Exhibit 4.5e

     

    EMPLOYMENT
      AGREEMENT

     

    This
      Employment Agreement (“Agreement”), made this 1st day of March, 2007, by and
      between INTERNATIONAL PLAYTHINGS, INC., a Delaware corporation with principal
      executive offices at 75D Lackawanna Avenue, Parsippany, NJ 07054 (the
“Company”),
      and
      MICHAEL VARDA, residing at 55 School House Road Oak Ridge NJ
      (“Varda”).

     

    WHEREAS
      the Company is engaged in the business of importing and wholesaling high quality
      toys and toy-related products for children and developing various proprietary
      lines of toy products, and distributing the same through a unique network of
      specialty toy and other retailers throughout the United States; and

     

    WHEREAS
      Varda shall serve as Chief Executive Officer of the Company, and Varda and
      the
      Company are desirous of formalizing their understanding for Varda’s employment,
      all upon the terms and subject to the conditions hereinafter
      provided.

     

    NOW,
      THEREFORE, in consideration of the mutual covenants and agreements herein
      contained, the parties hereto, intending to be legally bound, agree as
      follows:

    

      ARTICLE
        I EMPLOYMENT.

       

      The
        Company agrees to employ Varda, and Varda agrees to be employed by the Company,
        upon the terms and subject to the conditions of this Agreement.

       

      ARTICLE
        II TERM.

       

    

    Subject
      to the provisions governing termination as hereinafter provided, the term of
      this Agreement (the “Term”) shall be for a period of three (3) years commencing
      on the date hereof (the “Commencement Date”) and ending on February 28,
      2010, unless sooner terminated as hereinafter provided (the
“Term”).

    

      ARTICLE
        III DUTIES;
        BEST EFFORTS; INDEMNIFICATION.

       

    

    Section
      3.1 Varda
      shall serve as Chief Executive Officer of the Company, and shall report directly
      to the Chairmen of the Board (“Chairman”) and the Chief Executive Officer
      (“Grand CEO”) of it’s Parent Company Grand Toy International Limited (“Grand”).
      Varda shall have the general supervision and control over, and responsibility
      for, the day to day operations of the Company and shall have such other duties
      which are not inconsistent with his position as Chief Executive Officer of
      a
      company of comparable size as shall be assigned to him by the Board of Directors
      of the Company, the Chairman or the Grand CEO. Varda shall be based within
      a 25
      mile radius of Parsippany, New Jersey and shall undertake such domestic and
      foreign travel as shall be reasonably required to fulfill his
      duties.

     

    Section
      3.2 Varda
      shall devote all of his business time, attention and energies, on a full time
      and exclusive basis, to the business and affairs of the Company, shall use
      his
      best efforts to advance the best interests of the Company, and shall not during
      the Term be engaged in any other business activities, whether or not such
      business activities are pursued for gain, profit or other pecuniary advantage,
      without the consent of the Chairman or Grand CEO; provided,
      however,
      that,
      it shall not be a violation of this Agreement for Varda to (i) serve on
      corporate, civic or charitable boards or committees or (ii) manage passive
      personal investments, in either case so long as any such activities do not
      interfere with the performance of his responsibilities as an employee of the
      Company in accordance with this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      3.3 The
      Company shall indemnify Varda to the fullest extent permitted by applicable
      law
      for all amounts (including, without limitation, judgments, fines, settlement
      payments, expenses and attorney’s fees) incurred or paid by Varda in connection
      with any third party action, suit, investigation or proceeding arising out
      of or
      relating to the performance by Varda of services for, or the acting by Varda
      as
      a director, officer or employee of, the Company or of any other person or entity
      at the Company’s request, and the Company shall advance to Varda, or pay on his
      behalf, such amounts as the Board determines to be due by reason of such
      indemnification.

     

    
      ARTICLE
        IV COMPENSATION
        AND BENEFITS.

