensee knows intends to, or who Licensee reasonably should
                    suspect  intends to, sell or deliver such Licensed  Products
                    and/or Licensed Premiums outside the Territory; or

          (xiii)    Licensee  uses any labor that  violates any local labor laws
                    and/or it uses  prison,  slave or child labor in  connection
                    with  the  manufacture  of  the  Licensed   Products  and/or
                    Licensed Premiums; or

          (xiv)     Licensee  has  made  a  material  misrepresentation  or  has
                    omitted  to  state a  material  fact  necessary  to make the
                    statements not misleading as they pertain to this Agreement;
                    or

          (xv)      Licensee  shall  materially  breach any other  agreement  in
                    effect between  Licensee on the one hand and Licensor on the
                    other.

     (b)  In the event any of these defaults  occur,  Licensor shall give notice
          of  termination  in writing to  Licensee in the manner  prescribed  in
          Paragraph 16 below.  Licensee  shall have ten (10)  business days from
          the date of giving  notice in which to correct  any of these  defaults
          (except  subdivisions (vii), (viii), (x) and (xii) 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
          immediately  due and  payable in full and no  portion  of those  prior
          payments shall be repayable to Licensee.

     (c)  Licensee  shall have the right to  terminate  this  Agreement  without
          prejudice to any other rights which it may have,  whether  pursuant to
          the provisions of this Agreement, or otherwise at law or in equity, if
          Licensor  defaults  in the  performance  of  any  of  its  obligations
          provided for in this Agreement or in the event of a material breach by
          Licensor  of its  warranties  or  representations  set  forth  in this
          Agreement.  In the event any such default occurs,  Licensee shall give
          notice of  termination  in  writing to  Licensor  by  certified  mail.
          Licensor shall have thirty (30) days from the date of giving notice in
          which to correct any default or, if the  correction  would  reasonably
          take more than thirty (30) days,  such additional time as is needed so
          long as Licensor diligently pursues such correction,  and failing such
          correction,  this Agreement shall thereupon immediately terminate, and
          any and all Guaranteed Consideration later due from Licensee hereunder
          shall no longer be due;  provided,  however,  that no portion of prior
          payments hereunder shall be repayable to Licensee.

15.  FINAL STATEMENT UPON EXPIRATION OR TERMINATION:  Licensee shall deliver, as
     soon as  practicable,  but not later than  forty-five  (45) days  following
     expiration or termination  of this  Agreement,  a statement  indicating the
     number and description of Licensed  Products  and/or  Licensed  Premiums on
     hand  together  with a  description  of  all  advertising  and  promotional
     materials  relating  thereto.  Following  expiration or termination of this
     Agreement,  Licensee shall  immediately  cease any and all manufacturing of
     the Licensed  Products and/or Licensed  Premium.  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 and Royalty
     Payments, then Licensee may continue to distribute its remaining inventory,
     on a non-exclusive  basis only, for a period not to exceed ninety (90) days
     following such  expiration (the "Sell-Off  Period"),  subject to payment of
     applicable royalties thereto. In no event, however, may Licensee distribute
     during the Sell-Off  Period an amount of Licensed  Products and/or Licensed
     Premiums  that  exceeds the  average  amount of  Licensed  Products  and/or
     Licensed Premiums distributed during any consecutive ninety (90) day period
     during the Term. In the event this  Agreement is terminated by Licensor for
     any reason under this Agreement, Licensee shall be deemed to have forfeited
     its  Sell-Off  Period.  If  Licensee  has any  remaining  inventory  of the
     Licensed Products and/or Licensed  Premiums  following the Sell-Off Period,

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BRACKETS, HAS BEEN OMITTED AND FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
("SEC") PURSUANT TO SEC RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>
     Licensee  shall,  at Licensor's  option,  make  available such inventory to
     Licensor  for  purchase  at or  below  cost,  deliver  up to  Licensor  for
     destruction  said  remaining  inventory or furnish to Licensor an affidavit
     attesting to the destruction of said remaining  inventory.  Licensee shall,
     at Licensor's option,  deliver to Licensor at no charge all Artwork (except
     tooling and tooling aids) related to the Licensed  Products,  deliver up to
     Licensor  for  destruction  Artwork  or furnish to  Licensor  an  affidavit
     attesting to the  destruction  of said Artwork.  Licensee  shall furnish to
     Licensor  an  affidavit  attesting  to the  destruction  or  removal of the
     Licensed  Property from all tooling and tooling aids.  Licensor  shall have
     the right to conduct a physical  inventory  in order to ascertain or verify
     such  inventory  and/or  statement.  In the event that Licensee  refuses to
     permit Licensor to conduct such physical inventory,  Licensee shall forfeit
     its right to the Sell-Off  Period  hereunder or any other rights to dispose
     of such  inventory.  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 are 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, by facsimile
     or by overnight delivery service and the date of transmission by facsimile,
     receipt of overnight  delivery  service or two business  days after mailing
     shall for the  purposes of this  Agreement be deemed the date of the giving
     of such notice.

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.  NO  SUBLICENSING/NON-ASSIGNABILITY:  This Agreement shall bind and inure to
     the benefit of Licensor,  its  successors  and assigns.  This  Agreement is
     personal to Licensee. Licensee shall not sublicense,  franchise or delegate
     to third  parties its rights  hereunder  (except as set forth in  Paragraph
     10(b) hereof) without the prior written  consent of Licensor.  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,  liquidator, trustee or
     other  party.  Notwithstanding  the  foregoing,  Licensor  shall  not  seek
     injunctive  relief to  prevent  Licensee  from  consummating  a "change  of
     control" as defined in Attachment A, and any  termination of this Agreement
     as a result of a "change of control" shall be in accordance  with Paragraph
     14(a)(ix) above.

19.  BANKRUPTCY RELATED PROVISIONS:

     (a)  The  parties  hereby  agree  and  intend  that  this  Agreement  is an
          executory contract governed by Section 365 of the U.S. Bankruptcy Code
          ("Bankruptcy Code").

     (b)  In the event of  Licensee's  bankruptcy,  the parties  intend that any
          royalties payable under this Agreement during the bankruptcy period be
          deemed  administrative  claims under the  Bankruptcy  Code because the
          parties recognize and agree that the bankruptcy  estate's enjoyment of
          this Agreement  will (i) provide a material  benefit to the bankruptcy
          estate during its reorganization and (ii) deny Licensor the benefit of
          the  exploitation  of the rights  through  alternate  means during the
          bankruptcy reorganization.

     (c)  The parties  acknowledge  and agree that any delay in the  decision of
          trustee of the  bankruptcy  estate to assume or reject  the  Agreement
          (the "Decision Period")  materially harms Licensor by interfering with
          Licensor's  ability to alternatively  exploit the rights granted under
          this Agreement  during a Decision  Period of uncertain  duration.  The
          parties recognize that arranging appropriate alternative  exploitation
          would  be a time  consuming  and  expensive  process  and  that  it is
          unreasonable  for  Licensor  to endure a Decision  Period of  extended
          uncertainty.  Therefore,  the parties  agree that the Decision  Period
          shall not exceed sixty (60) days.

