Document:

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                                                                    EXHIBIT 10.4
                         WEB SITE DEVELOPMENT AGREEMENT

         This AGREEMENT (the "Agreement") is made and entered into as of the
17th day of December, 1999 (the "Effective Date"), by and between Miller
Systems, Inc., a Massachusetts corporation with offices at 364 Boylston Street,
Boston Massachusetts ("Developer") and LearningExpress.com LLC, a Delaware
limited liability company with offices at 29 Buena Vista Street, Ayer, MA
01432("Client").

                               W I T N E S S E T H

         WHEREAS, Developer is in the business of offering Internet services
relating to, among other things, development of sites on the World Wide Web
portion of the Internet, and is willing to provide services to Client on the
terms and subject to the conditions set forth below; and

         WHEREAS, Client desires to engage Developer, and Developer desires to
be engaged by Client, to provide Internet services on the terms and subject to
the conditions set forth below.

         NOW, THEREFORE, in consideration of the mutual promises set forth
herein, Developer and Client (collectively, the "Parties") hereby agree as
follows:

                              1. DEVELOPER SERVICES

         Developer agrees to provide Client with services relating to the
development of an online store as set forth or described in "Part II.
Functionality specifications for online store" of Exhibit A (the "Development
Services") attached hereto and made a part hereof. Obligations of Developer, if
any, to provide ongoing maintenance tasks for the on-line store described in the
Development Services (the "On-Line Store") shall be set forth and included as
part a separate agreement between the parties. (The Development Services are
hereinafter referred to collectively as the "Services.") Client agrees that
Developer is responsible only for providing the Services, and Developer is not
responsible for providing any services or performing any tasks not specifically
set forth in the Services.

                             2. DEVELOPMENT SERVICES

                      2.1 SPECIFICATIONS AND CLIENT CONTENT

         Developer, in consultation with Client, has developed written
specifications for the Development Services. (the "Specifications")-- which are
attached hereto as Part II of Exhibit A.

                         2.2 DELIVERY OF CLIENT CONTENT

         "Client Content" shall mean any materials provided by Client for
incorporation in the On-Line Store, including, but not limited to, any images,
photographs, illustrations, graphics, audio clips, video clips or text. Client
shall deliver the Client Content to Developer in an electronic file format
specified and accessible by Developer (e.g., .txt, .gif) or as otherwise
specified in the Specifications. Any services required to convert or input
Client Content not set forth in the Specifications shall be charged on a time
and materials basis pursuant to the fees schedule listed in the COSTS portion of
Exhibit A hereto. Client shall promptly deliver all Client Content to Developer
as reasonably required by Developer.
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                               2.3 INITIAL VERSION

         Upon Developer's receipt of the Client Content and any fees then due
and payable in accordance with the COSTS portion of Exhibit A hereto, Developer
shall commence tasks associated with the completing the Development Services
and, to the extent applicable, making the initial version available to Client
(an "Initial Version"). Developer shall use combinations of technology as
Developer, in consultation with the Client, deems appropriate to the Development
Services.

                                  2.4 REVISIONS

         Client shall have ten (10) days, or such time as otherwise agreed by
the Parties in writing, from the date of a written notice of completion of the
Initial Version (or any version completed pursuant to a "Change Order," as
defined below, any such version is a "Change Order Version")) from Developer to
review and request in writing from Developer revisions to the Initial Version
(or such Change Order Version). Upon receipt of such requests, Developer shall
use commercially reasonable efforts to implement such revision requests that are
within the scope of, and consistent with, the Specifications. If Client wishes
to implement any revisions to the On-Line Store that deviate in any material
respect from the Specifications, Client shall submit to Developer a written
change order containing (i) such revisions in detail and (ii) a request for a
price quote for each change (collectively, the "Change Order"). Developer shall
promptly evaluate the Change Order and submit to Client for its written
acceptance a proposal for undertaking the applicable tasks and a price quote
reflecting all fees associated with Client's Change Order. Client shall have ten
(10) business days from receipt of such proposal to accept or reject Developer's
proposal in writing. If Client accepts Developer's proposal to undertake the
work described in by the Change Order, then the Change Order, as supplemented
and/or modified by Developer's proposal, shall amend and become a part of the
Specifications and the COSTS portion of Exhibit A hereto, and Developer shall
proceed to implement such revisions in accordance with the Specifications and
such costs structure as so modified. If Client has not made any requests for
revisions by the end of ten (10) days from the date of written notice of
completion of the an Initial Version (or a Change Order Version) from Developer,
or by such time as otherwise agreed by the Parties in writing, the Initial
Version (or such Change Order Version) shall be deemed accepted by Client
("Acceptance").

         Any accepted Change Order, any failure of the Client to comply with the
timeframes contained in this Section 2.4, or any mutually agreed deviations from
such timeframes, may materially alter the timeframes in which the Development
Services are to be provided, and Developer shall notify Client promptly in
writing of the projected alterations to the timeframes caused by any such event.

                                  2.5 TRANSFER

         Upon Acceptance of the Services and payment of all fees called for in
Exhibit A hereto, Developer shall transfer the online store to the computer
system owned and operated by Client's designated third party contractor, through
which the online store may be accessed via the World Wide Web portion of the
Internet (the "Host Server").

                               2.6 ADDITIONAL WORK

         Subsequent to the execution of this Agreement by the Parties, the
Developer shall perform services for the Client which are not in the original
scope of Services hereunder only pursuant to a written agreement between the
parties.

                              3. PROPRIETARY RIGHTS
                        3.1 PROPRIETARY RIGHTS OF CLIENT

         As between Client and Developer, Client Content and "DC Content," as
defined in Section 3.2, shall remain the sole and exclusive property of Client,
including, without limitation, all copyrights, trademarks,

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patents, trade secrets, and any other proprietary rights. Nothing in this
Agreement shall be construed to grant Developer any ownership right in, or
license to, the Client Content or the DC Content, except as provided in Section
4.1 of this Agreement. To the extent, if any, that ownership of the Client
Content, or the DC Content does not automatically vest in Client by virtue of
this Agreement or otherwise, Developer hereby transfers and assigns to Client
all right, title and interest which Developer may have in and to the Client
Content and/or the DC Content.

                       3.2 PROPRIETARY RIGHTS OF DEVELOPER

Subject to Client's ownership interest in Client Content, all materials,
including, but not limited, to any computer software (in object code and source
code form), script, programming code, data, or information developed or provided
by Developer or its suppliers under this Agreement (with the exception of
original elements of audiovisual displays and/or any HTML script created
hereunder specifically for Client, which shall be the sole and exclusive
property of Client and shall be referred to herein as "DC Content), and any
trade secrets, know-how, methodologies and processes related to Developer's
products or services, shall remain the sole and exclusive property of Developer
or its suppliers, including, without limitation, all copyrights, trademarks,
patents, trade secrets, and any other proprietary rights inherent therein and
appurtenant thereto (collectively "Developer Materials"). To the extent, if any,
that ownership of the Developer Materials does not automatically vest in
Developer by virtue of this Agreement or otherwise, Client hereby transfers and
assigns to Developer all rights, title and interest which Client may have in and
to the Developer Materials. Client acknowledges and agrees that Developer is in
the business of designing and hosting Web sites, and that Developer shall have
the right to provide to third parties services which are the same or similar to
the Services, and to use or otherwise exploit any Developer Materials in
providing such services.

                               3.3 CONFIDENTIALITY

         Each party agrees that during the course of this Agreement, information
that is confidential or proprietary may be disclosed to the other party,
including, but not limited to software, technical processes and formulas
(including without limitation, the parameters applicable to Client's VIP program
and Client's proposed multi-facility distribution and fulfillment network),
source codes, product designs, sales, cost and other unpublished financial
information, product and business plans, advertising revenues, usage rates,
advertising relationships, projections, and marketing data ("Confidential
Information"). Confidential Information shall not include information that the
receiving party can demonstrate (a) is, as of the time of its disclosure, or
thereafter becomes part of the public domain through a source other than the
receiving party, (b) was known to the receiving party as of the time of its
disclosure, (c) is independently developed by the receiving party, (d) is
subsequently learned from a third party not under a confidentiality obligation
to the providing party, or (e) is required to be disclosed by a duly issued
order of a court of competent jurisdiction, provided that the party so ordered
to disclose shall use best efforts to notify the other party hereto prior to
such disclosure. Except as provided for in this Agreement, each party shall not
make any disclosure of the Confidential Information to anyone other than its
employees who have a need to know in connection with this Agreement. Each party
shall notify its employees of their confidentiality obligations with respect to
the Confidential Information and shall require its employees to comply with
these obligations. The confidentiality obligations of each party and its
employees shall survive the expiration or termination of this Agreement.

                              3.4 DEVELOPER NOTICES

         Unless otherwise agreed to in writing by the Parties, Developer shall
have the right to place the proprietary notices of Developer set forth on
Exhibit 3.4 attached hereto and made part hereof (the "Developer Notice"), on
the bottom of the home page for the On-Line Store in a font and typeface and
type size reasonably acceptable to Client. In no event may Client remove or
alter the Developer Notice from the On-Line Store without Developer's prior
written consent.

                                   4. LICENSE

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                         4.1 GRANT OF LICENSE -- CLIENT

         Client hereby grants to Developer a non-exclusive, worldwide,
royalty-free license for the Initial Term and any Renewal Term (as those terms
are hereinafter defined) to edit, modify, adapt, translate, exhibit, publish,
transmit, participate in the transfer of, reproduce, create derivative works
from, distribute, perform, display, and otherwise use Client Content and the DC
Content as necessary to render the Services to Client under this Agreement.

                        4.2 GRANT OF LICENSE -- DEVELOPER

         Subject to Section 10, Developer hereby grants to Client a perpetual,
limited, non-exclusive, nontransferable license to make use of the Developer
Materials which are incorporated in the online store and which are required for
the operation of the On-Line Store solely to allow the Client to operate and
utilize the On-Line Store (the "License"). Developer hereby reserves for itself
all rights in and to the Developer Materials not expressly granted to Client in
the immediately foregoing sentence. Other than as expressly set forth in this
Agreement, in no event shall Client use any trademarks or service marks of
Developer without Developer's prior written consent. The License is not
transferable or assignable without the prior written consent of the Developer,
except in the case of a sale of a majority of the assets or equity of the Client
or a merger, consolidation or reorganization of the Client, in which case the
License may be assigned without the prior written consent of the Developer.

                                5. CLIENT CONTENT
                    5.1 ACCURACY AND REVIEW OF CLIENT CONTENT

         Client assumes sole responsibility for: (a) acquiring any
authorization(s) necessary for hypertext links to third party Web sites; and (b)
the accuracy of materials provided to Developer, including, without limitation,
Client Content, descriptive claims, warranties, guarantees, nature of business,
and address where business is conducted; and (c) ensuring that the Client
Content does not infringe or violate any right of any third party.

                        5.2 LIMITATIONS ON CLIENT CONTENT

         Client shall provide Client Content that does not contain any content
or materials which are obscene, threatening, malicious, which infringe on or
violate any applicable law or regulation or any proprietary, contract, moral,
privacy or other third party right, or which otherwise expose Developer to civil
or criminal liability. Any such materials provided by Client to Developer which
do not satisfy the foregoing requirements in this Section 5.2 shall be deemed to
be a material breach of this Agreement.

                                6. FEES AND TAXES
                         6.1 ON-LINE STORE SERVICES FEES

         In consideration for the Services, the Client shall pay to the
Developer the fees listed in the COSTS portion of Exhibit A hereto pursuant to
the timeframe listed in such Exhibit A. Any hourly rates listed in Exhibit A are
good through December 1, 2000, and thereafter are subject to change in
Developer's sole discretion.

                              6.2 MAINTENANCE FEES

         The fee for any maintenance services that Developer provides to Client
shall be set forth in the separate maintenance agreement executed by the
parties.

