Document:

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                                                                    EXHIBIT 10.2

                            FIRST AMENDMENT TO LEASE

THIS FIRST AMENDMENT TO LEASE is effective as of May 1, 2002 by and between
MACANAN INVESTMENTS, a California limited partnership ("Landlord") and BAM!
Entertainment, Inc., a Delaware corporation ("Tenant").

                                    RECITALS

        A. Pursuant to that certain Office Space Lease dated May 3, 2001,
relating to approximately four thousand, eight hundred fifty-five (4,855) feet
of rentable area, known as suite 716, in those certain premises located at 333
West Santa Clara Street, San Jose, California, more particularly described
therein, and herein referred to as the "Original Leased Premises".

        B. The parties hereto now desire to amend the Lease to extend the Lease
Term to April 30, 2005, and to increase the gross leasable square footage
contained in the Leased Premises by four thousand, six hundred seventy-eight
(4,678) square feet of gross leasable area including four thousand, two hundred
seventy-one (4,271) square feet of useable area known as suite 708 on the
seventh floor of the Comerica Bank Building. The portion of the Leased Premises
being added is shown on Exhibit B-2 together with the Original Leased Premises,
as shown on Exhibit B-1 attached hereto and incorporated herein by this
reference. The parties also desire to reduce the Base Monthly Rent of the
Original Leased Premises as of May 1, 2002 to the same per square foot cost per
month as that which will be paid for the additional leased premises. The parties
agree that the

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previous personal lease guarantee, which is now in effect, will be voided by
Landlord upon signing First Amendment.

        NOW, THEREFORE, in consideration for the terms, covenants and conditions
contained herein, the parties hereto agree as follows:

        1.     The description of the Leased Premises referred to herein as the
               Original Leased Premises and shown on Exhibit B-1 to the Lease is
               hereby expanded to include Exhibit B-2. Page 2 of Exhibit B-2
               shows the relationship of space in Exhibit B-1 and Exhibit B-2.

        2.     The parties agree that all references in the Lease to the "Leased
               Premises" shall refer to the Increased Leased Premises, as herein
               defined. All other words and phrases defined in the Lease shall
               have the same meaning when used herein and therein.

        3.     Various other changes involving lease term, tenants allocated
               share, operating expense base year, real property base tax year,
               prepaid rent, security deposit, construction and delivery of
               tenant improvements, early occupancy, new rent commencement date,
               base monthly rent and periodic increase in monthly rent are
               changed.

        4.     Paragraph 1.1 of the Lease is hereby modified to read as follows:

               1.1    Rent Commencement Date. The term "Rent Commencement Date"
                      shall mean as of May 1, 2002.

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        5.     Paragraph 1.2 of the Lease is hereby modified to read as follows:

               1.2    Lease Term. The Lease Term is extended to April 30, 2005
                      unless this Lease is sooner terminated according to its
                      term or by mutual written agreement.

        6.     Paragraph 1.5 of the Lease is hereby modified to read as follows:

               1.5    Leased Premises. The term "Leased Premises" shall mean
                      those certain premises which are a portion of, and located
                      within, the Building as shown by the floor plan attached
                      hereto as Exhibit B-1 and Exhibit B-2 containing
                      approximately nine thousand, five hundred thirty-three
                      (9,533) square feet of gross leasable area ("Tenant's
                      Gross Leasable Area") including approximately eight
                      thousand, seven hundred three (8,703) square feet of
                      usable area ("Tenant's Net Leasable Area").

        7.     Paragraph 1.6 of the Lease is hereby modified to read as follows:

               1.6    Tenant's Allocated Share. The term "Tenant's Share" shall
                      mean the percentage obtained by dividing Tenant's Gross
                      Leasable Area by the Building Gross Leasable Area, which
                      as of May 1, 2002, is agreed to be four and forty-seven
                      hundredths (4.47%).

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        8.     Paragraph 1.7 of the Lease is hereby modified to read as follows:

               1.7    Prepaid Rent. The term "Prepaid Rent" shall mean the sum
                      of twenty-nine thousand, five hundred fifty-two dollars
                      ($29,552.00).

        9.     Paragraph 1.8 of the Lease is hereby modified to read as follows:

               1.8    Security Deposit. The term "Security Deposit" shall mean
                      an additional amount of ten thousand, one hundred
                      thirty-two dollars ($10,132.00) shall be added to that
                      security deposit already on deposit for suite 716 for a
                      total amount of twenty-nine thousand, five hundred
                      fifty-two ($29,552.00) dollars.

        10.    Paragraph 1.11 of this Lease is hereby modified to read as
               follows:

               1.11   Operating Expense Base Year. Effective May 1, 2002, the
                      term "Operating Expense Base Year" shall mean the calendar
                      year of 2002 for suite 708 and shall remain unchanged for
                      suite 716.

        11.    Paragraph 1.12 of the Lease is hereby modified to read as
               follows:

               1.12   Real Property Base Tax Year. The term "Real Property Base
                      Tax Year" shall mean the fiscal year 2001/2002 commencing
                      July 1, 2001 and ending June 30, 2002 for the entire
                      leased premises.

        12.    Paragraph 2.2 of the Lease is hereby modified to read as follows:

               2.2    Construction of Tenant Improvements. Prior to the Rent
                      Commencement Date, Landlord shall construct certain

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                      improvements as shown on RMW Drawing #21227.00 dated
                      3/14/02, which has been approved by Tenant and Landlord.
                      Any delays, including change orders, caused by Tenant
                      which delays the completion of the tenant improvements by
                      Landlord will offset the completion of work, on a day for
                      day basis, but in no event abate the rent or change the
                      rent commencement date.

        13.    Paragraph 2.3 of the Lease is hereby modified to read as follows:

               2.3    Delivery and Acceptance of Possession. Landlord will
                      complete work required of Landlord pursuant to Paragraph
                      2.2 by April 30, 2002 providing Tenant has approved said
                      plans by April 1, 2002.

        14.    Paragraph 2.4 of the Lease is hereby modified to read as follows:

               2.4    Early Occupancy. Tenant may enter or permit its
                      contractors to enter the Leased Premises prior to the Rent
                      Commencement Date by April 15, 2002, it shall do so upon
                      all of the terms of this Lease (including its obligations
                      regarding indemnity and insurance) except those regarding
                      the obligation to pay rent, which shall commence on the
                      Rent Commencement Date.

        15.    Paragraph 3.1 of the Lease is hereby modified to read as follows:

               3.1    Base Monthly Rent. Commencing on May 1, 2002 and
                      continuing throughout the remainder of the Lease Term,

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                      Tenant shall pay to Landlord a monthly rent (the "Base
                      Monthly Rent"), which shall be $29,552.00.

        16.    Paragraph 3.7 is hereby added to the Lease to read as follows:

               3.7    Periodic Increase in Base Monthly Rent. On May 1, 2002
                      ("Rent Commencement Date") and continuing until adjusted
                      pursuant to this paragraph, Tenant shall pay to Landlord
                      Base Monthly Rent in the initial amount set forth in
                      paragraph 3.1 above. However, the amount of the Base
                      Monthly Rent shall be redetermined in accordance with the
                      following formula as of and effective on each calendar
                      anniversary of the lease (the "Rent Adjustment Date") to
                      reflect any increase or decrease in the "Consumer Price
                      Index" (as that term is defined in paragraph 15.12) that
                      has occurred since the Rent Commencement Date. The Base
                      Monthly Rent commencing May 1, 2003 and May 1, 2004
                      determined by multiplying (i) the amount of the Base
                      Monthly Rent immediately preceding the adjustment by (ii)
                      a fraction whose numerator is the Consumer Price Index
                      published nearest and preceding the relevant Rent
                      Adjustment Date and whose denominator is the Consumer
                      Price published nearest and preceding the Rent
                      Commencement Date. However, in no event shall the Base
                      Monthly Rent adjustment be (i) an amount greater than 3%
                      per

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                      year, or (ii) an amount less than the Base Monthly Rent
                      immediately preceding the adjustment.

        17.    Paragraph 4.5 of the Lease is hereby modified to read as follows:

               4.5    Parking. Parking in the Building garage will be available
                      up to 40 spaces on month-to-month leases at the initial
                      rates of $90.00 per space per month for unreserved covered
                      parking and $60.00 per space per month for unreserved
                      uncovered parking if available (on the fourth (4th) floor
                      of the parking garage only). Landlord may adjust parking
                      rates to market during lease term or any extension
                      thereof. If Tenant elects to lease parking spaces on the
                      fourth (4th) floor of the parking garage, Tenant will be
                      issued a parking card for each space leased which will
                      permit the user to enter and exit the fourth (4th) floor
                      in addition to the ground floor entrance and exit of the
                      parking garage. If, after electing to lease parking spaces
                      on the fourth (4th) floor of the parking garage, Tenant or
                      its employees park on any floor other than the fourth
                      (4th) floor, Tenant's parking card will be automatically
                      cancelled and Tenant will be required to contact the
                      Building Manager to reactivate the cancelled parking card.
                      Tenant will be charged an additional $30.00 per month for
                      each card that must be reactivated due to improper use.

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                      Tenant shall not at any time use or permit its employees
                      or invitees to use more parking spaces than the number so
                      allocated to Tenant. Except as may be herein provided,
                      Tenant shall not have the exclusive right to use any
                      specific parking space. In the event Landlord elects or is
                      required by any Law to limit or control parking in the
                      Property, whether by validation of parking tickets or any
                      other method, Tenant, subject to its right to the
                      non-exclusive use of the number of parking spaces above
                      specified, agrees to participate in such validation or
                      other program under such reasonable rules and regulations
                      as are from time to time established by Landlord.

        18.    Any breach or default under any provisions of this First
               Amendment shall be a breach or default under the Lease, and any
               breach or default under the Lease shall be a breach or default
               under this First Amendment. To the extent there may be any
               inconsistencies between the terms of this Amendment and any terms
               of the Lease, the terms of this Amendment shall prevail. In all
               other respects, the Lease shall remain in full force and effect.
               All capitalized terms not defined herein shall have the meaning
               set forth in the Lease.

        19.    The Lease Guarantee signed on behalf of Bay Area Multimedia (now
               BAM! Entertainment, Inc.) by Guarantor, Ray Musci (Individual) on
               May 3, 2002, in favor of Macanan Investments, is hereby deleted
               and has no further force or effect.

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        IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment to Lease on the respective dates set forth below to be effective as of
May 1, 2002.