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BRACKETS, HAS BEEN OMITTED AND FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
("SEC") PURSUANT TO SEC RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>
     (d)  Licensor,   in  its  interest  to  safeguard  its  valuable  interests
          (including,  without limitation,  its intellectual  property rights in
          the  Licensed  Property),  has  relied  on the  particular  skill  and
          knowledge base of Licensee.  Therefore,  the parties  acknowledge  and
          agree that in a bankruptcy  context this Agreement is a license of the
          type described by Section 365(c)(1) of the Bankruptcy Code and may not
          be assigned without the prior written consent of the Licensor.

20.  CONSTRUCTION AND DISPUTE  RESOLUTION:  This Agreement shall be construed in
     accordance with the laws of the State of California of the United States of
     America  without  regard to its conflicts of laws  provisions.  Any and all
     controversies,  claims  or  disputes  arising  out of or  related  to  this
     Agreement or the interpretation,  performance or breach thereof, including,
     but not limited to,  alleged  violations  of state or federal  statutory or
     common  law  rights  or  duties,  and the  determination  of the  scope  or
     applicability  of this  agreement to arbitrate  ("Dispute"),  except as set
     forth in subparagraphs (b) and (c), below,  shall be resolved  according to
     the procedures set forth in subparagraph (a), below, which shall constitute
     the sole dispute resolution mechanism hereunder:

     (a)  ARBITRATION:  In the event that the  parties are unable to resolve any
          Dispute informally,  then such Dispute shall be submitted to final and
          binding arbitration.  The arbitration shall be initiated and conducted
          according to either the JAMS  Streamlined  (for claims under $250,000)
          or the JAMS Comprehensive (for claims over $250,000) Arbitration Rules
          and  Procedures,  except as modified  herein,  including  the Optional
          Appeal Procedure,  at the Los Angeles office of JAMS, or its successor
          ("JAMS")  in effect at the time the request  for  arbitration  is made
          (the " Arbitration  Rules"). The arbitration shall be conducted in Los
          Angeles  County  before  a  single  neutral  arbitrator  appointed  in
          accordance with the  Arbitration  Rules.  The arbitrator  shall follow
          California law and the Federal Rules of Evidence in  adjudicating  the
          Dispute.  The parties waive the right to seek punitive damages and the
          arbitrator  shall  have  no  authority  to  award  such  damages.  The
          arbitrator  will  provide a detailed  written  statement  of decision,
          which  will be part of the  arbitration  award and  admissible  in any
          judicial  proceeding to confirm,  correct or vacate the award.  Unless
          the parties agree otherwise, the neutral arbitrator and the members of
          any appeal panel shall be former or retired  judges or justices of any
          California state or federal court with experience in matters involving
          the entertainment  industry. If either party refuses to perform any or
          all of its obligations  under the final  arbitration  award (following
          appeal,  if  applicable)  within  thirty (30) days of such award being
          rendered,  then the other  party may  enforce  the final  award in any
          court of  competent  jurisdiction  in Los  Angeles  County.  The party
          seeking  enforcement  shall be entitled to an award of all costs, fees
          and expenses,  including  attorneys'  fees,  incurred in enforcing the
          award, to be paid by the party against whom enforcement is ordered.

     (b)  INJUNCTIVE RELIEF:  Notwithstanding the foregoing,  either party shall
          be entitled to seek injunctive relief (unless  otherwise  precluded by
          any other provision of this Agreement) in the state and federal courts
          of Los Angeles County.

     (c)  OTHER  MATTERS:  Any  Dispute or portion  thereof,  or any claim for a
          particular  form of  relief  (not  otherwise  precluded  by any  other
          provision of this Agreement),  that may not be arbitrated  pursuant to
          applicable  state  or  federal  law may be  heard  only in a court  of
          competent jurisdiction in Los Angeles County.

21.  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.

                                     Page 17

[*] = CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED IN THIS DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
("SEC") PURSUANT TO SEC RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>
22.  CONFIDENTIALITY:  The Artwork and the materials and information supplied to
     one party by the other hereunder constitute,  relate to, contain and form a
     part of confidential and proprietary  information of the disclosing  party,
     including,  but not limited to, Style Guides,  design  elements,  character
     profiles,  unpublished  copyrighted material,  release dates, marketing and
     promotional  strategies,  information  about new products,  properties  and
     characters,   the  terms  and  conditions  of  this  Agreement,  and  other
     information   which  is   proprietary  in  nature  or  is  a  trade  secret
     (collectively,  the "Proprietary Information"). The parties acknowledge and
     agree that the  Proprietary  Information  is highly  confidential  and that
     disclosure of the  Proprietary  Information  will result in serious harm to
     the owner  thereof.  Among other  damage,  unauthorized  disclosure  of the
     Proprietary   Information  will  (i)  damage  carefully  planned  marketing
     strategies,  (ii) reduce  interest  in the  Licensed  Property,  (iii) make
     unique or novel elements of the Licensed Property  susceptible to imitation
     or copying by competitors,  infringers or third parties prior to Licensor's
     release of the information or materials, (iv) damage proprietary protection
     in  undisclosed or  unpublished  information or materials,  and (v) provide
     unauthorized  third parties with materials  capable of being used to create
     counterfeit and unauthorized  merchandise,  audio-visual  products or other
     products,  all of which  will  seriously  damage  the  parties'  rights and
     business.  Except as  expressly  approved  in  writing  by the owner of the
     Proprietary  Information,  the other party shall not  reproduce  or use the
     Proprietary   Information  of  the  other  party  and  shall  not  discuss,
     distribute,  disseminate or otherwise disclose the Proprietary  Information
     or the substance or contents thereof,  in whole or in part, in its original
     form or in any other form, with or to any other person or entity other than
     employees of the parties and, in the case of  Licensee,  third  parties who
     have executed a Contributor's  Agreement (as provided in Paragraph 8(b)) or
     third party  manufacturer's  agreement (as provided in paragraph 10(b)) and
     been  approved by Licensor as provided  hereunder,  and such  employees and
     third parties shall be given access to the Proprietary  Information only on
     a "need-to-know"  basis. The foregoing  restrictions shall not apply to any
     information  which, (i) at the time of disclosure,  is in the public domain
     or  which,  after  disclosure,   becomes  part  of  the  public  domain  by
     publication or otherwise through no action or fault of the receiving party;
     (ii)  information  which the receiving party can show was in its possession
     at the time of  disclosure  and was not acquired,  directly or  indirectly,
     from the other party;  (iii)  information  which was received  from a third
     party having the legal right to transmit the same; (iv)  information  which
     is  independently  developed,  conceived,  or  created  without  use  of or
     reference  to any  Proprietary  Information  of  the  other  party;  or (v)
     information which is disclosed  pursuant to valid court order,  other legal
     process, or disclosure laws.

23.  ENTIRE AGREEMENT:  This Agreement  constitutes the entire Agreement between
     the parties concerning the subject matter hereof and cancels and supersedes
     any prior  understandings  and  agreements  between the parties hereto with
     respect  thereto.   There  are  no  representations,   warranties,   terms,
     conditions,  undertakings or collateral agreements,  expressed,  implied or
     statutory,  between the parties  other than as expressly  set forth in this
     Agreement.

