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                                                                  Exhibit 10.(b)

                              EMPLOYMENT AGREEMENT

                                    BETWEEN

                            RAYMOND A. CARDONNE, JR.

                                      AND

                                     REFAC

              (formerly REFAC TECHNOLOGY DEVELOPMENT CORPORATION)

                           Dated as of March 21, 2002


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         THIS EMPLOYMENT AGREEMENT (the "Agreement") made as of March 21, 2002
between REFAC, a Delaware corporation ("REFAC"), and Raymond A. Cardonne
("CARDONNE").

         CARDONNE is currently employed by REFAC and REFAC desires that CARDONNE
undertake responsibility to reposition REFAC for sale or for liquidation.
CARDONNE is willing to undertake these added duties and, accordingly, the
parties hereto desire to continue CARDONNE's employment upon the terms and
conditions hereinafter set forth.

         In consideration of the premises and the respective agreements of the
parties herein contained, the parties hereto, intending to be legally bound,
agree as follows:

         1. Employment. Subject to the provisions hereof, REFAC shall continue
to employ CARDONNE and CARDONNE shall continue to serve as the Chief Financial
Officer of REFAC.

         2. Term. The employment of CARDONNE by REFAC hereunder will continue
until March 31, 2004, unless further extended by agreement of CARDONNE and REFAC
or until sooner terminated as hereinafter provided.

         3. Duties.

         (a) Regular Duties. CARDONNE will continue to perform such duties and
have such powers as are customary for the chief financial officer of a
publicly-held corporations of a size and engaging in a business comparable to
REFAC.

         (b) Repositioning of REFAC for Sale or Liquidation. In addition to the
services rendered under Section 3(a) above, CARDONNE shall assist in REFAC's
efforts to reposition itself so that it may be sold or liquidated.

         (c) Responsible to the Board. CARDONNE will report and be directly
responsible to the Board of Directors of REFAC (the "Board") or the Chief
Executive Officer of REFAC.

         (d) Time devoted to REFAC's Affairs. CARDONNE will devote substantially
all his working time and efforts to the business and affairs of REFAC and will
not, without the express prior authorization of the Board, have any active
engagement in or responsibility with respect to any business or commercial
enterprise other than REFAC or a subsidiary of REFAC.

         (e) Post Employment Services. It is contemplated that some of REFAC's
assets may be sold in exchange for contract rights that include periodic
payments and that some of the royalty agreements might be collected until
maturity rather than sold. In such event and with respect to such contracts,
CARDONNE agrees to assist the Chief Executive Officer of REFAC in the contract
administration, which shall include invoicing


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(where appropriate), collecting the periodic payments, monitoring performance,
and record keeping. CARDONNE shall be reimbursed for all of his out-of-pocket
costs associated therewith and will perform these services on a part-time basis.

         4. Place of Performance. In connection with CARDONNE's employment by
REFAC, CARDONNE will be based in the New York City metropolitan area, except for
required travel on REFAC's business to an extent consistent with REFAC's
business requirements and his responsibilities hereunder.

         5. Base Salary and Incentive Compensation

         (a) Base Salary. CARDONNE's salary will be $175,000 per annum. Payment
of such salary will be made in accordance with REFAC's customary pay practices
for senior officers and will be subject to such payroll deductions as are
required by law or by the terms of any applicable benefit plan of REFAC.

