Document:

EXHIBIT 10.03

                              EMPLOYMENT AGREEMENT

     This EMPLOYMENT AGREEMENT, effective as of the 1st day of May, 2003, by and
between ASPEN EXPLORATION CORPORATION, a public Delaware corporation, Suite 208,
2050 S. Oneida Street, Denver, CO 80224, (303) 639-9860 ("ASPEN"), and R. V.
BAILEY, P.O. Box 1420 (current office is located at 515 Jerry St. but no mail is
delivered to this address), Castle Rock, CO 80104, (303) 660-0966 ("BAILEY"),
sometimes collectively referred to as the "Parties."

                                   WITNESSETH

     WHEREAS, ASPEN has employed BAILEY since ASPEN'S incorporation in 1980, a
portion of which has been pursuant to employment agreements which have since
expired; and

     WHEREAS, ASPEN wishes to establish an EMPLOYMENT PLAN for BAILEY as well as
to retain BAILEY in the capacity of Vice President and Board Chairman, and
BAILEY wishes to serve ASPEN in such capacity;

     NOW, THEREFORE, in consideration of the conditions and covenants set forth,
it is agreed as follows:

1. TERM OF EMPLOYMENT: BAILEY and ASPEN hereby agree that BAILEY shall be
employed by ASPEN for a period commencing May 1, 2003 and ending May 1, 2009
(the "EMPLOYMENT PERIOD"), in accordance with the terms of this Agreement. All
previous agreements pursuant to which BAILEY was employed by ASPEN (whether
written or oral) be and hereby are terminated to the extent that there are any
obligations remaining due by either party thereunder.

(a) This Agreement does not, however, terminate any rights that BAILEY may have
(or which may be granted to him in the future) to participate in ASPEN's
"Amended Royalty and Working Interest Plan". The June 4, 1993 Stock Purchase
Agreement is hereby terminated and Aspen, therefore, shall not be required to
provide any insurance on the life of BAILEY.

(b) Furthermore, this Agreement does not terminate any rights that BAILEY may
have (or which may be granted to him in the future) to participate in other
benefit programs or undertakings established by ASPEN for the benefit of
employees.

(c) BAILEY may resign from ASPEN and terminate this Agreement upon 30 days
written notice to ASPEN, in which case ASPEN shall pay salary and benefits set
forth in this Agreement through the date of termination and this Agreement shall
terminate.

Employment Agreement - R. V. BAILEY                                       Page 1

<PAGE>

2. DUTIES:

(a) During the EMPLOYMENT PERIOD BAILEY shall be employed with the title of Vice
President and shall be subject to the general direction of the President and
Board of Directors of ASPEN. Nothing in this Agreement prevents BAILEY and the
Board of Directors of Aspen from discussing alternative positions as an employee
or officer of, or consultant to, ASPEN in the future.

(b) BAILEY shall have such authority and responsibilities as are customarily
performed by a person holding such positions. BAILEY shall devote time,
attention and energies as needed to the business of ASPEN. No specific portion
of BAILEY'S time shall be required. BAILEY shall not engage in any business or
render services to others who directly or indirectly compete in direct or
indirect competition with the oil and gas business of ASPEN. This provision
shall not preclude BAILEY from making investments in any entity or continuing to
maintain BAILEY'S existing investments in certain oil and gas properties as in
the past. In addition, BAILEY may make other passive outside investments in oil
and gas opportunities only after having first offered such investment
opportunity to ASPEN. Such offer, and the response, may take the form of a phone
call or electronic mail between BAILEY and ASPEN.

(c) During the term of this Agreement, BAILEY will continue to provide, at no
cost to ASPEN, so long as BAILEY has such space available, indoor storage space
near Platteville, Colorado, for geological and engineering records related to
several uranium projects in Wyoming, which records are and will remain the sole
property of ASPEN.

3. COMPENSATION:

(a) ASPEN shall pay BAILEY a salary of $45,000 per year commencing May 1, 2003,
through December 31, 2006, and a salary or $60,000 per year commencing January
1, 2007 and ending April 1, 2009, subject to such further salary increases and
bonuses as the Board of Directors may determine to be appropriate. ASPEN shall
deduct and withhold such sums as are required by statute and applicable laws for
Social Security, taxes and otherwise, to be deducted or withheld from
compensation. ASPEN shall pay such compensation to BAILEY in equal monthly
installments in arrears after the deduction of appropriate taxes. During the
term of this Agreement BAILEY shall also participate in corporate stock option
plans in amounts deemed appropriate by the Board of Directors.

(b) ASPEN shall provide BAILEY the other benefits and expense reimbursement as
described in Sections 4, 5 and 6, below.

4. LOCATION:

(a) As long as ASPEN maintains a Denver office, ASPEN will not reimburse BAILEY
for the use of any other office space. If ASPEN no longer maintains a staffed
Denver office, ASPEN will pay to BAILEY a flat fee of $500 per month to
reimburse him for expenses he may incur for rent and utilities for any office
selected by BAILEY, regardless of BAILEY'S actual cost for providing office
space he deems appropriate. This reimbursement, should it commence, will
terminate on December 31, 2007.

Employment Agreement - R. V. BAILEY                                       Page 2

<PAGE>

(b) During the term of this Agreement, BAILEY may continue to utilize office
equipment (including furniture and computer equipment and accessories) that
ASPEN owns and which are located at BAILEY'S office in Castle Rock, Colorado.
Such equipment may be upgraded from time to time during the term of this
Agreement. BAILEY may, at his option, purchase such office equipment from ASPEN
at any time on or before December 31, 2007, for a total purchase price of
$10.00.