24.  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 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 of any check or
     other  consideration  given by Licensee  and/or delivery of any material by
     Warner  Bros.  Consumer  Products  to  Licensee  shall  not  be  deemed  an
     acceptance  by Warner  Bros.  Consumer  Products of this  application.  The
     foregoing   shall   apply  to  any   documents   relating  to  renewals  or
     modifications hereof.

                                     Page 18

[*] = CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED IN THIS DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
("SEC") PURSUANT TO SEC RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>
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:


WARNER BROS. CONSUMER PRODUCTS             POORE BROTHERS, INC.
a division of Time Warner
Entertainment Company, L.P.

By: /s/ Gary R. Simon                      By: /s/ Eric J. Kufel
    ------------------------------------       ---------------------------------
    Gary R. Simon, Senior Vice President
    Business & Legal Affairs


Date: 11/20/02                             Date: 11/18/02
      ----------------------------------         -------------------------------

                                     Page 19

[*] = CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED IN THIS DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
("SEC") PURSUANT TO SEC RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
<PAGE>
                                    EXHIBIT 1
                                 #1377L-WBLT/BIA

                            CHANNELS OF DISTRIBUTION
                                   DEFINITIONS

LICENSEE  MAY  SELL  THE  LICENSED   PRODUCTS   ONLY  THROUGH  THE  CHANNELS  OF
DISTRIBUTION AS SPECIFIED ABOVE IN PARAGRAPH 1(a) OF THIS LICENSE  AGREEMENT AND
AS  SUCH  CHANNELS  ARE  DEFINED  IN THIS  EXHIBIT  1.  ALL  OTHER  CHANNELS  OF
DISTRIBUTION  DEFINED IN THIS  EXHIBIT 1, WHICH ARE NOT  SPECIFIED  IN PARAGRAPH
1(a) ABOVE, ARE SPECIFICALLY EXCLUDED FROM THIS LICENSE AGREEMENT.

1.   "AIRPORT  GIFT AND OTHER  AIRPORT  STORES" shall mean gift and other stores
     located within  airports,  excluding  Duty-Free Store Operators (as defined
     below).  Examples  of  Airport  Gift  and  Other  Stores  include,  without
     limitation, PARADIES and W.H. SMITH.

2.   "AMUSEMENT GAME REDEMPTION"  shall mean  distribution of products as prizes
     awarded in amusement games.

3.   "AMUSEMENT  PARK  GIFT  STORES"  shall  mean  gift  stores  located  within
     amusement parks, such as Six Flags, Paramount Parks, Universal Theme Parks,
     Dollywood, Walt Disney World and the Disneyland Resort.

4.   "ART & CRAFT  STORES"  shall mean stores that offer for sale  primarily art
     and  craft  supplies.  Examples  of Art &  Craft  Stores  include,  without
     limitation, FAST FRAME, MICHAELS and MICHAELS MJ DESIGNS.

5.   "ATHLETIC APPAREL & FOOTWEAR STORES" shall means stores that offer for sale
     primarily  athletic  apparel and footwear.  Examples of Athletic  Apparel &
     Footwear Stores include, without limitation, FOOTLOCKER, ATHLETE'S FOOT and
     CHAMPS.

6.   "AUTOMOTIVE/CARWASH  STORES"  shall  mean (a)  stores  that  offer for sale
     primarily automotive supplies, or (b) stores located at carwash or gasoline
     station premises.

7.   "BABY  SPECIALTY  STORES"  shall mean stores that offer for sale  primarily
     infant  apparel,   furniture,   accessories  and  other  products  designed
     specifically for babies. Examples of Baby Specialty Stores include, without
     limitation, BABIES R US.

8.   "BEAUTY  SUPPLY  STORES"  shall mean stores  that offer for sale  primarily
     cosmetics,  haircare  products,  beauty  accessories and personal  grooming
     related items.

9.   "BUSINESS TO BUSINESS"  shall mean when a licensee sells product to another
     business and the items sold are used for CORPORATE GIFTS, PRIZES, ETC.

10.  "CAMERA/PHOTO  SPECIALTY  STORES"  shall  mean  stores  that offer for sale
     primarily camera equipment and supplies.

11.  "CANDY/CONFECTIONERY  SPECIALTY  STORES"  shall mean  stores that offer for
     sale   primarily   candy   and   confectionery   products.    Examples   of
     Candy/Confectionery  Specialty  Stores  include,  without  limitation,  FAO
     SCHWEETZ and THE SWEET FACTORY.

12.  "CATALOG  SHOWROOMS"  shall mean  stores that offer a broad  assortment  of
     products for sale primarily through a catalog along with display of samples
     of products in a showroom.  Examples of Catalog Showrooms include,  without
     limitation, SERVICE MERCHANDISE.

13.  "CHAIN BOOK STORES" shall mean chain stores (containing twenty (20) or more
     individual  stores) that offer for sale primarily books.  Examples of Chain
     Book Stores include,  without  limitation,  B. DALTON,  SUPERCROWN,  WALDEN
     BOOKS and BRENTANO'S.

                               Exhibit 1 - Page 1

[*] = CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED IN THIS DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
("SEC")  PURSUANT TO SEC RULE 24B-2 OF THE  SECURITIES  EXCHANGE act of 1934, AS
AMENDED.
<PAGE>
14.  "CHAIN COMIC BOOK STORES" shall mean chain stores  (containing  twenty (20)
     or more individual stores) that offer for sale primarily comic books.

15.  "CHAIN DRUG STORES" shall mean chain stores (containing twenty (20) or more
     individual   stores)  that  offer  for  sale  primarily   prescription  and
     over-the-counter  drugs,  personal care  products and  household  products.
     Examples  of Chain Drug  Stores  include,  without  limitation,  WALGREENS,
     RITE-AID,  THRIFTY/PAYLESS,  C.V.S./REVCO,  THRIFT  DRUG,  PHAR MOR,  LONGS
     DRUGS, JEAN COUTU, LONDON DRUGS and SHOPPER'S DRUG MART.

16.  "CHAIN JEWELRY STORES" shall mean chain stores  (containing  twenty (20) or
     more individual stores) that offer for sale primarily  jewelry.  The "Chain
     Jewelry  Stores"  channel shall  specifically  exclude  Guild  Jewelers (as
     defined  below).   Examples  of  Chain  Jewelry  Stores  include,   without
     limitation, STERLING, BARRY'S, LIPMAN'S and HELLSBURG.

17.  "CHAIN TOY STORES" shall mean chain stores  (containing twenty (20) or more
     individual  stores)  that  offer for sale  primarily  toys.  In order to be
     considered  a "Toy Store"  hereunder,  the total  number of toy-type  SKU's
     (stock-keeping  units) must represent  eighty percent (80%) or more of such
     store's  total SKU's.  The "Chain Toy Stores"  channel  shall  specifically
     exclude Toy Specialty/Better Toy Chain Stores (as defined below).  Examples
     of Chain Toy Stores include, without limitation, TOYS R US.

