EXHIBIT 10.7

                              DATED APRIL 27, 2004
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          (1) PEAK ENTERTAINMENT LTD

          (2) CADACO

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                             DISTRIBUTION AGREEMENT

                                   NO. DIST030

                                  COUNTIN SHEEP

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This AGREEMENT is made on the 27th    day of     April    2004

BETWEEN

1.     PEAK ENTERTAINMENT LTD whose registered office is at Bagshaw Hall,
       Bagshaw Hill, Bakewell, Derbyshire, DE45 1DL, England ("Peak")

AND

       CADACO, whose registered office is at 4300 West 47th Street, Chicago,
Illinois, 60632, USA ("Distributor")

BACKGROUND

(A)    Peak owns or controls rights to the Products in the Territory and
       manufactures the products through its Affiliate Jusco Toys Limited.

(B)    The Distributor is experienced in marketing and selling in the Territory
       and has agreed to act as the Distributor in the Territory.

(C)    Peak wishes to appoint the Distributor as an exclusive distributor in the
       Territory for the Products upon the Terms and Conditions of this
       Agreement.

IT IS HEREBY AGREED as follows:

1. DEFINITIONS AND INTERPRETATION

1.1    In this Agreement unless the context otherwise requires the following
       words shall have the following meanings:

       "ADVANCE"                      an initial non-refundable advance Royalty
                                      payment.

       "AFFILIATE"                    any person which is, in relation to a
                                      company, its parent undertaking or its
                                      subsidiary undertaking, or a subsidiary
                                      undertaking of its parent undertaking or
                                      any other person controlled by or under
                                      the same control either directly or
                                      indirectly. "Parent Undertaking" and
                                      "subsidiary undertaking" shall have the
                                      meanings attributed to them in sections
                                      258 and 259 Companies Act 1985.

       "AGREED PERCENTAGE"            10% of Net Selling Price

       "BUSINESS                      DAY" any other day other than Saturday or
                                      Sunday or a public or bank holiday in
                                      England or the USA.

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       "COMMENCEMENT DATE"            The date hereof.

       "CONFIDENTIAL INFORMATION"     all information in respect of the business
                                      of Peak or its Affiliates including,
                                      without prejudice to the generality of the
                                      foregoing any ideas; business methods;
                                      finance; prices, business, financial,
                                      marketing, development or manpower plans;
                                      customer lists or details; computer
                                      systems and software; products or
                                      services, including but not limited to
                                      know-how or other matters connected with
                                      the Products; and information concerning
                                      Peak's and its Affiliates relationships
                                      with actual or potential clients,
                                      customers or suppliers and the needs and
                                      requirements of Peak and its Affiliates
                                      and of such persons.

       "CUSTOMER"                     any person with whom the Distributor
                                      enters into a contract for the sale and
                                      purchase of the Products.

       "GUARANTEED                    ROYALTY" being the minimum Royalty payable
                                      by the Distributor during the Term of this
                                      Agreement.

       "INTELLECTUAL PROPERTY RIGHTS" any and all patents, trade marks, trade
                                      names, service marks, copyright, moral
                                      rights, rights in design, rights in
                                      databases, know-how, Confidential
                                      Information and all or any other
                                      intellectual or industrial property rights
                                      whether or not registered or capable of
                                      registration and whether subsisting in the
                                      Territory or any other part of the world
                                      together with all or any goodwill relating
                                      thereto.


       "PRODUCTS"                     the `Countin' Sheep' products listed in
                                      SCHEDULE 1 and such other toy product
                                      manufactured from time to time by Jusco
                                      Toys Limited (an affiliate of Peak) for
                                      Peak. It shall not include products, which
                                      have been licensed for manufacture, or are
                                      subsequently licensed for manufacture, by
                                      Peak to third parties and/or products,
                                      which third parties have licensed to Peak
                                      or Jusco Toys Limited to manufacture.

       "PROPERTY"                     a property created and/or controlled by
                                      Peak during the currency of this Agreement
                                      in respect of which Peak or Jusco Toys
                                      Limited manufacture Products and
                                      Properties shall be interpreted
                                      accordingly.

       "ROYALTY"                      the royalty payable by the Distributor to
                                      Peak pursuant to CLAUSE 11.

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       "TERM"                         from the Commencement Date until 31t
                                      December 2006


       "TERRITORY"                    United States of America

       "TRADE                         MARKS" Trade Marks registered by Peak or
                                      its Associates in the Territory in
                                      relation to the Products.

1.2    The headings used in this Agreement are included for convenience only and
       are not to be used in construing or interpreting this Agreement.