         (b) Incentive Compensation. CARDONNE shall use reasonable efforts,
consistent with prudent and reasonable business judgment, to convert REFAC's
assets into cash and securities that can be distributed to REFAC's stockholders.
As incentive compensation for this undertaking, upon a Payment Event (as such
term is hereinafter defined) CARDONNE (or in the case of death, CARDONNE's
estate) will be entitled to receive a bonus or bonuses (each, a "Success Bonus")
in consideration of his successful performance of the duties described in
Section 3(b) hereof equal to 4% of the "Eligible Consideration" (as hereinafter
defined) in accordance with the terms of this Section 5. For purposes of this
Agreement, "Payment Event" shall mean (i) each Liquidation (as hereinafter
defined) during the term of this Agreement, (ii) termination of CARDONNE's
employment with REFAC prior to the expiration of the term of this Agreement due
to his death, Disability (as hereinafter defined) or termination by REFAC
without Cause (as hereinafter defined), (iii) the expiration of the term of this
Agreement and (iv) the occurrence of a Company Sale. In the event that CARDONNE
receives a Success Bonus in respect of a Liquidation or Company Sale, he will
remain eligible for additional Success Bonus payments in the event of a
subsequent Liquidation (or Liquidations) or other Payment Event. In the event
that CARDONNE receives a Success Bonus in respect of a Payment Event subsequent
to a Liquidation or Company Sale, such amount shall be reduced by any Success
Bonus previously paid to CARDONNE (hereinafter, the "Offset Adjustment"). In the
event that CARDONNE receives a Success Bonus in respect of a Payment Event that
is not a Liquidation or Company Sale, CARDONNE will not be eligible for
additional Success Bonus payments upon the occurrence of any subsequent event.

         (1)      Eligible Consideration - Liquidation, Expiration of Term. In
                  the event of each Liquidation or the expiration of the term of
                  this Agreement, "Eligible Consideration" shall mean the
                  amount, if any, by which the Distributable Amount (as
                  hereinafter defined) exceeds $10 million. "Distributable
                  Amount" shall mean the aggregate


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                  amount of cash and the fair market value (as determined by the
                  Board in its sole discretion) of securities that are available
                  for distribution to REFAC's stockholders (plus the aggregate
                  amount distributed in any prior Liquidation plus any
                  compensation paid to CARDONNE or Robert L. Tuchman with
                  respect thereto) less the amount of (i) cash and the fair
                  market value of assets (as determined by the Board in its sole
                  discretion) reserved to cover actual or potential liabilities
                  or claims against or relating to REFAC, including unpaid legal
                  and other fees and expenses incurred by REFAC in connection
                  with the Liquidation (but excluding CARDONNE's incentive
                  compensation hereunder and Robert L. Tuchman's incentive
                  compensation under his employment agreement with REFAC).

         (2)      Eligible Consideration - Termination Due to Death or
                  Disability or By REFAC Without Cause. In the event that
                  CARDONNE's employment is terminated by REFAC without Cause or
                  due to CARDONNE's Disability or is terminated upon CARDONNE's
                  death, in any such case prior to the expiration of the term of
                  this Agreement, "Eligible Consideration" shall mean the sum of
                  (i) the aggregate amount of cash and the fair market value (as
                  determined by the Board in its sole discretion) of securities
                  that are available for distribution to REFAC's stockholders
                  (plus the aggregate amount distributed in any prior
                  Liquidation plus any compensation paid to CARDONNE or Robert
                  L. Tuchman with respect thereto) plus (ii) the amount (as
                  determined by the Board in its sole discretion) that
                  reasonably may be realized upon the sale of REFAC's remaining
                  assets, minus (iii) the cash and fair market value of assets
                  (as determined by the Board in its sole discretion) needed to
                  be reserved for actual or potential liabilities or claims
                  against or relating to REFAC, minus (iv) legal and other fees
                  and expenses expected by the Board, in its sole discretion, to
                  be incurred by REFAC in connection with the sale of REFAC's
                  assets (but excluding CARDONNE's incentive compensation
                  hereunder and Robert L. Tuchman's incentive compensation under
                  his employment agreement with REFAC), minus (v) $10 million.