18.  "COFFEE  SPECIALTY  STORES" shall mean stores that offer for sale primarily
     specialty  coffee and related  products,  such as coffee mugs.  Examples of
     Coffee  Specialty  Stores  include,  without  limitation,  STARBUCKS,  BUZZ
     COFFEE, GLORIA JEANS and THE COFFEE BEANERY.

19.  "COLLEGE/UNIVERSITY  STORES"  shall mean stores  located on the campuses of
     colleges or universities.

20.  "COMMERCIAL   FACILITIES"   shall  mean  offering   products  for  sale  to
     architectural   firms  or  interior   designers   working  with  commercial
     facilities, such as hotels and daycare facilities.

21.  "COMPUTER SPECIALTY STORES" shall mean stores that offer for sale primarily
     computer  equipment and  supplies.  Examples of Computer  Specialty  Stores
     include, without limitation, COMP USA.

22.  "CONVENIENCE  STORES"  shall  mean  stores  that  offer for sale  primarily
     packaged and "quick  service" food products,  are generally open 24 hours a
     day,  and  are   designed  to  offer   greater   convenience   than  larger
     Supermarket/Grocery Stores. Examples of Convenience Stores include, without
     limitation, 7-11, AM/PM, DAIRY MART and CIRCLE K.

23.  "DENTAL/MEDICAL PROFESSION" shall mean institutions or offices that provide
     dental or medical  services,  such as hospitals,  laboratories  or doctors'
     offices.

24.  "DIRECT MAIL CATALOGS" shall mean catalogs that offer products for sale and
     are mailed directly to consumers' homes. The "Direct Mail Catalogs" channel
     shall specifically exclude catalogs for fundraising purposes which shall be
     included in the  "Fundraising"  channel  defined below.  Examples of Direct
     Mail  Catalogs  include,  without  limitation,   SPIEGEL,  HEARTH  &  HOME,
     DOMESTICATIONS,  TAPESTRY,  COMPANY STORE, HAMMACHER SCHLEMMER,  FINGERHUT,
     AMWAY, LILLIAN VERNON, REGAL, AVON and SEARS CATALOG. (continued...)

     If Licensor  grants to Licensee the right to distribute  Licensed  Products
     through any Direct Mail Catalogs:  (a) each such catalog shall be specified
     in the Channels of Distribution  set forth in Paragraph l(a) of the License
     Agreement  or  otherwise  expressly  approved  in writing by  Licensor on a
     case-by-case basis, and (b) each such catalog depicting or referring to the
     Licensed  Products or the Licensed  Property  must be submitted to Licensor
     for prior written  approval in accordance with  Licensor's  Brand Assurance
     policies and procedures.

25.  "DIRECT  RESPONSE" shall mean print  advertisement,  free standing  inserts
     ("FSI's") and other promotional  material (except catalogs) that are mailed
     directly to consumers'  homes for the purpose of  soliciting  product sales
     directly from consumers.  The "Direct Response" channel shall  specifically
     exclude  direct mail  catalogs  which shall be included in the "Direct Mail
     Catalog" channel defined above.

                               Exhibit 1 - Page 2

[*] = CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED IN THIS DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
("SEC")  PURSUANT TO SEC RULE 24B-2 OF THE  SECURITIES  EXCHANGE act of 1934, AS
AMENDED.
<PAGE>
     If Licensor  grants to Licensee the right to distribute  Licensed  Products
     through  Direct  Response,   each  print   advertisement,   FSI  and  other
     promotional material depicting or referring to the Licensed Products or the
     Licensed  Property must be submitted to Licensor for prior written approval
     in accordance with Licensor's Brand Assurance policies and procedures.

26.  "DOOR-TO-DOOR  SOLICITATION"  shall mean offering products for sale through
     personal visits by salespersons to consumers' homes.

27.  "DUTY-FREE  OPERATORS"  shall  mean (a) stores  usually  located in transit
     locations (i.e. airports,  in-flight,  train, ferry stations,  cruise lines
     and ports) which offer products for sale to international travelers free of
     taxes  and  duties  and (b)  sales  offered  to  diplomat  shops,  diplomat
     suppliers and individual diplomats free of taxes and/or duties. If Licensor
     grants to  Licensee  the right to  distribute  products  through  Duty-Free
     Operators,  such  channels  of  distribution  (like all other  channels  of
     distribution  granted)  shall be limited to those stores located within the
     Territory.

28.  "EDUCATIONAL  INSTITUTIONS"  shall mean offering products (generally books)
     for sale to public or private  schools or other  educational  institutions.
     Examples of Educational Institutions include,  without limitation,  the Los
     Angeles Unified School District.

29.  "EDUCATIONAL  SPECIALTY  STORES"  shall  mean  stores  that  offer for sale
     primarily  educational  products.  Examples of Educational Specialty Stores
     include, without limitation, IMAGINARIUM and NATURE COMPANY.

30.  "ELECTRONICS  STORES"  shall  mean  stores  that  offer for sale  primarily
     electronic  products.  Examples  of  Electronics  Stores  include,  without
     limitation, CIRCUIT CITY, FRY'S and BEST BUY.

31.  "FAMILY  RESTAURANTS"  shall mean a food service  establishment or group of
     food service  establishments  that offer a sit down meal menu  conducive to
     all members of the family and generally  offers table service to customers.
     Examples of Family Restaurants  include,  without  limitation,  DENNY'S and
     FRIENDLY'S.

32.  "FASHION  ACCESSORY STORES" shall mean stores that offer for sale primarily
     costume jewelry,  hair accessories and other fashion accessories.  Examples
     of Fashion Accessory Stores include, without limitation, CLAIRE'S BOUTIQUE,
     AFTERTHOUGHTS, IT'S ABOUT TIME, PIERCING PAGODA, ARDENE and BENTLEY'S.

33.  "FASHION  SPECIALTY  BOUTIQUES"  shall  mean  stores  that  offer  for sale
     primarily fashion apparel product.  Examples of Fashion Specialty Boutiques
     include,  without limitation,  FRED SEGAL, URBAN OUTFITTERS,  AMERICAN RAG,
     and DR. J'S.

34.  "FLORISTS"  shall mean stores or  companies  that offer for sale  primarily
     flowers.  Examples of Florists include,  without limitation,  CONROY'S, FTD
     and 1-800-FLOWERS.

35.  "FOOD  SERVICE" shall mean locations that provide food service to consumers
     in cafeterias,  hospital food services,  school lunch programs, and similar
     institutional food service locations.

36.  "FUNDRAISING"  shall mean  offering  products  for sale  through  catalogs,
     direct mail brochures,  prize programs and in-school sales,  which are used
     by schools and charitable, religious or other organizations to raise funds.
     Examples of Fundraising  companies  include,  without  limitation,  GIFTCO,
     SPRINGWATER and DARLINGTON FARMS.

37.  "FURNITURE  STORES"  shall  mean  stores  that  offer  for  sale  primarily
     furniture.  Examples  of  Furniture  Stores  include,  without  limitation,
     WICKES, HOMEMAKERS, KIDDLES and LEVITZ.

38.  "GARDEN  SPECIALTY  STORES" shall mean stores that offer for sale primarily
     garden supplies and plants.  Examples of Garden  Specialty  Stores include,
     without limitation, Armstrong's, Callaway's and Wolf Nurseries.