(c) During the term of this Agreement, ASPEN will continue to provide BAILEY an
office at ASPEN'S Denver office for so long as ASPEN maintains offices in
Denver. The parties hereto recognize that this Denver office is also utilized
for filing cabinets and by the auditors and other parties as needed and this use
in the future is expected and approved.

(d) During the term of this Agreement ASPEN will reimburse BAILEY for office
supplies reasonably necessary or appropriate for the conduct of ASPEN'S business
in the same manner and to the same extent as in the past. This will include
reimbursement for office phones (in a proportionate amount), DSL (or equivalent)
and a cell phone. This reimbursement will discontinue on December 31, 2007.

5. BENEFITS AND EXPENSES:

(a) Non-Accountable Expense Allowance; Other Reimbursements.

    (i) During the term of this Agreement, ASPEN agrees to pay BAILEY monthly in
arrears (on a non-accountable basis) the sum of $1,700 per month to reimburse
BAILEY for miscellaneous items such as prescriptions, medical and dental
coverage for himself and his dependents and other expenses which are not subject
to reimbursement pursuant to Sections 4(a) and 4(d), above. This sum shall be
adjusted annually in the month of June to account for inflation.

    (ii) ASPEN recognizes that BAILEY is the founder of the corporation and has
been a trusted employee, officer and director of the corporation for more than
23 years. During the term of this Agreement, if BAILEY desires to incur any
expense on behalf of ASPEN exceeding cumulative $1,000 in any one month for
which he intends to seek reimbursement from ASPEN (such as travel to meetings of
the Board of Directors or to ASPEN'S properties), he shall advise the Board of
Directors or the President of ASPEN telephonically or by electronic mail of such
possible expense and the Board or President shall promptly respond. In the event
no such advisement has been conveyed, or the advisement was conveyed but no
response received, BAILEY may proceed to incur expenditures that he believes are
on behalf of ASPEN but with the understanding that such expenditures may or may
not be reimbursed subsequently by ASPEN.

(b) Termination of Other Benefits.

    (i) ASPEN currently maintains a key man life insurance policy on BAILEY'S
life as required pursuant to Section 2.1 of the Stock Purchase Agreement dated
June 4, 1993. BAILEY agrees that ASPEN shall allow the current key man policy on
BAILEY'S life to expire of its own terms, and ASPEN shall not be obligated to
purchase a new policy due to the excessive costs involved.

Employment Agreement - R. V. BAILEY                                       Page 3

<PAGE>

    (ii) Prior to January 1, 2004, the Parties agree to terminate the current
split dollar plan between ASPEN and BAILEY. The value of ASPEN'S interest
thereunder will be distributed to ASPEN in accordance with the provisions of the
plan. There is a possibility that a trust established by BAILEY will pay the
amount due to ASPEN.

(c) Vacation. BAILEY shall be entitled to four weeks paid vacation each year
during the EMPLOYMENT PERIOD. No more than one week may be carried forward to
any subsequent year.

(d) Vehicle Expenses. During the term of this Agreement and in addition to the
expense reimbursements set forth elsewhere in this Agreement, ASPEN agrees to
reimburse BAILEY on his monthly expense report submitted to ASPEN for all
expenses associated with the use of ASPEN'S four-wheel drive vehicle. BAILEY may
trade in the current ASPEN vehicle for a new similar vehicle of his choice once
prior to June 30, 2006. During 2007, or thereafter during the term of this
Agreement, ASPEN, upon request by BAILEY, shall sell to BAILEY free from any
liens, for the sum of $500.00, the ASPEN vehicle he is using, or, if BAILEY dies
during the EMPLOYMENT PERIOD, upon request of the personal representative of his
estate, ASPEN shall sell the vehicle to the estate of BAILEY for the
above-stated amount.

(e) Royalty and Working Interest Plan. As part of the benefits hereunder, during
the term of this Agreement, ASPEN will assign to BAILEY overriding royalties in
accordance with ASPEN'S existing Amended Royalty and Working Interest Plan dated
February 2, 1986.

(f) Participating Interests. During the term of this Agreement and thereafter,
ASPEN shall continue to offer to BAILEY participating working interests in oil
and gas exploration wells, or in production purchases, as has been done in years
past. Such offers shall be in no less amounts than are being offered to other
ASPEN employees or consultants. BAILEY may negotiate with ASPEN management for
greater working interest participation in certain drilling or acquisitions.

6. TERMINATION: The obligations of ASPEN hereunder for compensation during the
term of this Agreement shall remain and continue during the term of this
Agreement.

(a) ASPEN may terminate this Agreement upon BAILEY'S death, in which case ASPEN
will pay BAILEY'S estate all compensation that had accrued, or will accrue, to
the end of the year of the date of death plus an additional $75,000.

(b) ASPEN shall not have the right to unilaterally terminate this Agreement.

(c) If, during the term of this Agreement, BAILEY becomes totally and
permanently disabled, ASPEN shall pay, as its sole and exclusive liability
hereunder, one half (50%) of the salary and benefits set forth in this Agreement
for the remainder of the term of this Agreement.

Employment Agreement - R. V. BAILEY                                       Page 4

<PAGE>

7. GENERAL PROVISIONS:

(a) The headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.

(b) If any provision of this Agreement, or the application thereof to any
person, place or circumstance, shall be held by a court of competent
jurisdiction to be illegal, invalid, unenforceable or void, then such provision
shall be enforced to the extent that it is not illegal, invalid, unenforceable
or void, and the remainder of this Agreement, as well as such provision as
applied to other persons, places or circumstances, shall remain in full force
and effect.

