Toy License Agreement - Lucas Licensing Ltd. and Hasbro Inc.


      [Information below, marked with [**], has been omitted pursuant to a
    request for confidential treatment. A complete copy of this document has
     been supplied to the Securities and Exchange Commission under separate
      cover. Approximately 44 pages (including schedules) have been omitted
              pursuant to the request for confidential treatment.]

          TOY LICENSE AGREEMENT BETWEEN LUCAS LICENSING LTD. AND HASBRO
                          DATED AS OF OCTOBER 14, 1997



                              TOY LICENSE AGREEMENT

                                TABLE OF CONTENTS

1.  GRANT OF LICENSE ........................................................1
                                                                              
2.  TERM AND TERRITORY.......................................................2
                                                                              
3.  RESTRICTIONS.............................................................4
                                                                              
4.  OBLIGATIONS OF LICENSEE..................................................8
                                                                              
5.  LICENSOR APPROVALS.......................................................9
                                                                              
6.  [**]....................................................................11
                                                                              
7.  ADVANCE.................................................................11
                                                                              
8.  ROYALTIES AND OTHER CONSIDERATION.......................................12
                                                                              
9.  STATEMENTS AND PAYMENTS.................................................14
    
10. TAXES...................................................................16

11. RECORDS AND AUDITS......................................................16

12. COPYRIGHT AND TRADEMARK NOTICES.........................................17

13. OWNERSHIP...............................................................18

14. PROMOTIONAL VALUE, TRADEMARK RIGHTS AND GOODWILL........................20

15. APPROVAL OF MANUFACTURERS...............................................21

16. CONFIDENTIALITY.........................................................22

17. PRODUCT SAMPLES.........................................................23

18. INTENTIONALLY DELETED...................................................24

19. REPRESENTATIONS AND WARRANTIES..........................................24

20. INDEMNITIES.............................................................25

21. INSURANCE...............................................................27

22. EXPIRATION AND TERMINATION..............................................28

23. RESERVED RIGHTS.........................................................31

24. DEFINITIONS.............................................................31

25. GENERAL.................................................................39


                                       i


            SCHEDULE I -      PERMITTED LICENSEE AFFILIATES

            SCHEDULE II -     LICENSED PRODUCTS

            SCHEDULE III-     ADVANCES AND MINIMUM SALES LEVELS

            SCHEDULE IV -     EXCLUDED DISTRIBUTION CHANNELS

            SCHEDULE V -      LICENSOR TRADEMARKS

            SCHEDULE VI -     EXCLUDED COUNTRIES

            SCHEDULE VII -    [**]

            SCHEDULE VIII -   MARKET CATEGORIES

            SCHEDULE IX -     GIFT MARKET DEFINITION

            EXHIBIT A -       TRADEMARK LICENSE AGREEMENT

            EXHIBIT B -       APPROVAL OF SUBLICENSEE AGREEMENT

            EXHIBIT C -       STANDARD APPROVAL FORM

            EXHIBIT D -       ROYALTY REPORT FORM

            EXHIBIT E -       THIRD PARTY COPYRIGHT ASSIGNMENT

            EXHIBIT F -       APPROVAL OF MANUFACTURER AGREEMENT


                                       ii


                              TOY LICENSE AGREEMENT

This LICENSE AGREEMENT (the "Agreement") is made and entered into as of October
14, 1997, between Lucas Licensing Ltd., a California corporation ("Licensor"),
on the one hand located at P. O. Box 2009, San Rafael, CA 94912, and Hasbro,
Inc., a Rhode Island corporation, located at 1027 Newport Ave., Pawtucket, R.I.
02862-1059, Hasbro International, Inc. a Delaware Corporation, located at 1027
Newport Ave., Pawtucket, R.I. 02862-1059, and all Permitted Licensee Affiliates
(jointly and severally "Licensee" or "Hasbro") on the other hand.

WHEREAS:

      A. Licensor is a California corporation engaged in the licensing of
entertainment intellectual properties related to the "Pictures" (as hereinafter
defined);

      B. Licensor owns or controls rights in respect of the Licensed Property
(as hereinafter defined);

      C. Licensee is engaged in the manufacture, distribution and sale of
consumer products in the form of toys including, without limitation, toys based
on entertainment intellectual properties licensed from third parties; and

      D. Licensee wishes to be licensed to use the Licensed Property for the
manufacture, distribution and sale of Licensed Products in the Territory and
Licensor has agreed to license rights in the Licensed Property to Licensee,
subject to the terms and conditions of this Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:

1.    GRANT OF LICENSE.

      Subject to the terms and conditions of this Agreement, and in
      consideration for all of Licensee's warranties, representations and
      obligations hereunder, including, without limitation, Licensee's agreement
      to pay and actual payment to Licensor of the Royalties and Advances,
      Licensor grants to Licensee a non-transferable, non-assignable (except as
      otherwise specified in Subparagraph 25.1 hereinbelow) license during the
      Term and throughout the Territory:

      1.1. to develop, design, manufacture, distribute, advertise, publicize,
      market and sell the Licensed Products set forth in Schedule II attached
      hereto, for sale to retail Customers through all channels of wholesale and
      retail distribution permitted hereunder; and

      1.2. to reproduce the Licensed Property and to use the Licensor Trademarks
      on and in connection with the Licensed Products and containers, packaging,
      display and promotional material and in Consumer Marketing for the
      Licensed Products as provided in this Agreement. Concurrently with its
      execution of this Agreement, Licensee shall execute a Trademark License
      Agreement with Licensor on Licensor's then-current form for such
      



      agreements (the "Trademark License Agreement"), a current copy of which
      form is attached hereto and by this reference incorporated herein as
      Exhibit A.

      Licensor shall in a timely manner make available to Licensee such
      materials as may be available for use in exercising Licensee's rights
      hereunder, subject to the confidentiality provisions of Subparagraph 16.1
      hereinbelow.

2.    TERM AND TERRITORY.

      2.1.  Term.

            (a) Unless earlier terminated as provided in this Agreement,
            including, without limitation, pursuant to this Subparagraph 2.1,
            the term of Licensee's rights pursuant to this Agreement (the
            "Term") shall consist of the time period commencing as of the date
            hereof (subject to Subparagraph 25.15 hereinbelow) and ending on the
            later of: (i) the final day of the third Calendar Year following the
            Calendar Year in which the initial general theatrical release in the
            United States (the "U.S. Release Date") of Episode III occurs; and
            (ii) December 31, 2007 (such later day constituting the "Expiration
            Date").

            (b) Notwithstanding anything to the contrary contained herein or
            otherwise, the Term shall terminate as set forth below:

                  (i) if the U.S. Release Date of Episode I does not occur on or
                  before June 30, 2004 (the "Episode I Outside Date"), then the
                  Term shall terminate as of the Episode I Outside Date;

                  (ii) if the U.S. Release Date of Episode I occurs on or before
                  the Episode I Outside Date, but the U.S. Release Date of
                  Episode II does not occur prior to the date which is five (5)
                  years following the U.S. Release Date of Episode I (the
                  "Episode II Outside Date"), then the Term shall terminate as
                  of the later of the Episode II Outside Date and December 31,
                  2007; or

                  (iii) if the U.S. Release Date for Episode I occurs on or
                  before the Episode I Outside Date and the U.S. Release Date of
                  Episode II occurs on or before the Episode II Outside Date,
                  but the U.S. Release Date of Episode III does not occur on or
                  before the date which is five (5) years after the U.S. Release
                  Date of Episode II (the "Episode III Outside Date"), then the
                  Term shall terminate as of the later of the Episode III
                  Outside Date and December 31, 2007.