         (3)      Eligible Consideration -- Company Sale. In the event of a
                  Company Sale (as hereinafter defined), the Eligible
                  Consideration shall be the amount, if any, by which the Sale
                  Consideration (as hereinafter defined) and any Distributable
                  Amount previously calculated to be available for distribution
                  to REFAC's stockholders in connection with a Liquidation
                  exceeds $10 million. "Sale Consideration" shall mean (i) in
                  the case of a Company Sale which results in a merger or the
                  sale of 100% of REFAC's then-outstanding voting securities,
                  the aggregate value of the consideration (which may consist of
                  cash, securities, other property or a combination of the
                  foregoing) actually received by REFAC's stockholders in
                  connection with the consummation of a Company Sale or (ii) in
                  the case of a Company Sale which results in the sale of less
                  than 100% of REFAC's then-outstanding voting securities, the
                  aggregate amount of consideration which would have been
                  received by REFAC's stockholders in connection with the
                  consummation of a Company Sale assuming that the price
                  per-share applicable with respect to such Company Sale was
                  applied to all outstanding


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                  voting securities, in each case as determined by the Board in
                  its sole discretion.

         (c) Calculation of Eligible Consideration. The Board in its sole
discretion shall make all calculations and determinations necessary to the
calculation of the Eligible Consideration. In the case of a Liquidation, the
Eligible Consideration shall be calculated immediately prior to each date of an
actual distribution to stockholders. In the case of a Payment Event other than a
Liquidation, the Eligible Consideration shall be calculated immediately upon the
occurrence of such Payment Event.

         (d) Payment of Success Bonus. (i) In the event of a Liquidation, REFAC
shall pay CARDONNE the Success Bonus at the time of the payment to shareholders
in respect of such Liquidation. In the event of a Payment Event other than a
Liquidation, REFAC shall pay CARDONNE the Success Bonus as soon as practicable
following the occurrence of such Payment Event.

         (ii) Notwithstanding the foregoing, in the event that some or all of
the Eligible Consideration consists of securities or other property, the Board
may, in its sole discretion, pay CARDONNE a ratable portion of his Success Bonus
in such securities or other property, which shall be valued by the Board in its
sole discretion. If there are restrictions imposed upon the consideration
(including, without limitation, transfer restrictions or forfeiture conditions),
the Board may, in its sole discretion, require CARDONNE to consent to the
imposition of similar restrictions upon any share of such consideration conveyed
to him. Payment of such incentive compensation shall be made within thirty (30)
days after the date of calculation except that the Board may also elect to pay
CARDONNE his share of any consideration that it receives in installment payments
within thirty (30) days after receipt.

         (e) Company Sale Defined. For purposes of this Agreement, a "Company
Sale" will be deemed to have occurred if and when the event set forth in any one
of the following paragraphs shall have first occurred:

            (1)   there is consummated a merger or consolidation of REFAC or any
                  direct or indirect subsidiary of REFAC with any other
                  corporation, other than (A) a merger or consolidation which
                  would result in the voting securities of REFAC outstanding
                  immediately prior to such merger or consolidation continuing
                  to represent (either by remaining outstanding or by being
                  converted into voting securities of the surviving entity or
                  any parent thereof), in combination with the ownership of any
                  trustee or other fiduciary holding securities under an
                  employee benefit plan of REFAC or any subsidiary of REFAC, at
                  least 60% of the combined voting power of the securities of
                  REFAC or such surviving entity or any parent thereof
                  outstanding immediately after such merger or consolidation, or
                  (B) a merger or consolidation effected to implement a
                  recapitalization of REFAC (or similar transaction) in which no
                  Person (as hereinafter defined)is or becomes the Beneficial
                  Owner, directly or indirectly, of securities of REFAC (not
                  including in the securities Beneficially Owned by such Person


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any
                  securities acquired directly from REFAC or its affiliates
                  other than in connection with the acquisition by REFAC or its
                  affiliates of a business) representing 50% or more of the
                  combined voting power of REFAC's then outstanding securities;

         (2)      any Person is or becomes the Beneficial Owner (as hereinafter
                  defined), directly or indirectly, of securities of REFAC (not
                  including in the securities beneficially owned by such Person
                  any securities acquired directly from REFAC or its affiliates)
                  representing 50% or more of the combined voting power of
                  REFAC's then outstanding securities, excluding any Person who
                  becomes such a Beneficial Owner in connection with a
                  transaction described in clause (A) of paragraph (f)(1) above;
                  or

         (3)      the Board determines, in its discretion, that a Company Sale
                  has occurred.