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                                6.3 LATE PAYMENT

Client shall pay to Developer all fees not specifically itemized on Exhibit A
within thirty (30) days following the receipt of the applicable Developer
invoice. If Client fails to pay any fees within thirty (30) days from the date
due according to Exhibit A, or within (30) days from the date of an invoice,
where applicable, late charges of the greater of one point five percent (1.5%)
per month or the maximum allowable under applicable law shall also become
payable by Client to Developer. In addition, failure of Client to fully pay any
fees within sixty (60) days after the applicable due date shall be deemed a
material breach of this Agreement, justifying suspension of the performance of
the Services by Developer, and will be sufficient cause for immediate
termination of this Agreement by Developer. Any such suspension does not relieve
Client from paying past due fees plus interest and in event of collection
enforcement, Client shall be liable for any costs associated with such
collection, including, but not limited to, legal costs, attorneys' fees, court
costs, and collection agency fees.

                                    6.4 TAXES

         Client shall pay or reimburse Developer for all sales, use, transfer,
privilege, excise, and all other taxes and all duties, whether international,
national, state or local, however designated, which are levied or imposed by
reason of the performance by Developer under this Agreement; excluding, however,
income taxes on profits which may be levied against Developer.

                                  7. WARRANTIES
                            7.1 DEVELOPER WARRANTIES

         Developer represents and warrants that (a) Developer has the power and
authority to enter into and perform its obligations under this Agreement, and
(b) Developer's Services under this Agreement shall be performed in a
workmanlike manner. Developer further represents and warrants that, (i) for a
period of sixty 60 days after Client's Acceptance thereof, the On-Line Store
will operate substantially in accordance with the Specifications relating
thereto. Developer further warrants to Client that, no component of the
Developer Materials or the DC Content does or shall infringe on or violate any
applicable law, regulation or right of a third party, including, without
limitation, export laws, or any proprietary, contract, moral, or privacy right
or any other third party right, and that Developer owns the Developer Materials
and (except as assigned to Client) the DC Content or otherwise has and shall
have the right to place the Developer Materials and the DC Content on the
On-Line Store, provided, however, that Developer shall not be deemed to have
breached such warranty to the extent that Client or its agent(s) have modified
the On-Line Store in any material manner or to the extent any purported breach
arises in connection with the Client's incorporation in the On-Line Store
unauthorized third-party materials, through framing or otherwise.

                              7.2 CLIENT WARRANTIES

         Client represents and warrants that (a) Client has the power and
authority to enter into and perform its obligations under this Agreement, (b)
Client Content does not and shall not contain any content, materials,
advertising or services that are inaccurate or that infringe on or violate any
applicable law, regulation or right of a third party, including, without
limitation, export laws, or any proprietary, contract, moral, or privacy right
or any other third party right, and that Client owns the Client Content or
otherwise has the right to place the Client Content on the On-Line Store, and
(c) Client has obtained any authorization(s) necessary for hypertext links from
the On-Line Store to other third party Web sites.

                           7.3 DISCLAIMER OF WARRANTY

         EXCEPT FOR THE LIMITED WARRANTY SET FORTH IN SECTION 7.1, DEVELOPER
MAKES NO WARRANTIES HEREUNDER, AND DEVELOPER EXPRESSLY DISCLAIMS ALL OTHER

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WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

                               8. INDEMNIFICATION
                                   8.1 CLIENT

         Client agrees to indemnify, defend, and hold harmless Developer, its
directors, officers, employees and agents, and defend any action brought against
same with respect to any claim, demand, cause of action, debt or liability,
including reasonable attorneys' fees, to the extent that such action is based
upon a claim that: (i) if true, would constitute a breach of any of Client's
representations, warranties, or agreements hereunder; (ii) arises out of the
negligence or willful misconduct of Client; or (iii) any of the Client Content
to be provided by Client hereunder or other material on the On-Line Store
infringes or violates any rights of third parties, including, without
limitation, rights of publicity, rights of privacy, patents, copyrights,
trademarks, trade secrets and/or licenses.

                                  8.2 DEVELOPER

Developer agrees to indemnify, defend, and hold harmless Client, its directors,
officers, employees and agents, and defend any action brought against same with
respect to any claim, demand, cause of action, debt or liability, including
reasonable attorneys' fees, to the extent that such action is based upon a claim
that: (i) if true, would constitute a breach of any of Developer's
representations, warranties, or agreements hereunder; (ii) arises out of the
negligence or willful misconduct of Developer; or (iii) any of the Developer
Materials or DC Content to be provided by Developer hereunder infringes or
violates any rights of third parties, including, without limitation, rights of
publicity, rights of privacy, patents, copyrights, trademarks, trade secrets
and/or licenses.

                                   8.3 NOTICE

         In claiming any indemnification hereunder, the indemnified party shall
promptly provide the indemnifying party with written notice of any claim which
the indemnified party believes falls within the scope of the foregoing
paragraphs. The indemnified party may, at its own expense, assist in the defense
if it so chooses, provided that the indemnifying party shall control such
defense and all negotiations relative to the settlement of any such claim and
further provided that any settlement intended to bind the indemnified party
shall not be final without the indemnified party's written consent, which shall
not be unreasonably withheld.

                           9. LIMITATION OF LIABILITY

         DEVELOPER SHALL HAVE NO LIABILITY WITH RESPECT TO DEVELOPER'S
OBLIGATIONS UNDER THIS AGREEMENT OR OTHERWISE FOR CONSEQUENTIAL, EXEMPLARY,
SPECIAL, INCIDENTAL, OR PUNITIVE DAMAGES EVEN IF DEVELOPER HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES. OTHER THAN WITH RESPECT TO DEVELOPER'S
OBLIGATIONS IN SECTION 8.2(III), THE LIABILITY OF DEVELOPER TO CLIENT FOR ANY
REASON AND UPON ANY CAUSE OF ACTION SHALL BE LIMITED TO THE AMOUNT ACTUALLY PAID
TO DEVELOPER BY CLIENT UNDER THIS AGREEMENT. THIS LIMITATION APPLIES TO ALL
CAUSES OF ACTION IN THE AGGREGATE, INCLUDING, WITHOUT LIMITATION, BREACH OF
CONTRACT, BREACH OF WARRANTY, NEGLIGENCE, STRICT LIABILITY, MISREPRESENTATIONS,
AND OTHER TORTS.

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                           10. TERMINATION AND RENEWAL
                                    10.1 TERM

This Agreement shall be effective when signed by the Parties and shall continue
in effect thereafter indefinitely unless terminated by either party pursuant to
the terms of Section 10.2 (the "Term").

                                10.2 TERMINATION

         Either party may terminate this Agreement if the other party materially
breaches any of its representations, warranties or obligations under this
Agreement, and such breach is not cured within thirty (30) days of receipt of
notice specifying the breach, except that there shall be no cure period for
beaches of either party's obligations under Section 3.3 Confidentiality

                          10.3 TERMINATION AND PAYMENT

         Upon any termination or expiration of this Agreement, Client shall pay
all unpaid and outstanding fees due and payable through the effective date of
termination or expiration of this Agreement.

                             11. DESIGNATED CONTACT

         Each party shall designate one person who will act as the primary
liaison for all communications regarding the Services to be rendered by
Developer hereunder.

                                12. MISCELLANEOUS
                              12.1 ENTIRE AGREEMENT

         This Agreement and attached Schedules constitute the entire agreement
between Client and Developer with respect to the subject matter hereof and there
are no representations, understandings or agreements which are not fully
expressed in this Agreement.

                                12.2 COOPERATION

         The Parties acknowledge and agree that successful completion of the
Services shall require the full and mutual good faith cooperation of each of the
Parties.

                          12.3 INDEPENDENT CONTRACTORS

         Developer and its personnel, in performance of this Agreement, are
acting as independent contractors and not employees or agents of Client.

                                 12.4 AMENDMENTS

         No amendment, change, waiver, or discharge hereof shall be valid unless
in writing and signed by the party against which such amendment, change, waiver,
or discharge is sought to be enforced.

                           12.5 CLIENT IDENTIFICATION

Developer may use the name of and identify Client as a Developer client, in
advertising, publicity, or similar materials distributed or displayed to
prospective clients, provided that Developer shall provide advance written
notice to Client including therein a copy of such materials and Client shall
have approved in writing the form and substance of any such materials prior to
distribution, publication or display thereof by Developer, which approval shall
not be unreasonably withheld and which

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approval shall be deemed to have been granted if Client does not respond in
writing to Developer within ten (10) days following such written notice from
Developer.

                               12.6 FORCE MAJEURE

         Except for the payment of fees by Client, if the performance of any
part of this Agreement by either party is prevented, hindered, delayed or
otherwise made impracticable by reason of any flood, riot, fire, judicial or
governmental action, labor disputes, act of God or any other causes beyond the
control of either party, that party shall be excused from such to the extent
that it is prevented, hindered or delayed by such causes.

                             12.7 MASSACHUSETTS LAW

         This Agreement shall be governed in all respects by the laws of the
Commonwealth of Massachusetts without regard to its conflict of laws principles,
and Client and Developer agree that the sole venue and jurisdiction for disputes
arising from this Agreement shall be the appropriate state or federal court
located in the City of Boston, and Client and Developer hereby submit to the
jurisdiction of such courts.

                                 12.8 ASSIGNMENT

         Client shall not assign, without the prior written consent of
Developer, its rights, duties or obligations under this Agreement to any person
or entity, in whole or in part, whether by assignment, merger, transfer of
assets, sale of stock, operation of law or otherwise, and any attempt to do so
shall be deemed a material breach of this Agreement.

                                   12.9 NOTICE

         Any notice provided pursuant to this Agreement, if specified to be in
writing, shall be in writing and shall be deemed given (i) if by hand delivery,
upon receipt thereof, (ii) if by mail, three (3) days after deposit in the
United States mails, postage prepaid, certified mail, return receipt requested,
(iii) if by facsimile transmission, upon electronic confirmation thereof, or
(iv) if by next day delivery service, upon such delivery. All notices shall be
addressed as follows (or such other address as either party may in the future
specify in writing to the other):

  In the case of Developer:
  Miller Systems, Inc.
  364 Boylston Street
  Boston, MA 02116
  Attention: General Counsel

  In the case of Client:
  Devens Business Community
  29 Buena Vista Street
  Ayer, MA  01432 Fax: (978) 889-1010
  Attention: President

                                  12.10 WAIVER

         The waiver of failure of either party to exercise any right in any
respect provided for herein shall not be deemed a waiver of any further right
hereunder.

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                               12.11 SEVERABILITY

         If any provision of this Agreement is determined to be invalid under
any applicable statute or rule of law, it is to that extent to be deemed
omitted, and the balance of the Agreement shall remain enforceable.

                               12.12 COUNTERPARTS

         This Agreement may be executed in several counterparts, all of which
taken together shall constitute the entire agreement between the Parties hereto.

                                 12.13 HEADINGS

         The section headings used herein are for reference and convenience only
and shall not enter into the interpretation hereof.

                       12.14 APPROVALS AND SIMILAR ACTIONS

         Where agreement, approval, acceptance, consent or similar action by
either party hereto is required by any provision of this Agreement, such action
shall not be unreasonably delayed or withheld.

                                 12.15 SURVIVAL

         All provisions of this Agreement relating to Client warranties,
confidentiality, non-disclosure, proprietary rights, limitation of liability,
Client indemnification obligations and payment obligations shall survive the
termination or expiration of this Agreement.

                          13. RESTRICTIONS ON DEVELOPER

         For one (1) year after Acceptance by Client of the Development
Services, Developer will not assist any third party in creating an online store,
if such party earns forty one percent (41%) or more of their online revenues
from the sale of children's toys.

         IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized representatives as of the date first written
above.

LEARNINGEXPRESS.COM LLC                     DEVELOPER

By:  /s/ Michael Sanders                    By:  /s/ Seth A. Miller
     -----------------------------               -----------------------------
            (Signature)                                   (Signature)

Name:  Michael Sanders                      Name:  Seth A. Miller
       ---------------------------                 -----------------------------
Title:  Chief Operating Officer             Title:  Chief Operating Officer
       ---------------------------                 -----------------------------
Date:  December 17, 1999                    Date:  December 17, 1999
       ---------------------------                 -----------------------------

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                                    EXHIBIT A

                      LEARNING EXPRESS/LEARNING EXPRESS.COM

                           WEBSITE IMPLEMENTATION PLAN

                                       AND

                    ONLINE STORE FUNCTIONALITY SPECIFICATIONS

Dear Mike:

It has been a pleasure speaking with you over the last couple of weeks. We here
at Miller Systems genuinely appreciate this opportunity to work with Learning
Express.