(c) With regard to any power, remedy or right provided in this Agreement or
otherwise available to any party, no waiver or extension of time shall be
effective unless expressly contained in a writing signed by the waiving party,
no alteration, modification or impairment shall be implied by reason of any
previous waiver, extension of time, delay or omission in exercise or other
indulgence, and waiver by any party of the time for performance of any act or
condition hereunder does not constitute a waiver of the act or condition itself.

(d) All notices, demands, or other communications to be given or delivered under
or by reason of the provisions of this Agreement will be in writing and shall be
deemed to have been duly given or delivered (i) when delivered personally; (ii)
sent by telephone facsimile transmission; or (iii) sent via a nationally
recognized overnight courier to the recipient. Such notices, demands and other
communications will be sent to the address indicated in the first paragraph
hereof, or to such other address as any party may specify by notice given to the
other party in accordance with this Section. The date of giving any such notice
shall be (i) the date of hand delivery; (ii) the date sent by telephone
facsimile if a business day or the first business day thereafter; or (iii) the
business day after delivery to the overnight courier service.

(e) This Agreement shall be governed by and construed in accordance with the
domestic laws of the State of Colorado without giving effect to any choice or
conflict of law provision or rule (whether of the State of Colorado or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Colorado. Without limitation of the foregoing, BAILEY
and ASPEN specifically acknowledge that they do not intend the laws of the State
of California to be applicable to this employment relationship.

(f) This Agreement constitutes the entire agreement among the Parties with
respect to the subject matter of this Agreement and supersedes any prior
agreement or understanding, whether written and oral, among the Parties or
between any of them with respect to the subject matter of this Agreement. There
are no representations, warranties, covenants, promises or undertakings, other
than those expressly set forth or referred to herein.

(g) This Agreement may be amended, modified or waived only by a written
agreement signed by each of the Parties hereto.

(h) This Agreement shall be binding upon and shall inure to the benefit of the
Parties and their respective successors and, if applicable, permitted assigns.

Employment Agreement - R. V. BAILEY                                       Page 5

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(i) Each party intends that this Agreement shall not benefit or create any right
or cause of action in any person other than the Parties or as specifically
expressed in this Agreement.

(j) This Agreement may be executed in one or more counterparts, each of which
shall constitute an original but when taken together shall constitute but one
instrument.

(k) Aspen shall reimburse BAILEY for BAILEY'S reasonable expenses, not to exceed
$1,500, in connection with the execution, delivery and performance of this
Agreement and the transactions contemplated hereby, including without limitation
all fees and expenses of its agents, representatives, counsel and accountants.

9. REMEDIES: In the event of any disagreement or dispute arising hereunder, the
same shall be subject to Colorado law and be submitted to arbitration before the
Judicial Arbiter Group, Inc., Denver, Colorado, in accordance with the rules of
such group.

     IN WITNESS WHEREOF, the Board of Directors of ASPEN has approved this
Agreement by resolutions dated April 24, 2003, and the Parties have executed
this Agreement this 24th day of April, 2003, to be effective as of the first day
of May 2003.

ASPEN EXPLORATION CORPORATION

By:  /s/  Robert A. Cohan
   ---------------------------------
          Robert A. Cohan, President

Date:    May 6, 2003

EMPLOYEE

By:  /s/  R. V. Bailey
    ----------------------------------
          R. V. Bailey, Vice President

Date:    April 24, 2003

Employment Agreement - R. V. BAILEY                                       Page 6<PAGE>

                             CONFIDENTIAL TREATMENT

                                  Exhibit 10.2
                         Professional Services Agreement

<PAGE>

SVI RETAIL, INC.                                          CONFIDENTIAL TREATMENT
PROFESSIONAL SERVICES AGREEMENT

This PROFESSIONAL SERVICES AGREEMENT (Agreement) is between SVI Retail, Inc.
("SVI Retail") located at 12707, Suite 335, High Bluff Drive, San Diego, CA
92130, and TOYS "R" US, INC. ("Customer") located at 461 From Road, Paramus, NJ,
07652.

This Agreement sets forth the terms and conditions by which SVI Retail will
provide Professional Services to Customer. Any capitalized terms in this
Agreement shall have the same meaning as defined in Section 2 "Definitions" in
this agreement or the Schedules attached hereto.

SVI Retail will provide Customer with Professional Services for the SVI Retail
Software as defined in the Software License Agreement attached as Schedule 4,
Section 1.3 (the "Software") including services as defined in this agreement.

This Agreement consists of this document and the following schedules that are
incorporated by reference (the "Schedules").

Schedules

1A       Short Term Resource Plan
1B       Long Term Resource Plan (not currently included until final)
2        Professional Services Fee Rates
3        Professional Services Fee Schedule
--------------------------------------------------------------------------------

ACCEPTANCE

By signing below, Customer agrees to purchase the services of SVI Retail as
described in the Resource Plan, at the rates and times set forth in the
Schedules and SVI Retail agrees to provide such services to Customer, all
according to the terms of this Agreement. Once signed, any reproduction of this
Agreement, Agreement Modification, or Release Order made by reliable means (for
example, photocopy or facsimile) is considered an original and all Professional
Services SVI Retail provides under this Agreement are subject to this Agreement.

SVI RETAIL                                       TOYS "R" US, INC.

By                                             By
   -------------------------------                -----------------------------

Name    Kevin O'Neill                          Name
     -----------------------------                  ---------------------------

Title   Chief Financial Officer                Title
     -----------------------------                  ---------------------------

Date                                           Date
     -----------------------------                  ---------------------------

PLEASE RETURN TWO (2) ORIGINALS OF THIS AGREEMENT TO SVI RETAIL. UPON RECEIPT,
SVI RETAIL WILL SIGN AND RETURN ONE ORIGINAL TO CUSTOMER.

