EXHIBIT 4.3


                       AGREEMENT OF STRATEGIC RELATIONSHIP
                       -----------------------------------


This AGREEMENT OF STRATEGIC RELATIONSHIP (the "agreement") is made and entered
into as of October 14, 1997, between Lucasfilm Ltd., a California corporation
("Lucasfilm"), on the one hand, located at P. O. Box 2009, San Rafael, CA 94912
and Galoob Toys, Inc., a Delaware Corporation, located at 500 Forbes Boulevard,
South San Francisco, CA 94080 ("Galoob"), on the other hand.

WHEREAS:
--------

      A.Lucasfilm is a California corporation engaged in the production of
theatrical motion pictures and the licensing of intellectual property rights
related to such theatrical motion pictures;

      B. Lucasfilm owns or controls rights in respect of the Property (as
hereinafter defined);

      C. Galoob is engaged in the manufacture, distribution and sale of consumer
products in the form of toys including, without limitation, toys based on
entertainment intellectual properties licensed from third parties;

      D. Lucasfilm and Galoob have a long standing relationship with respect to
the licensing of such rights; and.

      E. Lucasfilm and Galoob wish to establish a strategic relationship whereby
Galoob would acquire the opportunity to license certain rights in and to
theatrical motion pictures produced by Lucasfilm for the manufacture,
distribution and sale of Products in the Territory, subject to the terms and
conditions of this agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:

1.    GRANT OF RIGHTS.
      ----------------

      Subject to the terms and conditions of this agreement, and in
      consideration for all of Galoob's obligations hereunder, including,
      without limitation, Galoob's agreement to grant to Lucasfilm a warrant as
      provided in Paragraph 4 hereinbelow, Lucasfilm grants to Galoob an
      exclusive, non-transferable, non-assignable right of first negotiation
      (the "First Negotiation Right") and, as more specifically provided in
      Subparagraph 3.3 hereinbelow, right of first refusal (the "First Refusal
      Right") during the Term and




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Agreement Between Lucasfilm Ltd. and Galoob Toys, Inc. dated October 14, 1997




      throughout the Territory to license the Property as provided in Paragraph
      3 hereinbelow:

      1.1. to develop, design, manufacture, distribute, advertise, publicize,
      market and sell the Products , for sale to retail Customers through all
      channels of wholesale and retail distribution permitted hereunder; and

      1.2. for reproduction on containers, packaging, display and promotional
      material and in Advertising and Advertising Materials for the Products.

      The First Negotiation Right and First Refusal Right shall be exercised by
      Galoob in accordance with the terms and conditions contained in this
      agreement.

2.    TERM AND TERRITORY.
      -------------------

      2.1. Term. The term of Galoob's rights pursuant to this agreement with
      respect to the First Negotiation Right and First Refusal Right (the
      "Term") shall consist of the time period commencing as of the date hereof
      and ending on October 14, 2009.

      2.2. Territory. The territory of Galoob's rights hereunder (the
      "Territory") consists of the world excluding China and India.

3.    EXERCISE OF FIRST NEGOTIATION RIGHT AND FIRST REFUSAL RIGHT.
      ------------------------------------------------------------

      The First Negotiation Right and in certain situations First Refusal Right
      as to each theatrical motion picture which is an element of the Property
      shall be exercisable by Galoob in accordance with the following procedure:

      3.1. If Lucasfilm desires to license the rights referenced in
      Subparagraphs 1.1 and 1.2 hereinabove with respect to any theatrical
      motion picture which is an element of the Property, then Lucasfilm shall
      notify Galoob in writing. Lucasfilm shall concurrently make available to
      Galoob at Lucasfilm's premises all materials then extant regarding such
      motion picture, including script, artwork, casting, to the extent
      available.