1.3    In this Agreement any reference to the plural includes the singular and
       vice versa, any reference to one gender includes all genders and any
       reference to a person includes companies, partnerships, firms, and any
       other unincorporated associations.

1.4    Any right or power conferred in this Agreement may be exercised and any
       duty imposed by this Agreement is to be performed from time to time, as
       occasion requires.

2      APPOINTMENT OF DISTRIBUTOR

2.1    Peak hereby appoints the Distributor as its sole and exclusive
       distributor for the sale of the Products in the Territory for the Term
       and the Distributor agrees to act in that capacity subject to the terms
       and conditions of this Agreement.

2.2    Peak reserves the right to supply Products direct to retailers and buyers
       within the Territory in the event that the Distributor fails to market
       Products to retailers who have specifically requested Product in the
       Territory within 6 months from acceptance by the Distributor of the
       Products in accordance with the Products listed in Schedule 1, from the
       Commencement date Peak will not directly canvas business and if any
       retailer approaches Peak directly or indirectly, Peak shall make the
       Distributor aware of any such request (and for the avoidance of doubt in
       such event Peak shall not pay commission referred to above to the
       Distributor)

2.3    The Distributor is entitled to describe itself as Peak's "Authorised
       Distributor" for the Products in the Territory but shall not hold itself
       out as Peak's agent for sales of the Product or as being entitled to bind
       Peak in any way.

2.4    Peak shall not be liable to the Distributor if any of the Products are
       sold in the Territory by any third party, unless that third party is
       acting with the actual consent of Peak given in breach of the Terms of
       this Agreement. Peak shall use its reasonable endeavours to prevent any
       unauthorised distribution in the Territory by third parties.

2.5    Nothing in this Agreement shall entitle the Distributor to any priority
       of supply in relation to the Products against Peak's other distributors
       or customers.


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3      GRANT AND PAYMENT

3.1    In consideration of the rights granted hereunder by Peak the Distributor
       shall place a minimum opening order on the date of signing this
       Agreement.

3.2    The royalties due on the opening order shall be treated as an advance
       payment of the Royalty and shall be off set against the Royalty payable
       during the Term of this Agreement, but shall be non-refundable.

3.3    The Distributor shall purchase the Products from Peak in accordance with
       the Terms and Conditions of telegraphic transfer of payment after receipt
       of document copies including the following: Invoice, Bill of Lading, and
       Packing Slip. Upon receipt of the payment, Peak will instruct their
       vendor to release the original paperwork to the distributor, free and
       clear. In the event of any conflict between the Terms and Conditions and
       the provisions of this Agreement, the latter shall prevail.

4.     PROHIBITIONS ON THE DISTRIBUTOR

4.1    The Distributor shall use its reasonable endeavours to procure that
       during the currency of this Agreement: 4.1.1 not to purchase the Products
       from anyone other than Peak during the Term of this Agreement; or

       4.1.2    sell Products to any person outside the Territory without prior
                written consent of Peak. Peak reserves the exclusive right to
                solicit orders for Products from any person not in the Territory
                save where it has allocated that right to a third party.

4.2    During the currency of this Agreement the Distributor will not:

       4.2.1    knowingly do anything which will harm the reputation of Peak;

       4.2.2    pledge the credit of Peak in any way or bind or attempt to bind
                it by contractor otherwise;

       4.2.3    use any marketing or promotional materials or attended any
                marketing events with respect to the Products which have not
                been approved by Peak in writing (such approval not to be
                unreasonably withheld or delayed);

       4.2.4    modify or alter the Products or their packaging in any way save
                as required by law unless agreed in writing by Peak;

       4.2.5    make any representations about the Products save as agreed in
                writing in advance by Peak;

       4.2.6    register any domain name relating to the Products and so nearly
                resembling the Trade Marks as to be likely to deceive or cause
                confusion for use on the

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                Internet except with the prior written consent of Peak, such
                consent not to be unreasonably withheld or delayed.

5.     GENERAL UNDERTAKINGS BY THE DISTRIBUTOR

5.1    The Distributor shall during the continuance of this Agreement:-

       5.1.1    (subject to Peak complying with its obligations in Clauses 6.10,
                7.1 and 7.2) diligently and faithfully serve Peak in the
                Territory and shall use its reasonable endeavours to improve the
                goodwill of Peak in the Territory and to increase the sales of
                the Products in the Territory.