                                       1
<PAGE>

                                                          CONFIDENTIAL TREATMENT

1. EFFECTIVE DATE AND TERM:

         1.1.     The effective date of this Agreement shall be the date this
                  document is executed by both SVI Retail and Customer.

         1.2.     This Agreement shall continue in force through [***] unless
                  otherwise terminated as provided herein.

2.   DEFINITIONS:

         2.1.     "Professional Services." Shall be the types of services
                  offered by SVI Retail as described in Section 3 below.

         2.2.     "Short Term Resources." Shall be those resources as defined in
                  Schedule 1A and that are available on a guaranteed minimum
                  utilization basis of [***], unless otherwise noted in Schedule
                  1A, during the specific time periods as defined in Schedule
                  1A.

         2.3.     "Long Term Resources." Shall be those resources as defined in
                  Schedule 1B and that are available on a guaranteed minimum
                  utilization basis of [***], unless otherwise noted in Schedule
                  1B, during the specific time periods as defined in Schedule
                  1B.

         2.4.     "Software." The computer programs in object code formally
                  described in the Software License Agreement attached as
                  Schedule 4, including any extracts from such programs,
                  derivative works of such programs, or collective works
                  including such programs (such as subsequent Releases) to the
                  extent specifically provided to Customer under this Agreement
                  or the License Agreement.

3.  PROFESSIONAL SERVICES:

         SVI Retail will provide Customer with SVI Retail employees for the
         purpose of performing services for Customer or its employees concerning
         the use of the Software. The time will be tracked in quarter-hour
         segments and billed as recorded. Professional Services includes (a)
         services both on site and off site which is billed at the published Fee
         Rates, as defined in Schedule 2, (b) time spent by SVI Retail personnel
         to answer Customer's questions via teleconference and e-mail, and (c)
         advance preparation by SVI Retail personnel as necessary in providing
         services to Customer as well as follow-up materials to document the
         results of visits, sessions or teleconferences.

4.  BOOKING OF PROFESSIONAL  SERVICES:

         4.1.     For Short Term and Long Term Resources, SVI Retail will ensure
                  that these resources will be available when Customer requests
                  them as defined in Schedule 1A and 1B, subject to their
                  health, vacation, and other such limitations. SVI Retail
                  agrees that the Customer will always have first priority
                  access to these resources regardless of other SVI Retail
                  customer requests. Customer acknowledges there might be times
                  when the SVI Retail employee Customer requests or those
                  qualified to provide the services Customer requires are not
                  immediately available when Customer requests them. In such a
                  case, SVI Retail will make every effort to accommodate
                  Customer's needs as well and as promptly as reasonably
                  possible.

[***] = Confidential Treatment Requested

                                       2
<PAGE>

                                                          CONFIDENTIAL TREATMENT

          4.2.    Customer acknowledges it will be charged for Short Term
                  Resources and Long Term Resources during the periods such
                  resources are allocated to it on Schedule 1A and 1B at a
                  minimum utilization level of [***], unless otherwise noted,
                  even if actual utilization is less.

5.  WORK AUTHORIZATION:

         5.1.     Requests for visits to Customer's location or requests for
                  services to be performed at an SVI Retail site must be made by
                  Customer in writing or by e-mail. Before an SVI Retail
                  representative travels or begins work on Customer's behalf,
                  SVI Retail will ask for written or e-mail confirmation of
                  Customer's request. Unless specifically indicated otherwise in
                  this Agreement, Customer will not be charged for fees and
                  expenses for services that Customer has not approved and SVI
                  Retail will not travel or perform any services until Customer
                  has given SVI Retail such approval.

         5.2.     Change orders or requests may be made by Customer in writing
                  or by e-mail. All such changes must detail the proposed
                  change, the reasons for the change and its perceived impact on
                  other services to be performed by SVI Retail. Within [***]
                  following receipt of any change pursuant to this Section, SVI
                  Retail shall notify Customer in writing or by e-mail of the
                  estimated effect such change will have on the cost and timing
                  of services to be provided hereunder.

6.  TRAVEL TIME:

         6.1.     Travel time for services originating from the SVI Retail US
                  office(s) to destinations in the US, Mexico or Canada, or for
                  service originating from the SVI Retail UK office to
                  destinations in Europe will not normally be billed unless the
                  total billable hours for a single trip is less than [***]In
                  such case, the lesser of [***]hours or the actual travel hours
                  for the trip will be billed.

         6.2.     Travel time for services originating from the SVI Retail US
                  office(s) to destinations other than the United States, Mexico
                  or Canada, or for services originating from the UK office of
                  SVI Retail to destinations other than Europe will not normally
                  be billed unless the total billable hours for a single trip is
                  less than [***]In such case, the lesser of [***]hours or [***]
                  for the trip will be billed.

7.  TRAVEL EXPENSES:

         7.1.     In scheduling a visit to Customer's location, SVI Retail
                  attempts to work with Customer so that the time SVI Retail
                  spends is used effectively. SVI Retail will assign its
                  personnel based upon the services to be performed, upon an
                  ongoing analysis of Customer's needs and upon Customer's
                  approval. There may be one of SVI Retail`s employees at
                  Customer's site on some occasions and more than one at other
                  times. For this reason, and because of the varying lengths of
                  stay, expenses will vary from visit to visit.

         7.2.     Expenses can include round trip airfare (regular unrestricted
                  coach for domestic flights and business class for
                  international flights), hotel accommodations (Hilton, Hyatt,
                  Marriott or equivalent in the US and Canada; Hilton, Marriott
                  or Holiday Inn or equivalent in the UK and Europe; Hilton,
                  Marriott, Prince or equivalent in Asia-Pacific), meals and
                  ground transportation (car rental, taxi, train, ferry,
                  parking, etc.). Any lost deposits or penalties that are
                  incurred as a result of Customer's canceling a visit after
                  having confirmed it will be billed to Customer.