39.  "GIFT  RETAILERS"  shall mean stores that (a) offer  products for sale that
     are in somewhat related product  categories and are known as "gifts" in the
     trade,  which  products  generally are  classified in the trade as "better"
     quality  and are higher  priced  (as  compared  to  National  and  Regional
     Discount/Mass Retailers' products), (b) do not usually discount merchandise
     or sell it at greatly reduced prices,  (c) usually focus more on aesthetics

                               Exhibit 1 - Page 3

[*] = CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED IN THIS DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
("SEC")  PURSUANT TO SEC RULE 24B-2 OF THE  SECURITIES  EXCHANGE act of 1934, AS
AMENDED.
<PAGE>
     in merchandise displays than on price, and (d) generally require individual
     store  servicing  by  suppliers  in  merchandise   set-up,   display,   SKU
     maintenance and reordering. Suppliers to Gift Retailers typically advertise
     in trade  publications,  such as "GIFT &  STATIONERY  BUSINESS",  "GIFTWARE
     NEWS" and "GIFTS & DECORATIVE  ACCESSORIES".  Suppliers  to Gift  Retailers
     usually  include  companies  such as Enesco,  Midwest of Cannon Falls,  New
     Creative Enterprises,  Dale Tiffany,  Pacific Rim, Ande Rooney,  Waterford,
     GiftCraft,  Carson  Industries,  Possible  Dreams,  Lenox,  Department  56,
     Lefton,   Swarovski  and  Flambro.   The  "Gift  Retailers"  channel  shall
     specifically  exclude  Novelty  Gift Stores (as defined  below),  Duty-Free
     Store  Operators  (as defined  above),  and Airport Gift and Other  Airport
     Stores (as defined above).

40.  "GOURMET  FOOD  SPECIALTY  STORES"  shall mean  stores  that offer for sale
     primarily  gourmet and specialty  food  products.  Examples of Gourmet Food
     Specialty Stores include,  without  limitation,  BRISTOL FARMS, WHOLE FOODS
     and GELSONS.

41.  "GREETING  CARD  STORES"  shall mean stores  that offer for sale  primarily
     greeting  cards.   Examples  of  Greeting  Card  Stores  include,   without
     limitation, HALLMARK.

42.  "GUILD  JEWELERS"  shall mean  stores  that offer for sale  primarily  fine
     jewelry  which is generally  classified in the trade as "best" or "highest"
     quality.  Examples of Guild Jewelers include,  without limitation,  MAYERS,
     ROGERS and BAILEY BANKS & BIDDLE.

43.  "HOBBY & MODEL  STORES"  shall mean  stores  that offer for sale  primarily
     hobby and model supplies.

44.  "HOME  IMPROVEMENT  STORES" shall mean stores that offer for sale primarily
     hardware and home improvement supplies. Examples of Home Improvement Stores
     include,  without  limitation,  HOME DEPOT,  OSH, HOME BASE, LOWES and HOME
     HARDWARE.

45.  "HOME  SPECIALTY  STORES"  shall mean stores that offer for sale  primarily
     bedding,  towels  and other  bathroom  products,  kitchen  merchandise  and
     housewares.  Examples of Home Specialty Stores include, without limitation,
     STROUDS,  LINENS  'N'  THINGS,  3D BED & BATH,  BED/BATH/BEYOND  and LUXURY
     LINENS.

46.  "ICE CREAM  SHOPS"  shall mean  stores  that offer for sale  primarily  ice
     cream, ice cream cakes and similar frozen dessert products. Examples of Ice
     Cream Shops include,  without limitation,  BASKIN-ROBBINS,  DAIRY QUEEN and
     BEN AND JERRY'S SHOPS.

47.  "IN-STORE  BAKERIES"  shall mean the  in-store  bakery  departments  within
     Supermarket/Grocery  Stores,  National and Regional Discount/Mass Retailers
     and Warehouse  Clubs.  Such  departments  offer for sale primarily  freshly
     baked breads, cakes, cookies and similar bakery items.

48.  "INTERNET"  shall mean  offering  products for sale through the  electronic
     network known as the Internet.

49.  "MALL  CLOTHING  SPECIALTY  STORES"  shall mean  stores that offer for sale
     primarily clothing and are located within a mall. Examples of Mall Clothing
     Specialty Stores include, without limitation, MILLERS OUTPOST, WET SEAL, AU
     COIN DES PETITES, LA SENZA, SUZIE SHIER and REITMANS.

50.  "MID-TIER DEPARTMENT STORES" shall mean stores that offer products for sale
     in a broad assortment of unrelated product  categories,  which products are
     generally  classified  in the trade as "better"  (but not  "best")  quality
     products.   Examples  of  Mid-Tier   Department  Stores  include,   without
     limitation, JC PENNEY, SEARS, MERVYN'S,  STEINMART,  KOHLS, FRED MEYER, THE
     BAY, CLEMONT and SIMON'S.

51.  "MILITARY  EXCHANGE  SERVICES" shall mean military  headquarters as well as
     individual  bases of armies  and/or  airforces of each  country  within the
     Territory.   Examples  of  Military  Exchange  Services  include,   without
     limitation,  U.S.  ARMY AND AIRFORCE  EXCHANGE  SERVICE  ("AAFES")  AND THE
     CANADIAN FORCES EXCHANGE SERVICE ("CANEX").  If Licensor grants to Licensee
     the right to distribute  products through Military Exchange Services,  such
     channel of distribution  shall be limited to the Military Exchange Services
     of the  countries  within  the  Territory,  but shall  include  all of such
     Military Exchange Services' stores located anywhere in the world.

                               Exhibit 1 - Page 4

[*] = CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED IN THIS DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
("SEC")  PURSUANT TO SEC RULE 24B-2 OF THE  SECURITIES  EXCHANGE act of 1934, AS
AMENDED.
<PAGE>
52.  "MUSIC/VIDEO  STORES"  shall  mean  stores  that  offer for sale  primarily
     musical  recordings,  on compact  discs,  cassettes or other media,  and/or
     movie  recordings  on videos,  laser  disks or other  media for home use by
     consumers.  Examples of Music/Video  Stores  include,  without  limitation,
     BLOCKBUSTER,  MUSICLAND, TOWER RECORDS, VIRGIN RECORDS, WHEREHOUSE RECORDS,
     SAM GOODY'S and SUNCOAST.

53.  "NATIONAL  DISCOUNT/MASS   RETAILERS"  shall  mean  stores  that  (a)  have
     nation-wide distribution, (b) offer products for sale in a broad assortment
     of  unrelated  product   categories,   which  products  generally  are  not
     classified in the trade as "better/best" quality products,  (c) are usually
     "self-service"  with more of an emphasis on price than aesthetics,  and (d)
     generally do not require individual store servicing by suppliers. Suppliers
     to  National   Discount/Mass   Retailers   typically   advertise  in  trade
     publications,  such as "DISCOUNT  STORE NEWS" and "DISCOUNT  MERCHANDISER",
     and usually attend the IMRA (International Mass Retailer Association) trade
     show. The "National  Discount/Mass  Retailers"  channel shall  specifically
     exclude the in-store  bakery  departments  of such  stores,  which shall be
     included in the "In-Store  Bakeries"  channel  defined  above.  Examples of
     National  Discount/Mass  Retailers include,  without  limitation,  WALMART,
     K-MART, TARGET, ZELLERS, BIWAY and CANADIAN TIRE.