         (f)      Liquidation Defined. For purposes of this Agreement, a
                  "Liquidation" shall mean a distribution in cash or securities
                  made to the stockholders of REFAC in connection with a plan of
                  complete liquidation or dissolution of REFAC.

         (g)      Certain Other Definitions.

         (1)      For purposes of this Section 5, "Person" shall have the
                  meaning given in Section 3(a)(9) of the Exchange Act, as
                  modified and used in Sections 13(d) and 14(d) thereof, except
                  that such term shall not include (i) REFAC or any of its
                  subsidiaries, (ii) a trustee or other fiduciary holding
                  securities under an employee benefit plan of REFAC or any of
                  its affiliates, (iii) an underwriter temporarily holding
                  securities pursuant to an offering of such securities, or (iv)
                  a corporation owned, directly or indirectly, by the
                  stockholders of REFAC in substantially the same proportions as
                  their ownership of stock of REFAC.

         (2)      For purposes of this Section 5, "Beneficial Owner" shall have
                  the meaning set forth in Rule 13d-3 under the Exchange Act.

         (h)      For purposes of this Section 5, "Exchange Act" shall mean the
                  Securities Exchange Act of 1934, as amended from time to time.

         6. Fringe Benefits, Expenses and Related Matters.

         (a) Expenses. During the term of CARDONNE's employment hereunder,
CARDONNE will be entitled to receive prompt reimbursement for all reasonable
expenses incurred by CARDONNE in performing services hereunder, including all
reasonable expenses of travel and living expenses while away from home on
business or at the request of and in the service of REFAC, provided that such
expenses are incurred and accounted for in accordance with the policies and
procedures established by REFAC.


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         (b) Other Benefits. CARDONNE will be entitled to participate in or
receive benefits under any employee benefit plan or arrangement now or in the
future made available by REFAC generally to its executive employees, subject to
and on a basis consistent with the terms, conditions and overall administration
of such plans and arrangements, including health insurance and life insurance
benefits.

         (c) Vacations. CARDONNE will be entitled to four weeks of paid vacation
per calendar year, prorated for any portion thereof and to all paid holidays
given by REFAC in accordance with REFAC's regular paid holidays policy.

         7. Facilities and Support Services Furnished. REFAC will furnish
CARDONNE with office space, secretarial assistance and such other facilities and
services as shall be suitable to CARDONNE's position and adequate for the
performance of his duties as herein set forth.

         8. Termination. CARDONNE's employment hereunder may be terminated under
the following circumstances:

         (a) Death. CARDONNE's employment hereunder will terminate immediately
upon his death.

         (b) Disability. REFAC may terminate CARDONNE's employment hereunder if
CARDONNE should become permanently disabled. For the purposes of this Agreement,
permanent disability ("Disability") means CARDONNE's inability, by virtue of
physical or mental illness or injury, to perform his regular duties on a
full-time, continuous basis for 120 consecutive days. CARDONNE's disability will
be established if a qualified medical doctor selected by the parties so
certifies in writing. If the parties are unable to agree on the selection of
such a doctor, each party will designate a qualified medical doctor who together
will select a third doctor who will make the determination. CARDONNE will make
himself available for an examination by a doctor selected in accordance with
this paragraph (b).

         (c) Cause. REFAC may terminate CARDONNE's employment hereunder for
Cause at any time during the term hereof as hereinafter set forth. For purposes
of this Agreement, REFAC will have "Cause" to terminate CARDONNE's employment
hereunder upon (i) the willful and continued failure, in the reasonable judgment
of the Board, by CARDONNE to perform substantially his duties with REFAC (other
than any such failure resulting from his death or Disability) after a written
demand for substantial performance is delivered to CARDONNE by the Board which
specifically identifies the manner in which it is believed that CARDONNE has not
substantially performed his duties, (ii) the willful engaging by CARDONNE in
conduct which in the reasonable opinion of the Board is materially and
demonstrably injurious to REFAC or (iii) the conviction of CARDONNE (or the
entering by CARDONNE of a plea of guilty or nolo contendere) for any felony or
any lesser crime which involved REFAC or its property. Notwithstanding the
foregoing, CARDONNE will not be deemed to have been terminated for Cause within
the meaning of clauses (i) and (ii) without (1) reasonable notice to CARDONNE
setting forth the reasons for REFAC's intention to terminate for