      2.2. Territory. The territory of Licensee's rights hereunder (the
      "Territory") consists of the following applicable locations for the
      following applicable Licensed Products:


                                       2


--------------------------------------------------------------------------------
        Licensed Product                                 Territory
--------------------------------------------------------------------------------
Standard Toys (excluding Novelty Candy,      Enumerated countries and groupings 
Coloring Toys, Mechanical Design Toys        of countries set forth in Column A 
and Craft Kits);                             of Schedule III attached hereto    
                                             (each such enumerated country or   
Non-Standard Board Games; and                grouping of countries a            
                                             "Sub-Territory" herein) and all    
Electronics/Hand-Held ("E/H")                other countries that currently     
                                             exist or which may hereafter exist 
                                             during the Term (other than the    
                                             specific excluded countries listed 
                                             in Schedule VI);                   
--------------------------------------------------------------------------------
All Games and Puzzles ("G/P") (other         United States and Canada
than Non-Standard Board Games); Novelty
Candy; Coloring Toys; Mechanical Design
Toys; and Craft Kits
--------------------------------------------------------------------------------

      Licensee's exercise of the rights granted under this Agreement in any
      country in the Territory that is not part of a Sub-Territory hereunder
      (each such country a "ROW Country") shall not entail any payment of
      Advances under Paragraph 7 of this Agreement, but shall entail payment of
      Royalties under Paragraph 8 of this Agreement. Notwithstanding the
      foregoing, the sole activity of manufacturing a Licensed Product outside
      of the applicable Territory hereunder may take place in a country outside
      of the Territory if the terms and conditions of Paragraph 15 hereinbelow
      have been first satisfied and so long as no Licensed Product manufactured
      in such country is distributed by Licensee (or with Licensee's express or
      implied authority) from such country for the "sale" thereof (as defined in
      Subparagraph 8.2 hereinbelow) to a Customer outside of the Territory.
      Subject to Paragraph 23 hereinbelow, if Licensor elects to license to any
      third party the right to manufacture, distribute and sell during the Term
      of this Agreement any Licensed Product in any country outside of the
      Territory, then Licensor shall notify Licensee of such election in
      writing. Licensee shall thereafter have thirty (30) days from the date of
      such notice to negotiate and enter into a written agreement regarding such
      license which agreement shall incorporate all of the terms and conditions
      of this Agreement except for Paragraph 7 (Advance) and Paragraph 4
      (Minimum Sales Levels) hereinbelow; provided, however, that neither
      Licensee nor Licensor shall be obligated to enter into an agreement with
      respect to such license. For purposes of this Agreement, a country shall
      be deemed to include all territories and possessions thereof.


                                       3


3.    RESTRICTIONS.

      3.1.  Distribution.

            (a) General. Licensee shall not have the right:

                  (i) to distribute or sell (or authorize any entity to
                  distribute or sell) any Licensed Product other than to a "bona
                  fide and recognized" (as such term is commonly understood in
                  the U.S. toy industry) third party wholesale entity for
                  distribution directly to a Retail Entity, or directly to a
                  bona fide and recognized third party Retail Entity (whether
                  such third party Retail Entity is a third party "traditional
                  retail store" (as that term is commonly understood in the U.S.
                  toy industry), a third party direct-to-consumer paper-printed
                  catalog company or direct mail company, a third party Internet
                  Retail Entity or, subject to Subparagraph 3.1(c) hereinbelow,
                  a third party Electronic Retailer). In particular, but not by
                  way of limitation, Licensee shall not distribute any Licensed
                  Product through any channel, method or outlet of distribution
                  denoted as an Excluded Distribution Channel on Schedule IV
                  attached hereto;

                  (ii) to distribute or sell (or authorize any entity to
                  distribute or sell) any Licensed Product to any party if
                  Licensee knows, or in the exercise of its reasonable good
                  faith business judgment should know, that such distribution or
                  sale will result in the distribution for sale or resale of any
                  Licensed Product outside of the Territory;

                  (iii) to conduct or authorize any entity to conduct Consumer
                  Marketing disseminated outside of the Territory for any
                  Licensed Product; or

                  (iv) except with Licensor's prior written approval, to
                  distribute or sell any Licensed Product to any Closeout Store
                  in any country prior to the date eighteen (18) months after
                  the initial "sale" (as such term is defined in Subparagraph
                  8.2 hereinbelow) of such Licensed Product to a Customer in
                  such country.

            (b) Licensor Channels. Notwithstanding the rights licensed to
            Licensee hereunder, Licensor shall also have the right to distribute
            and/or sell any Licensed Product purchased from Licensee, any
            Licensee Affiliate or Sublicensee through any Licensor Channel and,
            in this connection, Licensor shall purchase or require to be
            purchased from Licensee, a Licensee Affiliate or a Sublicensee any
            Licensed Product for which Licensee has exclusive rights hereunder
            and which is to be sold through a Licensor Channel, provided,
            Licensee shall manufacture and supply to Licensor or to Licensor's
            designee those numbers of such Licensed Product as Licensor shall
            request for the applicable Licensor Channel, and Licensee shall sell
            such Licensed Product to Licensor or to Licensor's designee at the
            lowest price and on the most favorable terms given by Licensee, a
            Licensee Affiliate or a 


                                       4


            Sublicensee to a Customer for the same or comparable quantities of
            such Licensed Product being sold and delivered on comparable terms
            and conditions, whether or not such Licensed Product is Account
            Specific Merchandise, F.O.B. Product or otherwise. Notwithstanding
            the foregoing, in the case of Account Specific Merchandise, the
            foregoing obligation shall be subject to Licensee having received
            the consent of the person for whom such Account Specific Merchandise
            was created.

            (c) Internet/Electronic Retailers. Licensee shall not have the right
            to manufacture, distribute and/or sell (or authorize any entity to
            manufacture, distribute or sell) any Licensed Product:

                  (i) through the Internet (except for the transmission,
                  reception, recordation or display of information relating to a
                  purchase order placed by a person to whom Licensee is
                  permitted to sell under Subparagraph 3.1(a)(i) and except if
                  such distribution or sale is through a bona fide and
                  recognized third party Internet Retail Entity pursuant to
                  Subparagraph 3.1[a][i] hereinabove, or through a Licensor
                  Channel as permitted pursuant to Subparagraph 3.1[b]
                  hereinabove) without Licensor's prior written approval in each
                  instance; or

                  (ii) through any Electronic Retailer except that, at
                  Licensor's request, Licensee is hereby licensed to supply to
                  Licensor or to Licensor's designee such specific Licensed
                  Products to such specific Electronic Retailer(s) as Licensor
                  may approve in advance in writing.

      3.2. Exclusivity. The rights licensed to Licensee hereunder shall be
      exclusive for Standard Toys (except for the Standard Toys defined as
      Plush, Craft Kits and Novelty Candy, for which Licensee's rights hereunder
      shall be non-exclusive), for G/P and for E/H, except as otherwise set
      forth in Schedule II.