                                    LANDLORD:
                                    MACANAN INVESTMENTS,
                                    A California limited partnership

                                    By:  MACANAN FINANCIAL CORPORATION,
                                    A California corporation,
                                    Its general partner

Dated:     3/29/02           By: /s/ DONALD MACMILLAN
      ----------------------    ---------------------------------
                                Donald MacMillan
                                President

Dated:     3/29/02           By: /s/ W. JOHN BUCHANAN
      ----------------------    ---------------------------------
                                W. John Buchanan
                                Secretary

                             TENANT:
                             BAM! Entertainment, Inc.
                             A Delaware corporation

Dated:  29 March 2002        By:  /s/  S M Ambler
       --------------------      --------------------------------

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                                   Exhibit B-1

                                    [DIAGRAM]

                                      A-1
<PAGE>

                                    [DIAGRAM]

                                      A-2
<PAGE>

                                   Exhibit B-2

                                    [DIAGRAM]

                                      A-3<PAGE>
                                                                    EXHIBIT 10.3

                         [CONFIDENTIAL PORTIONS OMITTED]

                              DATED 14 JANUARY 2002

                         AARDMAN ANIMATIONS LIMITED(1)

                                     - AND -

                          BAM ENTERTAINMENT LIMITED(2)

                                     - AND -

                           BAM ENTERTAINMENT, INC.(3)

                         ------------------------------

                               LICENCE AND OPTION
                                    AGREEMENT

                         ------------------------------

                                  WEDLAKE BELL

                                16 BEDFORD STREET
                                  COVENT GARDEN
                                 LONDON WC2E 9HF

                            DIRECT TEL: 020 7395 3122
                            DIRECT FAX: 020 7240 7316

                   DIRECT E-MAIL: JCORNTHWAITE@WEDLAKEBELL.COM
                           REF: JXC/62787/WB1-58187-1

<PAGE>

<TABLE>
<CAPTION>
                         INDEX OF CLAUSES AND SCHEDULES
<S>     <C>                                                                             <C>
1.      DEFINITIONS AND INTERPRETATION................................................. 1
2.      LICENCE........................................................................ 7
3.      OPTION: SCOPE.................................................................. 7
4.      OPTION: PROCEDURE.............................................................. 8
5.      CONSIDERATION.................................................................. 9
6.      ROYALTIES...................................................................... 11
7.      ROYALTY ACCOUNTING............................................................. 12
8.      ATTRIBUTION.................................................................... 14
9.      EXPLOITATION................................................................... 14
10.     LICENSOR'S APPROVAL RIGHTS..................................................... 15
11.     LICENSOR'S WARRANTIES.......................................................... 15
12.     LICENSEE'S WARRANTIES.......................................................... 17
13.     INDEMNITIES.................................................................... 18
14.     INTELLECTUAL PROPERTY.......................................................... 18
15.     CONFIDENTIAL INFORMATION....................................................... 20
16.     KEY EXECUTIVES................................................................. 21
17.     CONSULTATION AND COOPERATION................................................... 21
18.     TERM AND TERMINATION........................................................... 22
19.     CONSEQUENCES OF TERMINATION.................................................... 22
20.     FORCE MAJEURE.................................................................. 23
21.     ASSIGNMENT..................................................................... 24
22.     LIABILITY...................................................................... 24
23.     NOTICES........................................................................ 24
24.     GENERAL........................................................................ 25
25.     LAW AND JURISDICTION........................................................... 26
SCHEDULE I:  THE WALLACE & GROMIT PROPERTIES IN EXISTENCE AS AT THE COMMENCEMENT DATE.. 27
SCHEDULE II:  PROPERTIES REFERRED TO IN CLAUSE 3.1.1(A)................................ 28
SCHEDULE III:  PROPERTIES REFERRED TO IN CLAUSE 3.1.2(A)............................... 29
SCHEDULE IV:  THE PRIOR LICENCES....................................................... 31
PART A:  WALLACE & GROMIT PRIOR LICENCES............................................... 31
PART B:  NON-WALLACE & GROMIT PRIOR LICENCES........................................... 31
SCHEDULE V:  STOCK VALUATION........................................................... 32
SCHEDULE VI:  ROYALTY RATES............................................................ 33
SCHEDULE VII:  LICENSOR TRADE MARKS.................................................... 34
</TABLE>

<PAGE>

THIS AGREEMENT is made this 14th day of January 2002

BETWEEN:

1.      AARDMAN ANIMATIONS LIMITED a limited company incorporated under the laws
        of England and Wales under company number 2050843 the address of whose
        registered office is Gas Ferry Road, Bristol BS1 6UN, United Kingdom
        ("Licensor") of the first part; and

2.      BAM ENTERTAINMENT LIMITED a limited company incorporated under the laws
        of England and Wales under company number 04112030 the address of whose
        registered office is 17 Burlington Street, Bath, Avon & Somerset BA1 2SB
        United Kingdom ("Licensee") of the second part; and

3.      BAM ENTERTAINMENT, INC., a corporation incorporated under the laws of
        the State of Delaware whose principal office is located at 333 West
        Santa Clara Street, Suite 930, San Jose, California CA 95113, United
        States of America ("Grantor") of the third part.

WHEREAS

(A)     Licensor owns intellectual property rights in creative properties,
        characters and story boards.

(B)     Licensee and Grantor publish entertainment software products.

(C)     Licensee is a wholly-owned subsidiary of Grantor.

(D)     On or about 9 November 2001 Licensor and Licensee signed a written
        agreement whereby Licensor granted to Licensee a licence in some, and an
        option over other, Interactive Entertainment Rights ("the Initial
        Agreement").

(E)     The Initial Agreement recited that Licensor and Licensee intended that
        it be superseded by a more detailed agreement between Licensor, Licensee
        and Grantor.

(F)     The parties have agreed that the Initial Agreement be superseded by this
        Agreement.

OPERATIVE PROVISIONS:-

1.      DEFINITIONS AND INTERPRETATION

1.1     The following terms shall have the following respective meanings when
        used in the Agreement unless the context otherwise requires:-

        "AGREEMENT": this Agreement including its recitals and schedules;

        "ADVANCE": as defined in Clause 5.1;.

        "AFFILIATE": any entity which (i) a party Controls or (ii) Controls a
        party or (iii) is under common Control with a party;

                                      -1-
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        "BETA": a version of a Program which is "99% final" in the sole opinion
        of Licensee, with: all base languages implemented; all game elements
        implemented; all Intellectual Property and legal messages in place; and
        no material Errors;

        "CLAIM": as defined in Clause 13;

        "CLEARANCE SALE": the sale of any Product by Licensee or any of its
        Affiliates at a wholesale price less than its Cost of Manufacture in any
        part of the Territory with the intention of discontinuing its
        Exploitation in that part;

        "COMMENCEMENT DATE": 9 November 2001;

        "COMMERCIAL CHARACTERS": as defined in Clause 3.2;

        "COMMERCIAL RELEASE": the time when a Product is first made available by
        a retailer or otherwise for purchase by end-users in any country or
        jurisdiction within the Territory;

        "CONTRIBUTOR": a programmer, director, producer, actor, performer,
        musician, singer, designer, technician or any other person employed or
        contracted on whatever basis to provide materials, services or
        performances in connection with the creation or development of any
        Licensed Property;

        "CONTROL": as defined in section 840 of the Income and Corporation Taxes
        Act 1988;

        "COST OF MANUFACTURE": all reasonable costs paid by Licensee and/or any
        of its Affiliates to any third party (which shall exclude payment from
        one of its Affiliates to another) for designing, manufacturing and/or
        delivering any Product to its point of Exploitation, including the cost
        of duplication, printing, raw materials, manufacture, handling, packing,
        shipping, transportation, insurance, import duties, labour costs, and
        any applicable taxes, duties, levies and assessments whether local,
        national, supranational or otherwise howsoever;

        "CURRENCY": United States dollars;

        "DREAMWORKS": DreamWorks LLC a limited liability corporation
        incorporated under the laws of the State of Delaware whose principal
        place of business is situated at 1000 Flower Street, Glendale,
        California, CA 91201, United States of America and/or any of its
        Affiliates;

        "EXPLOITATION": production, reproduction, performance, promotion,
        publicity, development, publication, manufacture, marketing,
        advertisement, distribution, licensing, sub-licensing, importation,
        exportation, translation, Merchandising, localisation, display, rental,
        lease, lending, sale and any other form of commercial exploitation, and
        the authorisation of any third party to do any of the foregoing;

        "EXPLOIT" shall be interpreted accordingly; and "Merchandising" shall be
        interpreted to the effect that Licensee shall be entitled to merchandise
        Products save that nothing herein shall grant or be deemed to grant to
        Licensee any other merchandising rights in relation to any Property;

                                      -2-
<PAGE>

        "FEATURE FILM": a Property which is a single film (as defined in Part I
        of the Copyright Designs and Patents Act 1988) whose duration is no less
        than 70 (seventy) minutes;

        "FORCE MAJEURE": as defined in Clause 20.1;

        "FORMAT": any of the following, whether operating in stand-alone or
        networked configuration, regardless of storage media, whether hand-held
        or otherwise, and whether now in existence or hereafter invented:
        personal computers; domestic electronic games consoles; personal mobile
        gaming platforms (including mobile telephones); personal digital
        assistants; set-top boxes; and the internet;

        "FRONTIER": Frontier Developments Limited a limited company incorporated
        under the laws of England and Wales under company number 2892559 the
        address of whose registered office is Saxon Farm, Long Meadow, Lode,
        Cambridge, CB5 9HA, United Kingdom;

        "INFORMATION": as defined in Clause 15.1.1;

        "INITIAL AGREEMENT": as defined in Recital (D);

        "INITIAL TERM": the period from the Commencement Date to the 5th (fifth)
        anniversary of the Signature Date;

        "INSOLVENCY": any of the following in relation to any party: the
        appointment of or the application to a court for the appointment of a
        liquidator, administrator, manager, administrative receiver or receiver;
        any proposal by the party for or the entering into of a scheme of
        arrangement or composition with or for the benefit of creditors; any
        reorganisation, moratorium or other administration involving its
        creditors; a resolution or proposed resolution to wind it up; where the
        value of its assets is less than the amounts of its liabilities
        including any contingent or prospective liabilities; becoming unable to
        pay its debts as and when they fall due; where execution or other
        process issued on a judgment, decree or order of any court in favour of
        any creditor of the party in respect of a liability of the same is
        returned unsatisfied in whole or in part; ceasing to carry on business;
        or undergoing any procedure comparable or analogous to any of the
        foregoing under the laws of any competent jurisdiction; and "Insolvent"
        shall be construed accordingly;

        "INTELLECTUAL PROPERTY": all intellectual property rights throughout the
        Territory whether currently in existence or otherwise and whether vested
        or contingent, including copyright, rights in the nature of copyright,
        moral rights, database right, trade marks, designs, design rights,
        patents, utility models, logos, trade secrets, know-how, confidential
        processes and information, inventions, discoveries and improvements,
        trading and business names, moral rights, get-up, rights in internet
        domain names and any rights in the nature of intellectual property
        rights (in each case whether registered or not and including
        applications for registration thereof) and all rights or forms of
        protection of a similar or analogous nature or having equivalent or
        similar effect or any other matters which may subsist in any part of the
        Territory;