       

    

    Section
      4.1 The
      Company shall pay to Varda a base salary (the “Base
      Salary”)
      at a
      rate of Two Hundred and Thirty Thousand Dollars (US$230,000) per annum, payable
      in accordance with the Company’s payroll practices for its executive employees.
      The Chairman and Grand CEO will review the Base Salary for possible increase
      not
      less than annually during the Term with a view to ensuring that it remains
      commensurate with the time and effort required for the discharge of his
      responsibilities pursuant to this Agreement. The Company may from time to time
      exercise its discretion to grant Varda additional compensation or bonuses upon
      such terms and conditions as the Board of Directors of the Company shall deem
      to
      be in its business interest. The Company shall not be obligated to pay Varda
      any
      additional compensation or bonus, regardless of whether additional compensation
      or bonus was paid to him in any past or succeeding year or additional
      compensation or bonus was paid to other employees in any year. The Company’s
      determination with respect to the payment and amount of any additional
      compensation or bonus for any fiscal year shall be final and
      conclusive.

     

    Section
      4.2 The
      Company shall promptly pay to Varda the reasonable expenses incurred by him
      in
      the performance of his duties hereunder in accordance with the Company’s
      policies in effect from time to time, including, without limitation, those
      incurred in connection with business related travel or entertainment, or, if
      such expenses are paid directly by Varda, shall promptly reimburse him for
      such
      payment, provided that Varda provides proper documentation thereof in accordance
      with the Company’s policy.

     

    Section
      4.3 Varda
      shall be entitled to paid vacation days in each calendar year determined by
      the
      Company from time to time, but not less than four (4) weeks in any calendar
      year. Vacation shall be prorated in any calendar year of the Term during which
      Varda is employed hereunder for less than an entire year in accordance with
      the
      number of days in such year during which he is so employed. Varda shall also
      be
      entitled to annual paid sick leave, personal leave and holidays as per the
      Company’s policies as same may be amended from time to time. Varda shall also be
      entitled to other benefits as may be provided in applicable plans and programs
      of the Company, without limitation, according to the terms and conditions of
      such plans and programs.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    Section
      4.4 The
      Company may, at its discretion, subscribe for and maintain, on behalf of the
      Company, life insurance, key-man insurance and long-term disability insurance,
      in such amount and upon such terms or conditions as the Company may deem
      reasonable. Varda shall cooperate with the Company in connection with the
      obtaining of any such policies, including the submission to physical examination
      and blood testing.

     

    Section
      4.5 Varda
      shall be Granted 200,000 (Two Hundred Thousand) stock options for American
      Depository Shares of Grand Toy International Limited subject to the approval
      of
      the Board of Directors at the next meeting held following the execution of
      this
      contract. The exercise price the options will be the fair market value on the
      date of grant by the Board of Directors and the options will vest equally over
      3
      years and are otherwise subject to Grand Toys International Limited 2004 Stock
      Option Plan.

    

      ARTICLE
        V
TERMINATION.

    

     

    This
      Agreement may be terminated by either party with or without notice and without
      “Cause” (as defined herein). Further, this Agreement may be terminated by the
      Company with Cause in accordance with Section 5(a) below, or because of any
“Disability” (as defined herein) in accordance with Section 5(b)
      below.

     

    (a) For
      Cause.
      The
      Company shall have the right to terminate Varda’s employment for “Cause.” A
      termination for “Cause”
is
      a
      termination evidenced by a resolution adopted by the Board finding that Varda
      has:

     

    (i) materially
      breached or failed to comply with any of the material terms of this Agreement,
      including, without limitation, Sections 3, 7, 8, 9 or 12 of this
      Agreement;

     

    (ii) failed
      to
      perform his duties under this Agreement, including refusing to carry out the
      reasonable written instructions of the Board, the Chairman or the Grand CEO,
      or
      deliberately and intentionally disregarding the lawful instructions from the
      Board, the Chairman or the Grand CEO, in any case which instructions are
      consistent with the responsibilities and duties of Varda contemplated by this
      Agreement and provided that the instructions do not knowingly violate any of
      the
      inherent responsibilities accorded to the Chief Executive Officer.

     

    (iii) engaged
      in gross negligence or willful misconduct in connection with or arising out
      of
      the performance of his duties hereunder;

     

    (iv) been
      under the influence of drugs (other than prescription medicine or other
      medically-related drugs to the extent that they are taken in accordance with
      their directions) or alcohol during the performance of his duties under this
      Agreement, or while under the influence of drugs or alcohol, engages in
      inappropriate conduct;

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    (v) engaged
      in behavior that would constitute grounds for liability for sexual harassment
      (as proscribed by the U.S. Equal Employment Opportunity Commission Guidelines,
      the New Jersey Division of Human Rights and or any other applicable state
      regulatory body) or, in the reasonable opinion of the Board, other egregious
      conduct violative of laws governing the workplace; or