We have reviewed all of the delivered materials and our notes in detail
regarding both the near-term corporate website objectives as well as the online
store (.com business) goals. We are pleased to provide Learning Express with the
following materials:

I.       Implementation plan for the corporate website
II.      Functionality specification for online store
III.     Costs for implementation of site as well as development of online store

I. IMPLEMENTATION OF THE CORPORATE WEBSITE
Per our conversations, the corporate website is being developed by Hunt &
Gather. Once we receive the final delivery of the site, Miller Systems will
provide the following implementation services to post the static website for
November 22, 1999:

-        Standard Miller Systems QA process on the site, including HTML syntax,
         link integrity, page weight, browser compatibility, etc.
-        Temporary hosting of the site on one of our servers co-located at
         Exodus in Waltham
-        Coordinate DNS change with Bill Doyno/UltraNet (where DNS currently
         lives)

Within a sixty-day timeframe of the initial launch, Miller Systems will perform
the following additional services for the corporate website:

-        Manage the implementation/installation of the hosting solution with
         Cable and Wireless (or other vendor)
-        Manage the DNS changes & move of the site to Cable and Wireless (or
         other vendor)
-        Implement Miller Systems dataDriver(TM) content management tools for:
         -        Press Room (Press Releases, articles, events)
         -        Employment opportunities (Job Board)
         -        E-mail subscription service (e-push)
         -        Recall listing
         -        Toy facts

EXPLANATION OF dataDriver(TM) CONTENT MANAGEMENT TOOLS
As discussed, Miller Systems is in a unique position to assist Learning Express
in implementing a number of critical data driven content management tools. As
you are aware, Miller Systems has a "shrink-wrapped" application suite called
dataDriver(TM). These tools were built to empower our clients to manage the most
frequently changing pieces of content, without requiring personnel possessing
programming or HTML skills.

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This has been a tremendous success for many of our clients and their websites.

dataDriver(TM) PRESS ROOM
As demonstrated, dataDriver(TM) Press Room allows specified Learning Express
users to add, edit, and publish press releases, articles, and other news content
to the website by using a simple browser interface. As part of the project,
Miller Systems will design up to three different templates for different types
of news items. Further demonstration of dataDriver(TM) Press Room is available
upon your request.

Once items are entered into the database (and marked Active) via the management
interface, they are published dynamically each time a site visitor accesses the
news page(s). News items can be pre-entered into the database and set to run at
a specific date and time, alleviating the need for personnel to be present as
items run over wire services or are otherwise announced.

Each item in the database can be designated as a "Latest News" or "Hot" item,
which publishes these items to the site's home page and news summaries. This
allows Learning Express a great deal of flexibility and control over the content
on the site.

dataDriver(TM) JOB BOARD
Miller Systems also publishes an application for managing employment
opportunities on websites called dataDriver(TM) Job Board. Job Board has three
basic areas of functionality:

1)   An administrative front end with the ability to manage Positions,
     Departments, and Locations, for the purposes of publishing open positions
     to the website.
2)   A public front end where online resumes are collected from applicants. This
     already includes a file upload capability so applicants can attach PDF or
     Word versions of their resume in addition to any general profile
     information they submit.
3)   The ability to specify a (potentially different) set of Learning Express
     users who can browse the applicants information as captured by the front
     end. In a typical scenario, Human Resources manages the positions that are
     published, and the department that submitted the position has the ability
     to the browse the applicants in the database. dataDriver(TM) Job Board
     notifies the subscribed department members via e-mail when a new applicant
     submits their resume.

dataDriver(TM) E-PUSH
The third module in our dataDriver suite is called "E-push". The E-push module
allows Learning Express to provide an opt-in mechanism on the web site for
visitors/customers to subscribe to e-mail broadcasts. A robust administrative
interface allows Learning Express to search this database, create lists of
subscribers, and then create different messages. Lists are then married to
messages, and broadcasted out. The entire application, like the other dataDriver
modules, is configured and administered from the browser.

ONGOING MAINTENANCE AND MANAGEMENT
As time goes on, there will be other maintenance and development items that will
be required to further the mission of the corporate site. Miller Systems will
ensure that the site is kept up to date with content and applications, as well
as to ensure that the proper level of integration with the online store is
provided for.

HOSTING INFRASTRUCTURE
Miller Systems offers a full hosting solutions for our development clients. Our
web servers are DELL Windows NT boxes equipped with the following components:

<TABLE>
<S>                                            <C>
-  MICROSOFT WINDOWS NT 4.0                    -    DUAL PROCESSOR PENTIUM II OR BETTER
-  COMPUTER ASSOCIATES' ArcServeIT             -    MICROSOFT SQL SERVER
-  A RAID 5 DISK SYSTEM AND TAPE BACKUP        -    NETSCAPE'S ENTERPRISE SERVER
</TABLE>

                                      -11-
<PAGE>   12
<TABLE>
<S>                                            <C>

-  ALLAIRE'S ColdFusion PROFESSIONAL SERVER    -    WEBTRENDS PROFESSIONAL EDITION
</TABLE>

To address the high cost of this infrastructure for our clients, Miller Systems
has invested in a solid hosting solution consisting of Windows NT servers with
all of the above components installed and configured. These servers sit on a
very well managed network at Exodus Communications facility in Waltham,
Massachusetts. Exodus is a world class, Tier 1 data center provider. The
facility is equipped with unparalleled redundancy in power, bandwidth, and
monitoring. Much more information about this facility is available on the Exodus
website at http://www.exodus.com. This hosting infrastructure allows Miller
Systems to offer sophisticated development services and highly available
data-driven web hosting for very reasonable costs.

                                      -12-
<PAGE>   13
II. FUNCTIONALITY SPECIFICATIONS FOR THE ONLINE STORE
The following are the written functionality specification and initial design for
your online store. The materials consist of:

1.       A grouped list of functions/features for the front and administrative
         interfaces
2.       Database table definitions
3.       A proposed database schema
4.       A proposed process model for the front end purchase mechanism

1. FEATURE LISTING BY FUNCTION
After thoroughly reviewing the delivered materials and our notes from the
meetings, we have come up with the following list of features for the system:

CUSTOMER FRONT END FEATURES
-        PERSONALIZED SERVICES FOR CUSTOMERS
         -        Create an account on the system (done ahead of or during a
                  purchase)
                  -        Define multiple ship-to addresses
                  -        Define multiple billing methods (multiple credit
                           cards if desired)
                  -        E-mail password if forgotten
                  -        Loyalty program - LE VIPCards
                           -        Sign up
         -        Reminder service - put in birthdays, etc. and receive e-mail x
                  days in advance
         -        Wish List/Gift Registry
                  -        Create a wish list (shopping cart w/o buying -
                           essentially a gift registry)
                  -        Send wish list to specified e-mail addresses
                  -        Purchase items for other people's wish list
         -        Get on mailing list (eventual store integration with e-push)

-        SHOPPING CART FUNCTIONS
         -        Browse Toy Catalog
         -        Search toys by Keyword/Description
         -        Multiple shipping addresses for each item in single order
         -        Different wrapping paper for each item purchased
         -        Store informs customers of inventory status (e.g., in stock,
                  ships in x days, etc)
         -        Store suggests accessories or alternative items for products
                  chosen
         -        Survey/Demographic questions
         -        E-mail confirmation of order
         -        E-mail confirmation of shipping (with shipping info)
         -        Save items in multiple shopping carts for later purchases
         -        Link to LivePerson.com for personalized shopping
         -        Find out order status

-        OTHER CUSTOMER FEATURES
         -        Store locator
         -        Community comments on items (to be moderated by LE staff) -
                  amazon.com style reviews (moderated message board per product)
         -        Listing of Recalls
         -        Random Toy facts
         -        Purchase gift certificates for use only in online store

                                      -13-
<PAGE>   14
         -        Links to "great kid sites"

ADMINISTRATIVE FRONT END FEATURES
-        ITEM ADMINISTRATION
         -        Define source location on an item by item basis (ex: Brio gets
                  drop shipped from factory, other items from fulfillment house)
         -        Enter descriptions, keywords, upload pictures of items
         -        Price items
         -        Group/classify items
                  -        Define accessories for items
                  -        Suggestive sell for similar items/accessories
                           (horizontal)
         -        Export item data
         -        Inventory controls (data replicated from acctg system -
                  details TBD)
                  -        Reports
                  -        Define ETA on backordered items

-        CATALOG INVENTORY
         -        Track "in stock" supply
         -        Track "will ship in x days"
         -        Hold descriptions, title, SKU, retail price, image
         -        Track price change history on items
         -        Associate items with different fulfillment houses
         -        Items associated with vendors

-        DISCOUNTING/PROMOTION MODULE
         -        Define "wow! Toys" (featured items)
         -        Define/Enable discounts for items based on URL (banner ads or
                  referrals) or source codes
         -        Run "specials/sales" based on dates
         -        LE VIPCard members can get special discounts/offers
         -        Franchise owners get discounts

-        FINANCE ADMINISTRATION
         -        CyberCash tie out module

-        CUSTOMER MANAGEMENT
         -        Edit customer contact & billing info
         -        Search for customers
                  -        Quick Search
                           -        First Name, Last name, city, state, zip,
                                    customer or VIP #
                  -        Power Search
                           -        Search by item(s) purchased
                           -        Search by territory
                           -        Search by dollars spent
                           -        Search by last purchase date
                           -        Find customers with shipped/unshipped orders
                           -        Find customers by demographics answers
         -        Create lists of customers based on search results
         -        Export customer data

                                      -14-
<PAGE>   15
-        TRACK CUSTOMER INFORMATION
         -        Customizable survey with versioning
         -        Track name, age, e-mail etc.
         -        Track multiple shipping and billing addresses
         -        Store favorite credit cards
         -        Store gift certificates purchased with balance available
         -        Create reminder lists of special dates
         -        Create wish list with distribution to multiple recipients

-        GENERAL CONTENT MANAGEMENT
         -        Define customized text messages for
                  standard screens
-        REPORTING
         -        Sales reports
                  -        By time period
                  -        By item
                  -        By promotion
                  -        Referrals/discounts
                  -        By territory (need this for reimbursement to brick &
                           mortar stores)
         -        Fulfillment reports

SECURITY MODEL - USERS & GROUPS MODEL
         -        Administer Discounts
         -        Enter new orders for customers
         -        Read customer data
         -        Credit card tie out
         -        Process refunds
         -        Reports
         -        Search rights

ADVERTISING
         -        Schedule banner ads to run for specified dates or impressions
         -        Track click-through on banners
         -        Rotate banners
         -        Assign banners to specific pages

BACK END FUNCTIONALITY
         -        Online CyberCash Credit Card Processing
         -        Interface to Acctg system for:
                  -        Inventory
                  -        Fulfillment
                  -        Shipping info
                  -        Customer info
         -        Don't charge until shipped (see fulfillment)
         -        Capture shipping info from carrier (UPS, Fedex, Airborne,
                  etc.)
         -        Fulfillment

                                      -15-
<PAGE>   16
         -        Electronic notification of order to fulfillment house
         -        Receive electronic shipping confirmation info back from
                  fulfillment house