      3.2. Galoob shall thereafter have thirty (30) days from the date of such
      notice (the "First Negotiation Period") to negotiate and enter into a
      written agreement (the "Agreement"), which agreement shall incorporate no
      less than all of the terms and conditions of that certain license
      agreement between Galoob and Lucas Licensing Ltd. dated as of October 14,
      1997 (the "Toy Agreement") with the exception of Royalties (Paragraph 8),
      Advance (Paragraph 7), Term (Paragraph 2), Staffing/Overhead (Subparagraph
      4.3), Minimum Sales Levels (Subparagraph 4.2), and the definition of



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Agreement Between Lucasfilm Ltd. and Galoob Toys, Inc. dated October 14, 1997



      Licensed Property (Subparagraph 24.43) (collectively the "Excluded
      Terms"); provided, however, that neither party shall be obligated to
      conclude an Agreement with respect to a particular theatrical motion
      picture which is an element of the Property. During the First Negotiation
      Period, the parties shall negotiate with respect to the Excluded Terms,
      provided that the Royalty Percentage shall be no less than ten percent
      (10%) of Net Sales and no more than the rates specified in Paragraph 8 of
      the Toy Agreement.

      3.3. If the parties fail to enter into an Agreement with respect to such
      theatrical motion picture during the First Negotiation Period, then
      Lucasfilm shall be free to negotiate with and conclude an agreement with
      any third party with respect to the rights that are incorporated in the
      First Negotiation Right provided, that with respect to those theatrical
      motion pictures set forth in Subparagraphs 5.2(a)(i), (ii), (iii), and
      (iv) ("First Refusal Pictures"), Lucasfilm shall not conclude an agreement
      with a third party with respect to such rights on terms that are less
      favorable to Lucasfilm than those terms last offered by Galoob without
      giving notice of such third party offer to Galoob and providing Galoob
      with a ten (10) day period (the "First Refusal Period") within which to
      enter into an Agreement with Lucasfilm on the same terms and conditions
      contained in the third party offer (the "First Refusal Right"). If Galoob
      fails to execute such Agreement within such First Refusal Period with
      respect to a First Refusal Picture or within the First Negotiation Period
      with respect to all other theatrical motion pictures included within the
      Property, then Lucasfilm shall be free to enter into an agreement with
      such third party with respect to a First Refusal Picture or with any third
      party with respect to all other theatrical motion pictures subject to the
      First Negotiation Right and such theatrical motion picture shall be
      deleted from the definition of the Property hereunder.

      3.4. Lucasfilm makes no representation or warranty that any rights which
      otherwise would be subject to the First Negotiation Right and First
      Refusal Right as to any theatrical motion picture produced by Lucasfilm
      following the date hereof and during the Term will be owned or controlled
      by Lucasfilm or that Lucasfilm will retain the right or ability to include
      such theatrical motion picture as an element of the Property
      notwithstanding the fact that at any point in time, Lucasfilm may have
      owned or controlled such rights. In this connection, Galoob acknowledges
      that Lucasfilm may enter into an arrangement with respect to a particular
      theatrical motion picture (other than a grant of a license for the
      Products alone for such theatrical motion picture) in which the grant of
      such rights to a third party may be necessary in Lucasfilm's sole judgment
      in order to finance, produce, distribute or exploit such theatrical motion
      picture or any underlying rights relating to such theatrical motion
      picture.



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Agreement Between Lucasfilm Ltd. and Galoob Toys, Inc. dated October 14, 1997



4.    WARRANT.
      --------

      4.1. General. Concurrently with the execution of this Agreement, Galoob
      shall grant to Lucasfilm a warrant (the "Warrant") for the purchase of up
      to 1,450,000 fully paid and non-assessable shares of the common stock of
      Galoob following exercise of the Warrant at a per share exercise price
      equal to $15.00, subject to adjustment as provided in the warrant dated as
      of the date hereof between Lucasfilm and Galoob (the "Warrant").

      4.2. Additional Warrants. If at any time prior to the termination of the
      Warrant, Galoob grants any Common Stock, Convertible Securities or Options
      (as defined in the Warrant) to any officer, director, employee or
      consultant of Galoob ("EE Stock"), then Galoob shall simultaneously
      therewith grant to Lucasfilm a warrant ("Springing Warrant"), on the same
      terms and conditions as the Warrant (except that the exercise price per
      share of such Springing Warrant shall equal the exercise price per, or the
      amount paid for each, share of such EE Stock), to purchase that number of
      shares of Common Stock computed using the following formula:

            X = .154(B/A)(X+Y)

            Where:

            X = The number of shares of Common Stock to be issued to Lucasfilm
      upon exercise of the Springing Warrant

            Y = The number of shares of Common Stock issued or issuable pursuant
      to the grant of such EE Stock

            A = The original number of Warrant Shares (as defined in the
      Warrant)

            B = The number of Warrant Shares owned by Lucasfilm on the date of
      such grant of Additional Stock (as defined in the Warrant)

5.    DEFINITIONS.
      ------------

      5.1. "Products" means those products, goods and articles, within the
      enumerated categories in Schedule II of the Toy Agreement and which are
      based on or incorporating elements of the Property.