     

    (vi) committed
      any act of fraud, larceny, misappropriation of funds or embezzlement or been
      convicted of a felony or a crime of moral depravity;

     

    provided,
      however,
      that
      (A) in the case of clauses (i), (ii) and (iii) above, Varda shall receive
      thirty (30) days’ advance written notice that the Board intends to meet to
      consider Varda’s termination and specifying the actions constituting Cause, and
      Varda shall have the opportunity to cure the conduct constituting Cause during
      such thirty (30) day period and (B) any act, or failure to act, based upon
      authority given pursuant to a resolution duly adopted by the Board or based
      upon
      the advice of counsel for the Company shall be conclusively presumed to be
      done,
      or omitted to be done, by Varda in good faith and in the best interests of
      the
      Company. As used herein, “Good
      Reason”
shall
      mean Varda’s termination of this Agreement following the Company’s material
      breach thereof, provided,
      however,
      that
      the Company shall receive thirty (30) days’ advance written notice that Varda
      intends to terminate this Agreement and specifying the actions constituting
      material breach, and the Company shall have the opportunity to cure the conduct
      constituting Good Reason during such thirty (30) day period

     

    (b) For
      Disability.
      The
      Company shall have the right to terminate Varda’s employment as a result of
      Varda’s “Disability.” For purposes of this Agreement, a termination for
“Disability”
shall
      occur upon rendering of a written termination notice by the Company after Varda
      has been unable to substantially perform his duties hereunder for 90 consecutive
      calendar days (exclusive of any vacation permitted under Section 4(f)
      hereof) or for 120 days in any 360 Calendar day period by reason of any physical
      or mental illness or injury. This should not be deemed to limit the right of
      the
      Company under Section 5 regarding termination. Nothing in this
      Section 5 is intended to alter or impair Varda’s rights under the federal
      Family and Medical Leave Act, 29 U.S.C. § 2601 et seq.
      Varda
      agrees to make himself available and to cooperate in any reasonable examination
      by a reputable independent physician selected by the Company for the purpose
      of
      a termination pursuant to Section 5(b)(i).

    

      ARTICLE
        VI EFFECT
        OF TERMINATION.

    

     

    Section
      6.1 Death
      or Disability.
      In the
      event of the termination of Varda’s employment as a result of his death or
      Disability, the Company shall:

     

    (a) pay
      to
      Varda or his estate, as the case may be, the Base Salary (including Base Salary
      for accrued and unused vacation days) plus accrued and unpaid bonus and other
      benefits, if any, in accordance with Section 4(b) through the date of his
      death or Disability (pro rated for any partial month); and

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    (b) reimburse
      Varda, or his estate, as the case may be, for any expenses pursuant to
      Section 4(d) (the amounts payable pursuant to the foregoing clauses (i) and
      (ii) are hereafter referred to as the “Accrued Obligations”).

     

    Section
      6.2 Termination
      for Cause by the Company, by Varda Voluntarily or upon expiration of the
      Term.
      In the
      event that Varda’s employment is terminated by the Company for Cause or by Varda
      voluntarily or upon expiration of the Term (or any extension thereof), Varda
      shall only be entitled to:

     

    (a) the
      Base
      Salary (including Base Salary for accrued and unused vacation days) plus accrued
      and unpaid bonus and other benefits, if any, in accordance with
      Section 4(c) and Company policy through the date of
      termination;

     

    (b) Reimbursement
      for any and all expenses incurred pursuant to Section 4(b), but not paid
      prior to termination; and 

     

    (c) Such
      rights to other benefits as may be provided in applicable plans and programs
      of
      the Company, including, without limitation, applicable employee benefit plans
      and programs, according to the terms and conditions of such plans and
      programs.