       5.1.2    not to do anything that may prevent the sale or deter the
                development and increase the sales of the Products in the
                Territory;

       5.1.3    ensure that it conforms with all legislation, rules, regulations
                and statutory requirements existing in the Territory from time
                to time in relation to the Products;

       5.1.4    not to procure any third party to manufacture the Products;

       5.1.5    leave in position and not to cover or erase any notices or other
                marks (including without limitation details of notices that a
                trade mark design or copyright relating to the Products) which
                Jusco places on or affixed to the Products;

       5.1.6    provide such reasonable information as Peak may require. ;

       5.1.7    keep adequate records of Customers and prospective Customers and
                orders placed for the Products and provide on request details of
                their names and copies of correspondence with them to Peak; and

       5.1.8    maintain adequate stock of the Products to meet the
                Distributor's reasonably anticipated customer demand at all
                times.

       5.1.9    Refer promptly to Peak any enquiries the Distributor received
                from prospective customers outside the Territory.

6.     DISTRIBUTORS OBLIGATIONS AS TO MARKETING AND PEAK'S OBLIGATION TO
       SUPPORT.

6.1    The Distributor shall only market and solicit orders for the Products
       within the Territory.

6.2    The Distributor shall ensure that the Products shall be on sale to the
       public within three months of the date of shipment of the Product by Peak
       unless otherwise agreed in writing.

6.3    The Distributor shall ensure so far as it is reasonably practicable that
       the Products are not supplied for sale as an integral part of any other
       Product and shall not be supplied

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       either directly or indirectly to other manufacturers or to hawkers,
       street peddlers, street vendors and the like or to any person intending
       to distribute the products gratuitously unless agreed in writing by Peak.

6.4    It is agreed by the Distributor that the Products will be sold to
       recognised wholesale firms for resale to retail firms or to retail firms
       for resale to the public or direct to the public.

6.5    The Distributor shall at all times use its reasonable endeavours to sell
       and promote the sale of the Products throughout the Territory (subject to
       Peak complying with its obligations in clauses 6.10, 7.1 and 7.2).

6.6    The Distributor shall reasonably observe all reasonable directions and
       instructions given by Peak in relation to the promotion and marketing of
       the Products and dealings with Customers and prospective Customers.

6.7    All advertisements and promotions carried out and all advertising,
       promotional and sales material for the Products used by the Distributor
       shall be subject to the prior written approval of Peak, such approval to
       be given promptly.

6.8    In the event that the Distributor fails to offer or promote any of the
       Products for a period of 60 days at any time following acceptance
       thereof, Peak shall be entitled to immediately withdraw the rights for
       each Product not offered or promoted by giving the Distributor written
       notice of 30 days.

6.9    The Distributor undertakes to Peak to support the marketing the Products
       in respect of the properties to a level that is representative of the
       sales forecasts. Such marketing spend to be allocated throughout the Term
       of this Agreement as agreed between the parties.

6.10   Peak shall use its reasonable endeavours to promptly supply to the
       Distributor with up-to-date samples, catalogues, brochures and such
       information relating to Products and/or Properties as the Distributor
       shall reasonably request or which Peak shall consider relevant, and Peak
       shall use its reasonable endeavours to assist the Distributor in the
       placement of Products within major accounts.

6.11   Peak shall at all times during the continuance of this Agreement act
       towards the Distributor dutifully and in good faith.

7.     SUPPLY OF PRODUCTS

7.1    Peak shall promptly supply the Distributor with samples of the Products
       prior to order by the Distributor, such supply to be at the reasonable
       expense of the Distributor.

7.2    Subject to CLAUSE 8, Peak shall use its reasonable endeavours to supply
       the Products to the Distributor in accordance with the Distributor's
       orders and deliver the same in accordance with the Distributor's
       directions.

7.3    Peak shall supply to the Distributor where the Distributor so requests,
       certified copies of any relevant Toy Safety Certificates relating to the
       Products ordered and warrants


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       that all Products shall be of satisfactory quality and will comply with
       the specifications agreed (subject to clause 7.4). In addition, Peak will
       allow the Distributor to perform factory audits to assess compliance and
       quality checks and inspections. The Distributor will not be obliged to
       purchase the Products should the factory audits fail any compliance
       tests.

7.4    Peak is not under any obligation to continue the manufacture of all or
       any of the Products and shall be entitled to make such alterations to the
       specifications of the Products as it may think fit but will consult with
       the distributor and only make changes on 30 days prior written notice
       following the consultation with the distributor, but will not
       unreasonably stop or later production.