                                      -3-
<PAGE>

        "INTERACTIVE ENTERTAINMENT RIGHTS": the rights to Exploit Products in
        any Format, including the rights to use on or in connection with such
        Products (a) any Licensor Trade Marks and other Intellectual Property
        owned or controlled by Licensor properly associated with the respective
        Properties from which any Product derives and (b) (subject only to
        Licensee's obligations under Clause 9.6) the names, likenesses,
        biographies, photographs and recorded voices of all persons or
        characters appearing in or properly associated with the respective
        Properties from which any product derives;

        "IP ACTION": as defined in Clause 14.2.2;

        "IP CLAIM": as defined in Clause 14.1;

        "KEY EXECUTIVES": Peter Lord of 9 St Helena Road, Westbury Park, Bristol
        BS6 7NR and Nick Park of Sundon Cottage, Percival Road, Clifton, Bristol
        BS8 3LN;

        "LICENCE": as defined in Clause 2.1;

        "LICENSED PROPERTY": any Property that is the subject of the Licence
        and/or any Option Licence. The Wallace and Gromit Properties and any
        derivatives from, and sequels to, them shall together be deemed to be a
        single Licensed Property for the purposes of this Agreement. Further,
        any derivatives from, and sequels to, a Property shall together with the
        original Property be deemed to be a single Licensed Property;

        "LICENSED RIGHT": any Interactive Entertainment Right or other right
        licensed by Licensor to Licensee hereunder;

        "LICENSEE": as defined above;

        "LICENSOR": as defined above;

        "LICENSOR'S AGENT": Marjacq Micro Limited, a limited company
        incorporated under the laws of England and Wales under company number
        34508500 the address of whose registered office is 25 Montpelier Rise,
        Wembley, Middlesex HA9 8RG;

        "LICENSOR TRADE MARKS": those trade marks, logos, names and other signs
        (registered or unregistered) belonging to Licensor, of which those in
        existence as at the Commencement Date are specified in Schedule VII;

        "MANUFACTURER": (in respect of the video game platform on which any
        Product is to be playable) the manufacturer of the hardware for that
        platform;

        "NET RECEIPTS": 100% of the actual monies credited to or received in the
        Territory by Licensee or any of its Affiliates directly and identifiably
        from any Exploitation of any Interactive Entertainment Right less (a)
        any credits, returns, mark-downs, rebates and trade and other discounts
        actually given or allowed to any re-seller or distributor and (b) any
        royalties paid or payable to any Manufacturer in relation to the
        Exploitation of any Product;

                                      -4-
<PAGE>

        "NON-WALLACE AND GROMIT PRIOR LICENCES": those licences of Properties
        other than Wallace and Gromit Properties granted by Licensor to third
        parties prior to the Commencement Date as further particularised in Part
        B of Schedule IV.

        "NOTICE OF AVAILABILITY": as defined in Clause 4.2;

        "OPTION": as defined in Clause 3.1;

        "OPTION LICENCE": as defined in Clause 4.4;

        "OPTION LICENCE TERM": as defined in Clause 4.4;

        "OPTION NOTICE": as defined in Clause 4.3;

        "PRIOR LICENCES ": Wallace and Gromit Prior Licences and Non-Wallace and
        Gromit Prior Licences;

        "PRODUCT": an interactive computer software game for consumer use based
        on any Property and/or featuring any of a Property's characters or
        situations;

        "PROGRAM": (in respect of any Product) the computer program upon which
        the Product is based, including all object codes, security devices,
        listings and graphics;

        "PROMPTLY": as soon as practicable and in any event within 5 (five)
        Working Days after the relevant event provided that where the approval
        of Licensor is required and has been requested, such period shall be
        extended by such period of time as Licensor takes in order to approve or
        reject the matter in respect of which its approval has been sought;

        "PROPERTY": any creative work material invention character or storyboard
        created, designed or developed by or on behalf of Licensor prior to or
        during the Term, including literary works, dramatic works, musical
        works, artistic works, sound recordings, films, broadcasts, cable
        programmes (as the foregoing are defined in Chapter I of the Copyright,
        Designs and Patents Act 1988), audiovisual works, televisual works and
        internet works;

        "QUARTER": (a) each 3 (three)-month period in the Term ending on a
        Quarter Day, and (b) the period from the Operative Date to the next
        Quarter Day, and (c) the period from the last Quarter Day of the Term to
        the Termination Date;

        "QUARTER DAYS": 31 March, 30 June, 30 September and 31 December;

        "ROYALTY STATEMENT": as defined in Clause 7.1;

        "ROYALTIES": as defined in Clause 6.1;

        "SHORT FILM": a Property which constitutes (a) a film (as defined in
        Chapter I of the Copyright Designs and Patents Act 1988) of less than 70
        (seventy) minutes duration or (b) a series of films (as defined as
        aforesaid) whose individual episodes are less than 70 (seventy) minutes
        in duration in aggregate;

                                      -5-
<PAGE>

        "SIGNATURE DATE": the date when the Agreement is signed by the parties
        or (if they sign it on different dates) the latest of such dates;

        "TERM": the period from the Commencement Date to the Termination Date
        inclusive;

        "TERRITORY": the world;

        "TERMINATION DATE": the date of expiry or termination (howsoever caused)
        of the Agreement;

        "WALLACE AND GROMIT PRIOR LICENCES": those licences of Wallace and
        Gromit Properties granted by Licensor to third parties prior to the
        Commencement Date as further particularised in Part A of Schedule IV;

        "WALLACE AND GROMIT PROPERTIES": all Properties featuring or
        incorporating the characters "Wallace" and/or "Gromit", of which those
        originated by or on behalf of Licensor in existence as at the
        Commencement Date are specified in Schedule I;

        "WARRANT": warrant granting the right to purchase 1 (one) share of the
        common stock of Grantor at the valuation specified in Schedule V;

        "WORKING DAY": any day other than: a Saturday or a Sunday or any public
        holiday in England and Wales.

1.2     In this Agreement (except where the context otherwise requires):-

1.2.1   any reference to a Recital, Clause or Schedule is to the relevant
        recital, clause or schedule of or to the Agreement, and any reference to
        a sub-clause or paragraph is to the relevant sub-clause or paragraph of
        the Clause or Schedule in which it appears;

1.2.2   the Schedules are integral parts of the Agreement. In the event of any
        conflict between a term of a Schedule and a term elsewhere in the
        Agreement the latter shall prevail;

1.2.3   the headings of indices clauses and Schedules are included for
        convenience only and shall not affect the interpretation of the
        Agreement;

1.2.4   references to the "parties" or a "party" are references respectively to
        (a) Licensor of the one part and (b) Licensee and Grantor of the other
        part, and any obligation hereunder of the party of the second part shall
        be deemed to have been performed if performed by Licensee and/or
        Grantor;

1.2.5   the expressions "Licensor", "Licensee" and "Grantor" shall include
        (where appropriate) their respective successors in title and permitted
        assigns;

1.2.6   Licensor shall not unreasonably withhold or delay the giving of any
        consent or approval which Licensee and/or Grantor is required hereunder
        to seek from it;

                                      -6-
<PAGE>

1.2.7   unless the context otherwise requires: words denoting the singular shall
        include the plural and vice versa; references to a gender shall include
        all other gender; references to persons shall include bodies corporate,
        unincorporated associations, firms and partnerships in each case whether
        or not having a separate legal personality; and references to the word
        "include" or "including" are to be construed without limitation; and

1.2.8   any reference to a statute, statutory provision or subordinate
        legislation ("legislation") shall (except where the context otherwise
        requires) be construed as referring to such legislation as amended and
        in force from time to time and to any legislation which enacts or
        consolidates (with or without modification) any such legislation.

2.      LICENCE

2.1     Subject only to Clause 2.2 Licensor hereby grants to Licensee a sole and
        exclusive licence throughout the Territory during the Initial Term of
        the Interactive Entertainment Rights in the Wallace and Gromit
        Properties on the terms hereof ("the Licence").

2.2     The Licence shall exclude any Interactive Entertainment Right that is
        the subject of any Wallace and Gromit Prior Licence, but only for the
        duration of the latter.

3.      OPTION: SCOPE

3.1     Licensor hereby grants to Licensee a sole and exclusive option ("the
        Option") (the procedure for whose operation is specified in Clause 4)
        during the Initial Term throughout the Territory in respect of the
        following Interactive Entertainment Rights:

3.1.1   Interactive Entertainment Rights in any Property constituting a Feature
        Film except (a) those Properties subject to Licensor's written
        agreements dated 24 May 1999 and 30 May 1999 with DreamWorks as further
        particularized in Schedule II as at the Commencement Date (save that for
        the avoidance of doubt any such Properties constituting Wallace and
        Gromit Properties shall, notwithstanding the foregoing, be included in
        the Licence), and (b) those Properties featuring substantially the same
        characters as any Short Film included in the Option during the Initial
        Term that Licensee has declined to option;

3.1.2   (subject to Clause 3.2) Interactive Entertainment Rights (a) in any
        Property in which Licensor retains any such Rights (and to the extent
        that Licensor retains them) at the Commencement Date (as further
        particularized in Schedule III as at the Commencement Date), or (b) in
        any Short Film made by or on behalf of Licensor during the Initial Term;
        and

3.1.3   (save only to the extent (if at all) expressly excluded therefrom by the
        Agreement) the Interactive Entertainment Rights in all other Properties
        in existence as at the Commencement Date or coming into existence during
        the Initial Term.

                                      -7-
<PAGE>

3.2     The Option shall not extend to work commissioned from and/or created by
        Licensor specifically for any advertising campaign on behalf of any of
        its commercial clients ("Commercial Characters"). However to the extent
        that Licensor owns or controls any Interactive Entertainment Right in
        any Commercial Character and Licensee wishes to Exploit any such
        Interactive Entertainment Right with the agreement of Licensor's
        commercial clients or otherwise, Licensor shall Promptly introduce
        Licensee to the relevant commercial client and make reasonable
        endeavours to procure that such Right is licensed to Licensee before
        offering any such Right to another interactive game publisher (in
        connection with which Licensor shall follow the procedure, mutatis
        mutandis, stipulated in sub-clauses (a), (b) and (c) of Clause 5.4).

3.3     The Option shall not extend to any Interactive Entertainment Right which
        is the subject of any non-Wallace and Gromit Prior Licence, but only for
        the duration of the latter. Notwithstanding the foregoing the existence
        of a Non-Wallace and Gromit Prior Licence shall not prevent Licensee
        from exercising the Option in respect of other Interactive Entertainment
        Rights in the Property that is the subject of the said Prior Licence.

4.      OPTION: PROCEDURE

4.1     During the Initial Term Licensor shall not offer any Interactive
        Entertainment Rights that are included within the scope of the Option to
        any third party unless Licensee has declined to exercise the Option over
        them in accordance with this Clause 4.