     

    Section
      6.3 Termination
      by the Company other than for Cause.
      In the
      event that Varda’s employment is terminated by the Company other than for Cause,
      Varda shall be entitled to:

     

    (a) Reimbursement
      for any and all expenses incurred pursuant to Section 4(b), but not paid
      prior to termination; and

     

    (b) the
      Base
      Salary (including Base Salary for accrued and unused vacation days) plus accrued
      and unpaid bonus and other benefits, if any, in accordance with
      Section 4(c) of the Company policy, until the earlier of: (A) the last
      day of the Term (as if Varda’s termination had not occurred) or (B) the
      date that shall be six (6) months after the date of such termination


     

    Section
      6.4 This
      Section 6 sets forth the only obligations of the Company with respect to
      the termination of Varda’s employment with the Company, and Varda acknowledges
      that upon the termination of his employment, he shall not be entitled to any
      payments or benefits which are not explicitly provided herein hereof,
provided,
      that
      the foregoing shall not affect Varda’s accrued benefits under any benefit plans
      in which Varda participated pursuant to Sections 4(b) and 4(c) hereof, all
      of which benefits shall be governed and controlled by the terms of the
      applicable benefit plans. Any and all Accrued Obligations shall be paid within
      fifteen (15) calendar days of the termination of Varda’s
      employment.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    
      ARTICLE
        VII COVENANT
        REGARDING INVENTIONS AND COPYRIGHTS.

       

    

    Section
      7.1 Varda
      hereby acknowledges that all Innovations (as defined below) created by Varda
      (either working alone or as part of a group) that are used, useful or useable
      in
      connection with the present or future Business of the Company or any of its
      affiliates which (i) were or will be made using equipment, supplies,
      facilities or trade secret information of the Company, or (ii) were or will
      be developed at least in part on the Company’s time, or (iii) relate at the
      time of conception or reduction to practice thereof either to the Business
      or to
      the Company’s or its affiliates’ actual or demonstrably anticipated research or
      development, or (iv) result from any work that Varda performs or performed
      for the Company, were created at the request of the Company pursuant to this
      Agreement or other arrangement (written or unwritten) between the Company and
      Varda. The term “Innovations” shall include all of the results and proceeds of
      Varda’s services under this Agreement, including without limitation, all right,
      title and interest in any inventions, know-how, discoveries, improvements,
      original works of authorship, designs, software, source code, object code,
      programs, formulas, processes, developments, trade secrets, trademarks,
      copyrights, service marks, logos and related proprietary information and
      materials, whether patentable, copyrightable, subject to trademark registration,
      or not, and all drafts, prototypes, proposals, sketches, revisions and
      demonstration and “beta” versions thereof, written, created, developed or
      produced or to be written, created, developed or produced, by Varda (either
      working alone or as part of a group) in connection therewith (subject, in the
      case of Innovations created by Varda pursuant to an agreement between the
      Company and any licensor, to the terms of such agreement).

     

    Section
      7.2 Varda
      hereby acknowledges that the Innovations were specifically ordered or
      commissioned by the Company for the Business. Varda hereby irrevocably assigns
      to the Company all right, title and interest in and to all Innovations and
      all
      right, title and interest in and to all patents, domain names, trade secrets,
      trademarks and other intellectual property derived therefrom, such assignment
      to
      be effective when first capable of being so assigned, transferred or vested.
      All
      Innovations shall be delivered to the Company as required herein or on
      termination or completion of the Agreement, whichever is earlier, unless the
      Company requests otherwise. To the extent that any Innovation is or shall be
      a
      copyrightable work, Varda agrees that such Innovation constitutes and shall
      constitute a work-made-for-hire as defined in the United States Copyright Act
      of
      1976; that the Company is and shall be the author of said work-made-for hire
      and
      the owner of all rights in and to such Innovation throughout the universe,
      in
      perpetuity and in all languages, for all now known or hereafter existing uses,
      media and forms, including, without limitation, the copyrights therein and
      thereto throughout the universe for the initial term and any and all extensions
      and renewals thereof; and that the Company shall have the right to make such
      changes therein and such uses thereof as it may deem necessary or desirable.
      To
      the extent that such copyrightable Innovation is not recognized as a
      work-made-for-hire, Varda hereby irrevocably assigns, transfers and conveys
      to
      the Company, without reservation, all of his right, title and interest
      throughout the universe in perpetuity in such Innovation, including, without
      limitation, all rights of copyright and copyright renewal in such Innovation
      or
      any part thereof, and all rights to exclusively or non-exclusively license
      or
      sublicense the foregoing.

     

    Section
      7.3 Varda
      hereby waives all rights of “droit moral” or “moral rights of authors” or any
      similar rights or principles of law which Varda may now or later have in the
      Innovations. Varda covenants and agrees that his contributions to any
      Innovations shall not be an unauthorized copy of any existing work or violate
      or
      infringe upon any common law or statutory right of any party including, without
      limitation, contractual rights, copyrights, trademarks, patents, service marks
      and rights of privacy, publicity, or any other right of any person or entity
      and
      is not the subject of any litigation or claim that might give rise to
      litigation.