                                      -16-
<PAGE>   17
2. DATABASE TABLE DEFINITIONS

<TABLE>
------------------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>
accessory_items                                           Holds information relating products that are part of same product
                                                          line.
------------------------------------------------------------------------------------------------------------------------------
advertisers                                               Advertisers on site. Each advertiser can purchase multiple banner
                                                          ads.
------------------------------------------------------------------------------------------------------------------------------
article_run_dates                                         Used to schedule publishing of information in articles table.
------------------------------------------------------------------------------------------------------------------------------
article_texts                                             Holds text of articles published on site. Name, source, author are
                                                          stored in articles table.
------------------------------------------------------------------------------------------------------------------------------
articles                                                  Holds editorial articles of interest to site visitors. Table holds
                                                          name, author and source information. Article text is stored in
                                                          article_texts.
------------------------------------------------------------------------------------------------------------------------------
associated_items                                          Holds information relating products that are similar or have
                                                          been purchased in combination by other customers.
------------------------------------------------------------------------------------------------------------------------------
banner_ads                                                Info on banner ad. URL, NAME
------------------------------------------------------------------------------------------------------------------------------
banner_ads_s_site_pages                                   Holds information relating banner_ads to s_site_pages. Table is
                                                          responsible to assigning a banner ad to a page location.
------------------------------------------------------------------------------------------------------------------------------
catalog_item_inventory                                    Holds replicated data from accounting/inventory system on current
                                                          inventory of catalog items.
------------------------------------------------------------------------------------------------------------------------------
catalog_item_price_histories                              Holds information on history of price changes on catalog items.
------------------------------------------------------------------------------------------------------------------------------
catalog_items                                             Holds description, SKU, retail price, etc. on catalog items. May
                                                          be replicated from accounting/inventory system.
------------------------------------------------------------------------------------------------------------------------------
customer_addresses                                        Holds customer address information on billing address and multiple
                                                          shipping addresses.
------------------------------------------------------------------------------------------------------------------------------
customer_comments                                         Holds moderated comments entered by public about specific
                                                          products. Content is moderated through admin interface.
------------------------------------------------------------------------------------------------------------------------------
customer_gift_certificates                                Information on a customer's gift certificates redeemable by
                                                          customers.
------------------------------------------------------------------------------------------------------------------------------
customer_payment_methods                                  Information about a customer's individuals payment methods.
                                                          Customers MC or AMEX number.
------------------------------------------------------------------------------------------------------------------------------
customer_reminder_list_details                            Holds specific dates and events entered for customer-defined
                                                          reminders.
------------------------------------------------------------------------------------------------------------------------------
customer_reminder_lists                                   Holds basic information on customer-defined reminders.
------------------------------------------------------------------------------------------------------------------------------
customer_shopping_cart_items                              Hold information on a customer's shopping cart. They can leave a
                                                          session and return to the shopping cart information stored in this
                                                          table.
------------------------------------------------------------------------------------------------------------------------------
customer_shopping_carts                                   Holds basic information on a customer's shopping cart such as NAME
                                                          and DATE CREATED. A customer can have multiple shopping carts.
------------------------------------------------------------------------------------------------------------------------------
customer_survey_answers                                   Holds responses to customer surveys.
------------------------------------------------------------------------------------------------------------------------------
customer_wish_list_distributions                          Holds e-mail addresses of people to receive a customer's wish
                                                          list.
------------------------------------------------------------------------------------------------------------------------------
customer_wish_list_line_items                             Holds specific items from the catalog on a customer's wish list.
------------------------------------------------------------------------------------------------------------------------------
customer_wish_lists                                       Basic information on a customer's wish list such as LIST NAME,
                                                          CUSTOMER_ID.
------------------------------------------------------------------------------------------------------------------------------
customers                                                 Holds basic customer information, NAME, EMAIL, PHONE.
------------------------------------------------------------------------------------------------------------------------------
dynamic_text_texts                                        Holds actual text of dynamic_texts table.
------------------------------------------------------------------------------------------------------------------------------
dynamic_texts                                             Holds information on generic text that needs to maintained
                                                          through the admin interface and presented dynamically on the site.
------------------------------------------------------------------------------------------------------------------------------
featured_catalog_item_run_dates                           Schedules the time to display items in the featured_catalog_items
                                                          table.
------------------------------------------------------------------------------------------------------------------------------
featured_catalog_items                                    Holds information on catalog items to be featured on site.
------------------------------------------------------------------------------------------------------------------------------
featured_catalog_items_s_site_pages                       Assigns items in featured_catalog_items to specific page(s) of the
                                                          site.
------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      -17-
<PAGE>   18
<TABLE>
------------------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>
franchise_regions                                         Contains information on regions used to group franchise stores.
------------------------------------------------------------------------------------------------------------------------------
franchise_store_addresses                                 Contains address information on franchise stores.
------------------------------------------------------------------------------------------------------------------------------
franchise_store_events                                    Listing of event and promotions at franchise stores.
------------------------------------------------------------------------------------------------------------------------------
franchise_stores                                          Information on franchise stores. NAME, DESCRIPTION.
------------------------------------------------------------------------------------------------------------------------------
fulfillment_houses                                        Information on all available fulfillment houses to e-store.
------------------------------------------------------------------------------------------------------------------------------
groups                                                    Admin security associating users with like security access needs
                                                          into same group. Security access rights are then applied to the
                                                          group.
------------------------------------------------------------------------------------------------------------------------------
groups_s_security_attributes                              Associates groups with s_security_attributes. Used to assign
                                                          security rights to groups.
------------------------------------------------------------------------------------------------------------------------------
link_run_dates                                            Data schedules the publication of data in the links table.
------------------------------------------------------------------------------------------------------------------------------
links                                                     Holds information of links of interest to be published on the
                                                          site. Schedule publication with data in link_run_dates.
------------------------------------------------------------------------------------------------------------------------------
m_countries                                               Admin-defined meta data containing list of countries.
------------------------------------------------------------------------------------------------------------------------------
m_gift_certificates                                       Admin-defined meta data containing list of types of gift
                                                          certificates.
------------------------------------------------------------------------------------------------------------------------------
m_survey_answers                                          Admin-defined meta data containing list of possible answers
                                                          associated with m_survey_questions for customer surveys.
------------------------------------------------------------------------------------------------------------------------------
m_survey_questions                                        Admin-defined meta data containing list of questions asked on
                                                          customer survey.
------------------------------------------------------------------------------------------------------------------------------
m_survey_versions                                         Admin-defined meta data containing list version of surveys as the
                                                          survey is changed over time.
------------------------------------------------------------------------------------------------------------------------------
m_wrapping_papers                                         Admin-defined meta data containing list of available wrapping
                                                          papers. Papers are assigned to order line items.
------------------------------------------------------------------------------------------------------------------------------
order_line_items                                          Information on specific line items contained in an order.
------------------------------------------------------------------------------------------------------------------------------
order_line_items_shipping_addresses                       Holds specific shipping address information on an order with
                                                          multiple ship-to addresses.
------------------------------------------------------------------------------------------------------------------------------
order_payments                                            Payment information for order.
------------------------------------------------------------------------------------------------------------------------------
order_shipping_addresses                                  Primary shipping address for order. If multiple shipping addresses
                                                          are used they are stored in the customer_shopping_cart_items
                                                          table.
------------------------------------------------------------------------------------------------------------------------------
orders                                                    Holds general information on a customer's order. DATE,
                                                          CUSTOMER_ID.
------------------------------------------------------------------------------------------------------------------------------
promotion_catalog_items                                   Items in the catalog related to a promotion.
------------------------------------------------------------------------------------------------------------------------------
promotions                                                Hold information on promotions of e-store. Linked to catalog items
                                                          via promotion_catalog_items.
------------------------------------------------------------------------------------------------------------------------------
recall_run_dates                                          Used to schedule publishing of information in recalls table.
------------------------------------------------------------------------------------------------------------------------------
recall_texts                                              Holds text of recalls published on site. Name, source, author are
                                                          stored in recalls table.
------------------------------------------------------------------------------------------------------------------------------
recalls                                                   Holds information on recalls. Can be scheduled to publish via
                                                          recall_run_dates.
------------------------------------------------------------------------------------------------------------------------------
s_catalog_item_statuses                                   System-defined meta data on catalog items. AVAILABLE,
                                                          DISCONTINUED, DELETED etc.
------------------------------------------------------------------------------------------------------------------------------
s_customer_address_types                                  System-defined meta data on types of addresses for a customer.
                                                          SHIPPING, BILLING, etc.
------------------------------------------------------------------------------------------------------------------------------
s_customer_comment_statuses                               System-defined meta data on status of customer-input comments.
                                                          PENDING APPROVAL, PUBLISHED, DELETED.
------------------------------------------------------------------------------------------------------------------------------
s_customer_types                                          System-defined meta data on types of customers accessing the
                                                          system. PUBLIC, STORE etc.
------------------------------------------------------------------------------------------------------------------------------
s_franchise_region_statuses                               System-defined meta data on franchise regions statuses. OK,
                                                          DELETED.
------------------------------------------------------------------------------------------------------------------------------
s_franchise_store_statuses                                System-defined meta data on status of franchise store. OPEN,
                                                          OPENING SOON, CLOSED etc.
------------------------------------------------------------------------------------------------------------------------------
s_order_types                                             System-defined meta data on types of order a customer or admin
------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      -18-
<PAGE>   19
<TABLE>
------------------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>
                                                          person can place. PURCHASE, REFUND
------------------------------------------------------------------------------------------------------------------------------
s_payment_methods                                         System-defined meta data on payment methods available to public, MC,
                                                          VISA, GIFT CERTIFICATE etc.

------------------------------------------------------------------------------------------------------------------------------
s_security_attributes                                     System-defined meta data on levels of security available to the
                                                          admin interface. s_security_attributes are assigned to groups via
                                                          the groups_s_security_attributes table.
------------------------------------------------------------------------------------------------------------------------------
s_site_pages                                              System-defined meta data related to each page of site where dynamic
                                                          content would be presented.
------------------------------------------------------------------------------------------------------------------------------
s_survey_question_types                                   System-defined meta data on display of survey questions. Checkbox,
                                                          Select Menu, Radio Buttons etc.
------------------------------------------------------------------------------------------------------------------------------
toy_fact_run_dates                                        Schedules display of information in toy_facts table.
------------------------------------------------------------------------------------------------------------------------------
toy_fact_texts                                            Holds text of toy facts published on site. Name, source, author
                                                          are stored in toy_facts table.
------------------------------------------------------------------------------------------------------------------------------
toy_facts                                                 Listing of fact to be randomly displayed on site. Use
                                                          toy_fact_run_dates to schedule display.
------------------------------------------------------------------------------------------------------------------------------
Users                                                     Admin user's login information for maintaining system.
------------------------------------------------------------------------------------------------------------------------------
users_groups                                              Table relating users to multiple groups.
------------------------------------------------------------------------------------------------------------------------------
util_table_comments                                       System utility table holding documentation of tables in ERD.
------------------------------------------------------------------------------------------------------------------------------
Vendors                                                   Holds information on vendors. Used to group products by maker.
------------------------------------------------------------------------------------------------------------------------------
vip_cards                                                 Loyalty program information for each user participating.
------------------------------------------------------------------------------------------------------------------------------
</TABLE>

3.   PROPOSED DATABASE SCHEMA
     Please see attached PDF file (2 versions - 1 page and 4 page)

4.   PROPOSED PROCESS MODEL FOR FRONT END OF ONLINE STORE
     Please see attached PDF file (2 versions - 1 page and 4 page)

                                      -19-
<PAGE>   20
COSTS

I. IMPLEMENTATION OF THE CORPORATE WEBSITE

<TABLE>
<S>                                                                                                     <C>
       QA website & make changes/fixes................................................................  T&M*
       Host website on Miller Systems server..........................................................  $500/month

       License & integrate dataDriver Press Room......................................................  $ 7,500
       License & integrate dataDriver Job Board.......................................................    5,000
       License & integrate dataDriver e-push..........................................................    7,500
       Build Custom Dynamic Toy Facts Application.....................................................    T&M*
       Build Custom Dynamic recall list Application...................................................    T&M*

       TOTAL FIXED COSTS (ONE TIME)...................................................................  $20,000
       TOTAL MONTHLY RECURRING COSTS (TEMPORARY, UNTIL
       FINAL HOSTING SOLUTION IS IN PLACE)............................................................     $500
</TABLE>

       *T&M RATE SCHEDULE:
<TABLE>
<S>                                                                                                     <C>
       Project management.............................................................................  $150/hour
       Application & database design/architecture.....................................................  $150/hour
       Systems administration.........................................................................  $125/hour
       Engineering/Development (ASP/COM/database programming).........................................  $125/hour
       Graphic Design/Production/Optimization/QA......................................................  $115/hour
       HTML Production/QA.............................................................................  $115/hour
</TABLE>