[***] = Confidential Treatment Requested

                                       3
<PAGE>

                                                          CONFIDENTIAL TREATMENT

         7.3.     Since SVI Retail's employees might visit more than one user
                  site during a trip, it is possible that Customer will be
                  billed for only a portion of the related expenses. The portion
                  paid by Customer in such a case will be calculated by dividing
                  the number of hours spent at Customer's site by the total
                  number of hours for all users visited during the trip, and
                  then applying this ratio to any common expenses incurred, such
                  as airfare.

         7.4.     The amount Customer will be charged for travel expenses will
                  be determined by the going rates for services in Customer's
                  area. SVI Retail employees will make their own arrangements
                  and submit expense claims to SVI Retail. Customer will be
                  billed for each visit. Copies of completed, approved by SVI
                  Retail management travel expense reports will accompany all
                  travel expense invoices. All invoices submitted to Customer
                  will conform to Customer's Travel Reimbursement Policy
                  requirements.

8.  TIME AND COST:

         8.1.     SVI Retail will use its commercially reasonable best efforts
                  to ensure that its software products are installed, Customer's
                  staff is trained and any conversion or modifications requested
                  of it are delivered in the time agreed. SVI Retail provides
                  this assurance based upon the agreed scope of work known at
                  the time a completion or delivery date is agreed upon.
                  Customer's actual delivery time could vary based upon the
                  discovery of information or circumstances not previously known
                  or beyond SVI Retail's control.

         8.2.     SVI Retail service estimates are provided as a guideline based
                  upon our experience with similar requirements in similar
                  companies. Customer's actual cost could vary from that
                  estimated due to the discovery of information or circumstances
                  not then known or beyond SVI Retail's control. Customer's
                  costs could also vary based upon Customer's desire to use more
                  or less of SVI Retail's services than those normally used in
                  similar situations.

         8.3.     SVI Retail will not be responsible for any errors or omissions
                  in information, data or services provided by Customer or by
                  third parties hired by Customer to act on Customer's behalf.

9.  PROJECT STAFF:

         9.1.     Each party to this Agreement shall appoint a project or
                  account manager who will be responsible for representing that
                  party in connection with the services under this Agreement.
                  SVI Retail's account manager shall have the authority and
                  responsibility for the planning, control and scheduling of all
                  effort and resources in connection with SVI Retail's work
                  under this Agreement. Customer's project manager will have
                  responsibility for all planning, control and scheduling of
                  effort and resources required to be provided or made available
                  by Customer under this Agreement.

         9.2.     Each party will endeavor to ensure continuity of its key staff
                  on the project but reserves the right to make changes if
                  necessary due to circumstances beyond its control. Should it
                  become necessary for either party to replace any key member of
                  its staff involved in the performance of work under this
                  Agreement, the affected party shall notify the other and will
                  provide a suitably qualified and experienced replacement
                  member of staff with as similar a level of skill and
                  experience to the replaced member of staff as is reasonably
                  possible.

         9.3.     SVI Retail warrants that any staff assigned to provide
                  services to Customer under this Agreement shall possess such
                  skill and experience as is necessary for the proper
                  performance of those services.

         9.4.      [***]

[***] = Confidential Treatment Requested

                                       4
<PAGE>

                                                          CONFIDENTIAL TREATMENT

         9.5.     SVI Retail warrants that given adequate notice, it will use
                  its best efforts to make available the number of SVI Retail
                  employees Customer requests for the time period Customer
                  requests.

10.  DISCLAIMER OF WARRANTY AND LIMITATION OF LIABILITY:

         10.1.    EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, SVI RETAIL
                  EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES CONCERNING THE
                  SOFTWARE OR THE SERVICES TO BE RENDERED HEREUNDER, WHETHER
                  EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY
                  WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
                  PURPOSE.

         10.2.    In no event shall SVI Retail's cumulative liability for any
                  claim arising in connection with this Agreement exceed the
                  total fees and charges paid to SVI Retail by Customer within
                  the preceding 12 months. In no event shall SVI Retail be
                  liable for any indirect, consequential, special, exemplary, or
                  incidental damages of whatever kind, except for damages caused
                  by SVI Retail's negligence.

         10.3.    No action, whether based in contract, strict liability, or
                  tort, including any action based on negligence, arising out of
                  the performance of services under this Agreement, may be
                  brought by either party more than [***] year after such cause
                  of action accrued, except that an action for nonpayment may be
                  brought within [***] of the date of the last payment.

11.  ASSIGNMENT:

         Neither party shall assign any of its obligations under this Agreement
         without the prior written consent of the other party, which shall not
         be unreasonably withheld.

12.  CONFIDENTIALITY:

         12.1.    It is anticipated that Customer and SVI Retail, in the course
                  of carrying out their respective responsibilities under this
                  Agreement, will consult with the other party's personnel
                  about, or receive certain of, the other party's confidential
                  business and technical information ("Confidential
                  Information"). Customer and SVI Retail agree to keep
                  confidential and, without the other party's prior written
                  consent, will not use and will not disclose to any person or
                  entity any Confidential Information except as expressly
                  permitted by this Agreement. Customer and SVI Retail will each
                  take reasonable precautions to ensure that the Confidential
                  Information of the other party is disclosed to or used by only
                  those persons who have a reasonable need to know.