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    Section
      7.4 By
      execution hereof, Varda hereby irrevocably constitutes and appoints the Company
      with full power of substitution, to be Varda’s true and lawful attorney to
      execute, acknowledge, swear and file all instruments and documents, and to
      take
      any action which shall be deemed necessary, appropriate or desirable to
      effectuate the terms of this Section 8. The powers of attorney granted
      herein shall be deemed to be coupled with an interest and shall be irrevocable
      and survive the occurrence of Varda’s death, disability or
      bankruptcy.

    

      ARTICLE
        VIII PROTECTION
        OF CONFIDENTIAL INFORMATION.

    

     

    Varda
      acknowledges that he has been and will be provided with information about,
      and
      his employment by the Company will, throughout the Term, bring him into close
      contact with, many confidential affairs of the Company and its affiliates,
      including proprietary information about costs, profits, customers, suppliers,
      vendors, advertisers, markets, sales, products, key personnel, pricing policies,
      operational methods, technical processes and other business affairs and methods,
      plans for future developments and other information not readily available to
      the
      public (“Confidential Information”), all of which are highly confidential and
      proprietary and all of which were developed by the Company at great effort
      and
      expense. Varda further acknowledges that the services to be performed by him
      under this Agreement are of a special unique, unusual, extraordinary and
      intellectual character, that the Business will be conducted throughout the
      world
      (the “Territory”), that the Company’s services and products will be marketed
      throughout the Territory, that the Company competes and will compete in nearly
      all of its business activities with other organizations which are located in
      nearly any part of the Territory and that the nature of the relationship of
      Varda with the Company is such that Varda is capable of competing with the
      Company from nearly any location in the Territory. In recognition of the
      foregoing, Varda covenants and agrees during the Term and for a period of five
      (5) years thereafter that he will:

     

    (i) keep
      secret all Confidential Information and not divulge or disclose any Confidential
      Information to anyone outside of the Company or its affiliates, either during
      or
      after the Term, except with the Company’s prior written consent;

     

    (ii) not
      make
      use of any of such Confidential Information for his own purposes or the benefit
      of anyone other than the Company and its affiliates; and

     

    (iii) deliver
      promptly to the Company on termination of this Agreement, or at any time the
      Company may so request, all confidential memoranda, notes, records, reports
      and
      other confidential documents (and all copies thereof) relating to the
      Confidential Information and/or business of the Company and its affiliates,
      which he may then possess or have under his control.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    Notwithstanding
      the foregoing, the term “Confidential Information” shall not include any
      information (i) which is already known by Varda or which is or becomes
      publicly known through no wrongful act of Varda, (ii) which is rightfully
      received by Varda from any third party, provided that such third party was
      not
      known by Varda to be bound by a confidentiality agreement with or other
      contractual, legal or fiduciary obligation of confidentiality with respect
      to
      such information, (iii) which is disclosed by the Company to any third
      party without similar restriction, or (iv) which is disclosed by Varda
      pursuant to applicable law or the order of any court of competent
      jurisdiction.

    

      ARTICLE
        IX RESTRICTION
        OF COMPETITION; INTERFERENCE; AND NON-SOLICITATION.

    

     

    Section
      9.1 Non-Solicitation
      - As a significant inducement to the Company to enter into and perform its
      obligations under this Agreement, during the Term and until the second
      anniversary of the expiration of this Agreement or the termination of Varda’s
      employment, as applicable, for any reason Varda will not, either directly or
      indirectly, alone or in association with others:

     

    (a) solicit,
      or permit any person or organizations directly or indirectly to solicit, any
      individual who at the time of the solicitation is, or who within the six (6)
      month period prior to such solicitation was, an employee of the Company to
      leave
      the employ of the Company or terminate his or her employment relationship with
      the Company, or hire or attempt to hire or induce, any employee or employees
      of
      the Company to terminate their employment with, or otherwise cease their
      relationship with, the Company;

     

    (b) solicit,
      divert or take away, or attempt to divert or to take away, the business or
      patronage of any of the clients, customers, vendors or accounts of the
      Company;

     

    (c) induce
      any client, customer, vendor, agent or other person or entity with whom or
      which
      the Company has a business relationship, contractual or otherwise, to terminate
      or alter such business relationship; or

     

    (d) take
      any
      action reasonably likely to cause injury to the relationship between the Company
      or any of its respective employees and any client, lessor, lessee, vendor,
      supplier, customer, distributor, employee, consultant or other business
      associate of the Company or any of its affiliates as such relationship relates
      to the Company or its affiliates’ conduct of their business.