*The above rate schedule for standard site development services has been reduced
for 60 days in acknowledgment of the larger development project. The standard
rate schedule starting 60 days after implementation of the corporate site will
be as follows:

<TABLE>
<S>                                                                                                     <C>
       Project management.............................................................................  $175/hour
       Application & database design/architecture.....................................................  $175/hour
       Systems administration.........................................................................  $150/hour
       Engineering/Development (ASP/database programming).............................................  $150/hour
       Graphic Design/Production/Optimization/QA......................................................  $135/hour
       HTML Production/QA.............................................................................  $125/hour
</TABLE>

                                      -20-
<PAGE>   21
III. COSTS FOR IMPLEMENTATION OF SITE AND DEVELOPMENT OF ONLINE STORE

<TABLE>
<CAPTION>
       TASK                                                                                   HOURS REQUIRED
       -----------------------------------------------------------------------------------------------------
<S>                                                                                           <C>
       BACK END
       Design & Architecture....................................................................  60
       Programming..............................................................................  200

       SHOPPING FRONT END
       Detailed Design & Architecture ..........................................................  80
       Page Design..............................................................................  80
       Programming & implementation.............................................................  200

       ADMIN FRONT END
       Design & Architecture....................................................................  100
       Programming..............................................................................  350

       INTEGRATION WITH OUTSIDE SYSTEMS
       Work with integration firm to outline specs, determine API's, etc. ......................  T&M

       IMPLEMENTATION
       QA & Testing.............................................................................  135
       Implementation/Systems Admin.............................................................  40

       TOTAL NUMBER OF HOURS REQUIRED...........................................................  1245
       -----------------------------------------------------------------------------------------------
</TABLE>

       REDUCED RATES FOR STORE DEVELOPMENT
       Because Miller Systems has a strategic interest in building the online
       store for Learning Express, will charge a reduced rate for development as
       follows:

       RATE SCHEDULE
<TABLE>
<S>                                                                                                     <C>
       Project management.............................................................................  $150/hour
       Application & database design/architecture.....................................................  $150/hour
       Systems administration.........................................................................  $125/hour
       Engineering/Development (ASP/database programming).............................................  $125/hour
       Graphic Design/Production/Optimization/QA......................................................  $115/hour
       HTML Production/QA.............................................................................  $115/hour
</TABLE>

       This cost reduction yields the following result in cost for the store
       development:

<TABLE>
<CAPTION>
       -----------------------------------------------------------------------------------------------
       TASK                                                   HOURS        RATE        TOTAL
       -----------------------------------------------------------------------------------------------

       BACK END
       -----------------------------------------------------------------------------------------------
<S>                                                          <C>           <C>         <C>
       Design & Architecture                                  60           150         9000
       -----------------------------------------------------------------------------------------------
       Programming                                            200          125         25000
       -----------------------------------------------------------------------------------------------

       SHOPPING FRONT END
       -----------------------------------------------------------------------------------------------
       Detailed Design & Architecture                         80           150         12000
       -----------------------------------------------------------------------------------------------
       Page Design                                            80           115         9200
       -----------------------------------------------------------------------------------------------
</TABLE>

                                      -21-
<PAGE>   22
<TABLE>
       -----------------------------------------------------------------------------------------------
<S>                                                           <C>          <C>         <C>
       Programming & implementation                           200          125         25000
       -----------------------------------------------------------------------------------------------

       ADMIN FRONT END
       -----------------------------------------------------------------------------------------------
       Design & Architecture                                  100          150         15000
       -----------------------------------------------------------------------------------------------
       Programming                                            350          125         43750
       -----------------------------------------------------------------------------------------------

       INTEGRATION                                            T&M          T&M         T&M
       -----------------------------------------------------------------------------------------------

       IMPLEMENTATION
       -----------------------------------------------------------------------------------------------
       QA & Testing                                           135          115         15525
       -----------------------------------------------------------------------------------------------
       Implementation/Systems Admin                           40           125
       -----------------------------------------------------------------------------------------------

       TOTAL HOURS/COST                                       1245                     $154,475
</TABLE>

These reduced rates yield a total savings of $25,270 for Learning Express.

**IMPORTANT: It is important to note that there are certain components to the
project that are largely undefined, and the hours allocated are estimates. In
particular, our work with the integration firm will be billed on a Time and
Materials basis.

TIMEFRAMES FOR DELIVERY
Looking at the feature specifications and the workload and resource allocation
at Miller Systems, we believe that the project can be started on December 1st,
and completed by March 15th. We have discussed the prospect of a phased approach
in order to reduce the time to market. This may be possible - but could
significantly affect the cost of the project, as there will be data integrity,
DBA, and revision control implications associated with such an approach. It will
not be possible to determine the scope of the phases until we are at least 30
days into the project.

PAYMENT SCHEDULE
Miller Systems will invoice Learning Express at the following increments:

<TABLE>
<S>                                                                                                   <C>
30% at the onset of the project (required to begin work)............................................  $46,342.50
15% at first milestone..............................................................................   23,171.25
15% at second milestone.............................................................................   23,171.25
10% at third milestone..............................................................................   15,447.50
30% on final delivery...............................................................................   46,342.50
</TABLE>

MILESTONE SCHEDULE
MILESTONE 1 (WEEK OF DECEMBER 20TH):
-        Deliver Database design o Process Flow
-        Page Flow Design
-        Sign off on data elements for Store Home Page, Search results, and Toy
         Description detail screens
-        Design (non-working version) Customer Front End Prototype of Store Home
         Page, Search results, and Toy Description detail screens

MILESTONE 2 (JANUARY 15TH):

                                      -22-
<PAGE>   23
-        Working version of Customer Front End Prototype of Store Home Page,
         Search results, and Toy Description detail screens
-        Deliver Prototype of remaining Customer Front End pages
-        Admin Design & Architecture delivery

MILESTONE 3 (JANUARY 25TH):
-        Deliver working Admin Prototype

MILESTONE 4 (FEBRUARY 10):
-        Migration of development materials to target servers
-        Availability of Online Store for integration testing

MILESTONE 5 (1ST WEEK OF MARCH):
Store goes live, 1st shopper purchases toy

MAINTENANCE OF THE ONLINE STORE
Maintenance will be handled in a separate agreement.

                                      -23-<PAGE>   1
                                                                    EXHIBIT 10.1
                                YOUCENTRIC, INC.

                          1999 EQUITY COMPENSATION PLAN

                         ARTICLE I - GENERAL PROVISIONS

         1.1      The Plan is designed for the benefit of the Company to secure
and retain the services of Eligible Participants. The Board believes the Plan
will promote and increase personal interests in the welfare of the Company by,
and provide incentive to, those who are primarily responsible not only for its
regular operations but also for shaping and carrying out the long-range plans of
the Company and ordering its continued growth and financial success.

         1.2      Awards under the Plan may be made to Participants in the form
of (i) Incentive Stock Options; (ii) Nonqualified Stock Options; and (iii)
Restricted Stock.

         1.3      The Plan shall be effective December 23, 1999 (the "Effective
Date"). If any stock option intended to constitute an Incentive Stock Option is
granted prior to the date on which the shareholders of the Company approve the
Plan and such shareholder approval is not obtained within 12 months following
the date on which the Board adopts this Plan, such stock option shall be deemed
a Nonqualified Stock Option.

                            ARTICLE II - DEFINITIONS

         Except where the context otherwise indicates, the following definitions
apply:

         2.1      "Act" means the Securities Exchange Act of 1934, as now in
effect or as hereafter amended. All citations to sections of the Act or rules
thereunder are to such sections or rules as they may from time to time be
amended or renumbered.

         2.2      "Agreement" means the written agreement between the Company
and the Participant evidencing an Award granted to the Participant.

         2.3      "Award" means an award granted to a Participant of a Stock
Option or Restricted Stock or of any combination thereof.

         2.4      "Board" means the Board of Directors of YOUcentric, Inc.

         2.5      "Code" means the Internal Revenue Code of 1986, as now in
effect or as hereafter amended. All citations to sections of the Code are to
such sections as they may from time to time be amended or renumbered.

         2.6      "Committee" means the committee consisting of two or more
members of the Board as may be appointed by the Board to administer this Plan
pursuant to Article III or for such limited
<PAGE>   2
purposes as may be provided by the Board. In the event the Board does not
appoint such committee, all references to the "Committee" herein shall mean the
Board.

         2.7      "Company" means YOUcentric, Inc., a North Carolina
corporation, and its successors and assigns. The term "Company" shall include
any company during any period that it is a "parent corporation" or a "subsidiary
corporation" with respect to the Company within the meaning of Code section
424(d). With respect to all purposes of the Plan, including, but not limited to,
the establishment, amendment, termination, operation and administration of the
Plan, YOUcentric, Inc. shall be authorized to act on behalf of all other
entities included within the definition of "Company."

         2.8      "Disability," with respect to any Incentive Stock Option,
means disability as determined under section 22(e)(3) of the Code, and, with
respect to any other Award, means (i) with respect to a Participant who is
eligible to participate in the Company's program of long-term disability
insurance, if any, a condition with respect to which the Participant is entitled
to commence benefits under such program of long-term disability insurance, and
(ii) with respect to any Participant (including a Participant who is eligible to
participate in the Company's program of long-term disability insurance, if any),
a disability as determined under procedures established by the Committee or in
any Award.

         2.9      "Eligible Participant" means an employee of the Company
(including an officer), as shall be determined by the Committee, as well as any
other person, including a member of the Board and a consultant who provides
services to the Company, subject to limitations as may be provided by the Code,
the Act or the Committee, as shall be determined by the Committee.

         2.10     "Fair Market Value" means the fair market value of a share of
Stock, as determined in good faith by the Committee; provided, however, that

                  (a)      if the Stock is listed on a national securities
         exchange, Fair Market Value on a date shall be the closing sale price
         reported for the Stock on such exchange on such date if at least 100
         shares of Stock were sold on such date or, if fewer than 100 shares of
         stock were sold on such date, then Fair Market Value on such date shall
         be the closing sale price reported for the Stock on such exchange on
         the last prior date on which at least 100 shares were sold, all as
         reported in The Wall Street Journal or such other source as the
         Committee deems reliable; and

                  (b)      if the Stock is not listed on a national securities
         exchange but is admitted to quotation on the National Association of
         Securities Dealers Automated Quotation System or other comparable
         quotation system, Fair Market Value on a date shall be the last sale
         price reported for the Stock on such system on such date if at least
         100 shares of Stock were sold on such date or, if fewer than 100 shares
         of Stock were sold on such date, then Fair Market Value on such date
         shall be the average of the high bid and low asked prices reported for
         the Stock on such system on such date or, if no shares of Stock were
         sold on such date, then Fair Market Value on such date shall be the
         last sale price reported for the Stock on such system on the last date
         on which at least 100 shares of Stock were sold, all as

                                       2
<PAGE>   3
         reported in The Wall Street Journal or such other source as the
         Committee deems reliable; and

                  (c)      If the Stock is not traded on a national securities
         exchange or reported by a national quotation system, if any
         broker-dealer makes a market for the Stock, then the Fair Market Value
         of the Stock on a date shall be the average of the highest and lowest
         quoted selling prices of the Stock in such market on such date if at
         least 100 shares of Stock were sold on such date or, if fewer than 100
         shares of Stock were sold on such date, then Fair Market Value on such
         date shall be the average of the high bid and low asked prices for the
         Stock in such market on such date or, if no prices are quoted on such
         date, then Fair Market Value on such date shall be the average of the
         highest and lowest quoted selling prices of the Stock in such market on
         the last date on which at least 100 shares of Stock were sold.

The Committee shall determine Fair Market Value in connection with an Incentive
Stock Option in accordance with Section 422 of the Code and the rules and
regulations thereunder.

         2.11     "Incentive Stock Option" means a Stock Option granted to an
Eligible Participant under Article IV of the Plan.

         2.12     "Nonqualified Stock Option" means a Stock Option granted to an
Eligible Participant under Article V of the Plan.