      3.3.  Sublicenses.

            (a) Approval of Sublicensee Agreement. Licensee shall have no right
            to sublicense to any entity (including to a distributor or to a
            Licensee Affiliate that is not a Permitted Licensee Affiliate) any
            right licensed to it hereunder (other than the right to manufacture
            any Licensed Product, which shall be subject to Paragraph 15
            hereinbelow) or transfer or dispose of any Licensed Property to any
            distributor, including to a Licensee Affiliate that is not a
            Permitted Licensee Affiliate or to any other third party unless and
            until: (i) Licensor has provided Licensee with its prior written
            approval of the proposed sublicensee and the terms and conditions of
            any and all agreements between Licensee and such proposed
            sublicensee (and any modifications thereof, whether oral or written)
            for such sublicense (collectively the "Sublicense Agreement"); (ii)
            such sublicensee shall have executed an Approval of Sublicensee
            Agreement with Licensor in substantially the form of Licensor's
            then-current form for such agreement, as such form may be revised by
            Licensor in its 


                                       5


            reasonable discretion from time to time (any such sublicensee and
            all affiliated and related entities of such Sublicensee approved by
            Licensor for which an Approval of Sublicensee Agreement is fully
            executed, a "Sublicensee" herein); (iii) such Sublicensee shall
            agree in the Sublicense Agreement to be fully bound at all times by
            the terms and conditions of the following paragraphs and
            subparagraphs of this Agreement adjusted as appropriate: 3.1, 3.4,
            3.5, 3.7, 3.8, 11.1, 11.2, 12, 13.2-13.8, 14, 16, 17, 19.1(c),
            19.1(d) and 19.1(e); (iv) such Sublicensee shall execute a Trademark
            License Agreement with Licensor; and (v) such Sublicensee shall
            further agree in such Approval of Sublicensee Agreement that
            Licensor shall be a third party beneficiary thereof. A copy of
            Licensor's current form for Approval of Sublicensee Agreement is
            attached hereto as Exhibit B. The sublicense by Licensee of any
            rights licensed to Licensee hereunder shall in no manner whatsoever
            affect or otherwise diminish or relieve any of Licensee's
            obligations hereunder, and Licensee shall execute, and shall ensure
            that each prospective Sublicensee executes, the Approval of
            Sublicensee Agreement. The failure by a Sublicensee to adhere to the
            terms of the Approval of Sublicensee Agreement or the Sublicensee
            Agreement shall not be imputed to Licensee unless such Sublicensee
            is a controlled affiliate of Licensee or Licensee fails to comply
            with its obligations under Subparagraph 3.3(b) hereinbelow.

            (b) Enforcement of Sublicense Agreement. Licensee agrees to include
            and strictly enforce in each Sublicense Agreement all of the terms
            and conditions of this Agreement relevant to the sublicense to
            Sublicensee of any right licensed to Licensee hereunder. Licensee
            shall advise Licensor of any material breach thereof by a
            Sublicensee and of any corrective action taken by Licensee or by
            such Sublicensee as well as the results thereof. Licensee shall use
            its best efforts to cause such Sublicensee to cure such breach and,
            at the written request of Licensor following such breach, Licensee
            shall terminate such Sublicense Agreement, subject to the same cure
            provisions as are applicable to Licensee in Subparagraph 22.2(a)
            hereinbelow. Licensee hereby appoints Licensor its attorney-in-fact
            solely for the purpose of sending a notice of termination, subject
            to the immediately preceding sentence, in order to terminate such
            Sublicense Agreement or any specific rights thereunder, which
            appointment is irrevocable and coupled with an interest; provided,
            however, that Licensor will indemnify and hold harmless Licensee for
            damages resulting from knowingly making a material misstatement in
            connection with the exercise of such power of attorney.

      3.4.  (a) No Rights to Products Other Than Licensed Products. Other than
            the products, goods and articles defined in Schedule II as "Licensed
            Products," all products, goods, items, devices and articles of any
            kind based on or incorporating the Licensed Property are expressly
            excluded from the rights licensed to Licensee pursuant to this
            Agreement and are expressly reserved to Licensor. For the avoidance
            of doubt, Licensee acknowledges and agrees that Micro Toys and
            "Model Kits" (as hereinafter defined) do not constitute Licensed
            Products and are expressly excluded from this Agreement. The term
            "Model Kits," as used in this Agreement, means [**].


                                       6


            (b) No Joint or Cross Distributing, Promoting or Selling. No
            Licensed Product shall be jointly or cross distributed, marketed,
            promoted or sold with any product or service (other than another
            Licensed Product manufactured hereunder) without Licensor's prior
            written consent in each instance.

      3.5. Other Products. Licensee acknowledges and agrees that the fact that a
      Licensed Product is capable (whether or not by means of any electronic
      media or through the use of any electronic feature, mechanical feature,
      sound effect, light feature, mechanism or otherwise) of interacting with
      another product, good, item, device or article that is not a Licensed
      Product (the "Other Product") does not render such Other Product a
      Licensed Product hereunder or confer to Licensee any rights hereunder with
      respect to the use of the Licensed Property in conjunction with such Other
      Product.

      3.6. Licensor Third Party Obligations. Notwithstanding anything to the
      contrary contained in this Agreement or otherwise, but without limitation
      of Licensor's other rights and remedies:

            (a) Licensee acknowledges that Licensor may have heretofore executed
            agreements with third parties which may encompass rights with
            respect to some or all of the Licensed Products and/or which may
            grant to such third parties the right to dispose of, distribute and
            sell Licensed Products during their respective sell-off periods,
            which sell-off periods may occur during the Term, and that such
            sell-off rights shall not violate the terms of this Agreement; in
            this connection, Licensor agrees to disclose the identity of such
            third parties, the Licensed Products covered and the dates of their
            respective sell-off periods; provided, however, that the inadvertent
            failure by Licensor to disclose such information shall not
            constitute a breach hereunder, and such disclosure shall be subject
            to any applicable confidentiality restrictions; and

            (b) Licensor shall have the unrestricted right, prior to the
            expiration or termination of the Term to provide for the disposition
            of any or all of the rights licensed to Licensee hereunder,
            including, without limitation, entering into agreements with any
            third party(ies) which provide for the right for such third
            party(ies) to design, manufacture and/or distribute Licensed
            Products anywhere in the Territory, provided, that such agreement(s)
            shall not authorize the shipment of Licensed Products to customers
            on a date that would allow such Licensed Products to be sold to end
            users at retail prior to the expiration or termination of the Term.

      3.7. No Similar Products or Dumping of Licensed Products. Licensee
      recognizes and acknowledges that the Licensed Property, and all elements
      thereof, and the goodwill associated with the same are material and
      substantial business assets of Licensor. In that connection, Licensee
      agrees that, during the Term and throughout the Territory, Licensee:

            (a) will not Dump any Licensed Product in any country of the
            Territory during the Term and during any Sell-Off Period, subject to
            applicable law;


                                       7


            (b) will not manufacture, distribute or sell any merchandise or
            authorize the manufacture, distribution or sale of any merchandise
            bearing any artwork or other representation which is confusingly
            similar to or which disparages the Licensed Property (or any element
            thereof); and

            (c) shall use its best efforts to sell Licensed Products at a price
            which, in its reasonable, good faith business judgment, represents
            the best attainable price from its Customers.

      3.8. No Sales Prior to January 1, 1999. Notwithstanding anything to the
      contrary contained in this Agreement (other than Subparagraph 25.17):

            (a) with respect to all Licensed Products set forth on Schedule II
            other than E/H, Licensee shall not sell or distribute, or authorize
            the sale or distribution of, any Licensed Product (other than E/H)
            manufactured hereunder to a retail or wholesale entity for such
            entity's receipt anywhere in the Territory prior to January 1, 1999,
            except as the parties may otherwise mutually agree; and

            (b) with respect to all Licensed Products set forth on Schedule II
            and defined as E/H, Licensee shall not manufacture, distribute,
            market, promote or sell or authorize the manufacture, distribution,
            marketing, promotion or sale of such Licensed Product prior to
            January 1, 1999, except as the parties may otherwise mutually agree.

      3.9. Gift Market Other than with respect to a Gift Market Product sold in
      the Gift Market, Licensor shall not license to any third party the right
      to sell through any Excluded Distribution Channel any Licensed Product
      that is exclusively licensed to Licensee hereunder without Licensee's
      prior written consent.