7.5    The Distributor shall in respect of each order for the Products placed
       with Peak be responsible for:-

       7.5.1    ensuring the accuracy of orders

       7.5.2    providing Peak with any information which is necessary in order
                to enable Peak to fulfil the order and to comply with all
                labelling, marketing and other applicable legal requirements in
                the Territory; and

       7.5.3    obtaining any necessary import licences or other requisite
                documents and paying all applicable custom duties and taxations
                in respect of the importation of the Products into the Territory
                and their resale in the Territory.

7.6    The Distributor shall give Peak reasonable written notice of its
       estimated requirements of the Products in each month and shall promptly
       notify Peak of any changes in circumstances, which may affect its
       requirements.

7.7    Risk of damage to or loss of the Products shall pass to the Distributor
       upon delivery to the Distributor's freight forwarder at the named port of
       shipment.

7.8    Peak shall keep the Distributor advised of anticipated delivery dates and
       will use its reasonable endeavours to meet delivery dates advised to the
       Distributor.

8.     PRICE AND PAYMENT

8.1    The Distributor shall pay to Peak the Price for the Products which, for
       the avoidance of doubt, shall include the Royalty Rate. A royalty rate of
       10% will be paid in accordance with clause11.

8.2    The Price shall be in accordance with Peak's standard price list from
       time to time applicable that will be agreed with the Distributor. Peak
       may amend the price list after agreeing this with the Distributor and
       will not change the pricing unless full agreement is met by the
       distributor in writing.

8.3    In accordance with clause 8.2 Peak shall supply to the Distributor up to
       date copies of all prices lists for the Products and give the Distributor
       immediate notice in writing of its intention to alter prices and of the
       prices to be altered and the prices so altered shall apply to all
       Products ordered on or after the applicable dates of increase or decrease
       provided the Distributor agrees the price alterations.

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8.4    All Prices are exclusive of any applicable sales or importation taxes for
       which the Distributor shall be additionally liable. The Price is
       calculated on a FOB royalty free basis.

8.5    All payments will be made dollars in USA or in such other currency and
       place, as Peak shall from time to time specify in writing.

8.6    If the Distributor fails to pay within 30 days of the due date any amount
       which is payable to Peak under this Agreement then, without prejudice to
       any other rights set out in this Agreement:

       8.6.1    that amount shall bear interest from the due date until payment
                is made in full, both before and after any judgement, at 4 per
                cent per annum over Lloyds TSB Plc base rate from time to time;

       8.6.2    Peak shall be entitled to suspend deliveries of the Products
                until the outstanding amount has been received by Peak from the
                Distributor.

9.     PREMIUMS

9.1    The Distributor shall not sell or otherwise dispose of any Products as
       premiums to any person whatsoever.

9.2    Peak shall notify the Distributor of any premium promotions.

9.3    The right of sale as premiums is expressly reserved by Peak and if the
       Distributor shall receive any approach for the purpose of the use of sale
       of the Products as a premium it shall forthwith notify Peak and furnish
       it with the names and full particulars of the person making the approach.

9.4    For the purposes of this clause "premium" means a Product or Product
       combined with a service which is sold or supplied in association with the
       sales promotional activities of retailers, wholesalers or manufacturers
       associations with incentive programmes of all kinds.

10.    DISTRIBUTOR'S STAFF

       The Distributor shall employ during the continuance of this Agreement
       sufficient staff appropriate training and quality to sell, distribute and
       promote the sale of the Products throughout the Territory and perform in
       a timely and satisfactory manner the Distributor's obligations under this
       Agreement and in particular shall employ and maintain a sales force of
       sufficient size from time to time to fulfil the Distributor's obligations
       under this Agreement in relation to the sale and marketing of the
       Products.

11.    ROYALTIES

11.1   In consideration of the rights granted by Peak the Distributor shall pay
       Peak a royalty of the Agreed Percentage of the net selling price to
       retail as estimated in SCHEDULE 2.

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11.2   The Distributor shall send to Peak by the thirtieth day following the end
       of March, June, September and December during the continuance of this
       Agreement a report of sales made of the Products in the Territory since
       the last statement showing the total royalty payable (if any) to Peak and
       at the same time deliver to Peak a remittance for the full amount of that
       Royalty together with any marketing or other information in relation to
       the operation of the Agreement as Peak may reasonably require including
       details of the Customer of the Distributor and stock levels as at the
       date of the report.

11.3   All sums payable by the Distributor pursuant to this Agreement shall be
       paid free and clear of all deductions or withholdings whatsoever save
       only as may be required by any applicable law.

11.4   If any deductions or withholdings are required by law to be made from any
       of the sums payable pursuant to this Agreement, the Distributor shall be
       obliged to pay to Peak such sum as will, after deduction or withholding
       has been made, leave Peak with the same amount as it would be entitled to
       receive in the absence of any such requirement to make a deduction or
       withholding.