4.2     During the Initial Term Licensor shall Promptly notify to Licensee
        details of all its TV, film and internet projects and of all other
        Properties to which the Option applies, and serve on Licensee prior to
        the commencement of principal photography thereof a copy of the script
        or storyboard or character designs, film or other creative material for
        any said Property, and copies of all other relevant material in
        Licensor's possession (including chain-of-title documentation and
        proposed schedule for release) together with a notice stating that the
        Property is available for the exercise of the Option ("Notice of
        Availability"). Notices of Availability for Properties existing or in
        production at the Commencement Date shall be served on Licensee on or
        before the Signature Date and Licensor shall use best endeavours to
        Promptly serve on Licensee further details of such Properties upon
        request. For the avoidance of doubt this Clause 4.2 shall not apply in
        respect of any Property developed by or on behalf of Licensor as
        referred to in Clause 3.1.1(a) with a view to offering it to DreamWorks
        as a Feature Film until either a) DreamWorks has rejected such a
        Property or b) Licensor has decided not to offer the Property to
        DreamWorks.

4.3     Licensee may exercise its Option on each Property at any time up to 90
        (ninety) days after the date of service on it of the applicable Notice
        of Availability by serving notice on Licensor ("Option Notice").
        Licensee may expressly decline the Option on any Property by serving
        notice on Licensor. In the event that Licensee does not serve an Option
        Notice on Licensor within the said 90 (ninety)-day period the Option on
        that Property shall be deemed declined.

                                      -8-
<PAGE>

4.4     If Licensee exercises the Option on any Property pursuant to Clause 4.3,
        it shall automatically be granted by Licensor with effect from the date
        of the applicable Option Notice until the 5th (fifth) anniversary
        thereof ("Option Licence Term") a sole and exclusive licence throughout
        the Territory of the Interactive Entertainment Rights therein (subject
        only to such derogations, if any, as are applicable by virtue of Clause
        3 provided that such derogations were specified in the Notice of
        Availability) upon the terms hereof ("Option Licence").

4.5     Licensor covenants that at the request of Licensee it shall Promptly and
        unconditionally do or procure that there shall be done or such acts and
        execute or procure that there shall be executed all such documents as
        may be reasonably necessary or desirable in Licensee's opinion to secure
        the confirmation or perfection of the grant to Licensee of any Option
        Licence.

4.6     If the Option has been declined (or deemed declined pursuant to Clause
        4.3 by Licensee in respect of any Property Licensor shall be entitled to
        offer the Interactive Entertainment Rights in that Property to any third
        party.

5.      CONSIDERATION

5.1     In consideration of the grant of the Licence Licensee shall (subject
        always to Licensor's material compliance with its obligations and
        warranties hereunder) pay to Licensor in the following instalments the
        sum of US$ [*] ("the Advance") in advance of and recoupable from
        Royalties, which shall be payable as follows and which shall (without
        prejudice to any claim by Licensee against Licensor for damages in the
        event of breach of the Agreement by Licensor) be non-returnable:

5.1.1   US$ [*] on the Commencement Date (receipt of which the Licensor
        acknowledges);

5.1.2   US$ [*] on the Signature Date;

5.1.3   US$ [*] within 60 (sixty) days after the Signature Date;

5.1.4   US$ [*] on the date of notification to Licensee of Licensor's concept
        approval (as such term is understood in the interactive entertainment
        industry) of the Product based on any Wallace and Gromit Property
        produced by or on behalf of Licensee for the Nintendo GameBoy Advance
        format;

5.1.5   US$ [*] on the date of notification to Licensee of Manufacturer's or
        Licensor's approval of the first Product based on any Wallace and Gromit
        Property produced by or on behalf of Licensee for any platform other
        than Nintendo GameBoy Advance;

5.1.6   US$ [*] on the shipment by Licensee or any of its Affiliates or any
        sub-licensee of Licensee of the first 128-bit Product (or more advanced
        console Product, if earlier) produced by or on behalf of Licensee based
        upon any Wallace and Gromit Property.

------------------

[*] Confidential portion omitted and filed separately with the Commission.

                                      -9-
<PAGE>

5.2     In consideration of the grant of the Licence and of any Option Licence
        Grantor shall grant to Licensor up to [*] Warrants as set out below:

5.2.1   [*] Warrants on the Signature Date;

5.2.2   [*] Warrants within 60 (sixty) days after the Signature Date;

5.2.3   [*] Warrants within 7 (seven) Working Days after the earlier of the
        following dates: (a) the date of service on Grantor by Licensor of a
        copy of the greenlight notice (as such term is understood in the film
        industry) by DreamWorks for any Feature Film based on or featuring the
        characters of Wallace and Gromit or (b) the date of service on Grantor
        of notification that principal photography of the said Feature Film has
        commenced;

5.2.4   [*] Warrants on the service by Licensee of an Option Notice for any
        Short Film or other Property not being a Wallace and Gromit Property;
        and

5.2.5   [*] Warrants (or the balance of [*], if fewer) on the service on
        Licensor by Licensee of an Option Notice for a Feature Film.

5.3     The valuation of each Warrant shall be calculated pursuant to Schedule
        V.

5.4     In the event that Licensee wishes to exercise the Option in respect of
        one, two, three or four Properties during the Term no advance or option
        fee or other consideration shall be payable by Licensee to Licensor in
        respect thereof over and above what is specified in Clause 5.2. In the
        event that Licensee wishes to exercise the Option in respect of any
        Property in excess of four Properties during the Term, the parties shall
        attempt in good faith to agree an option fee or advance for such
        Property, failing which Licensor may offer to license the Interactive
        Entertainment Rights in such Property to any third party save that
        Licensor undertakes (a) Promptly to notify to Licensee full details of
        any bid for any such licence received by Licensor from any third party
        and (b) to provide to Licensee no less than 15 (fifteen) days in which
        to match any such bid and (c) (if Licensee matches the said bid within
        the said period) forthwith to grant to it an Option Licence in respect
        of the said Property.

5.5     Except as may be agreed between the parties in writing as provided in
        Clause 5.4 or otherwise no advances shall be payable or recoupable in
        respect of Properties optioned by Licensee pursuant to Clauses 5.2.4 or
        5.2.5 other than the grant of Warrants as specified therein. The value
        of Warrants shall not be recoupable from Royalties.

5.6     Licensor acknowledges and agrees that the consideration payable to it
        hereunder takes into account and includes a payment in respect of rental
        and lending rights and that such payment constitutes equitable and
        adequate consideration therefor and constitutes and satisfies in full
        any and all rights which Licensor has, or may at any time during the
        Term have, to receive equitable, adequate or other remuneration for the
        exercise by or behalf of Licensee of the said rights in respect of any
        Licensed Property.

------------------

[*] Confidential portion omitted and filed separately with the Commission.

                                      -10-
<PAGE>

6.      ROYALTIES

6.1     Subject always to Licensor's material compliance with its obligations
        and warranties hereunder Licensee shall pay to Licensor in the Currency
        royalties based on Net Receipts less Cost of Manufacture in respect of
        all Products Exploited by Licensee or any of its Affiliates in the
        Territory during the Term at the rates specified in Schedule VI
        ("Royalties").

6.2     Notwithstanding anything herein to the contrary Licensee shall be
        unconditionally entitled to recoup all instalments of the Advance paid
        by it to Licensor pursuant to Clause 5.1 against the Royalties (if any)
        payable by Licensee to Licensor pursuant to Clause 6.1 in respect of
        Exploitation of Wallace and Gromit Properties. For the avoidance of
        doubt, advances paid in respect of a specific Property shall not be
        recoupable from Royalties due in relation to a different Property.

6.3     Licensee shall be entitled to recoup all Advances paid to Licensor
        hereunder against the Royalties (if any) payable to Licensor hereunder
        as specified in Clause 6.1. For the avoidance of doubt Licensee shall
        not be entitled to recoup any Advance more than once.

6.4     Notwithstanding anything herein to the contrary, Licensee shall not be
        obliged to pay any Royalties to Licensor in respect of Products (a) used
        free of charge for bona fide promotional purposes, or (b) furnished free
        to the trade, press or for public relations use, or (c) sold as a
        Clearance Sale Devices, or (d) lost, stolen, damaged or destroyed.

6.5     Licensee shall pay to Licensor in accordance with Clause 7(a) [*] of any
        advance of or on account of royalties or any good or valuable
        consideration credited to or received by Licensee or any of its
        Affiliates for the grant of a sublicence in whole or in part of any
        Interactive Entertainment Right, and (b) sublicence royalties calculated
        in accordance with Clause 6.6.

6.6     Sublicence royalties shall be calculated on the basis of sublicensees'
        reports to or receipts by Licensee or its Affiliates, Exploitation
        reported by sublicensees being treated as Net Receipts for this purpose
        (whether or not actually received by Licensee). In the event that the
        value or quantity of units Exploited cannot be determined from such
        sublicensees' reports, it shall be assumed for the purpose of royalty
        calculations that the Net Receipts attributable to the Exploitation of a
        Product are equal to the mean of that (excluding returns) reported by
        Licensee for sales of Product of that format by Licensee or any of its
        Affiliates in the most recent prior period in which such Exploitation
        has taken place and Licensee's royalty statement shall (where
        applicable) state what assumption has been made.

6.7     Licensee may recoup the amount of any portion of a sublicence advance
        paid to Licensor pursuant to Clause 6.5 from sublicence royalties due to
        Licensor under Clause 6.5 pursuant to that sublicence and/or in respect
        of the Property or Product to which the sub-licence relates but not
        otherwise.

6.8     Notwithstanding anything herein to the contrary:-

------------------

[*] Confidential portion omitted and filed separately with the Commission.

                                      -11-
<PAGE>

6.8.1   no consideration for its grant of the rights granted hereunder to
        Licensee and Grantor shall be payable to Licensor hereunder other than
        the Advances and (to the extent applicable) the Warrants and the
        Royalties , which Licensor acknowledges shall constitute a full and
        final discharge of Licensee's obligations to it hereunder;

6.8.2   Except by way of cross-collateralisation of Royalties and Advances
        between different Licensed Properties Licensee shall be entitled to pay
        any Advance, Royalty or other sum payable to Licensor hereunder subject
        to any set-off, deduction or counter-claim by Licensee and/or Grantor
        against Licensor under the Agreement; and

6.8.3   in the event of any material breach of the Agreement or Insolvency by
        Licensor Licensee and Grantor shall be entitled without liability and
        without prejudice to their other remedies hereunder to suspend the
        payment to Licensor of any Advance and/or Royalty and the grant to
        Licensor of any Warrant that would otherwise have been payable or
        grantable (as the case may be) to Licensor provided that any such
        suspension shall be effective only for so long as Licensor's breach has
        not been remedied.

6.9     Licensee shall have the right to establish reserves (not to exceed [*]
        of Net Receipts) for returns and defective Products. Unused reserves
        shall be liquidated within 12 (twelve) months of being established if
        not applied to returns and defective Products.

6.10    To the extent that Licensee receives Net Receipts in a currency other
        than the Currency, such Receipts shall for the purpose of calculating
        Royalties be converted to the Currency at the rate prevailing for the
        purchase of the Currency with such other currency as designated by
        Licensee's bankers on the date when the Receipt is first received by the
        Licensee.