54.  "NON-CHAIN  BOOK STORES" shall mean stores or groups of stores  (containing
     fewer than twenty (20)  individual  stores)  that offer for sale  primarily
     books.

55.  "NON-CHAIN  COMIC  BOOK  STORES"  shall  mean  stores  or  groups of stores
     (containing  fewer than twenty (20) individual  stores) that offer for sale
     primarily comic books.

56.  "NON-CHAIN  DRUG STORES" shall mean stores or groups of stores  (containing
     fewer than twenty (20)  individual  stores)  that offer for sale  primarily
     prescription  and  over-the-counter   drugs,  personal  care  products  and
     household products.

57.  "NON-CHAIN   JEWELRY   STORES"  shall  mean  stores  or  groups  of  stores
     (containing  fewer than twenty (20) individual  stores) that offer for sale
     primarily   jewelry.   The  "Non-Chain   Jewelry   Stores"   channel  shall
     specifically exclude Guild Jewelers (as defined above).

58.  "NON-CHAIN  TOY STORES"  shall mean stores or groups of stores  (containing
     fewer than twenty (20)  individual  stores)  that offer for sale  primarily
     toys. In order to be considered a "Toy Store"  hereunder,  the total number
     of  toy-type  SKU's must  represent  eighty  percent  (80%) or more of such
     store's  total SKU's.  Examples of Non-Chain  Toy Stores  include,  without
     limitation, TALBOT'S TOYLAND and TONS OF TOYS, INC.

59.  "NON-MALL  CLOTHING SPECIALTY STORES" shall mean stores that offer for sale
     primarily clothing and are not located within a mall.  Examples of Non-Mall
     Clothing Specialty Stores include,  without  limitation,  KIDS MART, KIDS R
     US, CLOTHESTIME and FASHION BUG.

60.  "NOVELTY  GIFT  STORES"  shall mean  stores  that offer for sale  primarily
     novelty gift items.  The "Novelty Gift Stores"  channel shall  specifically
     exclude  Airport Gift and Other Airport Stores and Duty-Free  Operators (as
     such terms are defined  above).  Examples of Novelty  Gift Stores  include,
     without limitation, SPENCER'S and IT STORES.

61.  "OFF-PRICE/CLOSEOUT STORES" shall mean stores that offer for sale primarily
     discounted  apparel and other merchandise.  Examples of  Off-Price/Closeout
     Stores include, without limitation,  MARSHALL'S,  T.J. MAXX, ROSS DRESS FOR
     LESS, HIT OR MISS, TUESDAY MORNING and WINNERS.

62.  "OFFICE  SPECIALTY  STORES" shall mean stores that offer for sale primarily
     office  supplies.  Examples of Office  Specialty  Stores  include,  without
     limitation, OFFICE DEPOT, STAPLES and OFFICE MAX.

63.  "OUTLET STORES" shall mean stores that offer for sale primarily  discounted
     merchandise of a particular manufacturer or retailer.

64.  "PARTY  STORES"  shall  mean  stores  that offer for sale  primarily  party
     supplies. Examples of Party Stores include, without limitation,  PARTY CITY
     and PARTY WORLD.

                               Exhibit 1 - Page 5

[*] = CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED IN THIS DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
("SEC")  PURSUANT TO SEC RULE 24B-2 OF THE  SECURITIES  EXCHANGE act of 1934, AS
AMENDED.
<PAGE>
65.  "PET STORES" shall mean stores that offer for sale  primarily pet supplies.
     Examples of Pet Stores include, without limitation, PETCO and PETSMART.

66.  "QUICK  SERVICE  RESTAURANTS"  shall mean a food service  establishment  or
     group  of food  service  establishments  that  offer  rapid  meal  menus to
     consumers and  generally do not offer table service to customers.  Examples
     of Quick Service Restaurants include, without limitation, SUBWAY and BURGER
     KING.

67.  "REGIONAL DISCOUNT MASS RETAILERS" shall mean stores that (a) have regional
     distribution,  (b) generally offer products for sale in a broad  assortment
     of  unrelated  product   categories,   which  products  generally  are  not
     classified in the trade as "better/best" quality products,  (c) are usually
     "self-service"  with more of an emphasis on price than aesthetics,  and (d)
     generally do not require individual store servicing by suppliers. Suppliers
     to  Regional   Discount/Mass   Retailers   typically   advertise  in  trade
     publications,  such as "DISCOUNT  STORE NEWS" and "DISCOUNT  MERCHANDISER",
     and usually attend the IMRA (Intemational Mass Retailer  Association) trade
     show. The "Regional  Discount/Mass  Retailers"  channel shall  specifically
     exclude the in-store  bakery  departments  of such  stores,  which shall be
     included in the "In-Store  Bakeries"  channel  defined  above.  Examples of
     Regional  Discount/Mass  Retailers include,  without  limitation,  MEIJERS,
     CALDOR, AMES, BRADLEES,  HILL'S, ROSE'S,  VENTURE,  SHOPKO, COTTER, FIELDS,
     GIANT TIGER, HARTS, NORTHWEST and SAAN STORES.

68.  "RETAIL  BAKERIES" shall mean stores that offer for sale primarily  freshly
     baked  breads,  cakes,  cookies  and  similar  bakery  items.  The  "Retail
     Bakeries" channel shall specifically  exclude In-Store Bakeries (as defined
     above).

69.  "SCHOOL BOOK  CLUBS/FAIRS"  shall mean  offering  products for sale through
     book  catalogs  distributed  to teachers  and students at public or private
     schools (usually elementary or high school) or through book fairs conducted
     on the  premises  of such  schools.  Examples  of School  Book  Clubs/Fairs
     include, without limitation, Troll Book Club and Scholastic Book Fair.

70.  "SOUVENIR   STORES"  shall  mean  stores  that  offer  for  sale  primarily
     souvenirs.

71.  "SPORTING  GOOD  STORES"  shall mean stores  that offer for sale  primarily
     sporting goods,  equipment,  athletic  apparel,  and other merchandise that
     reflects a sports theme. Examples of Sporting Good Stores include,  without
     limitation, BIG 5 and SPORTS CHALET.

72.  "SPORTS  STADIUM  SHOPS" shall mean  concessionaire  shops  located  within
     stadiums or arenas where sporting events are held.

73.  "STATIONERY  STORES"  shall  mean  stores  that  offer  for sale  primarily
     stationery.  Examples of Stationery  Stores  include,  without  limitation,
     FARR'S STATIONAIRES.

74.  "STREET  VENDORS"  shall mean  individual  merchants who offer products for
     sale in stands, booths or other non-permanent structures usually located on
     the sidewalk and designed to attract passing pedestrians.