         2.13     "Option Grant Date" means, as to any Stock Option, the latest
of:

                  (a)      the date on which the Committee takes action to grant
         the Stock Option to the Participant;

                  (b)      the date the Participant receiving the Stock Option
         becomes an employee of the Company, to the extent employment status is
         a condition of the grant or a requirement of the Code or the Act; or

                  (c)      such other date (later than the dates described in
         (a) and (b) above) as the Committee may designate.

         2.14     "Participant" means an Eligible Participant to whom an Award
has been granted and who has entered into an Agreement evidencing the Award.

         2.15     "Plan" means the YOUcentric, Inc. 1999 Equity Compensation
Plan, as amended from time to time.

         2.16     "Restricted Stock" means an Award of Stock under Article VII
of the Plan, which Stock is issued with the restriction that the holder may not
sell, transfer, pledge, or assign such Stock and with such other restrictions as
the Committee, in its sole discretion, may impose, including without limitation,
any restriction on the right to vote such Stock, and the right to receive

                                       3
<PAGE>   4
any cash dividends, which restrictions may lapse separately or in combination at
such time or times, in installments or otherwise, as the Committee may deem
appropriate.

         2.17     "Restriction Period" means the period commencing on the date
an Award of Restricted Stock is granted and ending on such date as the Committee
shall determine.

         2.18     "Retirement" means retirement from active employment with the
Company, as determined by the Committee.

         2.19     "Stock" means the common stock of YOUcentric, Inc., as may be
adjusted pursuant to the provisions of Section 3.10.

         2.20     "Stock Option" means an Incentive Stock Option or a
Nonqualified Stock Option. Stock Options granted under the Plan shall be
designated as either Incentive Stock Options or Nonqualified Stock Options, and
in the absence of such designation shall be treated as Nonqualified Stock
Options.

         2.21     "Termination of Employment" means the discontinuance of
employment of a Participant with the Company for any reason or, if the
Participant is a non-employee member of the Board, the termination of the
Participant's directorship, or, if the Participant is a consultant to the
Company, the termination of the Participant's relationship as a consultant. The
determination of whether a Participant has incurred a Termination of Employment
shall be made by the Committee in its discretion. In determining whether a
Termination of Employment has occurred, the Committee may provide that service
as a consultant or service with a business enterprise in which the Company has a
significant ownership interest shall be treated as employment with the Company.
With respect to any Incentive Stock Option, employment shall be interpreted in a
manner consistent with section 422 of the Code. A Participant shall not be
deemed to have incurred a Termination of Employment if the Participant is on
military leave, sick leave, or other bona fide leave of absence approved by the
Company of 90 days or fewer (or any longer period during which the Participant
is guaranteed reemployment by statute or contract.) In the event a Participant's
leave of absence exceeds this period, he will be deemed to have incurred a
Termination of Employment on the day following the expiration date of such
period.

                          ARTICLE III - ADMINISTRATION

         3.1      This Plan shall be administered by the Committee. The
Committee, in its discretion, may delegate to one or more of its members such of
its powers as it deems appropriate. The Committee also may limit the power of
any member to the extent necessary to comply with rule 16b-3 under the Act, Code
section 162(m) or any other law or for any other purpose. If it so chooses, the
Board may appoint originally, and as vacancies occur, the members of the
Committee who shall serve at the pleasure of the Board. To the extent that a
Committee has not otherwise been appointed, references to the "Committee" herein
shall mean the Board.

                                       4
<PAGE>   5
         3.2      The Committee shall meet at such times and places as it
determines. A majority of its members shall constitute a quorum, and the
decision of a majority of those present at any meeting at which a quorum is
present shall constitute the decision of the Committee. A memorandum signed by
all of its members shall constitute the decision of the Committee without
necessity, in such event, for holding an actual meeting.

         3.3      The Committee shall have the exclusive right to interpret,
construe and administer the Plan, to select the persons who are eligible to
receive an Award, and to act in all matters pertaining to the granting of an
Award and the contents of the Agreement evidencing the Award, including without
limitation, the determination of the number of Stock Options or shares of Stock
subject to an Award and the form, terms, conditions and duration of each Award,
and any amendment thereof consistent with the provisions of the Plan. All acts,
determinations and decisions of the Committee made or taken pursuant to grants
of authority under the Plan or with respect to any questions arising in
connection with the administration and interpretation of the Plan, including the
severability of any and all of the provisions thereof, shall be conclusive,
final and binding upon all Participants, Eligible Participants and their estates
and beneficiaries.

         3.4      The Committee may adopt such rules, regulations and procedures
of general application for the administration of this Plan, as it deems
appropriate.

         3.5      Subject to adjustment as provided in Plan Section 3.10, the
aggregate number of shares of Stock which are available for issuance pursuant to
Awards granted under the Plan shall be Nine Hundred Thousand (900,000). Such
shares of Stock shall be made available from authorized and unissued shares of
Stock. If, for any reason, any shares of Stock awarded or subject to purchase
under the Plan are not delivered or purchased, or are reacquired by the Company,
for reasons including, but not limited to, a forfeiture of Restricted Stock or
termination, expiration or cancellation of a Stock Option, such shares of Stock
shall not be charged against the aggregate number of shares of Stock available
for issuance pursuant to Awards granted under the Plan and shall again be
available for issuance pursuant to Awards granted under the Plan. If the
exercise price and/or withholding obligation under a Stock Option is satisfied
by tendering shares of Stock to the Company (either by actual delivery or
attestation), only the number of shares of Stock issued net of the share of
Stock so tendered shall be deemed delivered for purposes of determining the
maximum number of shares of Stock available for issuance under the Plan.

         3.6      Each Award granted under the Plan shall be evidenced by a
written Award Agreement. Each Award Agreement shall be subject to and
incorporate, by reference or otherwise, the applicable terms and conditions of
the Plan, and any other terms and conditions, not inconsistent with the Plan, as
may be imposed by the Committee.

         3.7      The Company shall not be required to issue or deliver any
certificates for shares of Stock prior to:

                  (a)      the listing of such shares on any stock exchange on
         which the Stock may then be listed; and

                                       5
<PAGE>   6
                  (b)      the completion of any registration or qualification
         of such shares of Stock under any federal or state law, or any ruling
         or regulation of any government body which the Company shall, in its
         discretion, determine to be necessary or advisable.

         3.8      All certificates for shares of Stock delivered under the Plan
shall also be subject to such stop-transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange or
national quotation system upon which the Stock is then listed and any applicable
federal or state laws, and the Committee may cause a legend or legends to be
placed on any such certificates to make appropriate reference to such
restrictions. In making such determination, the Committee may rely upon an
opinion of counsel for the Company.

         3.9      Subject to the restrictions on Restricted Stock, as provided
in Article VII of the Plan and in the Restricted Stock Award Agreement, each
Participant who receives an Award of Restricted Stock shall have all of the
rights of a shareholder with respect to such shares of Stock, including the
right to vote the shares to the extent, if any, such shares possess voting
rights and receive dividends and other distributions. Except as provided
otherwise in the Plan or in an Award Agreement, no Participant awarded a Stock
Option shall have any right as a shareholder with respect to any shares of Stock
covered by his or her Stock Option prior to the date of issuance to him or her
of a certificate or certificates for such shares of Stock.

         3.10     If any reorganization, recapitalization, reclassification,
stock split, stock dividend, or consolidation of shares of Stock, merger or
consolidation or separation, including a spin-off, of the Company or sale or
other disposition by the Company of all or a portion of its assets, any other
change in the Company's corporate structure, or any distribution to shareholders
other than a cash dividend results in the outstanding shares of Stock, or any
securities exchanged therefor or received in their place, being exchanged for a
different number or class of shares of Stock or other securities of the Company,
or for shares of Stock or other securities of any other corporation; or new,
different or additional shares or other securities of the Company or of any
other corporation being received by the holders of outstanding shares of Stock,
then the Committee may make equitable adjustments in:

                  (a)      the limitation on the aggregate number of shares of
         Stock that may be awarded as set forth in Plan Section 3.5;

                  (b)      the number of shares and class of Stock that may be
         subject to an Award, and which have not been issued or transferred
         under an outstanding Award;

                  (c)      the purchase price to be paid per share of Stock
         under outstanding Stock Options; and

                  (d)      the terms, conditions or restrictions of any Award
         and Award Agreement, including the price payable for the acquisition of
         Stock;

                                       6
<PAGE>   7
provided, however, that all adjustments made as the result of the foregoing in
respect of each Incentive Stock Option shall be made so that such Stock Option
shall continue to be an incentive stock option within the meaning of Code
section 422, unless the Committee takes affirmative action to treat such Stock
Option instead as a Nonqualified Stock Option.

         3.11     In addition to such other rights of indemnification as they
may have as directors or as members of the Committee, the members of the
Committee shall be indemnified by the Company against reasonable expenses,
including attorney's fees, actually and necessarily incurred in connection with
the defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or any Award
granted thereunder, and against all amounts paid by them in settlement thereof,
provided such settlement is approved by independent legal counsel selected by
the Company, or paid by them in satisfaction of a judgment or settlement in any
such action, suit or proceeding, except as to matters as to which the Committee
member has been negligent or engaged in misconduct in the performance of his
duties; provided, that within 60 days after institution of any such action, suit
or proceeding, a Committee member shall in writing offer the Company the
opportunity, at its own expense, to handle and defend the same.

         3.12     The Committee may require each person purchasing shares of
Stock pursuant to a Stock Option or other Award under the Plan to represent to
and agree with the Company in writing that he is acquiring the shares of Stock
without a view to distribution thereof. The certificates for such shares of
Stock may include any legend which the Committee deems appropriate to reflect
any restrictions on transfer.

         3.13     The Committee shall be authorized to make adjustments in
performance based criteria or in the terms and conditions of other Awards in
recognition of unusual or nonrecurring events affecting the Company or its
financial statements or changes in applicable laws, regulations or accounting
principles. The Committee may correct any defect, supply any omission or
reconcile any inconsistency in the Plan or any Award Agreement in the manner and
to the extent it shall deem desirable to carry it into effect. In the event the
Company shall assume outstanding employee benefit awards or the right or
obligation to make future such awards in connection with the acquisition of
another corporation or business entity, the Committee may, in its discretion,
make such adjustments in the terms of Awards under the Plan as it shall deem
appropriate to assume the outstanding awards, rights and obligations.

         3.14     All outstanding Awards to any Participant may be canceled if
(a) the Participant, without the consent of the Committee, while employed by the
Company or after termination of such employment, becomes associated with,
employed by, renders services to, or owns any interest in, other than any
insubstantial interest, as determined by the Committee, any business that is in
competition with the Company or with any business in which the Company has a
substantial interest as determined by the Committee; or (b) is terminated for
cause as determined by the Committee.

         3.15     In connection with any underwritten public offering by the
Company of its equity securities pursuant to an effective registration statement
filed under the Securities Act of 1933,

                                       7
<PAGE>   8
including the Company's initial public offering, a Participant shall not sell,
make any short sale of, loan, hypothecate, pledge, grant any option for the
purchase of, or otherwise dispose or transfer for value or otherwise agree to
engage in any of the foregoing transactions with respect to, any Stock acquired
under the Plan without the prior written consent of the Company or its
underwriters. Such restriction (the "Market Stand-Off") shall be in effect for
such period of time from and after the effective date of the final prospectus
for the offering as may be requested by the Company or such underwriters. In no
event, however, shall such period exceed one hundred eighty (180) days. Any new,
substituted or additional securities that are by reason of any recapitalization
or reorganization distributed with respect to Stock acquired under the Plan
shall be immediately subject to the Market Stand-Off, to the same extent the
Stock acquired under the Plan is at such time covered by such provisions. In
order to enforce the Market Stand-Off, the Company may impose stop-transfer
restrictions with respect to the Stock acquired under the Plan until the end of
the applicable stand-off period.

                      ARTICLE IV - INCENTIVE STOCK OPTIONS

         4.1      Each provision of this Article IV and of each Incentive Stock
Option granted under the Plan shall be construed in accordance with the
provisions of Code section 422, and any provision hereof that cannot be so
construed shall be disregarded.