7.      ROYALTY ACCOUNTING

7.1     Licensee shall within 30 (thirty) days after each Quarter Day during the
        Term serve on Licensor and Licensor's Agent a full and complete
        statement containing the following information in respect of the
        Exploitation of the Properties and the Products by Licensee and its
        Affiliates during the preceding Quarter ("Royalty Statement"): all (if
        any) moneys owing to Licensor, the numbers of Products manufactured and
        sold, details of all deductions including reserves, returns and damaged
        copies and Costs of Manufacture, and details of sublicenses (including
        copies of sublicenseees statements to Licensee in the period) under the
        Agreement.

7.2     Royalties shall (subject to the terms and conditions hereof) be paid by
        Licensee to Licensor simultaneously with the service of the relevant
        Royalty Statement, provided that for each Licensed Property the advance
        (if any) and sub-licence advances (if any) shall be set-off against and
        deducted from Royalties accruing in relation to that Licensed Property.

7.3     Licensee shall during the Term keep full and proper books of account
        relating to the Exploitation of its rights under the Agreement and
        Licensor or its

------------------

[*] Confidential portion omitted and filed separately with the Commission.

                                      -12-
<PAGE>

        representative shall during the Term and for a period of 3 (three) years
        afterwards have the right during normal business hours and on not less
        than 15 (fifteen) days' notice to examine and take copies of such books
        of account no more frequently than once per calendar year at the
        premises where Licensee normally keeps them and subject always to
        Licensor's confidentiality obligations under Clause 15. In the event
        that such audit or inspection reveals any deficiency in moneys paid to
        Licensor under this Agreement then Licensee shall pay the same to
        Licensor together with interest from the date first due calculated with
        monthly rests at a rate of 2% (two per centum) above the prime or base
        rate from time to time charged to Licensor by its bankers and if such
        underpayment is in excess of [*] of sums due to Licensor Licensee shall
        pay all reasonable costs incurred by Licensor directly as a result of
        such inspection. Licensee shall reimburse to Licensor any such
        deficiency and pay to Licensor any such costs within 30 (thirty) days
        after the date of service on it by Licensor of documentary evidence
        thereof. Save as aforesaid any exercise by Licensor of its rights under
        this Clause 7.3 shall be at its own cost and expense.

7.4     If Licensor has any objection to a Royalty Statement, it shall notify
        full details thereof to Licensee within 3 (three) years after the date
        of service on Licensor of the said Statement. Each Royalty Statement
        will become conclusively and irrevocably binding on Licensor (save where
        facts are subsequently discovered by audit or otherwise that are
        inconsistent with it) at the end of the said period and (save as
        aforesaid) Licensor will have no right to institute any action against
        Licensee in connection with any Royalty accounting relating to such
        Statement, or to institute an action against Licensee for Royalties
        relating to such Statement in connection with any Exploitation of
        Products, unless the action is commenced within the said time period.

7.5     All Advances, Royalties and other sums payable to Licensor hereunder are
        exclusive of any value added, sales or other tax which may be applicable
        in any part of the Territory.

7.6     If Licensee is required by law to withhold any tax or any other sum from
        any Advances, Royalties or any other sums payable to Licensor hereunder
        the Licensee shall use its reasonable endeavours to serve on Licensor
        (a) evidence as to Licensee's obligations to make such withholding, and
        (if it is the case) that the said withholding has been made, and (b)
        such documentation and information as Licensor may reasonably require
        for the purpose of the Licensor obtaining any available tax credit in
        the United Kingdom.

7.7     Payments due to Licensor hereunder shall be paid via

7.7.1   US dollar cheque drawn on a United States bank made out to `Aardman
        Animations Limited' and sent to the following address:

        Aardman Animations Ltd
        PO Box 8500-50415
        Philadelphia
        PA 19178-50415
        USA

------------------

[*] Confidential portion omitted and filed separately with the Commission.

                                      -13-
<PAGE>

7.8     If exchange control or other restrictions prevent or threaten to prevent
        the remittance to Licensor of any money payable under the Agreement,
        Licensee shall (save to the extent that it is prohibited from so doing
        by any applicable law, regulation or standard) Promptly advise the
        Licensor in writing and follow Licensor's instructions in respect of the
        money to be remitted including if required depositing the same with any
        bank or other person designated by the Licensor at such location as may
        be designated by Licensor.

8.      ATTRIBUTION

8.1     All Products shall be marketed under (inter alia) such of the Licensor
        Trade Marks as (a) Licensor shall have notified to Licensee with
        sufficient advance notice and (b) are practicable to be included in
        connection with the said marketing. The packaging of the Products shall
        show that they are published by Licensee under licence.

8.2     The covers, sleeves and/or jackets of all Products, and all publicity,
        promotional and advertising material relating thereto, shall bear such
        credits, copyright and trade mark notices as (a) Licensor shall have
        notified to Licensee with sufficient advance notice and (b) are
        practicable to be included thereon.

9.      EXPLOITATION

9.1     Licensee shall have no obligation hereunder to Exploit any Interactive
        Entertainment Right licensed to it hereunder and, without prejudice to
        the generality of the foregoing, disclaims any warranty to Licensor that
        any level of sales of the Products will be achieved by it.

9.2     Notwithstanding anything to the contrary herein and save for the Prior
        Licences and Properties excluded under Clause 3.1.1 and Clause 3.2
        Licensor shall not in the Territory Exploit any Product or exercise any
        rights granted to Licensee and/or Grantor hereunder or authorise any
        third party to do any of the foregoing.

9.3     Except as otherwise expressly provided herein Licensee shall be solely
        and exclusively entitled at its sole discretion to determine the manner
        and method in which the Products are Exploited.

9.4     Licensor shall comply with any reasonable request from Licensee to
        support the promotion, publicity, marketing and advertising of the
        Products by or on behalf of Licensee. Licensee shall reimburse
        Licensor's reasonable and documented costs and expenses of so doing
        within 30 (thirty) days of having been notified of them.

9.5     The parties acknowledge that publishing is a speculative venture, and
        Licensee makes no warranty to Licensor that any, or any particular,
        level of sales of the Products shall be achieved.

9.6     Licensee shall be responsible for the cost of obtaining clearances of
        any relevant rights in respect of the names, likenesses, biographies,
        photographs and recorded voices of performers and other real persons
        appearing in any of the Properties for

                                      -14-
<PAGE>

        use in the Products. Licensor shall give all reasonable assistance to
        Licensee in obtaining such clearances.

10.     LICENSOR'S APPROVAL RIGHTS

10.1    Licensor shall have prior approval at its sole discretion of character
        models, packaging and sleeves, themes, and gameplay and final approval
        of Beta. Licensor shall have approval (not to be unreasonably withheld
        or delayed) of any developer including the Licensee or any of its
        Affiliates used by Licensee for a Property (in connection with which
        Licensor irrevocably and unconditionally approves Frontier as the
        Developer of the Programme entitled Wallace & Gromit 1: Zoo Game).
        Licensor shall have approval of sub-licences (not to be unreasonably
        withheld or delayed), and shall have approval (not to be unreasonably
        withheld or delayed)] of marketing plans and concepts and of all
        marketing and of all marketing methods and channels in which Licensee
        wishes to make use of any Licensor Trade Marks and approval of all
        marketing, publicity and advertising materials. Except where Licensor's
        approval is requested for fundamental changes in either game or
        marketing concepts, approval for the inclusion of any element within a
        particular game or marketing plan shall not be withdrawn or varied by
        Licensor once granted.

10.2    Subject to events of Force Majeure and to compliance by Licensor with
        its material obligations hereunder Licensee undertakes that it shall
        prior to 31 March 2002 serve on Licensor approval scripts and a demo for
        a Game Boy Advance game, and shall use its best endeavours to do so on
        or before the Signature Date. For the avoidance of doubt the payment by
        BAM to Aardman of the instalment of the Advance specified in Clause
        5.1.4 shall fall due on 31 March 2002 or the date of the approval of
        said presentation by Aardman (whichever earlier).

11.     LICENSOR'S WARRANTIES

        Licensor warrants represents and undertakes to Licensee that:-

11.1    it has the full, unconditional and irrevocable right and authority to
        enter into the Agreement and to fully perform all of its obligations
        hereunder and (without prejudice to the generality of the foregoing) has
        (subject only to Clause 9.6) obtained all consents relating to the
        content of all Licensed Properties required under the Copyright, Designs
        and Patents Act 1988 and all other legislation which may be required for
        the Exploitation of the Products by or on behalf of Licensee;

11.2    it is and will be during the Term the sole and exclusive owner
        throughout the Territory of all rights (including Intellectual Property
        rights) in and to all Licensed Properties and Licensed Rights and
        Licensor Trade Marks, and has not done or permitted and will not do or
        permit any act or omission which would impair or diminish the validity
        or duration of any such right;

11.3    it is solvent and not subject to or threatened by any Insolvency;

                                      -15-
<PAGE>

11.4    the Key Executives and all other Contributors employed or engaged by or
        on behalf of Licensor or any of its Affiliates are qualifying persons
        within the meaning of the Copyright, Designs and Patents Act 1988;

11.5    neither the performance of its obligations hereunder nor its agreement
        so to do is or shall be in breach of or prevented or restricted by or
        conditional on any express or implied obligation binding upon it or a
        breach, violation or infringement of any laws, rights or regulations,
        civil or criminal or otherwise, in any part of the world or give rise to
        any third party claim for compensation pursuant to any legal entitlement
        anywhere in the Territory (whether in force as at the Signature Date or
        at any time thereafter);

11.6    all Licensed Properties will during the Term:-

11.6.1  be (a) wholly-owned original works of authorship developed by it or its
        employees or (b) works in respect of which Licensor enjoys all such
        licences and authorisations necessary to enable Licensee to Exploit them
        as if they were works falling within Clause 11.6.1 (a) without any
        further cost or expense and

11.6.2  be free and clear of any and all claims, liens, charges or encumbrances
        which may adversely affect any Licensed Right and

11.6.3  contain nothing which infringes any right of publicity, privacy or
        personality or which is obscene and/or libellous or which breaches any
        duty of confidence or constitutes any contempt of court anywhere in the
        Territory;

11.7    the exercise of the Licensed Rights by or on behalf of Licensee in
        accordance with the terms hereof will not (a) infringe any Intellectual
        Property or other proprietary right of any person anywhere in the
        Territory or (b) breach, violate or infringe any laws or regulations,
        civil or criminal or otherwise, in any part of the Territory or give
        rise to any third party claim for compensation pursuant to any legal
        entitlement anywhere in the Territory (whether in force at the Signature
        Date or at any time thereafter) or (c) oblige Licensee or any of its
        Affiliates or any licensee of the foregoing to make any payment to any
        person other than as specified herein and as referred to in the
        definition of "Cost of Manufacture";

11.8    save as disclosed hereunder it has not entered into and will not during
        the Term enter into any agreement, arrangement or understanding (whether
        legally enforceable or not) (a) for the assignment, transfer or
        licensing or otherwise permitting the Exploitation of any Licensed Right
        or (b) which prevents, restricts or otherwise inhibits Licensee's
        freedom to Exploit any Licensed Right in accordance with the terms
        hereof or (c) which may conflict with any obligation of Licensor or any
        right of Licensee or Grantor hereunder;

11.9    to the best of its knowledge and belief:-

11.9.1  no Licensed Right is currently being infringed, misused or used without
        authorisation by any third party or has been so infringed, misused or
        used without authorisation prior to the Signature Date;

                                      -16-
<PAGE>

11.9.2  no third party has threatened any such infringement, misuse or
        unauthorised use; and

11.9.3  there is no present or prospective IP Claim in respect of any Licensed
        Right;

11.10   it has neither by any act or omission caused or permitted anything to be
        done, nor has knowingly withheld from Licensee knowledge of any
        circumstances, that might endanger the validity of any Licensed Right or
        the ability of Licensee to enforce or Exploit it in accordance with the
        terms hereof;

11.11   the Licensed Rights shall provide to Licensee any and all rights of
        Licensor to Exploit the Licensed Properties throughout the Territory in
        interactive entertainment software format.