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Cause, (2) an opportunity for CARDONNE, together with his counsel, to be heard
before the Board, and (3) delivery to CARDONNE of a Notice of Termination, as
defined in paragraph (e) of this Section 9, from the Board finding that, in the
good faith opinion of the Board, clause (i) or (ii) hereof may be invoked, and
specifying the particulars thereof in detail.

         (d) Notice of Termination. Any termination of CARDONNE's employment by
REFAC or by CARDONNE (other than termination pursuant to Section 9(a)) will be
communicated by written Notice of Termination to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" means a notice which shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of CARDONNE's employment under the provision so
indicated.

         (e) Date of Termination. "Date of Termination" shall mean (i) if
CARDONNE's employment is terminated by his death, the date of his death, (ii) if
CARDONNE's employment is terminated pursuant to paragraph (b) of this Section 9,
three weeks after Notice of Termination, (iii) if CARDONNE's employment is
terminated pursuant to paragraph (c) of this Section 9, the date specified in
the Notice of Termination, and (iv) if CARDONNE's employment is terminated for
any other reason, the date specified in the Notice of Termination.

         (f) CARDONNE Cooperation. From and after the earlier to occur of (i)
delivery of a Notice of Termination and (ii) termination of CARDONNE's
employment hereunder (other than termination due to CARDONNE's death) CARDONNE
will, to the best of his knowledge, disclose or provide for the disclosure to
REFAC or any successor thereof, orally or in writing as appropriate, all
information of a material nature relating to existing or prospective clients and
licensees and as to any other matters in which CARDONNE shall prior to his Date
of Termination have been personally involved or as to which CARDONNE will have
acquired special knowledge, and CARDONNE will thereafter answer to the best of
his knowledge any questions that REFAC may from time to time submit with respect
to any such aforesaid matters.

         9. Compensation Upon Termination or During Disability.

         (a) Disability. During any period that CARDONNE fails or is unable to
perform his duties hereunder as a result of Disability, CARDONNE will continue
to receive his full salary at the rate then in effect for such period until his
employment is terminated, provided that such payments will be reduced by the
amounts, if any, paid to CARDONNE under any disability benefit plans of REFAC or
under the Social Security disability insurance program. Following the
termination of his employment, CARDONNE's benefits will be determined in
accordance with REFAC's retirement, insurance, and other applicable programs and
plans then in effect, if any.

         (b) Death. If CARDONNE's employment should be terminated by his death,
REFAC will (i) pay any accrued salary and other compensation and benefits
through the date of death to CARDONNE's spouse, or, if he leaves no spouse, to
his estate and


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(ii) pay or cause the payment to CARDONNE's beneficiary, or if he specified no
beneficiary, to his estate, the death benefits payable pursuant to REFAC's life
insurance program in effect at the date of death, if any.

         (c) Cause. If CARDONNE's employment should be terminated by REFAC for
Cause or by CARDONNE prior to the expiration date hereof, REFAC will pay
CARDONNE his full salary through the Date of Termination at the rate in effect
at the time Notice of Termination is given, plus all other amounts to which
CARDONNE is entitled as of the Date of Termination under any benefit plan of
REFAC at the time such payments are due, and REFAC will have no further
obligations to CARDONNE under this Agreement.