4.    OBLIGATIONS OF LICENSEE.

      4.1. [**].

      4.2. Minimum Sales Levels. Licensee shall exercise reasonable commercial
      efforts to ensure that Net Sales during each time period for which a
      Marketing Plan is due hereunder will be equal to or exceed the Sales
      Projections set forth in such Marketing Plan as approved by Licensor for
      such time period including the Net Sales outlined in Column D of Schedule
      III for Calendar Years 1999 and 2000 (the "Minimum Sales Levels");
      provided, however, the parties agree that such Sales Projections are
      predicated upon the assumption that Episode I will have a U.S. Release
      Date between May 1 and June 30, 1999, and if the U.S. Release Date occurs
      after June 30, 1999, then the parties agree to adjust such Sales
      Projections in good faith.

      4.3. [**].

      4.4. [**].


                                       8


      4.5. [**].

      4.6. [**].

      4.7. [**].

5.    LICENSOR APPROVALS.

      5.1. Creative Materials. Licensor will have the right to approve in the
      good faith exercise of its discretion the following material, in
      accordance with the procedures set forth in Subparagraph 5.2 hereinbelow:

            (a) the Licensed Products, including, but not limited to, the
            initial concepts, design documents, scripts, copy, alpha version,
            beta version, unpainted sculpts, painted sculpts, prototypes and
            manufacturing samples;

            (b) any (i) Artwork and Film Clips and (ii) all other audio and/or
            visual materials (including, without limitation, artwork,
            photographs, images and designs) incorporating any part of the
            Licensed Property, including, without limitation, initial concepts,
            preliminary designs and final artwork intended for any uses
            hereunder (the "Designs"); and

            (c) any and all cartons, containers, packaging, instructions, tags,
            labeling and wrapping material for the Licensed Products and any and
            all Consumer Marketing, publicity, promotional and similar materials
            for the Licensed Products (including, by way of illustration, but
            not limitation, catalogs, trade advertisements, flyers, sales
            sheets, labels, package inserts and display materials) which are
            used in connection with the Licensed Products and which make use of
            any of the Licensed Property, as well as any trade or other Consumer
            Marketing or similar announcements intended to advise potential
            customers of the rights acquired by Licensee under this Agreement,
            whether or not such materials make use of the Licensed Property
            (collectively the "Consumer Marketing Materials").

All materials submitted in a language other than English will be accompanied by
a complete and accurate English translation. Licensee shall ensure that all
Licensed Products, in their finished goods form, shall in all material respects
reflect and be accurate representations of the prototypes for the Licensed
Products as approved by Licensor, and Licensee's failure to do so shall be
deemed to be a material breach of this Agreement, provided that Licensee shall
be entitled to cure such breach as provided in Subparagraph 22.2(a) hereinbelow.


                                       9


      5.2.  Approval Procedure.

            (a)   In General.

                  (i) [**].

                  (ii) Creative Materials: Licensee will submit to Licensor,
                  along with Licensor's Standard Approval Form attached hereto
                  as Exhibit C, the Licensed Products, the Designs, Consumer
                  Marketing Materials and Copyright Materials for Licensor's
                  approval, subject to Subparagraph 25.10 hereinbelow, prior to
                  manufacture, printing, production, duplication, distribution,
                  sale or other use by Licensee thereof and each and every
                  modification thereto. If Licensor requires alterations prior
                  to an approval, then such alterations shall be made at
                  Licensee's sole cost and shall be submitted to Licensor for
                  further written approval in accordance with this Subparagraph
                  5.2. Licensee agrees to strictly adhere to all of Licensor's
                  product approval procedures, and to comply with Licensor's
                  style and legal guides provided to Licensee's representative,
                  and use best efforts to cause all parties with whom Licensee
                  contracts relative to the Licensed Products to do so, and,
                  where necessary, to incorporate changes in compliance
                  therewith. Any modification of any Licensed Product, Design,
                  Consumer Marketing Material and/or Copyright Material must be
                  re-submitted in advance for Licensor's written approval as if
                  it were a new Licensed Product, Design, Consumer Marketing
                  Material and/or Copyright Material. Licensee agrees not to
                  change the Licensed Product, Design, Consumer Marketing
                  Material or Copyright Material, as the case may be, without
                  first submitting to Licensor samples showing such proposed
                  changes and obtaining Licensor's written approval of such
                  samples.

            (b) Licensor's Approvals. Any product, good or article not approved
            in writing by Licensor prior to the manufacture thereof [**] shall
            not be a Licensed Product and Licensee shall have no right to
            manufacture, market, distribute, sell or exercise any other right
            licensed to it hereunder with respect to such product, good or
            article in such Sub-Territory. Licensor's approval of any Copyright
            Materials in accordance with this Subparagraph 5.2 with respect to a
            specific Licensed Product shall not be deemed to be approval for the
            use of any part of such Copyright Materials with respect to another
            Licensed Product.

            (c) Third Party Sourcing. Licensee shall not have the right to use
            any artwork or other creative material incorporating elements of the
            Licensed Property used in connection with the products, goods or
            articles of third parties (including, without limitation, books,
            comics and trading cards), without first advising Licensor in
            writing of the third party which had used such artwork and without
            first obtaining Licensor's written approval thereof in accordance
            with this Paragraph 5.


                                       10


      5.3. Pre-Existing Approvals: Licensor hereby acknowledges and affirms the
      written approvals given by it pursuant to the Prior Agreement (as
      hereinafter defined) in respect of any Copyright Materials prepared by
      Licensee and any Licensed Products manufactured pursuant to any of the
      "Prior Agreements" (as hereinafter defined) as well as (a) Licensee's
      right to use such Copyright Materials hereunder through September 30,
      1998, and (b) Licensee's right to manufacture, distribute and sell any
      such Licensed Product during the Term and pursuant to the terms and
      conditions of this Agreement, including, without limitation, the Marketing
      Plans approved hereunder. The "Prior Agreements" means the following
      agreements: (i) agreement between Licensor and Hasbro, Inc., dated as of
      May 1, 1993, as amended (the "Toy Agreement"); (ii) agreement between
      Licensor and Hasbro, Inc., dated as of October 26, 1994, as amended (the
      "Games Agreement"); and (iii) agreement between Licensor and Hasbro, Inc.,
      dated as of October 26, 1994, as amended (the "Puzzle Agreement").

6.    [**].

      6.1.  [**].

      6.2.  [**].

      6.3.  [**].

7.    ADVANCE.

      7.1. Advance. Licensee agrees to pay to Licensor, an advance of Four
      Hundred Fifty Million Dollars ($450,000,000), payable in the following
      amounts at the following times:

            (a) One Hundred Million Dollars ($100,000,000) thereof, payable on
            the initial shipment of any Licensed Product incorporating elements
            of Episode I that is sold to a Customer hereunder;

            (b) One Hundred Fifty Million Dollars ($150,000,000) thereof,
            contingent upon the occurrence of the initial general theatrical
            release in the United States of Episode I and payable on the U.S.
            Release Date of Episode I;

            (c) One Hundred Million Dollars ($100,000,000) thereof, contingent
            upon the occurrence of the initial general theatrical release in the
            United States of Episode II and payable on the U.S. Release Date of
            Episode II; and

            (d) One Hundred Million Dollars ($100,000,000) thereof, contingent
            upon the occurrence of the initial general theatrical release in the
            United States of Episode III and payable on the U.S. Release Date of
            Episode III.

      In the event that the U.S. Release Date of Episode I does not occur on or
      before the Episode I Outside Date, then any portion of the Advance payment
      made pursuant to Subparagraph 7.1(a) hereinabove that has not been
      recouped by Licensee from Royalties


                                       11


      earned on or before the Episode I Outside Date shall be refunded to
      Licensee within thirty (30) days following the Episode I Outside Date.
      [**].