         12.2.    The foregoing obligations of this Section 12 will not apply to
                  any information or data that (1) at the time of disclosure or
                  use by the recipient is known or available to the general
                  public by publication or otherwise (other than as a result of
                  a breach of this Section 12; (2) is known by the recipient at
                  the time of receiving such information; (3) is made public by
                  the disclosing party; (4) is developed independently by the
                  recipient prior to the date of disclosure by the disclosing
                  party; or (5) is acquired by the recipient from a third party
                  who independently and rightfully developed or acquired the
                  information or data and was under no duty to refrain from its
                  disclosure.

         12.3.    Customer shall not, and shall not allow any other party to,
                  reverse assemble or reverse compile the Software, for any
                  purpose.

[***] = Confidential Treatment Requested

                                       5
<PAGE>

                                                          CONFIDENTIAL TREATMENT

         12.4.    Either Customer or SVI Retail may specifically enforce any
                  agreement contained in this Section 12 through an injunction
                  or otherwise, in the event of breach or threatened breach by
                  the other. Such remedies will be in addition to all others
                  that may be available.

         12.5.    The Confidentiality provisions of this Section 12 shall
                  survive termination of this Agreement.

13.  NON-SOLICITATION OF STAFF:

         13.1.    For the duration of this Agreement and for a period of [***]
                  thereafter neither party shall employ nor make any offers of
                  employment to any employee of the other engaged in the
                  performance of this Agreement unless agreed in writing by the
                  other party. "Employ" means the engagement of such person as
                  an employee, director, sub-contractor or independent
                  contractor.

         13.2.    Each party's estimate of the damage that a breach of the above
                  paragraph would have upon its business is herein quantified as
                  liquidated damages in the amount [***] for the individual in
                  question. Each party accepts that these are reasonable
                  estimates of loss and agrees to pay the same upon demand in
                  the event of its breach of this clause.

14. NO WAIVER:

         Neither party shall by mere lapse of time, without giving notice or
         taking other action hereunder, be deemed to have waived any breach by
         the other party of any of the provisions of this Agreement. Further,
         the waiver by either party of a particular breach of this Agreement by
         the other shall not be construed or constitute a continuing waiver of
         such breach or of other breaches of the same or other provisions of
         this Agreement.

15.  PAYMENT:

         15.1.    SVI Retail shall invoice Customer for services and related
                  expenses provided under this Agreement on a single invoice on
                  a monthly basis for all fees and charges accrued, and all
                  reimbursable expenses incurred, during the previous month.
                  Customer shall pay the invoiced amount promptly upon receipt
                  of such invoice. Any amount not paid within [***] days after
                  the invoice date shall bear interest at the lesser of [***]
                  percent per month or the highest rate allowed by applicable
                  law.

         15.2.    Customer shall be responsible for procuring, installing, and
                  maintaining all equipment, telephone lines, communications
                  interfaces, and other hardware (other than the hardware
                  constituting the program control center maintained at SVI
                  Retail's facilities) necessary to operate the Software and to
                  obtain from SVI Retail the services called for by this
                  Agreement.

         15.3.    Customer shall pay SVI Retail in advance for the Short and
                  Long Staff Resources as defined in Schedule 3 attached to this
                  Agreement. These advance payments shall be credited to the
                  Customer's account during the term of the Agreement as defined
                  in Schedule 3.

16.  INDEMNITY:

         Each party agrees to indemnify and hold the other harmless from any
         third party loss, claim, liability or damage to person or property
         arising out of this Agreement and services provided which is caused by
         the negligence or intentional misconduct of the party causing such
         loss, claim, liability or damage. This indemnity will survive the
         termination of this Agreement.

[***] = Confidential Treatment Requested

                                       6
<PAGE>

                                                          CONFIDENTIAL TREATMENT

17.  TERMINATION:

         Customer may not terminate this Agreement at any time for any reason,
         unless for reason of default by SVI Retail which has not been cured
         within [***] following delivery to SVI Retail of written notice of the
         specific conditions constituting such default. SVI Retail may terminate
         this Agreement if Customer fails to pay, within 60 days of receiving an
         invoice, for any services, which have been requested by Customer and
         have been duly performed by SVI Retail, SVI Retail may suspend its
         performance of services under the terms of this Agreement pending
         receipt of such payment, require prepayment for any subsequent services
         to be rendered, or any combination of the foregoing

18.  LEGAL AUTHORITY:

         SVI Retail and Customer are independent entities and shall not have
         authority to act for or bind the other in any way or to represent that
         either of them is in any way responsible for acts of the other. All
         persons employed by SVI Retail in connection with performing the
         services described herein shall, for all purposes, be employees or
         agents of SVI Retail and under no circumstances shall SVI Retail or any
         of its employees be deemed employees or agents of Customer. SVI Retail
         and Customer each represent and warrant to the other (i) it is aware of
         no obligation, legal or otherwise, which is inconsistent with its
         obligations under this Agreement and (ii) performance of its
         obligations under this Agreement will not violate any law, rule,
         regulation, or any proprietary right of a third party.

19.  LAW:

         All questions concerning the validity, operation, interpretation and
         construction of this Agreement shall be governed by and determined in
         accordance with the internal laws of the State of California
         (irrespective of its choice of law principles).

20.  ARBITRATION:

         20.1.    Except as specifically modified by this paragraph, and
                  excepting matters involving provisional remedies as set forth
                  below, any controversy or claim arising out of or relating to
                  this Agreement, or any breach thereof, including without
                  limitation, any claim that this Agreement, or any part
                  thereof, is invalid, illegal or otherwise voidable or void,
                  shall be submitted to arbitration to be held before a single
                  arbitrator in San Diego, California before and in accordance
                  with the commercial arbitration rules of the American
                  Arbitration Association. If the claims at issue exceed
                  $500,000.00, exclusive of interest and attorneys fees, such
                  commercial arbitration rules shall include the supplementary
                  procedures for large, complex cases and the number of
                  arbitrators shall be three. In all cases, the arbitrators
                  shall be members of the State Bar of California, actively
                  engaged in the practice of law for at least 10 years, or a
                  retired member of the state or federal judiciary.