12.     LICENSEE'S WARRANTIES

        Licensee warrants represents and undertakes to Licensor that:-

12.1    it has the full, unconditional and irrevocable right and authority to
        enter into the Agreement and to fully perform all of its obligations
        hereunder;

12.2    it is solvent and not subject to or threatened by any Insolvency;

12.3    it will ensure that the Products carry all proper copyright notices and
        credits as notified to it by Licensor;

12.4    (without prejudice to Licensor's warranties in Clause 11) the Products
        shall be manufactured, sold and distributed in accordance with all
        applicable laws and standards and shall not be accompanied by any
        defamatory, malicious, false, licentious or blasphemous material or any
        actual firearms, tobacco, alcohol or drugs or so as to bring Licensor
        into disrepute;

12.5    (without prejudice to Licensor's warranties in Clause 11) it shall (as
        between the parties) be responsible for obtaining all certifications,
        registrations and approvals from statutory or regulatory authorities for
        release and distribution of the Products in the Territory (but for the
        avoidance of doubt excluding certifications, negotiations and approvals
        relating to Licensor Trade Marks and other Intellectual Property owned
        or controlled by Licensor);

12.6    (subject to Clause 9.6) it shall ensure that it has obtained and paid
        for all licences, clearances and authorisations from third parties to
        produce the Products;

12.7    it shall not do or omit to do or permit there to be done any act which
        may render invalid the Property or any right of copyright or other
        rights licensed under the Agreement;

12.8    it shall during the Term maintain at its own expense product liability
        insurance (which shall name Licensor as co-insured and co-payee) in the
        amount of US$3,000,000 (three million US dollars) or sterling equivalent
        in the aggregate and for each claim to protect Licensee and Licensor
        against any and all claims actions losses or damages arising out of any
        actual or alleged defects in the

                                      -17-
<PAGE>

        Product such product liability insurance being from a reputable
        recognised insurance company and prior to manufacturing the Products
        Licensee shall supply for Licensor's retention a copy of all policy
        documentation relating thereto. In addition the policy shall be Promptly
        endorsed so that cancellation or material alteration shall not take
        place without the written consent of Licensor;

12.9    Licensee shall not knowingly manufacture or distribute any defective or
        sub-standard Products or publicity material relating thereto and shall
        ensure that at its own expense all products and said publicity material
        are of the highest standards used in the industry and (without prejudice
        to Licensor's warranties in Clause 11) shall conform with all applicable
        laws and standards.

13.     INDEMNITIES

        Each party ("the First Party") hereby agrees at all times (both during
        and after the Term) fully and effectively to indemnify the other party
        ("the Other Party") and to keep it so indemnified from and against any
        and all losses, costs, expenses, damages and liabilities (including any
        damages or compensation paid by the Other Party on the advice of its
        legal advisers to compromise or settle any Claim and any legal costs or
        expenses incurred by the Other Party) which it or any of its directors
        officers employees or agents may sustain or incur arising directly or
        indirectly from any action, claim, suit or proceeding (together "Claim")
        brought, made or threatened by any third party against any of the
        foregoing persons resulting from any actual or alleged breach by or on
        behalf of the First Party of any of its warranties expressed or implied
        herein PROVIDED ALWAYS that (notwithstanding anything to the contrary
        herein):-

13.1    the First Party shall be exclusively entitled to contest, defend or
        settle any Claim;

13.2    the Other Party shall Promptly notify to the First Party details of any
        Claim (whether actual, suspected or threatened) that comes to its
        attention;

13.3    the Other Party shall at the request and expense of the First Party
        provide to the First Party all reasonable assistance for the purpose of
        contesting defending or settling any Claim;

13.4    the Other Party shall not (by any act or omission) admit liability or
        otherwise prejudice or jeopardise the First Party's actual or potential
        defence to any Claim; and

13.5    the said indemnity is subject to the Other Party's duty to mitigate all
        of its said losses, costs, expenses, damages and liabilities.

14.     INTELLECTUAL PROPERTY

14.1    In the event of any actual, threatened or suspected claim by any third
        party against Licensee and/or Licensor in any part of the Territory
        (whether or not in the form of or accompanied by legal proceedings) that
        the actual or intended Exploitation of any Product infringes the
        Intellectual Property rights or any other rights of the said third party
        anywhere in the Territory ("IP Claim"):-

                                      -18-
<PAGE>

14.1.1  Licensor shall Promptly notify to Licensee all details of the IP Claim
        of which it is or becomes aware;

14.1.2  Licensor shall at Licensee's request Promptly and unconditionally
        provide to Licensee all reasonable assistance for the purpose of
        contesting, defending or settling the IP Claim, including modifying any
        part of the Property in suit in order to remove it from the scope of the
        IP Claim;

14.1.3  Licensor shall not (by any act or omission) admit liability or otherwise
        prejudice or jeopardise the actual or potential defence of either party
        to any IP Claim;

14.1.4  Licensee shall be entitled to retain any costs awarded against or paid
        by said third party and to recoup any of its unreimbursed expenses from
        any damages or other compensation paid or awarded in respect of the IP
        Claim, after which the balance (if any) of such damages or other
        compensation shall be considered Net Receipts; and

14.1.5  nothing in this Clause 14.1 shall prejudice any of Licensee's rights
        against Licensor under Clauses 11 or 13 in connection with any IP Claim.

14.2    In the event of any actual, threatened or suspected infringement by any
        third party in the Territory of the Intellectual Property in any
        Licensed Right:-

14.2.1  Licensor shall Promptly notify to Licensee all details of any such
        infringement of which it is or becomes aware;

14.2.2  Licensee shall (subject only to the service of prior notice on Licensor)
        be entitled to take such action in any part of the Territory against the
        third party on behalf of itself or on behalf of itself and Licensor
        (whether or not in the form of legal proceedings) as it deems
        appropriate ("IP Action"). The said entitlement shall be sole and
        exclusive save where (a) Licensee fails to take such action after a
        reasonable period of time has elapsed after having been requested so to
        do by Licensor, and/or (b) where the infringement extends to
        Intellectual Property Rights in a Licensed Property in addition to
        Interactive Entertainment Rights, in either of which cases the said
        entitlement shall be non-exclusive;

14.2.3  Licensor shall at Licensee's request and reasonable expense Promptly and
        unconditionally provide to Licensee all reasonable assistance in
        connection with any IP Action; and

14.2.4  Licensee shall be entitled to retain any costs, expenses, damages or
        other compensation awarded against or paid by the said third party in
        connection with the resolution or settlement of any IP Action.

14.3    In respect of the grant of the Licence and of all Option Licences, and
        without prejudice to Clause 8 or Clauses 12 and 13 , Licensor hereby
        irrevocably and unconditionally waives in favour of Licensee and its
        Affiliates and licensees and the successors and assigns of the foregoing
        all moral rights within the meaning of Chapter IV of Part I of the
        Copyright, Designs and Patents Act 1988 and of all legislation or laws
        anywhere in the Territory of similar or equivalent effect and

                                      -19-
<PAGE>

        warrants that it has procured all persons referred to in Clause 11.4 so
        to waive the same.

15.     CONFIDENTIAL INFORMATION

15.1    Save as may be required by operation of law or the rules of The Stock
        Exchange or by any governmental, regulatory or judicial authority of
        competent jurisdiction each party ("the First Party"):

15.1.1  shall keep strictly confidential information of a confidential,
        proprietary or sensitive nature received, obtained or learned from the
        other party before or since the Operative Date pursuant to or in
        preparation or contemplation of its performance of the Agreement
        relating to the other party ("the Other Party") or any of its Affiliates
        or to any of the officers, servants, agents, customers or suppliers of
        any of the foregoing persons or to the business of any of the foregoing
        persons or to any Product or Property, and whether or not expressly
        designated confidential and/or in tangible format ("Information");

15.1.2  shall not without the Other Party's prior written consent use or permit
        or cause any Information to be used save for the direct purposes of the
        Agreement; and

15.1.3  shall not without the Other Party's prior written consent disclose or
        permit or cause any Information to be disclosed to any person other than
        to those of its officers, directors, contractors, employees or
        professional advisers (a) who need to be informed thereof to enable the
        First Party to perform its obligations hereunder or to take advice
        thereon and (b) who have been informed of the Information's
        confidentiality and directed to keep it confidential and (c) who are
        under an enforceable obligation of confidentiality to the First Party.

15.2    For the purpose of this Clause 15 the terms of the Agreement shall be
        deemed to be Information received by one party from the other.

15.3    The First Party shall forthwith notify to the Other Party any actual,
        suspected or threatened use or disclosure of the Other Party's
        Information in contravention of this Clause 15 of which it becomes aware
        and shall render such assistance to restrain such use as the Other Party
        may request.

15.4    Each Party shall all use reasonable endeavours to procure that none of
        its officers, directors, servants or agents is responsible for any act
        or omission which (if it were responsible for it) would constitute a
        breach of any of the provisions of this Clause 15.

15.5    Each Party further acknowledges and agrees that, in the event of a
        breach or threatened breach of this Clause 15, the other party may have
        no adequate remedy in money or damages and, accordingly may be entitled
        to preliminary, permanent and other injunctive relief.

15.6    Notwithstanding the foregoing the First Party will have no obligation in
        connection with specific Information to the extent, but only to the
        extent that:-

                                      -20-
<PAGE>

15.6.1  is in the public domain at the time that it is received, obtained or
        learned by the First Party;

15.6.2  it subsequently becomes part of the public domain through no wrongful
        act of the First Party, or

15.6.3  it is received by the First Party from a third party who is lawfully
        authorised to disclose the same without breach of the Agreement and/or
        of any obligation to the Other Party.