      7.2.  [**].

8.    ROYALTIES AND OTHER CONSIDERATION.

      8.1. Royalty Percentage. Licensee will pay to Licensor sums ("Royalties")
      equal to the following applicable percentage of Net Sales ("Royalty
      Percentage") for Net Sales of each unit of a Licensed Product:

            (a) Basic Figures: With respect to Net Sales of each unit of Basic
            Figures: [**] of cumulative Net Sales of all Basic Figures
            throughout the Territory, subject to the provisions of Subparagraph
            8.1(c) hereinbelow.

            (b) Other Licensed Products: With respect to Net Sales of each unit
            of Other Licensed Products, [**] of cumulative Net Sales of all
            Other Licensed Products throughout the Territory, subject to the
            provisions of Subparagraph 8.1(c) hereinbelow.

            (c)   [**]

                  (iv) Royalty Adjustment. Licensor shall consider any request
                  made by Licensee to reduce Royalty Percentages set forth in
                  Subparagraphs 8.1(a)-(c) hereinabove for a specific Licensed
                  Product solely for the reason that Licensee is required to pay
                  a royalty to a third party inventor or holder of patent rights
                  or manufacturing process rights in connection with such
                  Licensed Product.

      8.2. Net Sales. Subject to Subparagraph 8.8 hereinbelow, "Net Sales" shall
      be equal to [**].

      8.3. Special Circumstances. Notwithstanding anything to the contrary
      contained in this Agreement, (i) to the extent that Licensee is prohibited
      by reason of a law in any country of the Territory from remitting to
      Licensor the full amount of Royalties payable to Licensor with respect to
      a Licensed Product, then the parties shall discuss in good faith an
      equitable treatment of the situation and the advisability of distributing
      such Licensed Product in such country and it shall be in Licensor's
      discretion to approve or disapprove such distribution of such Licensed
      Product in such country; and (ii) the parties acknowledge that Licensee
      may sell Licensed Products on a consignment basis (such as in Taiwan) or
      make demonstrator sales of Licensed Products (such as in France), and the
      parties agree to consider in good faith the treatment of returns in
      connection with such sales. Licensor acknowledges that in situations where
      local law or regulations in a particular country prohibit the payment of a
      royalty to an affiliated company (such as in Italy and Greece), Licensor
      agrees to enter into an agreement directly with such affiliated company in
      order to permit Licensor to receive the applicable Royalties due to
      Licensor 


                                       12


      hereunder. Such agreement will not otherwise alter or diminish any of
      Licensor's rights and entitlements or any of Licensee's obligations in
      accordance with this Agreement.

      8.4. F.O.B. or Ex Works. Notwithstanding anything to the contrary
      contained herein or otherwise, with respect to the "sale" (as defined in
      Subparagraph 8.2 hereinabove) of a Licensed Product on a F.O.B., Ex Works
      or similar basis, the applicable Royalty for such Licensed Product shall
      be as follows:

            (a) In those cases where the Licensed Product is specifically
            designed as and is intended to be sold as an F.O.B. Product, is sold
            directly to retailers on an F.O.B. basis and is not sold by Licensee
            other than on an F.O.B. basis then the applicable Royalty for such
            Licensed Product shall be [**] (such Royalty hereinafter the "F.O.B.
            Royalty").

            (b) In those cases where the Licensed Product is offered for sale in
            a country on other than an F.O.B. basis and the same Licensed
            Product is also offered for sale in the same country on an F.O.B.
            basis, then the applicable Royalty for such Licensed Product sold on
            an F.O.B. basis shall be [**].

      8.5. Episode I Bonus. On the U.S. Release Date of Episode I, Licensee
      shall pay to Licensor a non-recoupable bonus equal to Five Million Seven
      Hundred Thousand Dollars ($5,700,000).

      8.6. Bundling Royalty. Licensee shall not have the right to distribute,
      market or sell (or authorize a third party to distribute, market or sell)
      any Licensed Product with any other product, good or article (other than
      another Licensed Product) in a single package at a single price
      ("Bundling") without Licensor's prior written approval of: (a) whether or
      not such Bundling may occur; (b) the terms and conditions of such
      Bundling; and (c) Licensor's Royalty in such instance.

      8.7. [**].

      8.8. Value-Added Taxes. Calculation of Net Sales shall not include any
      sales, use, Value Added Tax ("VAT"), excise, local privilege or any other
      tax. Licensee shall not pass along to Licensor and Licensor shall not bear
      any VAT or any other tax charges incurred with respect to a Licensed
      Product.

      8.9. No Waiver. Acceptance of any sums by Licensor by way of Advances,
      Royalties or otherwise shall not prevent Licensor at any time from
      disputing or demanding particulars with reference to the amounts due nor
      shall such acceptance constitute Licensor's waiver of any breach by
      Licensee of any terms hereof.

      8.10. No Carryover. If the parties agree to an extension of the Term and
      if, on the expiration of the Term, any Advance shall not have been
      recouped by the applicable Royalties paid to Licensor, then the shortfall
      will not be carried forward to any extension of the Term.


                                       13


      8.11. Warrant. Concurrently with the execution of this Agreement, Licensee
      shall grant to Licensor a warrant (the "Warrant") for the purchase of up
      to four million three hundred thousand (4,300,000) fully paid and
      non-assessable shares of the common stock of Licensee following exercise
      of the Warrant at a per share exercise price equal to twenty-eight dollars
      ($28), subject to adjustment as provided in the Warrant.

9.    STATEMENTS AND PAYMENTS.

      9.1. Payment Terms. Licensee will wire transfer (as immediately available
      funds) to Licensor all sums due to it hereunder for Licensor's receipt
      thereof within [**] days following the end of each calendar month based on
      the Net Sales by Licensee and any Licensee Affiliates of Licensed Products
      in such Calendar Month. Net Sales generated by a Sublicensee which is not
      a Licensee Affiliate shall be reported to Licensor in respect of the
      calendar month in which such Net Sales are paid or reported to Licensee or
      any Licensee Affiliate, whichever first occurs. All payments will be in
      United States currency. Late payments will accrue interest charges from
      the due date through the date of payment at an interest rate equal to [**]
      and shall be payable upon demand.

      9.2. Remittance of Funds. All compensation amounts stated in this
      Agreement, including without limitation, Advances and Royalties accrued
      and/or payable to Licensor pursuant to this Agreement shall be computed,
      accrued, paid and remitted to Licensor as follows, and Licensee shall bear
      all costs (including, without limitation, all transactional and transfer
      costs, points and fees), as follows:

            (a) All Royalties due and payable to Licensor hereunder shall be
            converted from the local currency of the source country to U.S.
            Dollars based upon the exchange rates as follows: (i) with respect
            to subsidiaries and affiliates of Licensor, the conversion rate
            shall be set by Citibank London as of the 20th day of the month
            following the close of each calendar month, subject to local
            holidays and week-ends and further subject to Licensee ensuring that
            Citibank London will make such conversion rates available to
            Licensor upon reasonable request, and (ii) with respect to other
            parties, the exchange rate shall be the rate of exchange published
            in The Wall Street Journal for such local currency which is in
            effect on the date payment is due to Licensor or, if payment to
            Licensor is late, then the rate of exchange published in The Wall
            Street Journal on the date payment is due or the date of actual
            payment, whichever rate yields the higher amount of U.S. Dollars.

            (b) Subject to Subparagraphs 8.3 and 9.3, hereinbelow, it shall be
            Licensee's sole responsibility and expense to obtain the approval of
            any governmental authorities to take whatever steps that may be
            required and to comply in all respects with all applicable laws and
            regulations in order to remit funds to Licensor.