         (d) Without Cause. CARDONNE's employment with REFAC may not be
terminated prior to March 31, 2004 for reasons other than those described in
Section 9(a), 9(b) or 9(c) unless, prior to such termination CARDONNE has
together with his counsel had an opportunity to appear and be heard at a meeting
of the Board which was called and held (after reasonable notice to CARDONNE) for
the purpose of considering such a termination. In the event that CARDONNE's
employment is terminated prior to March 31, 2004 for reasons other than those
described in Section 8(a), 8(b) or 8(c), REFAC will pay CARDONNE a lump sum
equal to his full salary that would have been payable absent such termination
for the period of time commencing on the Date of Termination and ending on March
31, 2004 at the rate in effect at the time Notice of Termination is given and
will provide, except to the extent that CARDONNE shall receive similar benefits
from a subsequent employer, the life, health and similar welfare benefits which
CARDONNE would have been entitled to through the expiration date of the
Agreement under any such benefit plan of REFAC.

         (e) Mitigation of Payments. CARDONNE will not be required to mitigate
the amount of any lump sum payment or bonus entitlement provided for in this
Section 10 by reducing it by the amount of any compensation earned by CARDONNE
as the result of employment by another employer after the Date of Termination,
or otherwise. However, he will be required to mitigate the costs of the other
benefits provided for in this Section

         10. Noncompetition. CARDONNE will not, except as hereinafter set forth,
engage in any Competitive Activity (as hereinafter defined) during the term of
this Agreement. For purposes of this Section, "Competitive Activity" will mean
directly or indirectly: owning, managing, controlling, investing in, or
otherwise being connected with, in any manner, whether as an officer, director,
employee, partner, investor, consultant, lender or otherwise, any business
entity or activity which is engaged in, or is in any way related to, the
business of establishing, acquiring or administrating manufacturing licenses and
joint ventures from or with third parties in the United States; it will also
mean the direct or indirect solicitation or representation for any such business
purpose of or for any existing or prospective client of REFAC or any of its
subsidiaries. Nothing herein contained will prohibit CARDONNE from (i) investing
in securities of a business entity if the securities of such entity are listed
for trading on a national securities exchange or traded in the over-the-counter
market and CARDONNE's holdings therein represent less than five (5%) percent of
the total number of shares or principal amount of


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other securities of such entity outstanding or (ii) at any time subsequent to
the termination of this Agreement, engaging in the design, development and
licensing of children's toys, games, stationery products and characters in or
with which REFAC, prior to such termination, shall not have been directly,
indirectly or prospectively engaged for REFAC's own account or in the normal
course of REFAC's business.

         11. Section 162 (m). In the event that any payment or benefit received
or to be received by CARDONNE in connection with his employment by REFAC would
otherwise not be deductible (in whole or part), by REFAC as a result of the
operation of Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code"), the delivery of the non-deductible portion of such payment or
benefit to CARDONNE by REFAC shall be deferred until the earliest date on which
it may be delivered to CARDONNE without being subject to the limit on
deductibility imposed by Section 162(m) of the Code.

         12. Successors; Binding Agreement.

         (a) Should any entity succeed (whether by purchase, merger,
consolidation or similar transaction) to all or substantially all of the
business and/or assets of REFAC, CARDONNE shall continue to perform all of his
duties and obligations hereunder.

         (b) REFAC will require any successor (whether by purchase, merger,
consolidation or similar transaction) to all or substantially all of the
business and/or assets of REFAC, by agreement in form and substance reasonably
satisfactory to CARDONNE, to expressly assume and agree to perform this
Agreement in substantially the same manner and to substantially the same extent
that REFAC would be required to perform it if no such succession had taken
place.

         (c) This Agreement and all rights of CARDONNE hereunder shall inure to
the benefit of and be enforceable by CARDONNE's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If CARDONNE should die while any amounts would still be
payable to him hereunder if he had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to CARDONNE's devisee, legatee, or other designee or, if there be no
such designee, to CARDONNE's estate.

         13. Notice. For the purposes of this Agreement, notices, demands and
all other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or (unless otherwise
specified) mailed by United States certified mail, return receipt requested,
postage prepaid, addressed as follows:


         If to CARDONNE:

                  Raymond A. Cardonne
                  81 Katydid Drive
                  Branchburg NJ 08876


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         If to REFAC:

                    REFAC
                    The Hudson River Pier
                    115 River Road
                    Edgewater, New Jersey 07020

         Copy to:

                    Skadden, Arps, Slate, Meagher & Flom LLP
                    4 Times Square
                    New York, New York 10036
                    Attention:  Stephen Banker, Esq.

         or to such other address as any party may have furnished to the others
         in writing in accordance herewith, except that notices of change of
         address shall be effective only upon receipt.