11.5   The Distributor shall keep and maintain separate and detailed accurate
       accounts and records so as to show the quantity and net sales price of
       the Products sold for each Royalty period giving separately the figures
       for each Product. Peak shall have the right, at reasonable hours, and on
       giving the Distributor reasonable notice, to appoint a representative
       (being a qualified, certified or chartered accountant) to audit the said
       accounts and records and if such audit reveals a discrepancy, it shall be
       collected forthwith. It is further agreed that if such discrepancy is 10%
       or more in the Distributor's favour the Distributor shall pay Peak's
       reasonable auditing fees and expenses (including travel and
       accommodation) in addition to any other payments due and interest on the
       discrepancy at 2% above the base lending rate from time to time of
       Lloyd's TSB Plc.

12.    INTELLECTUAL PROPERTY

12.1   Peak authorises the Distributor to use the Trade Marks in the Territory
       in relation to the Products for the purposes only of exercising its
       rights and performing its obligations under this Agreement.

12.2   The Distributor shall ensure that each reference to and use of any of the
       Trade Marks by the Distributor is in a manner from time to time approved
       by Peak and accompanied by an acknowledgement in a form approved by Peak
       (such approval not to be unreasonably withheld or delayed), that the same
       is a Trade Mark of Peak.

12.3   The Distributor shall not:

       12.3.1   modify, remove or tamper with any Trade Mark or any copyright
                statement on the Products or their packaging;

       12.3.2   use any of the Trade Marks in any way which might prejudice
                their distinctiveness or validity or the goodwill of Peak;

       12.3.3   use in relation to the Products any trade marks or names other
                than the Trade Marks without obtaining the prior written consent
                of Peak; or

<PAGE>

       12.3.4   use in the Territory, any trademarks or names so resembling the
                Trade Marks as to be likely to cause confusion or deception.

12.4   The Distributor shall not apply to register any of the Intellectual
       Property Rights in the Products nor any trademarks or trade names so
       nearly resembling the Trade Marks as to be likely to deceive or cause
       confusion.

12.5   Except as expressly provided in this Agreement the Distributor shall have
       no rights in respect of Intellectual Property Rights however used by Peak
       in relation to the Products and the Distributor hereby acknowledges that
       he shall not acquire any rights in respect thereof and that all such
       Intellectual Property Rights are and shall remain vested in or controlled
       by Peak.

12.6   The Distributor will immediately inform Peak in writing of any actual,
       threatened or suspected infringement of the Intellectual Property Rights
       of Peak relating to the Products or of any claim that the Products
       infringe the Intellectual Property Rights of a third party, but the
       Distributor shall take no steps or enter into any proceedings with
       respect to such infringement or claim without the prior written consent
       of Peak.

12.7   The Distributor shall at the expense of Peak take all such steps as Peak
       may reasonably require to assist Peak in maintaining the validity and
       enforceability of the Intellectual Property Rights of Peak during the
       Term of this Agreement PROVIDED THAT Peak shall indemnify the Distributor
       against all costs, claims, damages, expenses and other liabilities
       arising from or in connection with such steps and FURTHER PROVIDED THAT
       Peak shall be entitled to all damages recovered.

12.8   The Distributor shall not do or authorise any third party to do any act,
       which would or might invalidate or be inconsistent with any Intellectual
       Property Rights of Peak and shall not omit or authorise any third party
       to omit to do any act, which, by its omission, would have that effect.

12.9   Distributor acknowledges that any and all Intellectual Property Rights
       created, developed or subsisting in connection with the Products and any
       modifications thereto shall be and remain the sole property of Peak and
       Distributor shall do all acts and execute all documents (and procure that
       its employees do likewise) necessary to perfect or vest the ownership
       thereof in Peak.

2.10     Peak warrants to the Distributor that:

       12.10.1  it has been granted the rights to use all Intellectual Property
                Rights necessary to allow it to manufacture, supply and sell the
                Products; and

       12.10.2  the manufacture and sale of the Products by Peak and the rights
                granted by this Agreement does not infringe the Intellectual
                Property Rights of any third party in so far as Peak is aware.

       And Peak shall indemnify the Distributor in respect of any breach of the
       warranties in this clause 12.10.