         20.2.    The provisions of this paragraph shall be construed as
                  independent of any other covenant or provision of this
                  Agreement; provided that if a court of competent jurisdiction
                  determines that any such provisions are unlawful in any way,
                  such court shall modify or interpret such provisions to the
                  minimum extent necessary to have them comply with the law.

         20.3.    Judgment upon an arbitration award may be entered in any court
                  having competent jurisdiction and shall be binding, final and
                  non-appealable.

         20.4.    This arbitration provision shall be deemed to be
                  self-executing and shall remain in full force and effect after
                  expiration or termination of this Agreement. In the event
                  either party fails to appear at any properly noticed
                  arbitration proceeding, an award may be entered against such
                  party by default or otherwise notwithstanding said failure to
                  appear.

[***] = Confidential Treatment Requested

                                       7
<PAGE>

                                                          CONFIDENTIAL TREATMENT

21.  PRESS RELEASES:

         SVI Retail may issue press releases that provide information regarding
         the contents of this Agreement. SVI Retail will receive Customer's
         approval before releasing any press release that provides any
         information regarding Customer, however, SVI Retail may be obligated
         under Securities and Exchange Commission public disclosure rules to
         release information regarding Customer or this Agreement without prior
         approval. SVI Retail may also include Customer's name on its list of
         customers.

22.  SCOPE OF AGREEMENT; AMENDMENT:

         The parties hereto acknowledge that each has read this Agreement,
         understands it, and agrees to be bound by its terms. The parties
         further agree that this Agreement is the complete and exclusive
         statement of agreement and supersedes all proposals (oral or written),
         understandings, representations, conditions, warranties, covenants, and
         other communications between the parties relating hereto. This
         Agreement may be amended only by a subsequent writing that specifically
         refers to this Agreement and is signed by both parties, and no other
         act, document, usage, or custom shall be deemed to amend this
         Agreement.

23.  VENUE AND JURISDICTION:

         For purposes of venue and jurisdiction, this Agreement shall be deemed
         made and to be performed in the City of San Diego, California.

24.  COUNTERPARTS:

         This Agreement may be executed in counterparts, each of which shall be
         deemed an original and all of which together shall constitute one
         document.

25.  TIME OF ESSENCE:

         Time and strict and punctual performance are of the essence with
         respect to each provision of this Agreement.

26.      ATTORNEY'S FEES:

         In the event any litigation, arbitration, mediation, or other
         proceeding ("Proceeding") is initiated by any party(ies) against any
         other party(ies) to enforce, interpret or otherwise obtain judicial or
         quasi-judicial relief in connection with this Agreement, the prevailing
         party(ies) in such Proceeding shall be entitled to recover from the
         unsuccessful party(ies) all costs, expenses, and actual attorney's fees
         relating to or arising out of (a) such Proceeding (whether or not such
         Proceeding proceeds to judgment), and (b) any post-judgment or
         post-award proceeding including without limitation one to enforce any
         judgment or award resulting from any such Proceeding. Any such judgment
         or award shall contain a specific provision for the recovery of all
         such subsequently incurred costs, expenses, and actual attorney's fees.

27. HEADINGS:

         The headings of the Paragraphs of this Agreement have been included
         only for convenience, and shall not be deemed in any manner to modify
         or limit any of the provisions of this Agreement, or be used in any
         manner in the interpretation of this Agreement.

                                       8
<PAGE>

                                                          CONFIDENTIAL TREATMENT

28.      PARTIAL INVALIDITY:

         Each provision of this Agreement shall be valid and enforceable to the
         fullest extent permitted by law. If any provision of this Agreement or
         the application of such provision to any person or circumstance shall,
         to any extent, be invalid or unenforceable, the remainder of this
         Agreement, or the application of such provision to persons or
         circumstances other than those as to which it is held invalid or
         unenforceable, shall not be affected by such invalidity or
         unenforceability, unless such provision or such application of such
         provision is essential to this Agreement.

29.  DRAFTING AMBIGUITIES:

         Each party to this Agreement and its legal counsel have reviewed and
         revised this Agreement. The rule of construction that any ambiguities
         are to be resolved against the drafting party shall not be employed in
         the interpretation of this Agreement or of any amendments or exhibits
         to this Agreement.

30. NOTICES:

         Any notice, consent, authorization or other communication to be given
         hereunder shall be in writing and shall be deemed duly given and
         received when delivered personally or transmitted by facsimile
         transmission with receipt acknowledged by the addressee or three days
         after being mailed by first class mail, or the next business day after
         being deposited for next-day delivery with a nationally recognized
         overnight delivery service, charges and postage prepaid, properly
         addressed to the party to receive such notice at the address(es)
         specified below, or at such other address as shall be specified by like
         notice:

                      SVI Retail, Inc.
                      12707 High Bluff Drive, Suite 335
                      San Diego, California 92130
                      Attention:  Kevin O'Neill, Chief Financial Officer
                      Facsimile:   (858) 481-8557

                      with a copy to:

                      Solomon Ward Seidenwurm & Smith, LLP
                      401 B Street, Suite 1200
                      San Diego, California 92101
                      Attention: Norman L. Smith
                      Facsimile:  (619) 231-4755

                      Toys "R" Us
                      461 From Road
                      Paramus, NJ 07652

                      Attention: Arthur Mason
                      Facsimile: (201) 802-5799

-- END --

                                       9
<PAGE>

* Confidential portions of this document have been redacted and have been
separately filed with the Commission.