     

    Section
      9.2 Restriction
      of Competition - As a further significant inducement to the Company to enter
      into and perform its obligations under this Agreement, during the Term and
      for a
      period of six (6) months from the expiration of this Agreement or the
      termination of Varda’s employment, as applicable, for any reason Varda will not,
      either directly or indirectly:

     

    (a) engage
      in
      any business which develops, manufactures, promotes or distributes products
      that
      are competitive with those that are marketed by the Company, or those products
      which are then under active development by the Company (a “Competing
      Business”),
      whether such engagement shall be as a director, officer, employee, stockholder,
      shareholder, partner, member or other owner, affiliate or other participant
      in
      any Competing Business, provided, however, that Varda’s employment by an entity
      that (A) carries both a Competing Business and one or more other businesses
      or (B) can be shown not to involve participation in such Competing
      Business; shall not constitute a breach of this clause; or

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

     

    (b) assist
      any other person or entity in organizing or engaging in any Competing Business
      in any capacity or manner described in clause (i) above.

     

    Section
      9.3 Non-Disparagement
      - Neither during the Term nor at any time thereafter shall Varda disparage
      the
      Company, any director, officer, employee or shareholder of the Company, or
      any
      affiliate of any such director, officer, employee or shareholder of the Company
      by making (or causing others to make) any oral or written statements or
      representations that could reasonably be construed to be a false and misleading
      statement of fact or a libelous, slanderous or disparaging statement of or
      concerning any of the aforementioned persons.

     

    Section
      9.4 Waiver
      -
      Sections 9(a), 9(b), and 9(c) of this Agreement shall apply in their
      entirety in the event that Varda’s employment with the Company is terminated by
      any party, and for any of the reasons set forth in Section 5 herein.
      However, if Varda remains employed by the Company and is not presented with
      a
      written offer of continued employment by the Grand CEO at least six (6) months
      prior to the expiration of the Agreement at equal or greater Compensation than
      that which he is receiving at that time, and there is a voluntary termination
      of
      the agreement by Varda, then Sections 9(a)(ii) and (iii) and 9(b)(i) and
      (ii) will be waived.

    

      ARTICLE
        X
SPECIFIC
        REMEDIES.

    

     

    It
      is
      understood by Varda and the Company that the covenants contained in this
      Section 10 and in Sections 7, 8 and 9 hereof are essential elements of
      this Agreement and that, but for the agreement of Varda to comply with such
      covenants, the Company would not have agreed to enter into this Agreement or
      consummate the transactions contemplated by the Asset Purchase Agreement. The
      Company and Varda have independently consulted with their respective counsel
      and
      have been advised concerning the reasonableness and propriety of such covenants
      with specific regard to the nature of the business conducted by the Company
      and
      all interests of the Company and its stockholders. Varda agrees that the
      covenants of Sections 7, 8 and 9 are reasonable and valid. If Varda commits
      a breach of any of the provisions of Sections 7, 8 or 9 hereof, such breach
      shall be deemed to be grounds for termination for Cause. In addition,
      notwithstanding the provisions of Sections 8 and 9, Varda acknowledges that
      the Company may have no adequate remedy at law if he violates any of the terms
      hereof. Varda therefore understands and agrees that the Company shall have
      without prejudice as to any other remedies, the right upon application to any
      court of proper jurisdiction to a temporary restraining order, preliminary
      injunction, injunction, specific performance or other equitable
      relief.

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    

      ARTICLE
        XI INDEPENDENCE;
        SEVERABILITY AND NON-EXCLUSIVITY.