      9.3. Blocked Funds. If the payment of funds in any country is blocked from
      export out of such country ("Blocked Funds"), such payment either may be
      held by Licensee or a Sublicensee, or, at the election of Licensor,
      deposited in an interest-bearing escrow 


                                       14


      banking or other interest-bearing escrow account in Licensee's name on
      behalf of Licensor in the blocking country (if permitted by local law) or
      may be removed from such country and paid to Licensor, subject to whatever
      restrictions, limitations and/or taxes may be imposed by the government of
      such country upon such Blocked Funds. In the event of any such blockage,
      Licensor and Licensee shall cooperate in seeking an equitable solution. If
      no such solution is attained, Licensor may require Licensee to, or
      Licensee may voluntarily, suspend marketing and sales of Licensed Products
      in such blocked country, and this Agreement shall be deemed amended
      accordingly.

      9.4. Payment Reports. Within [**] days after the close of each Calendar
      Month, Licensee will prepare and deliver to Licensor one or more Royalty
      report forms, each in the form attached hereto as Exhibit D, as such form
      shall be modified by Licensor from time to time, together with all other
      information required by Licensor hereunder (the "Royalty Report Form"). A
      Royalty Report Form will be due on a calendar monthly basis whether or not
      Royalties are payable to Licensor hereunder.

      9.5. Report Information.

            (a) Licensee shall furnish to Licensor, concurrently with the
            delivery of the Royalty Report Form pursuant to Subparagraph 9.4
            hereinabove, a full and complete statement, duly certified by an
            officer of Licensee to be true and accurate, providing at least the
            following information: [**].

            (b) Each and every item of financial information required to be
            submitted by Licensee pursuant to Subparagraphs 9.5(a)(i) through
            9.5(a)(ix) hereinabove shall be broken down into the following
            categories: the Calendar Month to which the statement applies;
            cumulative from the inception of the Calendar Year to which such
            statement applies; and cumulative from and after the date of this
            Agreement to the close of the Calendar Month to which such statement
            applies; and such information shall be aggregated as follows: [**].

            (c) All amounts to be reported pursuant to Subparagraph 9.5(a) above
            shall be first stated in the local currency in which the pertinent
            Net Sales occurred. If several currencies are involved in any
            reporting category, that category shall be broken down by each such
            currency. Next to each local currency amount shall be set forth the
            equivalent amount stated in U.S. Dollars, and the rate of exchange
            required to be used hereunder in making the conversion calculation.

            (d) Each such statement and Royalty Report Form shall be provided by
            Licensee, at its sole expense, to Licensor in ASCII format or any
            other electronic media format as Licensor may reasonably request.

            (e) Upon Licensor's reasonable written request, Licensee shall make
            available to Licensor such relevant data and information which
            Licensor shall reasonably require to substantiate any Royalty Report
            Form submitted to Licensor, the proper exercise of the rights
            licensed to Licensee hereunder and/or the operation and 


                                       15


            performance of Licensor's duties and obligations hereunder. Such
            data and information shall be included within the definition of
            "Licensee's Records" set forth in Subparagraph 11.1 hereinbelow and
            shall include, [**].

10.   TAXES.

      Except as provided in the remainder of this Paragraph 10, no withholding
      taxes of any kind may be deducted from any Royalties or gross amounts
      derived with respect to the sale of a Licensed Product. If and only to the
      extent that Royalties hereunder are remitted directly to Licensor from a
      country having a tax withholding requirement, then Licensee is authorized
      by Licensor to deduct and to withhold from Royalties generated from such
      country any withholding tax imposed by such country at the local statutory
      rate or lower income tax convention rate, if applicable; provided,
      however, that the Royalties due to Licensor with respect to the "sale" (as
      defined in Subparagraph 8.2 hereinabove) of any particular Licensed
      Product may not be reduced by withholding taxes from more than one
      country, that such tax payments made by Licensee on behalf of Licensor may
      not reduce the amounts payable and paid to Licensor under this Agreement
      by more than the applicable withholding taxes of the relevant country and,
      that Licensee shall promptly provide Licensor with notification of and
      official receipts for all tax payments made on Licensor's behalf pursuant
      to this Agreement. If, within forty-five (45) days after each payment is
      made hereunder Licensor has not received either: (a) an authenticated
      withholding tax certificate (stamped by the appropriate tax authority); or
      (b) written evidence by Licensee (in form reasonably satisfactory to
      Licensor) that Licensee has filed an application to receive a withholding
      tax certificate from such tax authority, then Licensee shall immediately
      pay to Licensor an amount equal to the amount previously withheld by
      Licensee from such payment, divided by 1 minus the applicable withholding
      tax rate, (e.g., if the tax withheld was $15, and the withholding tax rate
      was 15%, then Licensee shall remit to Licensor $15 divided by 85%, or
      $17.65).

11.   RECORDS AND AUDITS.

      11.1. Licensee's Records. During the Term and for not less than seven (7)
      years following the transactions to be recorded, but in the event of a
      pending audit conducted by Licensor hereunder of any of Licensee's Records
      for a period ending not earlier than the date on which such audit is
      finally resolved with respect to the Licensee's Records subject to such
      audit, Licensee will maintain complete and accurate records of all
      transactions relating to this Agreement and/or Licensee's rights and/or
      obligations hereunder including, but not limited to, the data and
      information described in Subparagraphs 9.5(a)-(e) hereinabove
      (collectively "Licensee Records") and Licensee will contractually obligate
      all Sublicensees and Manufacturers to maintain complete and accurate
      records of all transactions relating to this Agreement, the Sublicense
      Agreement or the Manufacturing Agreement, and/or the rights or obligations
      of any Sublicensees and/or Manufacturer, as the case may be, including,
      but not limited to, the data and information described in Subparagraph
      9.5(e) hereinabove. No information pertinent to Licensee's rights and
      obligations under or performance in connection with third party agreements
      shall be


                                       16


      considered Licensee Records, except and to the extent that such third
      party agreements relate to Licensed Products and/or Licensee's obligations
      hereunder.

      11.2. Audits. Licensor or any independent certified public accountant
      selected by Licensor may from time to time, but not more frequently than
      one time per Calendar Year, upon reasonable notice and during normal
      business hours, inspect (a) with respect to audits conducted in the United
      States, at Licensee's main headquarters located in the United States any
      and all Licensee Records maintained by Licensee in the United States and
      such audit samples from other countries as may be reasonably requested by
      Licensor and (b) with respect to audits outside of the United States,
      wherever such records are kept outside of the United States. If, upon
      performing such audit, it is determined that Licensee has underpaid
      Licensor, Licensee will immediately make full payment under Paragraph 8
      hereinabove. If the amount of underpayment exceeds the greater of [**] of
      the payments due Licensor in the period being audited and [**], Licensee
      will bear all direct, reasonable out-of-pocket expenses and costs related
      to such audit in addition to its obligation to make full payment under
      Paragraph 8 hereinabove. All underpayments and late payments will be
      subject to interest charges, at the rate specified for late payments in
      Subparagraph 9.1 hereinabove, calculated from the due date to the actual
      payment date. The obligation to maintain records and to grant Licensor and
      Licensor's representatives access to such records shall survive the
      expiration or earlier termination of this Agreement. All non-public
      information elicited by Licensor pursuant to Subparagraph 9.5(e) and
      through audits pursuant to this Subparagraph 11.2 shall be subject to
      Paragraph 16.1 hereinbelow as Confidential Information of Licensee.