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Agreement Between Lucasfilm Ltd. and Galoob Toys, Inc. dated October 14, 1997


      5.2. "Property" means, subject to the terms, conditions and restrictions
      contained in Lucasfilm's or any Lucasfilm Related Entity's agreements with
      persons, firms or entities rendering services or granting rights:

            (a) the original titles, designs, character names and likenesses,
            dialogue, music and sound effects, words, symbols, logographics and
            the footage, photographs, artwork, visual representations of the
            props, costumes, sets, special effects and any other original
            creative elements) which appear in, have become directly associated
            with, and as are depicted in, any theatrical motion picture produced
            by Lucasfilm prior to or during the Term, as to which Lucasfilm owns
            and controls the rights hereunder, subject to Section 3.4,
            including, but not limited to:

                  (i) any theatrical motion picture based on or related to the
                  character "Indiana Jones," including without limitation:
                  Raiders of the Lost Ark, Indiana Jones and the Temple of Doom,
                  Indiana Jones and the Last Crusade, and any prequel or sequel
                  theatrical motion picture based on the "Indiana Jones"
                  character including the sequel theatrical motion picture
                  currently in development and tentatively entitled "Indiana
                  Jones IV" and intended to star Harrison Ford and be directed
                  by Steven Spielberg;

                  (ii) the theatrical motion picture entitled "Willow" and any
                  sequels, prequels or remakes thereof, including, without
                  limitation, those based upon the "Shadow Wars" book series
                  written by George Lucas and Chris Claremont;

                  (iii) any theatrical motion picture based upon the book series
                  entitled "Lucasfilm's Alien Chronicles" published by Berkeley
                  Books;

                  (iv) the theatrical motion pictures entitled "Tucker: The Man
                  and His Dream" and any sequels, prequels or remakes thereof;
                  and

            (b) such original trademarks, tradenames, servicemarks and
            servicenames owned by Lucasfilm and arising out of and which become
            directly associated with any theatrical motion picture which is an
            element of the Property, to the extent of Lucasfilm's rights in each
            applicable country of the Territory under such country's applicable
            trademark laws.

      Notwithstanding anything set forth above, Property shall not include any
      theatrical motion picture based on or related to "Star Wars", including
      without limitation:



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Agreement Between Lucasfilm Ltd. and Galoob Toys, Inc. dated October 14, 1997



                        (A) those certain previously released theatrical motion
                        pictures (and the special editions thereof released
                        theatrically in 1997) entitled "STAR WARS: EPISODE IV -
                        A NEW HOPE," "STAR WARS: EPISODE V - THE EMPIRE STRIKES
                        BACK" and "STAR WARS: EPISODE VI - RETURN OF THE JEDI"
                        (the "Classic Trilogy"); and

            (B) each of the first three succeeding prequel theatrical motion
            pictures to the Classic Trilogy tentatively entitled "Episode I,"
            "Episode II" and "Episode III," respectively (each such prequel
            theatrical motion picture a "Prequel" herein).

In connection with such exclusion, the parties acknowledge that Galoob has
entered into the Toy Agreement with Lucas Licensing Ltd., the owner of the
applicable rights related to Star Wars.