    

     

    Each
      of
      the rights enumerated in Sections 7, 8 or 9 hereof and the remedies
      enumerated in Section 10 hereof shall be independent of the others and
      shall be in addition to and not in lieu of any other rights and remedies
      available to the Company at law or in equity. If any provision of this
      Agreement, or any part of any of them, is hereafter construed or adjudicated
      to
      be invalid or unenforceable, the same shall not affect the remainder of the
      covenants or rights or remedies which shall be given full effect without regard
      to the invalid portions. If any covenant set forth herein is held to be invalid
      or unenforceable because of the duration of such provision or the area covered
      thereby, the parties agree that the court making such determination shall have
      the power to reduce the duration and/or area of such provision and in its
      reduced form said provision shall then be enforceable. No such holding of
      invalidity or unenforceability in one jurisdiction shall bar or in any way
      affect the Company’s right to the relief provided in Section 10 or
      otherwise in the court of any other state or jurisdiction within the
      geographical scope of such covenants as to breaches of such covenants in such
      other respective states or jurisdictions, such covenants being, for this
      purpose, severable into diverse and independent covenants.

     

    
      ARTICLE
        XII CONFLICTING
        AGREEMENTS.

       

    

    Section
      12.1 Varda
      hereby represents that he is not bound by the terms of any agreement with any
      previous employer, or with any other party, that would impair his right or
      ability to enter the employ of the Company or perform fully his obligations
      pursuant to this Agreement. Varda further represents and warrants that his
      performance of all the terms of this Agreement and as an executive of the
      Company does not and will not breach any agreement to keep in confidence
      proprietary information, knowledge or data acquired by him in confidence or
      in
      trust prior to his employment with the Company.

    

      ARTICLE
        XIII SUCCESSORS;
        BINDING AGREEMENT.

    

     

    This
      Agreement is personal to Varda and without the prior written consent of the
      Company shall not be assignable by Varda otherwise than by will or the laws
      of
      descent and distribution or by the Company, except that the Company shall be
      permitted to assign its rights, interests and obligations to a parent or
      subsidiary of, or an Affiliate controlled by the Company which assumes in
      writing all of the obligations under this Agreement, without obtaining any
      consent from Varda. This Agreement shall inure to the benefit of and be
      enforceable by Varda’s legal representatives and the Company’s successors and
      permitted assigns. Arbitration of Employment-Related Disputes

     

    The
      parties hereby unmistakably and voluntarily agree that all employment-related
      disputes, including workplace discrimination claims, are to be submitted to
      arbitration before a single arbitrator, to be selected by the parties, in
      accordance with the National Rules for the Resolution of Employment Disputes
      of
      the American Arbitration Association. It is further agreed and understood that
      the site of any arbitration shall be within Morris County in the State of New
      Jersey.

     

    The
      agreement to arbitrate applies to all employment-related disagreements and
      problems, which are those that concern a right, privilege, or interest
      recognized by applicable law. Such disputes include claims, demands or actions
      under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866,
      the Civil Rights Act of 1991, the Equal Pay Act, the Age Discrimination in
      Employment Act, the Americans with Disabilities Act, the Employee Retirement
      Security Act of 1974, the Fair Labor Standards Act, the Rehabilitation Act
      of
      1973, the Family and Medical Leave Act, the Conscientious Employee Protection
      Act, the New Jersey Law Against Discrimination, the New Jersey Family Leave
      Act,
      the New Jersey Prevailing Wage Act, and any other federal, state, or local
      statute, regulation, or common law doctrine regarding employment discrimination,
      conditions of employment, or termination of employment.

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    

      ARTICLE
        XIV ARBITRATION
        OF EMPLOYMENT-RELATED DISPUTES.

    

     

    The
      parties further understand that the remedies available to Varda and the Company
      during the arbitration proceeding shall be the same as the remedies available
      under the statute(s) upon which any claim(s) is based, and that could be awarded
      by any court or administrative agency. Each party shall bear its own attorneys’
fees, unless otherwise provided by statute.

     

    The
      arbitrator’s determination shall be final and binding upon the
      parties.

     

    This
      agreement to arbitrate does not pertain to a claim of violation of
      Sections 7, 8 and/or 9 of this Agreement which may be pursued by the
      Company, in accordance with Section 10, by alternatively applying to a
      court of competent jurisdiction for a temporary restraining order, preliminary
      injunction, and/or such other legal and equitable remedies as may be
      appropriate.

     

    ARTICLE
      XV NOTICES.

     

    Any
      notice or other communications required or permitted hereunder shall be in
      writing and shall be deemed effective (i) upon personal delivery, if
      delivered by hand and followed by notice by mail or facsimile transmission,
      (ii) upon actual receipt after the date of deposit in the mails, if mailed
      by certified or registered mail (return receipt requested), or (iii) on the
      next business day, if mailed by an overnight mail service to the parties or
      sent
      by facsimile transmission,

     

    To
      the
      Company: 

     

    International
      Playthings Inc.