12.   COPYRIGHT AND TRADEMARK NOTICES.

      12.1. Copyright and Trademark Notices. Licensee will place the following
      notice on each unit of a Licensed Product and on all Consumer Marketing,
      promotional material, packaging and any other material using the Licensed
      Property:

            TM or (R) (if verified in writing by Licensor) & (C) (______) LUCAS.
            In English or local language: All Rights Reserved. Used under
            Authorization)

            (      ) First year of Publication.

      If this notice cannot be used due to space limitations, Licensor will
      supply an alternative notice upon request. Licensee agrees that trademarks
      arising from the Licensed Property will only be displayed in a form and
      manner approved by Licensor. Licensor reserves the right to require
      changes in the required notice if Licensor in its reasonable judgment
      deems changes required by applicable law. [**]

      12.2. First Use. Licensee agrees to provide Licensor with the date of
      first use of each Licensed Product pursuant to this Agreement in each
      country of the Territory, together with documentation evidencing the first
      sale or shipment of such Licensed Product. In addition, Licensee shall
      submit to Licensor at the beginning of each selling season, a


                                       17


      statement on Licensor's standard form describing the Licensed Products
      that are being offered for sale.

13.   OWNERSHIP.

      13.1. Ownership of Copyright Materials. Licensor represents and warrants
      that it has the right to grant the license granted to Licensee in this
      Agreement. Licensee acknowledges and agrees that, as between Licensor and
      Licensee, the Licensed Property is owned solely and exclusively by
      Licensor. Further, Licensee acknowledges and agrees that if and to the
      extent that any Licensed Products, Designs, Consumer Marketing Materials,
      Production Materials or other works are based on, derived from or
      incorporate the Licensed Property or any part thereof (all of the
      foregoing to such extent being individually and collectively the
      "Copyright Materials"), such Copyright Materials will immediately from the
      inception of creation become the property of Licensor and be owned solely
      and exclusively by Licensor. Licensor's ownership rights under this
      Subparagraph 13.1 will include any and all copyrights and any other
      intellectual property rights in the Licensed Property and in any Copyright
      Materials. Licensor acknowledges and agrees that, as between Licensor and
      Licensee, Licensee is the owner of all tangible rights in and to any
      intellectual property created by or on behalf of Licensee that does not
      constitute any Copyright Material, any physical inventory of Licensed
      Products and, subject to Subparagraph 13.2 hereinbelow, in all Production
      Materials.

      13.2. Ownership of Production Materials. In addition to Licensor's other
      rights and remedies hereunder, if the Agreement, in whole or in part, is
      terminated prior to the expiration of the Term then, at Licensor's sole
      option exercisable within thirty (30) days following such expiration or
      termination by written notice to Licensee, Licensor shall have the right:
      (a) to cause Licensee to destroy and to cause any and/or all Licensee
      Affiliates and/or Sublicensees to destroy any or all Production Materials,
      [**]. "Production Materials" shall be defined as any and all physical
      materials incorporating any element of the Licensed Property, tangible
      tools, molds and printing plates used in the development or production of
      the Licensed Products created pursuant to this Agreement which reproduce
      any aspect of the Licensed Property, whether or not developed by or on
      behalf of Licensee, a Licensee Affiliate, a Sublicensee, a Manufacturer or
      a third party. Subject to the foregoing, Licensee also agrees that upon
      Licensor's request, Licensee shall provide to Licensor satisfactory
      evidence of the destruction of any or all Production Materials[**], and
      that Licensor shall have the right at any time to enter the premises where
      the Licensed Products (or their components) are stored or manufactured (to
      the extent such premises are owned or controlled by Licensee or Licensee
      Affiliate) to take inventory or witness the destruction of [**] any
      Production Materials. Licensee shall not have any obligation to destroy or
      cause the destruction of [**] any Production Materials that can be used by
      Licensee without infringing or otherwise violating any of Licensor's
      rights.

      13.3. Assignment of Ownership.

            (a) Assignment by Licensee. Licensee acknowledges that the
            copyrights and all other proprietary rights in and to the Licensed
            Property are exclusively owned 


                                       18


            by and reserved to Licensor. Licensee shall neither acquire nor
            assert copyright ownership or any other proprietary right in the
            Licensed Property or in any derivation, adaptation, variation or
            name thereof. Without limiting the foregoing, Licensee hereby
            assigns, and shall contractually obligate all entities with whom it
            contracts relative to the creation, design or manufacture of a
            Licensed Product or Copyright Material to assign to Licensor, all
            right, title and interest which Licensee or any such other entity
            may have in the Licensed Property or any Copyright Material
            heretofore or hereafter created by Licensee, such other entity or by
            any employee of Licensee or such other entity including, without
            limitation, any copyrights and any other intellectual property
            rights therein and the goodwill associated therewith. All such new
            materials shall be included in the definition of "Licensed Property"
            under this Agreement. Licensee acknowledges that said assignment
            includes, without limitation, the right on Licensor's part to
            license such materials outside the Territory during the Term and
            anywhere thereafter, subject to the terms of this Agreement.

            (b) Employment for Hire. Licensee acknowledges that the Licensed
            Property is owned solely and exclusively by Licensor. All Copyright
            Materials created or developed by any employee of Licensee shall be
            prepared by such employee as an employee for hire of Licensee under
            Licensee's sole supervision, responsibility and monetary obligation
            and shall be on a "work for hire" basis within the meaning of the
            U.S. Copyright Act of 1978, as amended. Licensee has caused or shall
            cause such Copyright Materials to be "works made for hire" (as that
            term is understood in the U.S. Copyright Law) within the scope of
            such employee's employment for Licensee, and such Copyright
            Materials, and the results and proceeds of such employee's services
            are freely assignable by Licensee hereunder.

            (c) Assignment of Third Parties. Prior to and as a condition of
            retaining any third party who is not an employee of Licensee to
            assist with or contribute to the development or creation of any
            Copyright Materials, or any part thereof, Licensee, at its sole
            expense, will obtain from such third party a complete, executed
            written assignment of all right, title and interest in such
            Copyright Materials substantially in the form attached hereto as
            Exhibit E.

      13.4. Further Assurances. During and after the Term, at Licensor's
      request, Licensee will assist and cooperate, and will cause all of its
      employees and contractors to assist and cooperate, with Licensor in all
      reasonable respects, including, without limitation, by executing documents
      (including the form attached hereto as Exhibit E), by giving testimony,
      executing documents and taking such further acts reasonably requested by
      Licensor to acquire, transfer, maintain, perfect and enforce copyright,
      trademark, trade secret, contract rights and other legal protection for
      the Licensed Property, any Copyright Materials and/or Licensor's interest,
      if any, in Production Materials. Further, if Licensee fails to comply with
      any of the obligations set forth above within ten (10) business days of
      Licensor's request, Licensee hereby appoints the officers of Licensor as
      its attorney-in-fact (which appointment is irrevocable and coupled with an
      interest) to execute documents on behalf of Licensee and its employees and
      contractors for this limited purpose; provided, 


                                       19


      however, that Licensor will indemnify and hold harmless Licensee for
      damages resulting from Licensor's knowingly making a material misstatement
      in connection with its exercise of such power of attorney. Licensee shall
      not make any representations or do any act which may be taken to indicate
      that it has any right, title or interest in or to the ownership or use of
      the Licensed Property except under the terms of this Agreement. Nothing
      contained in this Agreement shall give Licensee any right, title or
      interest in or to the Licensed Property except for the rights licensed
      hereunder, subject to the terms and conditions hereof.

      13.5. Moral Rights. Licensee hereby, on behalf of itself, its employees
      and its contractors, irrevocably transfers and assigns to Licensor, and
      waives and agrees never to assert, any and all "Moral Rights" (defined
      hereinbelow) Licensee or its or their respective employees or its
      contractors may have in or with respect to the Licensed Property and/or
      any Copyright Materials.