6.    GENERAL.
      --------

      6.1. Assignment. Subject to the other terms and conditions of this
      Subparagraph 6.1, this agreement will bind and inure to the benefit of
      each party and to their respective successors and assigns. Galoob shall
      not voluntarily or by operation of law assign, sub-license, transfer,
      encumber or otherwise dispose of all or part of any right or privilege
      licensed to Galoob in this agreement, including to a Galoob Affiliate,
      without Lucasfilm's prior written approval to be given or withheld in
      Lucasfilm's absolute discretion. Lucasfilm shall not voluntarily or by
      operation of law assign, transfer or otherwise dispose of all or part of
      its rights or obligations under Section 4.2 without Galoob's prior written
      approval to be given or withheld in Galoob's absolute discretion, except
      that Lucasfilm may assign or otherwise dispose of all or part of such
      rights or obligations in connection with a sale or other transfer of all
      or substantially all of Lucasfilm's theatrical motion picture business.
      For purposes of this Subparagraph 6.1, any change in control of Galoob,
      whether through merger, acquisition, reorganization, liquidation,
      foreclosure, involuntary sale in bankruptcy, or the purchase of
      substantially all of Galoob's assets or otherwise, shall be deemed a
      purported assignment subject to Lucasfilm's prior written approval. Any
      attempted assignment, sublicense, transfer, encumbrance or other disposal
      without such approval will be null and void and constitute a material
      default and material breach of this agreement.

      6.2. Governing Law. This agreement will be governed by and construed in
      accordance with the laws of the federal laws of the United States and the
      laws of the State of California applicable to agreements entered into, and
      to be performed entirely, within California between California residents
      (and excluding the United Nations Convention on Contracts for the
      International Sale of Goods) without regard to choice



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Agreement Between Lucasfilm Ltd. and Galoob Toys, Inc. dated October 14, 1997


      of law provisions and regardless of the place or places of its actual
      execution or performance. Any suit, action or proceeding between or among
      any of the parties hereto arising out of or related to this agreement will
      be brought solely in the federal or state courts in the Northern District
      of California, and Galoob hereby submits to the personal jurisdiction
      thereof and agrees to such courts as the appropriate venue.
      Notwithstanding the foregoing, Galoob agrees that, for purposes of
      collecting monies due pursuant to this agreement, Galoob, at Lucasfilm's
      election, may be subject to whatever local laws and courts have
      jurisdiction in any country of the Territory over Galoob. Process in any
      action or proceeding referenced to in this Subparagraph 6.2 may be served
      on Galoob at the address for notices set forth in Subparagraph 6.4
      hereinbelow.

      6.3. Attorneys' Fees. In the event of any legal proceeding between the
      parties arising out of or related to this agreement, the prevailing party
      shall be entitled to recover, in addition to any other relief awarded or
      granted, its costs and expenses (whether or not in connection with
      litigation and including, without limitation, attorneys' fees and costs)
      incurred in connection with any such proceeding.

      6.4. Notices. Any notice to be given or served under this agreement shall
      be in writing and shall be delivered to the parties addressed as set forth
      below, or to such other address as either party shall notify the other
      party of in writing, as follows: personally or sent by cable, telegram or
      telemessage or by facsimile, telex, telecopy or other print out
      communication mechanism or by first class, prepaid, registered or
      certified mail (if available) post (air mail if posted to another country)
      to the party to be served at the address set forth below in this
      Subparagraph 6.4 or to such other address as either party may from time to
      time notify in writing to the other. Such notice shall be deemed to have
      been served: (a) immediately in the case of personal delivery; (b) in the
      case of a cable, telegram or telemessage, on the first business day after
      the receipt by the relevant service of the order therefor; (c) in the case
      of facsimile, telex, telecopy or other print out mechanism, on the
      expiration of four (4) hours from the time of transmission subject in the
      case of telex or facsimile to proof by the sender that he/she holds an
      acknowledgment (whether in mechanical form other otherwise) confirming its
      receipt at its destination and subject in the case of facsimile or other
      print out transmission in the absence of an acknowledgment to the original
      notice being sent by post or by personal delivery in accordance with this
      Subparagraph 6.4 not later than the next business day after such
      transmission; and (d) in the case of postal delivery, on the second
      business day following the date of posting (the fifth business day if
      posted to another country) or on acknowledgment of receipt if earlier.

            If to Lucasfilm:
            ----------------


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Agreement Between Lucasfilm Ltd. and Galoob Toys, Inc. dated October 14, 1997



            For notices to Lucasfilm: P. O. Box 2009, San Rafael, CA  94912,

            Attention: President; with a copy to: General Counsel.