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13.    TERMINATION

13.1   Either party may by notice in writing served on the other terminate this
       Agreement forthwith if the other:

       13.1.1   shall be in continuing or material breach of any of the terms of
                this Agreement and, where the breach is capable of remedy, the
                other party fails to remedy such breach within 30 days' service
                of a written notice (or if not practicable, within such a period
                as is practicable) from the party not in breach specifying the
                breach and requiring it to be remedied;

       13.1.2   being a company, summons a meeting of its creditors, suffers a
                proposal for a voluntary arrangement, becomes subject to any
                voluntary arrangement, is unable to pay its debts within the
                meaning of section 123 Insolvency Act 1986, has a receiver,
                manager, administrator or administrative receiver appointed over
                its assets, undertaking or income, has passed a resolution for
                its winding-up (save for the purpose of voluntary reconstruction
                or amalgamation previously approved in writing by the party
                serving notice), has a petition presented to any Court for its
                winding-up (save for the purpose of a voluntary reconstruction
                or amalgamation previously approved in writing by the party
                serving notice), has a provisional liquidator appointed, has a
                proposal made for a scheme of arrangement under section 245
                Companies Act 1985 or is subject of a notice to strike off the
                register at Companies House or for an administration order.

       13.1.3   has any distraint, execution or other process levied or enforced
                on any of its property;

       13.1.4   ceases or threatens to cease to trade;

       13.1.5   in the case of the Distributor only, has a change in its
                management and/or control involving 25% of its shares being
                transferred to a person who is not a shareholder of the
                Distributor at the Commencement Date unless such shares are
                transferred to an Affiliate; or

13.2   As from the date of termination the Distributor will cease to hold itself
       out as Distributor for Peak and for the sale and marketing of the
       Products provided always that for a period of 120 days immediately
       following the date of termination of this Agreement howsoever arising the
       Distributor will be entitled, to sell Products which are in the
       Distributor's stock as at the date of termination.

13.3   On termination of this Agreement, howsoever arising, the Distributor will
       forthwith return to Peak all documents and other materials or things on
       loan or issued from Peak and any copies thereof made by the Distributor
       which are in the Distributor's possession, custody or control as at the
       date of termination.

13.4   On termination of this Agreement, both parties shall meet to conclude any
       outstanding matters.

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13.5   Any order for the Products in the progress of manufacture at the time of
       termination shall be paid for by the Distribution and shipped to the
       Distribution in accordance with the Terms and Agreement, the sale of such
       Products by the Distributor to be in accordance with clause 13.2.

13.6   Upon termination of this Agreement the Distributor shall:-

       13.6.1   pay to Peak the balance of any Royalties accrued up to the date
                of termination and the balance of the Guaranteed Royalty not
                already paid (less any Advance already paid) if appropriate
                under this Agreement. There shall be no further sums payable by
                the Distributor to Peak under this Agreement apart from those
                that may become due in accordance with Clauses 11, 13.2 and
                13.5.

       13.6.2   if required to do so by Peak supply Peak with a list of the
                Customers for the Products; and

       13.6.3   assign to Peak free of charge all permission consents and
                licences (if any) relating to the marketing and/or distribution
                and/or sale of the Products in the Territory and execute all
                documents and so all the things necessary to ensure that Peak
                enjoys the benefit of those permissions, consents and licences
                after the termination of this Agreement to the entire exclusion
                of the Distributor.

13.7   The termination of this Agreement howsoever arising is without prejudice
       to the rights, duties and liabilities of either party accrued prior to
       termination. The clauses in this Agreement with expressly or impliedly
       have effect after termination shall continue to be enforceable
       notwithstanding termination.

14.    INDEMNITY AND INSURANCE

14.1   The Distributor shall indemnify and hold harmless Peak from and against
       any liability, loss, claim or proceedings whatsoever arising under any
       statute or at common law in respect of personal injury or damage to any
       property real or personal arising from the sale of the Products unless
       such liability arises from the negligent act or omission or breach of
       contract of Peak or its Affiliates, employees, agents or officers.

14.2   The Distributor shall have in force Public and Product Liability
       Insurance for not less than(pound)1 million satisfactory to Peak.

14.3   The Policies of insurance shall be shown to Peak whenever it requests
       together with satisfactory evidence of payment of premiums.

15.    CONFIDENTIALITY

15.1   The Distributor undertakes to Peak:

       15.1.1     to use its reasonable endeavours to keep confidential all
                  Confidential Information (whether written or oral) which it
                  has obtained or received as a result of the discussions
                  leading up to or the entering into, or obtains or receives in
                  performance of, this Agreement;

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       15.1.2   not to disclose the Confidential Information in whole or in part
                to any other person without Peak's written consent, save those
                of its employees, agents and sub-contractors involved in the
                implementation of this Agreement and who have a need to know the
                same and are bound to keep it confidential; and

       15.1.3   to use the Confidential Information solely in connection with
                the performance of this Agreement and not otherwise or for the
                benefit of any third party.