         14. Miscellaneous. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by CARDONNE and such other officer of REFAC as may be
specifically designated by the Board. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not set forth expressly in this
Agreement. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of New York without regard
to its conflicts of law principles. All compensation payable to CARDONNE
pursuant to this Agreement shall be subject to all applicable withholding taxes,
normal payroll withholding and any other amounts required by law to be withheld.

         15. Validity. If any term or provision of this Agreement or the
application thereof to any person, entity or circumstance should to any extent
be invalid or unenforceable, the remainder of this Agreement or the application
of such term or provision to any person, entity or circumstance other than those
as to which it is held invalid or unenforceable shall not be affected thereby,
and each term and provision of this Agreement (including, to the extent
permitted by law, any such term or provision which has been held to be otherwise
invalid or unenforceable) shall be deemed valid and enforceable to the fullest
extent permitted by law.

         16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.


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         17. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement will be settled exclusively by arbitration in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction.

         18. Confidentiality. As an officer and director of REFAC, CARDONNE is
privy to information generally regarded as confidential and often proprietary
with respect to REFAC, its business relationships, negotiations and activities.
Such information may include details of REFAC's business and client
relationships (past, present and prospective) and related REFAC and client
plans, products, property rights, technical and market data.

         By reason of the foregoing:

         (a) CARDONNE will not at any time divulge or negligently permit the
communication of any of the foregoing types of information in any way that could
conflict with the interests of REFAC and its clients and the responsibilities of
REFAC to its clients and business associates.

         (b) For a period of two (2) years after termination, CARDONNE will not
without REFAC's prior written approval by a designated REFAC officer, directly
or indirectly, either as a principal, agent, employee or employer or in any
other capacity, solicit, serve, engage or assist in the business of any REFAC
client or business associate or of any prospective client or business associate
with whom REFAC shall have been in contact for business purposes at any time
prior to the termination date of CARDONNE's employment by REFAC, provided that
this clause shall not apply following a termination of CARDONNE's employment
upon a Company Sale or a Liquidation unless its continued effectiveness is a
condition of such Company Sale or, to the extent required, in connection with
any assets sold.

         (c) For a period of two (2) years after termination, neither CARDONNE
nor any company which CARDONNE directly or indirectly owns, controls or manages
shall employ or solicit the employment of any present or future REFAC employee,
provided that this Section 18(c) shall not apply following a termination of
CARDONNE's employment upon a Company Sale or a Liquidation unless its continued
effectiveness is a condition of such Company Sale or, to the extent required, in
connection with any assets sold.

         19. Breach of Confidentiality Covenant. Each of the parties hereto
acknowledges that in the event of any breach of Section 18 of this Agreement by
CARDONNE, REFAC would be irreparably harmed and could not be made whole by
monetary damages. Therefore REFAC, in addition to any other remedy to which it
may be entitled at law or in equity, may compel specific performance of such
Sections of this Agreement. CARDONNE hereby acknowledges and agrees that the
covenants contained in Section 18 of this Agreement are reasonable and fully
necessary for the protection of the legitimate interests of REFAC and are not
oppressive to the interest of CARDONNE.


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<PAGE>

         20. Entire Agreement. This Agreement sets forth the entire agreement of
the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements, promises, agreements, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto; and any prior agreement
of the parties hereto in respect of the subject matter contained herein is
hereby terminated and canceled.

         IN WITNESS WHEREOF, the parties have executed this Agreement on the
date and year first above written.

                                              /s/ Raymond A. Cardonne
                                              ----------------------------------
                                              Raymond A. Cardonne


                                              REFAC


                                              By: /s/ Neil R. Austrian
                                                  ------------------------------
                                              Title: Director


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