            For wire transfers:  pursuant to Lucasfilm's written wire transfer 
            instructions

            For deliveries requiring Lucasfilm's street address:  5858 Lucas 
            Valley Road,  Nicasio, CA  94946

            If to Galoob:
            -------------
            Galoob Toys, Inc.
            500 Forbes Blvd.
            South San Francisco, CA  94080
            Attn:  Executive Vice President

      6.5. No Waiver. No action taken by either party pursuant to this
      agreement, and no waiver by either party, whether express or implied, of
      any provision or right in this agreement or any breach thereof, and no
      failure of either party to exercise or enforce any of its rights under
      this agreement, will constitute a continuing waiver with respect to such
      provision or right or as a breach or waiver or any other provision or
      right, whether or not similar.

      6.6. Independent Contractors. The parties to this agreement are and shall
      remain independent contractors. There is no relationship of partnership,
      employer, employee, principal, agent, joint venture, employment, franchise
      or agency between the parties. Except as expressly provided in this
      agreement, neither party will have the power to bind the other or incur
      obligations on the other's behalf without the other's prior written
      approval and shall not represent that it has such right.

      6.7. Nonexclusive Remedy. The exercise by either party of any remedy under
      this agreement will be without prejudice to its other remedies under this
      agreement or otherwise.

      6.8. Severability. This agreement is severable. If any provision of this
      agreement is found invalid or unenforceable in any jurisdiction, that
      provision, as to that jurisdiction, will be ineffective to the extent of
      such invalidity or unenforceability without rendering invalid or
      unenforceable the other remaining provisions of this agreement, which
      other remaining provisions will not be affected and shall remain in force,
      to the maximum extent permissible.




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Agreement Between Lucasfilm Ltd. and Galoob Toys, Inc. dated October 14, 1997


      6.9. Headings, Captions and Names. The name of this agreement, and all
      headings and captions herein contained, are for reference and convenience
      only and do not define, limit or expand the scope or intent of any
      provision hereof and shall not be relied upon in or in connection with the
      construction or interpretation of this agreement. The words "herein,"
      "hereunder," "hereof" and similar terms refer to this entire agreement and
      shall not be limited to the specific paragraphs or subparagraphs in which
      they are used.

      6.10. Capitalized Terms. All capitalized terms contained in this agreement
      shall have the same meaning as set forth in the Toy Agreement, except as
      otherwise expressly set forth herein.

      6.11. Counterparts. This agreement may be executed in one or more
      counterparts, and by facsimile, telex, telecopy or other print out
      communication mechanism, each copy of which shall be deemed an original
      and all of which, when taken together, shall constitute one and the same
      instrument, but this agreement shall not be binding upon the parties until
      it has been signed by both parties. The parties hereto agree that
      facsimile signatures on a copy of this agreement shall be effective and
      enforceable as if they were original signatures.

      6.12. Further Instruments. Except as otherwise expressly provided in this
      agreement, each party shall furnish to the other (and shall deliver and
      cause to be executed, acknowledged and delivered to the other) any further
      instruments, which such other party may reasonably require or deem
      necessary from time to time to evidence, establish, protect, enforce,
      defend or secure to such other party any or all of its rights hereunder or
      to more effectuate or carry out the purposes, provisions or intent of this
      agreement.

      6.13. Entire Agreement. This agreement together with the Warrant
      constitute the complete and entire agreement between the parties with
      respect to the subject matter hereof, superseding and replacing any and
      all prior agreements, negotiations, communications, and understandings
      (both written and oral) regarding such subject matter. This agreement may
      only be modified, or any rights under it waived, by a written document
      executed by both parties.



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Agreement Between Lucasfilm Ltd. and Galoob Toys, Inc. dated October 14, 1997



LUCASFILM LTD. ("Lucasfilm"),             GALOOB TOYS, INC. ("Galoob"),
a California Corporation                  a Delaware Corporation, on behalf of
                                          itself and all Galoob Affiliates


By: /s/ Gordon Radley                     By: /s/ Mark Goldman
    ------------------------------            -------------------------------

Title:                                    Title:  President and CEO
       ---------------------------                ---------------------------









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