         4.2      Incentive Stock Options shall be granted only to Eligible
Participants who are in the active employment of the Company, and to individuals
to whom grants are conditioned upon active employment, each of whom may be
granted one or more such Incentive Stock Options for a reason related to his
employment at such time or times determined by the Committee following the
Effective Date through the date which is ten (10) years following the Effective
Date, subject to the following conditions:

                  (a)      The Incentive Stock Option exercise price per share
         of Stock shall be set in the Agreement, but shall not be less than 100%
         of the Fair Market Value of the Stock on the Option Grant Date. If the
         Eligible Participant owns more than 10% of the outstanding Stock (as
         determined pursuant to Code section 424(d)) on the Option Grant Date,
         the Incentive Stock Option exercise price per share shall not be less
         than 110% of the Fair Market Value of the Stock on the Option Grant
         Date; provided, however, that if an Incentive Stock Option is granted
         to such an Eligible Participant at an exercise price per share that is
         less than 110% of Fair Market Value of the stock on the Option Grant
         Date, such Option shall be deemed a Nonqualified Stock Option.

                  (b)      The Incentive Stock Option may be exercised in whole
         or in part from time to time within ten (10) years from the Option
         Grant Date (five (5) years if the Eligible Participant owns more than
         10% of the Stock on the Option Grant Date), or such shorter period as
         may be specified by the Committee in the Award; provided, that in any
         event, the Incentive Stock Option shall lapse and cease to be
         exercisable upon a Termination of Employment or within such period
         following a Termination of Employment as shall have been specified in
         the Incentive Stock Option Award Agreement, which period shall in no
         event exceed three months unless:

                                       8
<PAGE>   9
                           (i)      employment shall have terminated as a result
                  of death or Disability, in which event such period shall not
                  exceed one year after the date of death or Disability; or

                           (ii)     death shall have occurred following a
                  Termination of Employment and while the Incentive Stock Option
                  was still exercisable, in which event such period shall not
                  exceed one year after the date of death; provided, further,
                  that such period following a Termination of Employment shall
                  in no event extend the original exercise period of the
                  Incentive Stock Option.

                  (c)      To the extent the aggregate Fair Market Value,
         determined as of the Option Grant Date, of the shares of Stock with
         respect to which incentive stock options (determined without regard to
         this subsection) are first exercisable during any calendar year (under
         this Plan or any other plan of the Company and its parent and
         subsidiary corporations (within the meaning of Code sections 424(e) and
         424(f), respectively)), by Participant exceeds $100,000, such Incentive
         Stock Options granted under the Plan shall be treated as Nonqualified
         Stock Options granted under Article V to the extent of such excess.

                  (d)      The Committee may adopt any other terms and
         conditions which it determines should be imposed for the Incentive
         Stock Option to qualify under Code section 422, as well as any other
         terms and conditions not inconsistent with this Article IV as
         determined by the Committee.

                  (e)      The maximum number of shares of Stock authorized for
         issuance pursuant to Incentive Stock Option Awards shall be the total
         number authorized for issuance pursuant to Awards under the Plan
         pursuant to Section 3.5 above.

         4.3      The Committee may at any time offer to buy out for a payment
in cash, Stock, or Restricted Stock an Incentive Stock Option previously
granted, based on such terms and conditions as the Committee shall establish and
communicate to the Participant at the time that such offer is made.

         4.4      If the Incentive Stock Option Award Agreement so provides, the
Committee may require that all or part of the shares of Stock to be issued upon
the exercise of an Incentive Stock Option shall take the form of Deferred or
Restricted Stock, which shall be valued on the date of exercise, as determined
by the Committee, on the basis of the Fair Market Value of such Restricted Stock
determined without regard to the deferral limitations and/or forfeiture
restrictions involved.

         4.5      Any Incentive Stock Option that fails to qualify under section
422 of the Code shall be treated as a Nonqualified Stock Option.

                                       9
<PAGE>   10
                     ARTICLE V - NONQUALIFIED STOCK OPTIONS

         5.1      Nonqualified Stock Options may be granted to Eligible
Participants to purchase shares of Stock at such time or times determined by the
Committee, subject to the terms and conditions set forth in this Article V.

         5.2      The Nonqualified Stock Option exercise price per share of
Stock shall be established in the Agreement and may be more than, equal to or
less than 100% of the Fair Market Value at the time of the grant, but may not be
less than par value of the Stock.

         5.3      A Nonqualified Stock Option may be exercised in full or in
part from time to time within such period as may be specified by the Committee
in the Agreement; provided, that in any event, the Nonqualified Stock Option
shall lapse and cease to be exercisable upon a Termination of Employment or
within such period following a Termination of Employment as shall have been
specified in the Nonqualified Stock Option Award Agreement; provided, that such
period following a Termination of Employment shall in no event extend the
original exercise period of the Nonqualified Stock Option.

         5.4      The Nonqualified Stock Option Award Agreement may include any
other terms and conditions not inconsistent with this Article V or Article VI,
as determined by the Committee.

                     ARTICLE VI - INCIDENTS OF STOCK OPTIONS

         6.1      Each Stock Option shall be granted subject to such terms and
conditions, if any, not inconsistent with this Plan, as shall be determined by
the Committee, including any provisions as to continued employment as
consideration for the grant or exercise of such Stock Option and any provisions
that may be advisable to comply with applicable laws, regulations or rulings of
any governmental authority.

         6.2      Except as provided below, a Stock Option generally shall not
be transferable by the Participant other than by will or by the laws of descent
and distribution, or, to the extent otherwise allowed by applicable law,
pursuant to a qualified domestic relations order as defined by the Code or the
Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder, and shall be exercisable during the lifetime of the Participant only
by him or in the event of his death or Disability, by his guardian or legal
representative. However, a Nonqualified Stock Option may be transferred and
exercised by the transferee to the extent determined by the Committee to be
consistent with securities and other applicable laws, rules and regulations and
with Company policy. Notwithstanding any language herein or in any Agreement to
the contrary, any restrictions on transfer of a Stock Option in the Plan or an
Agreement shall be void and of no effect if the Committee determines that a
transfer can be made consistent with securities and other applicable laws, rules
and regulations.

         6.3      Shares of Stock purchased upon exercise of a Stock Option
shall be paid for at the time of exercise (or, in case of an exercise pursuant
to a cashless exercise mechanism described below, as soon as practicable after
such exercise) in cash or by tendering (either by actual delivery

                                       10
<PAGE>   11
or by attestation) shares of Stock acceptable to the Committee and valued as of
the exercise date or in any combination thereof in such amounts, at such times
and upon such terms as shall be determined by the Committee, subject to
limitations set forth in the corresponding Stock Option Award Agreement. The
Committee may establish a cashless exercise mechanism by which a Participant may
pay the exercise price under a Stock Option by irrevocably authorizing a third
party to sell shares of Stock (or a sufficient portion of the shares) acquired
upon exercise of the Stock Option and remit to the Company a sufficient portion
of the sales proceeds to pay the entire exercise price and/or any tax
withholding resulting from such exercise. Without limiting the foregoing, the
Committee may establish payment terms for the exercise of Stock Options which
permit the Participant to deliver shares of Stock, or other evidence of
ownership of Stock satisfactory to the Company, with a Fair Market Value equal
to the Stock Option price as payment.

         6.4      No cash dividends shall be paid on shares of Stock subject to
unexercised Stock Options. The Committee may provide, however, that a
Participant to whom a Stock Option has been granted which is exercisable in
whole or in part at a future time for shares of Stock shall be entitled to
receive an amount per share equal in value to the cash dividends, if any, paid
per share on issued and outstanding Stock, as of the dividend record dates
occurring during the period between the date of the grant and the time each such
share of Stock is delivered pursuant to exercise of such Stock Option. Such
amounts (herein called "dividend equivalents") may, in the discretion of the
Committee, be:

                  (a)      paid in cash or Stock either from time to time prior
         to, or at the time of the delivery of, such Stock, or upon expiration
         of the Stock Option if it shall not have been fully exercised; or

                  (b)      converted into contingently credited shares of Stock,
         with respect to which dividend equivalents may accrue, in such manner,
         at such value, and deliverable at such time or times, as may be
         determined by the Committee.

         Such Stock, whether delivered or contingently credited, shall be
         charged against the limitations set forth in Plan Section 3.5.

         6.5      The Committee, in its sole discretion, may authorize payment
of interest equivalents on dividend equivalents which are payable in cash at a
future time.

         6.6      In the event of Disability or death, the Committee, with the
consent of the Participant or his legal representative, may authorize payment,
in cash or in Stock, or partly in cash and partly in Stock, as the Committee may
direct, of an amount equal to the difference at the time between the Fair Market
Value of the Stock subject to a Stock Option and the option price in
consideration of the surrender of the Stock Option.

         6.7      If a Participant is required to pay to the Company an amount
with respect to income and employment tax withholding obligations in connection
with exercise of a Nonqualified Stock Option, and/or with respect to certain
dispositions of Stock acquired upon the exercise of an Incentive Stock Option,
the Committee, in its discretion and subject to such rules as it may adopt,

                                       11
<PAGE>   12
may permit the Participant to satisfy the obligation, in whole or in part, by
surrendering shares of Stock which the Participant already owns or by making an
irrevocable election that, in lieu of the issuance of Stock, a portion of the
total Fair Market Value of the shares of Stock subject to the Nonqualified Stock
Option and/or with respect to certain dispositions of Stock acquired upon the
exercise of an Incentive Stock Option, be surrendered for cash and that such
cash payment be applied to the satisfaction of the withholding obligations. The
amount to be withheld shall not exceed the statutory minimum federal and state
income and employment tax liability arising from the Stock Option exercise
transaction.

         6.8      The Committee may permit the voluntary surrender of all or a
portion of any Stock Option granted under the Plan to be conditioned upon the
granting to the Participant of a new Stock Option for the same or a different
number of shares of Stock as the Stock Option surrendered, or may require such
surrender as a condition precedent to a grant of a new Stock Option to such
Participant. Subject to the provisions of the Plan, such new Stock Option shall
be exercisable at such price, during such period and on such other terms and
conditions as are specified by the Committee at the time the new Stock Option is
granted. Upon surrender, the Stock Options surrendered shall be canceled and the
shares of Stock previously subject to them shall be available for the grant of
other Stock Options.

         6.9      The Committee may provide in any Stock Option Agreement
entered into pursuant to the Plan, or by separate agreement, that if a
Participant makes payment upon the exercise of any Stock Option granted under
this Plan in whole or in part through the surrender of shares of Stock, such
Participant shall automatically receive a new Stock Option for the number of
shares of Stock so surrendered by him at a price equal to the Fair Market Value
of the shares of Stock at the time of surrender, exercisable on the same basis
and having the same terms as the underlying Stock Option or on such other basis
as the Committee shall determine and provide in the Stock Option Agreement.

                         ARTICLE VII - RESTRICTED STOCK

         7.1      Restricted Stock Awards may be made to Participants as an
incentive for the performance of future services that will contribute materially
to the successful operation of the Company. Awards of Restricted Stock may be
made either alone or in addition to or in tandem with other Awards granted under
the Plan.

         7.2      With respect to Awards of Restricted Stock, the Committee
shall:

                  (a)      determine the purchase price, if any, to be paid for
         such Restricted Stock, which may be more than, equal to, or less than
         par value and may be zero, subject to such minimum consideration as may
         be required by applicable law;

                  (b)      determine the length of the Restriction Period;

                  (c)      determine any restrictions applicable to the
         Restricted Stock such as service or performance;

                                       12
<PAGE>   13
                  (d)      determine if the restrictions shall lapse as to all
         shares of Restricted Stock at the end of the Restriction Period or as
         to a portion of the shares of Restricted Stock in installments during
         the Restriction Period; and

                  (e)      determine if dividends and other distributions on the
         Restricted Stock are to be paid currently to the Participant or paid to
         the Company for the account of the Participant.

         7.3      Awards of Restricted Stock must be accepted within a period of
60 days, or such shorter period as the Committee may specify, by executing a
Restricted Stock Award Agreement and paying whatever price, if any, is required.
The prospective recipient of a Restricted Stock Award shall not have any rights
with respect to such Award, unless such recipient has executed a Restricted
Stock Award Agreement and has delivered a fully executed copy thereof to the
Committee, and has otherwise complied with the applicable terms and conditions
of such Award.