15.2   The provisions of CLAUSE 15.1 shall not apply to the whole or any part of
       the Confidential Information which is:

       15.2.1   lawfully obtained after the Commencement Date free of any duty
                of confidentiality otherwise than directly or indirectly from
                Peak;

       15.2.2   already in the Distributor's possession other than as a result
                of a breach of this CLAUSE 15.1;

       15.2.3   in the public domain (other than as a result of a breach of this
                CLAUSE 15.1);

       15.2.4   necessarily disclosed pursuant to a statutory obligation;

       15.2.5   disclosed to the professional advisors, auditors and bankers of
                the Distributor under the terms of confidentiality; or

       15.2.6   disclosed with the prior written consent of Peak.

15.3   Save as otherwise set out in this Agreement, no announcement, circular,
       advertisement or other publicity in connection with this Agreement, its
       subject matter or any ancillary matter shall be made or issued by or on
       behalf of the Distributor without the prior written consent of Peak.

16.    ASSIGNMENT AND SUB-CONTRACTING

16.1   The Distributor may not assign the benefit (including any present, future
       or contingent interest or right to any sums or damages payable by Peak
       under or in connection with this Agreement) or otherwise mortgage, charge
       or otherwise transfer any or all of its rights and obligations under this
       Agreement without the prior written consent of Peak which shall not be
       unreasonably withheld.

16.2   The Distributor shall not subcontract any or all of its rights and
       obligations under this Agreement and shall not be entitled to appoint any
       sub-distributors without the prior written consent of Peak.

17.    WAIVER OF RIGHTS

17.1   The failure or delay by Peak in exercising any right, power or remedy of
       Peak under this Agreement shall not in any circumstances impair such
       right, power or remedy nor operate as a waiver of it. The single or
       partial exercise by Peak of any right, power or remedy under this
       Agreement shall not in any circumstances prelude any other or further
       exercise of it or the exercise of any other right, power or remedy.

<PAGE>

17.2   Any waiver of a breach of, or default under, any of the terms of this
       Agreement shall not be deemed a waiver of any subsequent breach or
       default and shall in no way affect the other terms of this Agreement.

18.    ENTIRE AGREEMENT

       This Agreement contains all the terms and refers to all the documents
       which the parties have agreed in relation to the subject matter of this
       Agreement and supersedes any prior written or oral agreements,
       representations or understanding between the parties relating to such
       subject matter save for the licence agreements and the variation deeds
       referred to in clause 1.5. Neither party to this Agreement has been
       induced to enter into this Agreement or any of those documents by a
       statement or promise which they do not contain, save that this clause
       shall not exclude any liability which one party would otherwise have to
       the other party in respect of any statement made fraudulently by that
       party.

19.    VARIATION

       No variation to this Agreement shall be effective unless in writing
       signed by a Director or other duly authorised officer of each of the
       parties.

20.    INVALIDITY

20.1   If at any time any clause or part of this Agreement is found by any
       court, tribunal or administrative body of competent jurisdiction to be
       wholly or partly illegal, invalid or unenforceable in any respect under
       the law of any jurisdiction:

20.2   That shall not affect any other provisions of this Agreement which shall
       remain in full force and effect and;

20.3   The parties shall in good faith amend, and if necessary, novate this
       Agreement to reflect nearly as possible the spirit and intention behind
       that illegal, invalid or unenforceable provision so that the amended
       clause complies with the laws of that jurisdiction.

21.    NOTICE

2.1    Any notice in connection with this Agreement shall be in writing and may
       be delivered by hand, pre-paid first class post (but not by email),
       addressed to the recipient at its registered office or its address as the
       case may be stated in CLAUSE 21.3 below (or such addresses as may be
       notified in writing from time to time) in accordance with this clause 21
       and in the case of notices sent to Peak such notices shall be marked for
       the attention of ... or such other individual as Peak shall notify the
       Distributor in accordance with this Clause 21.

21.2   The notice shall be deemed to have been duly served:

       21.2.1   If delivered by hand, when left at the proper address for
                service;

       21.2.2   if given or made by prepaid first class post 48 hours after
                being posted or in the case of Airmail 14 days after being
                posted (excluding days other than Business Days);

<PAGE>

       provided that, where in the case of delivery by hand such delivery occurs
       either after 4.00pm on a Business Day, or on a day other than a Business
       Day. Service shall be deemed to occur at 9.00am on the next following
       Business Day (such times being local time at the address of the
       recipient).