<TABLE>

                                  Schedule 1A
SVI Resource Plan
Exclusive of SVI Enhancements Project & Platinum Software Support
Assumes Testing Project Complete Jan 02

                                                           1999      2000      2001       2002       2003

May 24, 2001             Positions   People   In Project    New Hire   Replacement Hire
------------------------------------------------------------------------------------------------------------
<S>                      <C>
Overall Project  [***]

Data Warehouse Project (Project Manager = TRUI)        [***]
                                                       [***]
                                                       [***]

Interface Project (Project Manager = TRUI)       [***]
                                                 [***]
                                                 [***]
                                                 [***]

Data Conversion Project       [***]
                              [***]
                              [***]
                              [***]
                              [***]
                              [***]
                              [***]
                              [***]
                              [***]

SVI Enhancements Project (no Client Services Resource)      [***]

TRUI Testing Project for Unit, Cross Functional, and Systems Integration (Project Manager = TRUI)    [***]
                                                                                                     [***]
                                                                                                     [***]
                                                                                                     [***]
                                                                                                     [***]
                                                                                                     [***]
                                                                                                     [***]
                                                                                                     [***]
                                                                                                     [***]
                                                                                                     [***]
                                                                                                     [***]
                                                                                                     [***]
                                                                                                     [***]

<PAGE>
                                  Schedule 1A
SVI Resource Plan
Exclusive of SVI Enhancements Project & Platinum Software Support
Assumes Testing Project Complete Jan 02

                                                           1999      2000      2001       2002       2003

May 24, 2001             Positions   People   In Project    New Hire   Replacement Hire
------------------------------------------------------------------------------------------------------------

Business Implementation Project    [***]
                                   [***]
                                   [***]
                                   [***]
                                   [***]
                                   [***]
                                   [***]
                                   [***]
                                   [***]
                                   [***]
                                   [***]
                                   [***]
                                   [***]
                                   [***]
                                   [***]
                                   [***]
                                   [***]
                                   [***]
                                   [***]
                                   [***]
                                   [***]
                                   [***]
                                   [***]
                                   [***]
                                   [***]
                                   [***]
                                   [***]
                                   [***]
                                   [***]
</TABLE>

<PAGE>

                                   SCHEDULE 2
                                   ----------

CLIENT SERVICES FEE RATES

POSITION                                               HOURLY RATE
--------                                               -----------

Account Manager                                           [ * ]
Technical Consultant                                      [ * ]
Business / System Analyst                                 [ * ]
Business Partner                                          [ * ]
Data Modeler                                              [ * ]
Knowledge Team Project Manager                            [ * ]
Implementation Project Manager                            [ * ]
Tester                                                    [ * ]
Application Specialist                                    [ * ]
Project Administrator                                     [ * ]
Programmer/Programmer Analyst                             [ * ]
Writer                                                    [ * ]
Business Liaison                                          [ * ]

During the term of this agreement [ * ]

                                       11
<PAGE>

                                   SCHEDULE 3

                                                          CONFIDENTIAL TREATMENT

                                  FEE SCHEDULE

Customer will pay SVI Retail for the services provided pursuant to Schedule 1A
resources included in this agreement using the following method:

1.       Initial payment of [***] as of [***] for services to be provided
         beginning [***]

2.       Subsequent monthly payments of [***] from [***] through [***]

3.       Monthly payments of [***] beginning [***] through [***] then monthly
         payments of [***] beginning [***] through [***] followed by monthly
         payments of [***] beginning [***] through [***]

4.       SVI Retail will submit monthly Professional Services "billing detail"
         to Customer providing detail records of actual services performed and
         charges accrued.

5.       At the end of each three (3) month period, SVI Retail will provide
         Customer with a reconciliation of the total charges for Professional
         Services provided to Customer during that respective period including
         application of the monthly payment credits. If the actual charges
         exceed the total of the monthly payments for the subject 3 month
         period, then SVI Retail will invoice Customer for the amount in excess
         of the total payments made in that period. If the actual charges are
         less than the total of the monthly payments for the subject 3 month
         period, then SVI Retail will issue credits to Customer for the amount
         overpaid by Customer and will apply these credits towards future
         monthly payments. At the end of the [***] period, SVI Retail will issue
         either a final invoice or credit to Customer based upon a final
         reconciliation of this period. [***]

6.       SVI Retail will invoice Customer separately on a monthly basis for all
         travel expenses authorized by Customer for SVI Retail's Professional
         Services resources related travel during that month.

<TABLE>
<CAPTION>
These payments are further detailed in the table below:

<S>                  <C>           <C>           <C>           <C>           <C>
     [***]           [***]         [***]         [***]         [***]         [***]
---------------- ------------- ------------- ------------- ------------- --------------
---------------- ------------- ------------- ------------- ------------- --------------
     [***]           [***]         [***]         [***]         [***]         [***]
---------------- ------------- ------------- ------------- ------------- --------------
---------------- ------------- ------------- ------------- ------------- --------------
     [***]           [***]         [***]         [***]         [***]         [***]
---------------- ------------- ------------- ------------- ------------- --------------
---------------- ------------- ------------- ------------- ------------- --------------
     [***]           [***]         [***]         [***]         [***]         [***]
---------------- ------------- ------------- ------------- ------------- --------------
---------------- ------------- ------------- ------------- ------------- --------------
     [***]           [***]         [***]         [***]                       [***]
----------------
</TABLE>

[***] = Confidential Treatment Requested

                                       10

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