         7.4      Except when the Committee determines otherwise, or as
otherwise provided in the Restricted Stock Agreement, if a Participant
terminates employment with the Company for any reason before the expiration of
the Restriction Period, all shares of Restricted Stock still subject to
restriction shall be forfeited by the Participant and shall be reacquired by the
Company.

         7.5      Except as otherwise provided in this Article VII, or as
otherwise provided in the Restricted Stock Agreement, no shares of Restricted
Stock received by a Participant shall be sold, exchanged, transferred, pledged,
hypothecated or otherwise disposed of during the Restriction Period.

         7.6      To the extent not otherwise provided in a Restricted Stock
Agreement, in cases of death, Disability or Retirement or in cases of special
circumstances, the Committee may in its discretion elect to waive any or all
remaining restrictions with respect to such Participant's Restricted Stock.

         7.7      In the event of hardship or other special circumstances of a
Participant whose employment with the Company is involuntarily terminated, the
Committee may in its discretion elect to waive in whole or in part any or all
remaining restrictions with respect to any or all of the Participant's
Restricted Stock, based on such factors and criteria as the Committee may deem
appropriate.

         7.8      Upon an Award of Restricted Stock to a Participant, one or
more stock certificates representing the shares of Restricted Stock shall be
registered in the Participant's name. Such certificates may either:

                  (a)      be held in custody by the Company until the
         Restriction Period expires or until restrictions thereon otherwise
         lapse, and the Participant shall deliver to the Company one or more
         stock powers endorsed in blank relating to the Restricted Stock; and/or

                                       13
<PAGE>   14
                  (b)      be issued to the Participant and registered in the
         name of the Participant, and shall bear an appropriate restrictive
         legend and shall be subject to appropriate stop-transfer orders.

         7.9      Except as provided in this Article VII, a Participant
receiving a Restricted Stock Award shall have, with respect to such Restricted
Stock Award, all of the rights of a shareholder of the Company, including the
right to vote the shares to the extent, if any, such shares possess voting
rights and the right to receive any dividends; provided, however, the Committee
may require that any dividends on such shares of Restricted Stock shall be
automatically deferred and reinvested in additional Restricted Stock subject to
the same restrictions as the underlying Award, or may require that dividends and
other distributions on Restricted Stock shall be paid to the Company for the
account of the Participant. The Committee shall determine whether interest shall
be paid on such amounts, the rate of any such interest, and the other terms
applicable to such amounts.

         7.10     If and when the Restriction Period expires without a prior
forfeiture of the Restricted Stock subject to such Restriction Period,
unrestricted certificates for such shares shall be delivered to the Participant;
provided, however, that the Committee may cause such legend or legends to be
placed on any such certificates as it may deem advisable under the rules,
regulations and other requirements of the Securities and Exchange Commission and
any applicable federal or state law.

         7.11     In order to better ensure that Award payments actually reflect
the performance of the Company and the service of the Participant, the Committee
may provide, in its sole discretion, for a tandem performance-based or other
Award designed to guarantee a minimum value, payable in cash or Stock to the
recipient of a Restricted Stock Award, subject to such performance, future
service, deferral and other terms and conditions as may be specified by the
Committee.

                    ARTICLE VIII - AMENDMENT AND TERMINATION

         8.1      The Board at any time and from time to time, may amend or
terminate the Plan. To the extent required by Code section 422 and/or the rules
of the exchange upon which the Stock is traded, no amendment, without approval
by the Company's shareholders, shall:

                  (a)      alter the group of persons eligible to participate in
         the Plan;

                  (b)      except as provided in Plan Section 3.10, increase the
         maximum number of shares of Stock which are available for issuance
         pursuant to Awards granted under the Plan;

                  (c)      extend the period during which Incentive Stock
         Options may be granted beyond the date which is ten (10) years
         following the Effective Date.

                  (d)      limit or restrict the powers of the Committee with
         respect to the administration of this Plan;

                                       14
<PAGE>   15
                  (e)      change the definition of an Eligible Participant for
         the purpose of Incentive Stock Options or increase the limit or the
         value of shares of Stock for which an Eligible Participant may be
         granted an Incentive Stock Option;

                  (f)      materially increase the benefits accruing to
         Participants under this Plan;

                  (g)      materially modify the requirements as to eligibility
         for participation in this Plan; or

                  (h)      change any of the provisions of this Article VIII.

         8.2      No amendment to or discontinuance of this Plan or any
provision thereof by the Board or the shareholders of the Company shall, without
the written consent of the Participant, adversely affect, as shall be determined
by the Committee, any Award previously granted to such Participant under this
Plan; provided, however, the Committee retains the right and power to treat any
outstanding Incentive Stock Option as a Nonqualified Stock Option in accordance
with Plan Section 4.3.

         8.3      Notwithstanding anything herein to the contrary, if the right
to receive or benefit from any Award, either alone or together with payments
that a Participant has the right to receive from the Company, would constitute a
"parachute payment" under Code section 280G, all such payments may be reduced,
in the discretion of the Committee, to the largest amount that will avoid an
excise tax to the Participant under Code section 280G.

                      ARTICLE IX - MISCELLANEOUS PROVISIONS

         9.1      Nothing in the Plan or any Award granted under the Plan shall
confer upon any Participant any right to continue in the employ of the Company,
or to serve as a director thereof, or interfere in any way with the right of the
Company to terminate his or her employment at any time. Unless agreed by the
Board, no Award granted under the Plan shall be deemed salary or compensation
for the purpose of computing benefits under any employee benefit plan or other
arrangement of the Company for the benefit of its employees. No Participant
shall have any claim to an Award until it is actually granted under the Plan. To
the extent that any person acquires a right to receive payments from the Company
under the Plan, such right shall, except as otherwise provided by the Committee,
be no greater than the right of an unsecured general creditor of the Company.
All payments to be made under the Plan shall be paid from the general funds of
the company, and no special or separate fund shall be established and no
segregation of assets shall be made to assure payment of such amounts, except as
provided in Article VII with respect to Restricted Stock and except as otherwise
provided by the Committee.

         9.2      The Committee may make such provisions and take such steps as
it may deem necessary or appropriate for the withholding of any taxes which the
Company is required by any law or regulation of any governmental authority,
whether federal, state or local, domestic or foreign, to withhold in connection
with any Award or the exercise thereof, including, but not limited to,
withholding the payment of all or any portion of such Award or another Award
under

                                       15
<PAGE>   16
this Plan until the Participant reimburses the Company for the amount the
Company is required to withhold with respect to such taxes, or canceling any
portion of such Award or another Award under this Plan in an amount sufficient
to reimburse itself for the amount it is required to so withhold, or selling any
property contingently credited by the Company for the purpose of paying such
Award or another Award under this Plan in order to withhold or reimburse itself
for the amount it is required to so withhold. The amount to be withheld shall
not exceed the statutory minimum federal and state income and employment tax
liability arising from the exercise transaction.

         9.3      The Plan and the grant of Awards shall be subject to all
applicable federal and state laws, rules, and regulations and to such approvals
by any United States government or regulatory agency as may be required.

         9.4      The terms of the Plan shall be binding upon the Company, and
its successors and assigns.

         9.5      The Plan is intended to constitute an "unfunded" plan for
incentive and deferred compensation. With respect to any payments not yet made
to a Participant by the Company, nothing contained herein shall give any such
Participant any rights that are greater than those of a general creditor of the
Company. In its sole discretion, the Committee may authorize the creation of
trusts or other arrangements to meet the obligations created under the Plan to
deliver shares of Stock or payments in lieu of or with respect to Awards under
the Plan; provided, however, that, unless the Committee otherwise determines
with the consent of the affected Participant, the existence of such trusts or
other arrangements is consistent with the "unfunded" status of the Plan.

         9.6      Each Participant exercising an Award under the Plan agrees to
give the Committee prompt written notice of any election made by such
Participant under Code section 83(b) or any similar provision thereof.

         9.7      If any provision of this Plan or an Award Agreement is or
becomes or is deemed invalid, illegal or unenforceable in any jurisdiction, or
would disqualify the Plan or any Award Agreement under any law deemed applicable
by the Committee, such provision shall be construed or deemed amended to conform
to applicable laws or if it cannot be construed or deemed amended without, in
the determination of the Committee, materially altering the intent of the Plan
or the Award Agreement, it shall be stricken and the remainder of the Plan or
the Award Agreement shall remain in full force and effect.

                                       16
<PAGE>   17
         9.8      The Committee may incorporate additional or alternative
provisions for this Plan with respect to residents of one or more individual
states to the extent necessary or desirable under state securities laws. Such
provisions shall be set out in one or more appendices hereto which may be
amended or deleted by the Committee from time to time.

         IN WITNESS WHEREOF, this Plan is executed this the 23rd day of
December, 1999.

                                    YOUCENTRIC, INC.

                                    By: /s/ Tom Fedell
                                       ----------------------------------------
                                            Tom Fedell, Chief Executive Officer

                                       17
<PAGE>   18
                        AMENDMENT TO THE YOUCENTRIC, INC.
                          1999 EQUITY COMPENSATION PLAN

         THIS AMENDMENT is made and entered into this 22nd day of March, 2000
by YOUcentric, Inc., a North Carolina corporation (the "Corporation").

                              W I T N E S S E T H:

         WHEREAS, the Corporation has previously established and adopted the
YOUcentric, Inc. 1999 Equity Compensation Plan (the "Plan") effective December
23, 1999;

         WHEREAS, section 8.1 of the Plan provides, in part, that the Board of
Directors of the Corporation ("the "Board") at any time and from time to time
may amend the Plan, provided that to the extent required by section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), and except as provided
in Section 3.10 of the Plan, no amendment may, without shareholder approval,
increase the maximum number of shares of common stock of the Corporation which
are available for issuance pursuant to awards granted under the Plan;

         WHEREAS, section 3.10 of the Plan provides, in part, that in the event
of a stock dividend with respect to the common stock of the Corporation, the
committee under the Plan may make equitable adjustments in the limitation on the
aggregate number of shares of common stock of the Corporation authorized for
issuance pursuant to grants under the Plan, the number of shares of common stock
of the Corporation subject to outstanding awards under the Plan and the exercise
price per share of common stock of the Corporation under outstanding awards
under the Plan;

         WHEREAS, the Board effected a three-for-one share split of its Common
Stock by way of a 200% share dividend February 22, 2000;

         WHEREAS, the Board acting as the committee under the Plan took action
pursuant to section 3.10 of the Plan, effective at such time as such share split
was effected, to make equitable adjustments in the aggregate number of shares of
common stock of the Corporation authorized for issuance pursuant to grants under
the Plan, the number of shares of common stock of the Corporation subject to
outstanding awards under the Plan and the exercise price per share of common
stock of the Corporation under outstanding awards under the Plan;

         WHEREAS, as a result of such Board action there were 2,700,000 shares
of common stock of the Corporation authorized for issuance under the Plan; and

         WHEREAS, pursuant to section 8.1 of the Plan the Board subsequently
amended the Plan to increase the number of shares of common stock authorized for
issuance under the Plan by an additional 850,000 shares such that there are now
3,550,000 shares of common stock of the Corporation authorized for issuance
under the Plan.
<PAGE>   19
         NOW, THEREFORE, IT IS HEREBY RESOLVED, in consideration of the premises
herein contained, the Corporation hereby amends the Plan as follows:

         1.       The first sentence of section 3.5 of the Plan is hereby
amended to read as follows effective as of the date hereof:

                  "3.5     Subject to adjustment as provided in Section 3.10 of
         the Plan, the aggregate number of shares of Stock which are available
         for issuance pursuant to Awards granted under the Plan shall be Three
         Million Five Hundred Fifty-five Thousand (3,550,000)."

         2.       This Amendment does not supersede the terms and conditions of
the Plan, except to the extent expressly described herein.

         IN WITNESS WHEREOF, the Corporation has caused this Amendment to be
executed by its duly authorized officer, all as of the day and year first above
written.

                                    YOUCENTRIC, INC.

                                    By:/s/ Tom Fedell
                                       ----------------------------------------
                                           Tom Fedell, Chief Executive Officer

                                       2

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