16.     KEY EXECUTIVES

        Licensee shall be entitled to terminate (at its discretion) the
        Agreement or the Option in the event that either Key Executive should
        cease to be either employed by or an active creative consultant for
        Licensor ("Cessation"). Licensor shall Promptly notify Licensee of any
        Cessation in respect of either Key Executive and Licensee shall have 30
        (thirty) days from the date of service thereof to exercise its said
        entitlement. If Licensee fails to notify Licensor of its intention to do
        so during the said 30-day period or declines to terminate the Option
        Licensee shall not be entitled to terminate the Option upon the
        provisions of this clause save in the event of a Cessation in respect of
        the other Key Executive.

17.     CONSULTATION AND COOPERATION

17.1    Licensor and Licensee shall consult each other in good faith in
        concerning the creation, development and marketing of the Properties and
        of any Products developed pursuant to the Agreement. Without prejudice
        to the generality of the foregoing, Licensor shall inform Licensee of
        the status of pre-production, production and post-production of each
        Licensed Property no less frequently than monthly, and shall serve on
        Licensee regular production status reports during the period of
        principal photography and post-production of each Licensed Property.

17.2    Each party ("the first party") shall make reasonable efforts to procure
        that the other party has access in advance to the marketing plans and
        advertising materials prepared by or on behalf of the first party in
        connection with Exploitation of the Properties or any Products. Without
        prejudice to the generality of the foregoing Licensor shall use all
        reasonable endeavours to provide to Licensee free access to all
        publicity and advertising materials prepared by or on behalf of Licensor
        in connection with the theatrical or televisual release of any Licensed
        Property, and agrees that Licensee may use such materials free of charge
        to Exploit any Products developed in connection with such Licensed
        Property.

17.3    Neither party shall make any press or public announcement concerning the
        Agreement without consulting the other in advance.

17.4    Licensee shall during the Term and for 3 (three) years thereafter keep
        full and proper chain-of-title documentation for each Licensed Property
        and Licensee or its representative shall during the Term and for 3
        (three) years thereafter have the right during normal business hours and
        on not less than 15 (fifteen) days' notice to examine and take copies of
        such documentation at the premises where

                                      -21-
<PAGE>

        Licensor normally keeps them, and subject always to Licensee's
        confidentiality obligations under Clause 15.

18.     TERM AND TERMINATION

18.1    This Agreement shall come into force on the Commencement Date and,
        subject to premature termination as specified herein, shall expire on
        the latest of the following dates:-

18.1.1  (if no Option Licence has been granted to Licensee) the date of expiry
        of the Initial Term, or

18.1.2  (if any Option Licences have been granted to Licensee) the date of
        expiry of the Option Licence Term of the last Option Licence to have
        been granted to Licensee.

18.2    Each party shall be entitled to terminate the Agreement summarily by the
        service of notice on the other if:-

18.2.1  the other commits any breach of any of its obligations or warranties
        hereunder and, in the case of a breach capable of remedy, has failed to
        remedy the same within 30 (thirty) days after the service on it by the
        first-mentioned party of notice particularising the breach and requiring
        its remedy and containing a warning of such party's intention to
        terminate; or

18.2.2  the other becomes Insolvent.

18.3    Licensee shall be entitled to terminate the Agreement summarily by the
        service of notice on Licensor if Licensor undergoes or announces its
        intention to undergo any change of Control which results in a majority
        of the ordinary voting shares in Licensor being transferred to a person
        who is a publisher of interactive entertainment software.

18.4    For the purpose of this Clause 18 a breach shall be considered capable
        of remedy if the party in breach can perform the obligation in question
        in all respects other than as to time of performance (provided that time
        of performance is not of the essence). For the avoidance of doubt the
        dates for the performance of the obligations of Licensee and Grantor
        under the Agreement shall not be of the essence unless agreed in writing
        to the contrary between the parties.

18.5    The rights to terminate the Agreement given by this Clause 18 shall be
        without prejudice to any other right or remedy of either party in
        respect of the breach concerned (if any) or any other breach.

19.     CONSEQUENCES OF TERMINATION

19.1    In the event of termination of the Option by Licensee pursuant to Clause
        16 the Agreement shall continue in force save that subject to accrued
        rights and liabilities of the parties (if any) Clauses 3, 4, 5.2, 5.3
        and 5.4 shall cease to have effect.

                                      -22-
<PAGE>

19.2    On expiry of the Initial Term all rights licensed to Licensee under the
        Licence shall immediately revert to Licensor, provided that if expiry
        takes place subsequent to Commercial Release of any Product for which
        all relevant approvals have been obtained, Licensee shall have the right
        to sell units of the Product in stock or already irrevocably ordered
        from manufacturers for a period of 12 (twelve) months after the date of
        expiry of the Initial Term, provided that it shall continue to account
        for Royalties in accordance with the Agreement.

19.3    On the expiry of the Initial Term or (if earlier) termination of the
        Option by Licensee pursuant to Clause 16 the right to exercise the
        Option under the Agreement shall immediately revert to Licensor, but
        without prejudice to the entitlement of Licensee to exercise in
        accordance with the terms hereof for the remainder of its Option Licence
        Term any Option Licence granted to Licensee during the Initial Term.

19.4    On expiry or termination of the Agreement for whatever cause:

19.4.1  all rights licensed to Licensee under the Agreement shall immediately
        revert to Licensor, provided that if termination takes place subsequent
        to Commercial Release of any Product for which all relevant approvals
        have been obtained, Licensee shall have the right to sell units of the
        Product in stock or already irrevocably ordered from manufacturers for a
        period of 12 (twelve) months after the Termination Date, provided it
        shall continue to account for Royalties in accordance with the
        Agreement;

19.4.2  expiry or termination shall be without prejudice any rights accrued in
        favour of either party in respect of any breach committed prior to the
        Termination Date by the other party including (without limitation) any
        breach giving rise to termination hereof.

19.5    Clauses 1, 7, 13, 15, 17.4, 19, 22, 23, 24 and 25 and any other
        provision of this Agreement whose terms or context require its survival
        shall survive the expiry or termination of this Agreement.

20.     FORCE MAJEURE

20.1    Neither party shall be under any liability to the other party in any way
        whatsoever for destruction, damage or delay arising from circumstances
        beyond its reasonable control, including war, rebellion, civil
        commotion, strikes, lock-outs and industrial disputes, fire, theft,
        explosion, earthquake, act of God, flood, drought or bad weather, the
        unavailability of deliveries, supplies, products, disks or other media
        or the requisitioning or other act or order by any government
        department, council or other constituted body (together "Force
        Majeure"). Notwithstanding the forgoing, each party shall use all
        reasonable endeavours to continue to perform, or resume performance of,
        such obligations hereunder for the duration of such Force Majeure.

20.2    If either party is affected by Force Majeure, it shall promptly notify
        the other in writing of the nature and extent of the circumstances in
        question, and the length of time for which it is estimated such
        circumstances shall subsist.

                                      -23-
<PAGE>

20.3    In the event that either party is affected by Force Majeure for a period
        of more than 30 (thirty) days the other party may terminate the
        Agreement summarily upon notice to the first party.

21.     ASSIGNMENT

21.1    Subject to Clause 21.2 neither party may without the prior written
        consent of the other (not to be unreasonably withheld or delayed) give,
        bargain, sell, assign, transfer, charge, sub-contract, delegate or
        otherwise dispose of any of its rights or obligations hereunder.

21.2    It shall be unreasonable for Licensor to withhold or delay its consent
        to any gift, bargain, sale, assignment, transfer, charge,
        sub-contracting, delegation or other disposal of any of the rights or
        obligations of Licensee or Grantor hereunder to an Affiliate of either
        of the foregoing who (in the case of a gift, bargain, sale, assignment
        or transfer) agrees in writing to assume all of the assignor's
        obligations hereunder.

21.3    Any sub-contracting or delegation by either party of any of its
        obligations hereunder shall not relieve it of those obligations, for
        which it will at all times remain primarily responsible and liable to
        the other party for the conduct of its sub-contractors.

22.     LIABILITY

22.1    Subject only to Clause 22.2, and notwithstanding anything herein to the
        contrary, neither Licensee nor Grantor shall be under any liability
        hereunder or otherwise to Licensor for any loss (whether direct or
        indirect) of profits, time, business, goodwill or anticipated savings or
        for any incidental, indirect, special, consequential or punitive loss or
        damage whether foreseeable or unforeseeable whatsoever or howsoever
        caused.

22.2    Neither Licensee nor Grantor excludes or restricts liability for death
        or personal injury resulting from its own negligence.

22.3    Licensor acknowledges that the Licensed Rights are of a special, unique,
        unusual, extraordinary and intellectual character giving them a peculiar
        value, the loss of which cannot be reasonably or adequately compensated
        in damages in an action at law, and that a breach hereof by Licensor
        will or may inflict irreparable injury and damage on Licensee and/or
        Grantor who may thereby be entitled to injunctive and other equitable
        relief to restrain the same.

23.     NOTICES

23.1    All notices, demands, claims, requests, invoices, consents, approvals,
        reports, recommendations or other communications (collectively referred
        to herein as "notices") given or made by one party to or on the other
        hereunder shall (unless expressed to the contrary herein) be in writing
        (which shall include email).

23.2    Unless expressed to the contrary herein all notices served by one party
        on the other shall be delivered by hand or sent by pre-paid first class
        post or by facsimile

                                      -24-
<PAGE>

        transmission or by e-mail transmission at or to the other's address
        given at the head hereof or to the other's fax number given in Clause
        23.5 or to the other's e-mail address given in Clause 23.6 or at or to
        such other address or number as the other may notify to the serving
        party with a copy to Licensor's Agent.

23.3    If either party changes its address for service or its fax number or its
        e-mail address it may serve notice thereof on the other, but
        notwithstanding anything herein to the contrary no such notice shall
        take effect until or unless actually received by the other party.

23.4    The date of service of notices served hereunder shall be:

23.4.1  (for notices served by hand) the day of delivery or (if the same is not
        a Working Day) the next Working Day thereafter;

23.4.2  (for notices served by pre-paid post) 2 (two) days after the date of
        posting; and

23.4.3  (for notices served by facsimile or e-mail transmission) the day of
        transmission or (if the same is not a Working Day and/or if transmission
        takes place after 17:00 hours) the next Working Day thereafter, provided
        that a confirmation copy thereof is sent by registered post to the other
        party at its said address within 24 (twenty-four) hours after
        transmission.

23.5    The respective fax numbers of the parties and Licensor's Agent are as
        follows:-

23.5.1  Licensee and Grantor: 01225 329241

23.5.2  Licensor: 0117 908 6677

23.5.3  Licensor's Agent: 020 7935 9115

23.6    The respective e-mail addresses of the parties and Licensor's Agent are
        as follows:-

23.6.1  Licensee and Grantor: jbooth@bam4fun.com

23.6.2  Licensor: sean.clarke@aardman.com

23.6.3  Licensor's Agent: jacqui@marjacq.com

23.7    Neither party shall prevent or delay the service on it of a notice
        hereunder or attempt to do so.

24.     GENERAL

24.1.1  All rights in any Property neither expressly granted to Licensee herein
        nor expressly subject to the Options granted to Licensee herein are
        reserved to the Licensor.