21.3   The addresses for the parties are as follows:

Peak Entertainment Ltd                Cadaco
Bagshaw Hall                          4300 West 47th Street
Bagshaw Hill                          Chicago, Illinois 60632
Bakewell                              USA
Derbyshire
DE45 1DL

21.4   For the avoidance of doubt, where proceedings to which the Civil
       Procedure Rules apply have been issued, the provisions of Civil Procedure
       Rule 6 must be complied with in respect of the service of documents in
       connection with those proceedings.

22.    FORCE MAJEURE

22.1   Neither party to this Agreement shall be deemed to be in breach of this
       Agreement or otherwise liable to the other party in any manner whatsoever
       for any failure or delay in performing its obligations under this
       Agreement due to Force Majeure.

22.2 If a party's performance of its obligations under this Agreement is affect
by Force Majeure:

       22.2.1   It shall give written notice to the other party, specifying the
                nature and extent of the Force Majeure, within seven days of
                becoming aware of the Force Majeure and will at all times use
                all reasonable endeavours to mitigate the severity of the Force
                Majeure;

       22.2.2   subject to the provisions of CLAUSE 22.3, the date for
                performance of such obligation shall be deemed suspended only
                for a period equal to the delay caused by such event;

       22.2.3   it shall not be entitled to payment from the other party in
                respect of extra costs and expenses incurred by virtue of the
                Force Majeure event.

22.3   If the Force Majeure in question continues for more than three months,
       either party may give notice in writing for the other to terminate this
       Agreement. This notice to terminate must specify the termination date,
       which will not be less than 15 days after the date on which notice is
       given, and once such notice has been validly given, this Agreement will
       terminate on that termination date.

23.    CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

       The parties to this Agreement do not intend that any of its terms will be
       enforceable by virtue of the Contracts (Rights of Third Parties) Act 1999
       by any person not a party to it.

<PAGE>

24.      COUNTERPARTS

       This Agreement may be executed in two counterparts each executed by one
       party hereto and in such event the counterparts shall together constitute
       one agreement.

25.    JURISDICTION

       The formation, existence, construction, performance, validity and all
       aspects whatsoever of this Agreement or of any term of this Agreement
       shall be governed by English law. The English courts shall have exclusive
       jurisdiction to settle any disputes, which may arise out of or in
       connection with this Agreement, and the parties agree to submit to such
       jurisdiction.

26.    ENTIRE UNDERSTANDING AND VARIATION

       26.1 this agreement constitutes the entire Agreement between the Parties
       in respect of the subject matter contained or referred to herein and
       supersedes any and all promises, representations, warranties or other
       statements whether written or oral made by or on behalf of one party to
       the other of any nature whatsoever.

       26.2 no variation or amendment of this Agreement or oral promise or
       commitment related to it shall be valid unless committed to in writing
       and signed by a director of Peak and a director of the Distributor.


<PAGE>

SIGNED BY:  /s/ PHIL OGDEN
           .............................................
ON BEHALF OF PEAK ENTERTAINMENT LIMITED


PRINT NAME    PHIL OGDEN
           .............................................


PRINT POSITION    MANAGING DIRECTOR
           .............................................


SIGNED BY:    /s/ JOHN M. LINDEAY
           .............................................
ON BEHALF OF CHARACTER OPTIONS LIMITED

PRINT NAME    JOHN M. LINDEAY
           .............................................


PRINT POSITION    PRESIDENT
                ........................................



<PAGE>

                                   SCHEDULE 1

                                    PRODUCTS

Countin' Sheep plush

                         PROPOSED LINE PLAN AND COSTING

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
                                                         Estimated           Target         FOB Price
Description                    Display                     Cube             Retail $
--------------------------------------------------------------------------------------------------------
<S>                            <C>                  <C>                       <C>             <C>
Countin' Sheep Plush           Bulk with ear tag    96 pieces per outer
                                                      (25"x16"x10.5")         $2.50           $1.45
                                                       gross 5.73kg
--------------------------------------------------------------------------------------------------------
</TABLE>










<PAGE>

                                   SCHEDULE 2

                                    PRODUCTS

Countin' Sheep Plush

                    ESTIMATED ROYALTIES INCLUDED IN FOB PRICE

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
                                                        Estimated              FOB          Estimated
Description                    Display                    Cube                               ROYALTY
---------------------------------------------------------------------------------------------------------
<S>                            <C>                 <C>                        <C>             <C>
Countin' Sheep Plush           Bulk                96 pieces per outer
                                                     (25"x16"x10.5")          $1.45           $0.30
                                                      gross 5.73kg
---------------------------------------------------------------------------------------------------------
</TABLE>