    75D
      Lackawanna Ave.

    Parsippany
      NJ 07438

     

    with
      copies to: 

     

    Grand
      Toy
      International Limited

    Room
      UG202 - Floor UG2

    Chinachem
      Golden Plaza

    77
      Mody
      Rd

    Tsimshatsui
      East, Kowloon

    Hong
      Kong

    Att
      Jeff
      Hsieh

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

     

    Connell
      Foley

    85
      Livindston Ave

    Roseland
      NJ 07068-1765

    Att
      John
      Cromie

     

    To
      Varda: 

     

    Mr.
      Michael Varda

    55
      School
      House Rd

    Oak
      Ridge
      NJ 07043

     

    or
      at
      such other address or telecopy number (or other similar number) as either party
      may from time to time specify to the other. Any notice, consent or other
      communication required or permitted to be given hereunder shall have been deemed
      to be given on the date of mailing, personal delivery or telecopy or other
      similar means (provided the appropriate answer back is received) thereof and
      shall be conclusively presumed to have been received on the second business
      day
      following the date of mailing or, in the case of personal delivery or telecopy
      or other similar means, the day of delivery thereof, except that a change of
      address shall not be effective until actually received.

    

      ARTICLE
        XVI HEADINGS.

       

      The
        headings of this Agreement are for convenience of reference only and shall
        not
        affect in any manner any of the terms and conditions hereof.

       

      ARTICLE
        XVII ACTS
        AND DOCUMENTS.

       

      The
        parties agree to do, sign and execute all acts, deeds, documents and corporate
        proceedings necessary or desirable to give full force and effect to this
        Agreement.

       

      ARTICLE
        XVIII COUNTERPARTS.

       

      This
        Agreement may be executed in two or more counterparts, each of which shall
        be
        deemed an original and all of which together shall constitute one and the
        same
        agreement.

       

      ARTICLE
        XIX MODIFICATIONS
        AND WAIVERS.

       

    

    No
      term,
      provision or condition of this Agreement may be modified or discharged unless
      such modification or discharge is authorized by the Board of Directors of the
      Company and is agreed to in writing and signed by Varda. No waiver by either
      party hereto of any breach by the other party hereto of any term, provision
      or
      condition 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.

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    

      ARTICLE
        XX ENTIRE
        AGREEMENT.

       

      This
        Agreement constitutes the entire agreement between the parties with respect
        to
        the subject matter herein and supersedes all prior agreements, negotiations
        and
        discussions between the parties hereto, there being no extraneous agreements.
        This Agreement may be amended only in writing executed by the parties hereto
        affected by such amendment.

       

      ARTICLE
        XXI LAW
        GOVERNING.

       

      Except
        as
        otherwise explicitly noted, this Agreement shall be governed by and construed
        in
        accordance with the laws of the State of New Jersey (without giving effect
        to
        the principles of conflicts of law).

       

      ARTICLE
        XXII JURISDICTION.

    

     

    In
      the
      event of a claim of violation of Sections 7, 8 and/or 9 of this Agreement
      relating to Inventions and Copyrights, Confidential Information, and Varda’s
      post-employment restrictive covenant, the Company may alternatively apply to
      a
      court of competent jurisdiction for a temporary restraining order, preliminary
      injunction, and/or such other legal and equitable remedies as may be appropriate
      because both parties acknowledge that the Company would have no adequate remedy
      at law for such violation or non compliance. Employee hereby consents to the
      jurisdiction of the Courts of the State of New Jersey or the United States
      District Court for the District of New Jersey with respect to such an action
      and
      to service of process upon her in accordance with Section 21.

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, the parties hereto have executed this Employment Agreement
      on
      the day and year set forth above.

     

    
      	 	 	 
	
            	
            	
              /s/
                Michael Varda 

            
	 	
              
Michael
              Varda


    

     

    
      	
            	 	 
	 	
              INTERNATIONAL
                PLAYTHINGS, INC.

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              Name:

              Title:

            




    
      	
            	 	 
	 	Grand Toys International Limited
	 
 	 
 	 
 
	
            	By:  	/s/ Jeff Hsieh
	 	
              

              Name:
                Jeff Hsieh

              Title:
                Chief Executive Officer

            


    

     

    
      
        
        

      

      
        -14-