75.  "SUPERMARKET/GROCERY   STORES"  shall  mean  stores  that  offer  for  sale
     primarily packaged food products. The "Supermarket/Grocery  Stores" channel
     shall specifically  exclude the in-store bakery departments of such stores,
     which shall be included in the "In-Store  Bakeries"  channel defined above.
     The "Supermarket/Grocery Stores" channel shall specifically exclude Gourmet
     Food Specialty Stores (as defined above) and Convenience Stores (as defined
     above). Examples of Supermarket/Grocery Stores include, without limitation,
     KROGER,  SAFEWAY,  AMERICAN  STORES,  ALBERTSON'S,  WINN DIXIE,  FOOD LION,
     VON'S, FINAST, RALPHS, MARSH and SUPERSTORES.

76.  "SWAP  MEETS/FLEA  MARKETS"  shall mean offering  products for sale through
     organized events known as swap meets or flea markets, which involve a group
     of vendors offering for sale a variety of products,  often  collectibles or
     antiques.

77.  "TELEVISION  HOME SHOPPING"  shall mean offering  products for sale through
     cable  and  broadcast  television,  including  infomercials,  QVC and  Home
     Shopping Network. The "Television Home Shopping" channel shall specifically
     exclude  sales through the Internet,  CD-Interactive  and other  electronic
     media.

                               Exhibit 1 - Page 6

[*] = CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED IN THIS DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
("SEC")  PURSUANT TO SEC RULE 24B-2 OF THE  SECURITIES  EXCHANGE act of 1934, AS
AMENDED.
<PAGE>
78.  "THEATRICAL  CONCESSIONS"  shall  mean the retail  section  that sells such
     items as popcorn,  soda and candy within chain and non-chain  movie theater
     locations such as Cineplex Odeon, Loews and Cinemark.

79.  "TOY SPECIALTY/BETTER TOY CHAIN STORES" shall mean companies that offer for
     sale primarily specialty toys. Examples of Toy  Specialty/Better  Toy Chain
     Stores include, without limitation, FAO SCHWARZ, ZANY BRAINY,  IMAGINARIUM,
     and NOODLE KIDOODLE.

80.  "TOY  WHOLESALERS"  shall mean companies that offer for sale primarily toys
     to retail stores.  In order to be considered a "Toy Wholesaler"  hereunder,
     the total number of toy-type SKU's must  represent  eighty percent (80%) or
     more of such wholesaler's total SKU's.

81.  "TRACKSIDE - CART" shall mean offering products for sale at races organized
     and sponsored by Championship Auto Racing Teams.

82.  "TRACKSIDE  -  NASCAR"  shall  mean  offering  products  for  sale at races
     organized and sponsored by the National Association for Stock Car Racing.

83.  "TRACKSIDE - NHRA" shall mean offering products for sale at races organized
     and sponsored by the National Hot Rod Association.

84.  "UPSTAIRS  DEPARTMENT STORES" shall mean stores that (a) offer products for
     sale in a broad assortment of unrelated product categories,  which products
     are generally  classified in the trade as "best" quality products,  and (b)
     offer a high level of  customer  service  with a strong  emphasis  on store
     aesthetics.   Examples  of  Upstairs  Department  Stores  include,  without
     limitation,  BLOOMINGDALE'S, MACY'S, NORDSTROM, MAY DEPARTMENT STORES, SAKS
     FIFTH AVENUE, NEIMAN MARCUS and DILLARDS.

85.  "VENDING MACHINES" shall mean self-contained automated dispensing equipment
     operated by insertion of coin or paper currency or the  equivalent  thereof
     (i.e. debit cards, credit cards, etc.).

86.  "WALL DECOR  STORES" shall mean stores that offer for sale  primarily  wall
     decor products.  Examples of Wall Decor Stores include, without limitation,
     DECK THE WALLS, AARON BROTHERS and PRINTS PLUS.

87.  "WAREHOUSE  CLUBS" shall mean stores that offer for sale  products in large
     sizes and  quantities  with more of an  emphasis  on price than  service or
     store aesthetics.  The "Warehouse Clubs" channel shall specifically exclude
     the in-store bakery departments of such stores,  which shall be included in
     the "In-Store Bakeries" channel defined above.  Examples of Warehouse Clubs
     include, without limitation, SAM'S CLUB and PRICE COSTCO.

88.  "WBSS  INTERNATIONAL"  shall mean the retail  stores  known as Warner Bros.
     Studio Stores, which are operated outside the United States.

     If Licensor grants to Licensee the right to sell Licensed  Products to WBSS
     International:  (a) such rights  shall be  worldwide,  notwithstanding  any
     restrictions  as to "Territory"  contained in the  Agreement,  and (b) such
     rights shall be non-exclusive,  notwithstanding any exclusivity  provisions
     contained in the Agreement.

                               Exhibit 1 - Page 7

[*] = CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED IN THIS DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
("SEC")  PURSUANT TO SEC RULE 24B-2 OF THE  SECURITIES  EXCHANGE act of 1934, AS
AMENDED.
<PAGE>
                                    EXHIBIT 2
                                 #13771-WBLT/BIA

                             CONTRIBUTOR'S AGREEMENT

I,  ____________________________,  the  undersigned  ("Contributor"),  have been
engaged by POORE  BROTHERS,  INC.  ("Licensee")  to work on or contribute to the
creation of Licensed  Products,  described as  ____________________________,  by
Licensee  under an agreement  between  Licensee and Warner Bros.,  a division of
Time Warner Entertainment  Company,  L.P., c/o Warner Bros. Consumer Products, a
division  of  Time  Warner   Entertainment   Company,   L.P.   ("Warner")  dated
____________________________.

I  understand  and agree that the  Licensed  Products,  and all Artwork or other
results of my services for Licensee in connection  with such  Licensed  Products
("Work")  is a "work made for hire" for  Warner  and that all  right,  title and
interest  in and to the Work  shall vest and remain  with  Warner.  I reserve no
rights therein.  Without limiting the foregoing, I hereby assign and transfer to
Warner all other rights whatsoever,  in perpetuity throughout the universe which
I may have or which may  arise in me or in  connection  with the Work.  I hereby
waive all moral  rights in  connection  with such Work  together  with any other
rights  which are not  capable of  assignment.  I further  agree to execute  any
further  documentation  relating to such  transfer or waiver or relating to such
Work at the request of Warner or Licensee, failing which Warner is authorized to
execute same as my Attorney-in-Fact.