24.2    This Agreement shall operate to the entire exclusion of the Initial
        Agreement and any other agreements and understandings of any kind made
        or given by the parties before the Commencement Date relating to the
        subject matter hereof

                                      -25-
<PAGE>

        which are hereby superseded and of no further legal effect, and shall
        constitute the entire contract between the parties concerning the
        subject matter hereof.

24.3    No variation of the Agreement shall be effective unless set forth in
        writing and signed by a duly authorised representative of each party.

24.4    Except as expressly provided herein all conditions, warranties,
        representations,, indemnities, guarantees and other terms implied by
        statute or common law are hereby excluded to the fullest extent
        permitted by law. No party has entered into the Agreement in reliance
        upon any representation, warranty or undertaking of the other party
        which is not expressly set out or referred to herein. Nothing in this
        Clause 24.4 shall exclude any liability for fraud or fraudulent
        misrepresentation.

24.5    No forbearance, delay or indulgence by either party in enforcing the
        provisions of the Agreement shall prejudice or restrict its rights, nor
        shall any waiver by either party of a breach hereof by the other party
        operate as a waiver of any subsequent breach of the same or any other
        provisions hereof. No such waiver shall be effective unless it is
        writing and has been signed by the party against whom it is asserted.

24.6    No right, power or remedy herein conferred upon or reserved for either
        party is exclusive of any other right, power or remedy available to it
        and each such right, power or remedy shall be cumulative.

24.7    The parties are not partners or joint venturers or in a relationship of
        employer and employee or in a relationship of principal and agent. Save
        as expressly authorised hereby (if at all) neither party has any right
        or authority to act on behalf of the other party or to make any
        representation on its behalf and will not represent that it has such
        right or authority.

24.8    Each of the terms of the Agreement shall be construed as independent of
        every other such term to the effect that if any such term shall be
        determined by any judicial, arbitral, regulatory or other public
        authority of competent jurisdiction to be invalid, unlawful, void,
        voidable or unenforceable such term shall be severed from the remaining
        terms hereof without effect thereon which such remaining terms shall
        continue to be valid, lawful and enforceable to the fullest extent
        permitted by law.

24.9    The provisions of the Agreement are personal to the parties and are not
        intended to confer any rights of enforcement on any third party. The
        Contracts (Rights of Third Parties) Act 1999 shall not apply to this
        Agreement or any of its provisions.

24.10   Each party shall bear its own costs and expenses in relation to the
        preparation, execution and carrying into effect of this Agreement.

25.     LAW AND JURISDICTION

        The construction, validity and performance of this Agreement shall be
        governed in all respects by English law and the parties hereby agree to
        submit to the exclusive jurisdiction of the courts of England and Wales.

                                      -26-
<PAGE>

            SCHEDULE I: THE WALLACE & GROMIT PROPERTIES IN EXISTENCE
                           AS AT THE COMMENCEMENT DATE

The Short Films:

A GRAND DAY OUT,

THE WRONG TROUSERS, and

A CLOSE SHAVE

all directed by Nick Park

together with derivative products in print media based on them.

                                      -27-
<PAGE>

             SCHEDULE II: PROPERTIES REFERRED TO IN CLAUSE 3.1.1(a)

Chicken Run

Hare and Tortoise

                                      -28-
<PAGE>

             SCHEDULE III: PROPERTIES REFERRED TO IN CLAUSE 3.1.2(a)

Morph

Wallace and Gromit

Rabbits

Rex the Runt

Deadline

Blobs

Angry Kid

Creature Comforts

Heat Electric characters

Pib and Pog

Wat's Pig

Stagefright

Hum Drum

My baby Just Cares for Me

War Story

Going Equipped

Next

Adam

Ident

Loves me love me not

Not without my handbag

Minotaur and Little Nerkin

Al Dente

Owzat

Pop

Babylon

                                      -29-
<PAGE>

On Probation

Sales Pitch

Palmy Days

Early Bird

Late Edition

Confessions of a Foyer Girl

Down and Out

Happiness Bear

Get me Outta Here

Chump

Mr. Nobody

Shaun the Sheep

                                      -30-
<PAGE>

                         SCHEDULE IV: THE PRIOR LICENCES

                     PART A: WALLACE & GROMIT PRIOR LICENCES

<TABLE>
<CAPTION>
----------------------------- --------------------------------- --------------- --------------
PROPERTY                      PRODUCT                           LICENSEE        EXPIRY DATE
----------------------------- --------------------------------- --------------- --------------
<S>                           <C>                               <C>             <C>
Wallace & Gromit              Funpack (CD-ROM)                  BBC Worldwide   30/10/2004

Wallace & Gromit              ClipArt (CD-ROM)                  BBC Worldwide   30/10/2004

Wallace & Gromit              Print-o-matic (CD-ROM)            BBC Worldwide   30/06/2004

Wallace & Gromit              Cracking Animator (CD-ROM)        BBC Worldwide   30/06/2004
----------------------------- --------------------------------- --------------- --------------
</TABLE>

                   PART B: NON-WALLACE & GROMIT PRIOR LICENCES
<TABLE>
<CAPTION>
----------------------------- --------------------------------- --------------- --------------
PROPERTY                      PRODUCT                           LICENSEE        DURATION
----------------------------- --------------------------------- --------------- --------------
<S>                           <C>                               <C>             <C>
SMart Morph                   CD-ROM                            BBC             30/9/2005

Angry Kid Online Game         Choirboy                          Aardman         Perpetuity

Angry Kid Online Game         Bored Game                        Aardman         Perpetuity
----------------------------- --------------------------------- --------------- --------------
</TABLE>

                                      -31-
<PAGE>

                           SCHEDULE V: STOCK VALUATION

Common stock of Grantor in respect of which Warrants are granted to Licensor
hereunder shall for the purposes of the Agreement be priced as the average of
the closing sales price of Grantor's common stock as reported on the Nasdaq
National Market System (or such other exchange as Grantor's common stock is then
quoted on the United States of America) for the 5 (five) -- day trading period
immediately preceding the date of grant.

                                      -32-
<PAGE>

                           SCHEDULE VI: ROYALTY RATES

1.      WALLACE AND GROMIT PROPERTIES

1.1     non-hand-held platforms

                      0 - 250,000 units [*]%

                      250,001 - 500,000 units [*]%

                      Above 500,000 units [*]%

        The rates shall be applied in tranches, and shall be cumulative across
        all non-hand-held platforms and every Wallace and Gromit Product.

1.2     hand-held platforms (other than mobile phones): [*]% to 250,000 units
        sold and [*]% thereafter.

1.3     sequels to Products referred to in paragraphs 1.1 and 1.2: [*]%.

1.4     mobile telephones (and sequels thereto): to be negotiated in good faith.

2.      Short Films and any other Properties (other than Feature Films and
        excluding Properties distributed on national US television channels)
        over which the Option is exercised:

2.1     non-hand-hand platforms: 0 - 250,000 units [*]% 251,000 - 500,000 units
        [*]% Above 500,000 units [*]% The rates shall be applied in tranches,
        and shall be cumulative across all non hand-held platforms for each
        separate Property.

2.2     hand-held platforms (other than mobile telephones): [*]% to 250,000
        units sold and [*]% thereafter.

2.3     sequels to Products referred to in paragraphs 2.1 and 2.2: [*]%.

2.4     mobile telephones (and sequels thereto): to be negotiated in good faith.

3.      Feature Films (and any other Properties distributed on national US
        television channels) over which the Option is exercised.

3.1     non-hand-held platforms: 0 - 250,000 units [*]% 250,000 - 500,000 units
        [*]% Above 500,000 units [*]% The rates shall be applied in tranches,
        and shall be to be cumulative across all non hand-held platforms for
        each separate Property.

3.2     hand-held platforms (other than mobile telephones): [*]% to 250,000
        units sold and [*]% thereafter.

3.3     sequels to Products referred to in paragraphs 3.1 and 3.2: [*]%.

3.4     mobile telephones (and sequels thereto): to be negotiated in good faith.

------------------

[*] Confidential portion omitted and filed separately with the Commission.

                                      -33-
<PAGE>

                       SCHEDULE VII: LICENSOR TRADE MARKS

                               TRADEMARKS SUMMARY

REX THE RUNT - WORD MARK & DEVICE MARKS AS FOLLOWS

                                  [RUNT LOGO]

                              [REX THE RUNT LOGO]

Main characters -- Rex, Bad Bob, Wendy, Vince

--------------------------------------------------------------------------------

WALLACE & GROMIT

                            [WALLACE & GROMIT LOGO]

WORD MARK

Main characters -- Wallace, Gromit, Feathers McGraw, Shaun, Wendolene, Preston
Films:  A Grand Day Out, The Wrong Trousers, A Close Shave

                                      -34-
<PAGE>

--------------------------------------------------------------------------------

CREATURE COMFORTS - WORD MARK ONLY

--------------------------------------------------------------------------------

AARDMAN & STAR

                             [AARDMAN & STAR LOGO]

DEVICE MARK

--------------------------------------------------------------------------------

MORPH

--------------------------------------------------------------------------------

RABBITS!

--------------------------------------------------------------------------------

ANGRY KID

                                      -35-
<PAGE>

IN WITNESS WHEREOF the parties have set their hands the day and year first above
written.

SIGNED by                               )
                                        )        /s/ Sean Clarke
duly authorised  for and on behalf of   )    -----------------------------------
AARDMANANIMATIONS                       )
LIMITED                                 )

                                             -----------------------------------
Witness signature:                               /s/ Suzanne Cherry

Witness name:                               Suzanne Cherry

Address:                                    Gas Ferry Road
                                            Bristol BS6 1ON

Occupation:                                 PA to Sean Clarke

SIGNED by                               )   ------------------------------------
                                        )        /s/ Ray Musci
duly authorised  for and on behalf of   )        Ray Musci
BAM ENTERTAINMENT                       )        Director
LIMITED                                 )

Witness signature:                               /s/ S M Ambler
                                            ------------------------------------

Witness name:                               Stephen Ambler

Address:                                    3660 Jackson Oaks Court
                                            Morgan Hill, CA  95037
                                            USA

Occupation:                                 Chartered Accountant

                                      -36-
<PAGE>

SIGNED by                               )        /s/ Ray Musci
                                        )   ------------------------------------
duly authorised for and on behalf of    )        Ray Musci
BAM ENTERTAINMENT, INC.                 )        President

Witness signature:                               /s/ S M Ambler
                                            ------------------------------------

Witness name:                               Stephen Ambler

Address:                                    3660 Jackson Oaks Court
                                            Morgan Hill, CA  95037
                                            USA

Occupation:                                 Chartered Accountant

                                      -37-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00039-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00039-of-00352.parquet"}]]