                                        Contributor:

                                        ________________________________________
                                        Signature

                                        ________________________________________
                                        Print Name

                                        ________________________________________
                                        Address

                                        ________________________________________


                                        ________________________________________
                                        Country

                                        ________________________________________
                                        Date

Warner Bros. Consumer Products:

By: ______________________________

Date: ____________________________

                               Exhibit 2 - Page 1

[*] = CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED IN THIS DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
("SEC")  PURSUANT TO SEC RULE 24B-2 OF THE  SECURITIES  EXCHANGE act of 1934, AS
AMENDED.
<PAGE>
                                    EXHIBIT 3
                                 #13771-WBLT/BIA

WARNER BROS. CONSUMER PRODUCTS
4000 Warner Boulevard
Bridge Building 156 South - 4th Floor
Burbank, CA 91522

Re: Approval of Third Party Manufacturer

To Whom It May Concern:

This letter will serve as notice to you that pursuant to Paragraph  10(b) of the
License Agreement dated  ________________________,  200_ between WARNER BROS., A
DIVISION OF TIME WARNER  ENTERTAINMENT  COMPANY,  L.P. and POORE BROTHERS,  INC.
("Licensee"),  we  have  been  engaged  as  the  manufacturer  for  Licensee  in
connection  with the  manufacture  of the  Licensed  Products  as defined in the
aforesaid License  Agreement.  We hereby acknowledge that we may not manufacture
Licensed Products for, or sell or distribute  Licensed Products to, anyone other
than Licensee. We hereby further acknowledge that we have received a copy of the
relevant  terms and conditions 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  Products.  It is  expressly  understood  that we are  obligated to
comply with all local laws,  including without limitation,  labor laws, wage and
hour  laws and  anti-discrimination  laws  and that you or your  representatives
shall,  at  anytime,  have the right to inspect  our  facilities  and review our
records to ensure compliance therewith. It is understood that this engagement is
on a royalty free basis and that we may not  subcontract any of our work without
your prior written approval.

We understand that our engagement as the manufacturer for Licensee 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/Company Name

                                        ________________________________________
                                        Signature

                                        ________________________________________
                                        Print Name

                                        ________________________________________
                                        Address

                                        ________________________________________


                                        ________________________________________
                                        Country

                                        ________________________________________
                                        Date

                                        ________________________________________
                                        Product(s) Manufacturing
AGREED and ACCEPTED:
WARNER BROS. CONSUMER PRODUCTS
a division of Time Warner
Entertainment Company L.P.

By: ____________________________________
    Gary R. Simon, Senior Vice President
    Business & Legal Affairs


Date: __________________________________

                               Exhibit 3 - Page 1

[*] = CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED IN THIS DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
("SEC")  PURSUANT TO SEC RULE 24B-2 OF THE  SECURITIES  EXCHANGE act of 1934, AS
AMENDED.
<PAGE>
                                  ATTACHMENT A
                                 #13771-WBLT/BIA

     (a)  "Change of Control" means and includes each of the following:

          (1)  Any transaction or series of transactions, whereby any person (as
that term is used in Section 13 and 14(d)(2) of the  Securities  Exchange Act of
1934, as amended (the "Exchange  Act"),  is or becomes the beneficial  owner (as
that term is used in Section 13(d) of the Exchange Act) directly or  indirectly,
of securities of the Licensee  representing more than fifty percent (50%) of the
combined voting power of the Licensee's then outstanding  securities;  PROVIDED,
that for  purposes of this  paragraph,  the term  "person"  shall  exclude (A) a
trustee or other fiduciary holding  securities under an employee benefit plan of
the Licensee or a subsidiary of Licensee and (B) a corporation owned directly or
indirectly  by the  stockholders  of the  Licensee  in  substantially  the  same
proportions as their ownership in the Licensee;

          (2)  Any merger,  consolidation,  other  corporate  reorganization  or
liquidation  of the  Licensee  in which the  Licensee is not the  continuing  or
surviving  corporation  or entity or pursuant to which  shares of Stock would be
converted into cash, securities,  or other property,  other than (A) a merger or
consolidation  with a wholly  owned  subsidiary,  (B) a  reincorporation  of the
Licensee in a different jurisdiction, or (C) other transaction in which there is
no substantial change in the stockholders of the Licensee;

          (3)  Any merger or  consolidation of the Licensee with or into another
entity or any other corporate  reorganization,  if more than fifty percent (50%)
of the combined voting power of the continuing or surviving entity's  securities
outstanding immediately after such merger, consolidation or other reorganization
is owned by persons who were not stockholders of the Licensee  immediately prior
to such merger, consolidation or other reorganization;

          (4)  The sale, transfer,  or other disposition of all or substantially
all of the assets of the Licensee; or

          (5)  A change  or  series  of  related  or  unrelated  changes  in the
composition of the Board of Directors of Licensee,  during any twenty-four  (24)
month period  beginning on the first  anniversary of the date of this Agreement,
as a result of which fewer than fifty percent  (50%) of the incumbent  directors
are directors who either (i) had been  directors of the Licensee on the later of
such first  anniversary or the date twenty-four (24) months prior to the date of
the event that may constitute a Change of Control (the "Original  Directors") or
(ii) were elected,  or nominated for election,  to the Board of Directors of the
Licensee  with the  affirmative  votes of a least a majority of the aggregate of
the Original  Directors  who were still in office at the time of the election or
nomination  and the directors  whose  election or nomination  was  previously so
approved.

                               Exhibit 3 - Page 2

[*] = CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED IN THIS DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
("SEC")  PURSUANT TO SEC RULE 24B-2 OF THE  SECURITIES  EXCHANGE act of 1934, AS
AMENDED.
<PAGE>
                                  ATTACHMENT B
                                (CLOSING REPORT)

--------------------------------------------------------------------------------
                       PROMOTION PROGRAM EVALUATION SHEET
--------------------------------------------------------------------------------

PARTNER:                                                DATE:
         ------------------------------                       ------------------

--------------------------------------------------------------------------------
                         VALUE/IMPRESSIONS PER ELEMENT:
--------------------------------------------------------------------------------


                          TIMING             VALUE ($)         IMPRESSIONS ($)
                          ------             ---------         ---------------

TV:
                    ------------------   ------------------   ------------------

PRINT:
                    ------------------   ------------------   ------------------

RADIO:
                    ------------------   ------------------   ------------------

ON-PACK:
                    ------------------   ------------------   ------------------

POP:
                    ------------------   ------------------   ------------------
PREMIUMS
(AMOUNT #):
                    ------------------   ------------------   ------------------
OTHER:
(PLEASE DESCRIBE)
                    ------------------   ------------------   ------------------

TOTAL
                    ------------------   ------------------   ------------------


--------------------------------------------------------------------------------
                           BRIEF PROGRAM DESCRIPTION:
--------------------------------------------------------------------------------

     ----------------------------------------------------------------------

     ----------------------------------------------------------------------

     ----------------------------------------------------------------------

     ----------------------------------------------------------------------

--------------------------------------------------------------------------------
                                    RESULTS:
--------------------------------------------------------------------------------

     ----------------------------------------------------------------------

     ----------------------------------------------------------------------

     ----------------------------------------------------------------------

     ----------------------------------------------------------------------

                               Exhibit 3 - Page 3

[*] = CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED IN THIS DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
("SEC")  PURSUANT TO SEC RULE 24B-2 OF THE  SECURITIES  EXCHANGE act of 1934, AS
AMENDED.
<PAGE>
--------------------------------------------------------------------------------
                                    COMMENTS:
--------------------------------------------------------------------------------

     ----------------------------------------------------------------------

     ----------------------------------------------------------------------

     ----------------------------------------------------------------------

     ----------------------------------------------------------------------

                               Exhibit 3 - Page 4

[*] = CERTAIN  CONFIDENTIAL  INFORMATION  CONTAINED IN THIS DOCUMENT,  MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
("SEC")  PURSUANT TO SEC RULE 24B-2 OF THE  SECURITIES  EXCHANGE act of 1934, AS
AMENDED.