      13.6. Quality Assurance. Licensee shall ensure that the form, quality and
      standard of all materials used in the connection with the Licensed
      Products conforms to that of the samples approved by Licensor pursuant to
      this Agreement and complies with all good manufacturing practices relevant
      to the Licensed Products including methods of storage and with all laws
      and regulations relevant to the Licensed Products including any relevant
      regulations concerning the manufacture, sale or promotion or labeling or
      marking of such Licensed Products. Any modifications by or on behalf of
      Licensee to the Licensed Products previously approved above shall be
      submitted to Licensor for written approval as if the same were new and
      without approval.

      13.7. Right To Inspect. Licensee shall allow Licensor and/or its duly
      authorized representative the right to inspect samples of the Licensed
      Products at any time and on reasonable notice, and shall afford Licensor
      every reasonable assistance and allow or use reasonable efforts to procure
      them access to any premises of Licensee or other premises where the
      Licensed Products are being created or held on behalf of Licensee, for so
      long as any use is made of the Licensed Property.

      13.8. [**].

14.   PROMOTIONAL VALUE, TRADEMARK RIGHTS AND GOODWILL.

      14.1. Promotional Value. Licensee acknowledges that Licensor is entering
      into the Agreement not only in consideration of the Royalties to be paid,
      but also for the promotional value to be secured by Licensor for the
      Pictures as a result of the manufacture, sale and distribution by Licensee
      of Licensed Products and the Consumer Marketing and promotion of the
      Licensed Products.

      14.2. Trademark License Agreement. Licensee will execute the Trademark
      License Agreement attached hereto as Exhibit A, and Licensee's use of
      Licensor Trademarks will be subject to the terms and conditions of the
      Trademark License Agreement.


                                       20


      14.3. Goodwill. Licensee recognizes the great value of the goodwill
      associated with the Licensed Property and acknowledges that such goodwill
      exclusively belongs to Licensor and that the Licensed Property has
      acquired a secondary meaning in the mind of the public. Further, any and
      all goodwill arising from use of the Licensed Property by Licensee, a
      Licensee Affiliate, a Sublicensee and/or a Manufacturer pursuant to this
      Agreement will inure to Licensor's sole benefit.

      14.4. Registrations. Except with the written approval of Licensor,
      Licensee will not register or attempt in any country to register
      copyrights in, or register as a trademark, service mark, design patent or
      industrial design, or business designation, any of the Licensed Property,
      Licensor Trademarks or derivations or adaptations thereof, or any word,
      symbol or design which is so similar thereto as to suggest association
      with or sponsorship by Licensor or by any Licensor-Related Entities.

15.   APPROVAL OF MANUFACTURERS.

      15.1. Approval of Manufacturer Agreement. Licensee shall have no right to
      sublicense the right to manufacture any Licensed Product hereunder to any
      entity (including to a Licensee Affiliate that is not a Permitted Licensee
      Affiliate or any other third party) unless and until: (a) Licensor has
      provided Licensee with its prior written approval of the proposed
      manufacturer and the terms and conditions of any and all agreements
      between Licensee and any proposed manufacturer (and any modifications
      thereof), whether oral or written, for and/or to the extent relating to
      the manufacture of Licensed Products (individually and collectively, the
      "Manufacturing Agreement"); (b) such manufacturer shall have executed an
      Approval of Manufacturer Agreement with Licensor in substantially the form
      of Licensor's then-current form for such agreement, as such form may be
      revised by Licensor in its reasonable discretion from time to time (any
      such manufacturer approved by Licensor for which an Approval of
      Manufacturer Agreement is fully executed, a "Manufacturer"); (c) such
      Manufacturer shall agree in the Manufacturing Agreement to be fully bound
      at all times by the following subparagraphs of this Agreement adjusted as
      appropriate: 3.7(b), 3.8, 11.1, 12, 13.2, 13.3, 13.4, 13.5, 13.6, 13.7,
      13.8, 14, 15, 16 and 19.1(e); (d) such Manufacturer shall execute a
      Trademark License Agreement with Licensor; and (e) such manufacturer shall
      further agree in such Manufacturing Agreement that Licensor shall be a
      third party beneficiary thereof. A copy of Licensor's current form of
      Approval of Manufacturer Agreement is attached hereto as Exhibit F. The
      manufacturer of Licensed Products by any third party shall in no manner
      whatsoever affect Licensee's obligations hereunder and Licensee shall
      execute, and ensure that each prospective Manufacturer executes, the
      Approval of Manufacturer Agreement. The failure by a Manufacturer to
      adhere to the terms of the Approval of Manufacturer Agreement or the
      Manufacturer Agreement shall not be imputed to Licensee unless such
      Manufacturer is a controlled affiliate of Licensee or Licensee fails to
      comply with its obligations under Subparagraph 15.2 hereinbelow.

      15.2. Enforcement of Manufacturing Agreement. Licensee agrees to include
      and strictly enforce in each Manufacturing Agreement all of the terms and
      conditions of this Agreement relevant to the manufacture of the Licensed
      Products. Licensee shall advise 


                                       21


      Licensor of any material breach thereof by a Manufacturer and of any
      corrective action taken by Licensee or by such Manufacturer, as well as
      the results thereof. Licensee shall use its best efforts to cause such
      Licensee to cure such breach and, at the written request of Licensor
      following such breach, Licensee shall terminate such Manufacturing
      Agreement, subject to the same cure provisions as are applicable to
      Licensee in Subparagraph 22.2(a) hereinbelow. Licensee hereby appoints
      Licensor its attorney-in-fact solely for the purpose of sending a notice
      of termination, subject to the immediately preceding sentence, in order to
      terminate such Manufacturing Agreement or any specific rights thereunder,
      which appointment is irrevocable and coupled with an interest; provided,
      however, that Licensor will indemnify and hold harmless Licensee for
      damages resulting from knowingly making a material misstatement in
      connection with the exercise of such power of attorney.

16.   CONFIDENTIALITY.

      16.1. Confidential Information. The parties hereto agree that the material
      terms and conditions contained in this Agreement and/or in any other
      agreement between Licensor and Licensee related to the Licensed Products
      are confidential ("Confidential Information"). In addition to Confidential
      Information, the parties agree that any and all information and material
      concerning or pertaining to the following are confidential and proprietary
      to Licensor (collectively, "Special Confidential Information"): (i) any
      script, concept, schedule of Licensor or of any Licensor-Related Entity
      (including, without limitation, any pre-production, production or
      post-production schedule or release schedule for any Prequel or for any
      derivative work thereof) and (ii) any Copyright Material and/or any
      Production Material (including without limitation, any artwork, design or
      prototype created for any Licensed Product to the extent incorporating any
      element of the Licensed Property). The parties hereto acknowledge that all
      elements of any Marketing Plan constitute Confidential Information of
      Licensee and shall be treated as such hereunder. Notwithstanding the
      foregoing, the parties acknowledge that certain elements of any Marketing
      Plan may be shared by Licensor with certain persons or categories of
      persons but not others and Licensor and Licensee shall mutually agree as
      to the elements of such Marketing Plan that may be shared with certain
      persons and the identity of such persons.

      Without the prior written consent of the party disclosing Confidential
      Information or Special Confidential Information (the "Disclosing Party"),
      the recipient of any Confidential Information or Special Confidential
      Information (the "Recipient") shall not use, copy, or disclose, or
      authorize or permit the use, copy or disclosure of, any Confidential
      Information or Special Confidential Information; provided, that
      Confidential Information may be disclosed to the Recipient's employees,
      directors, officers and shareholders, attorneys, financial advisors,
      auditors, agents and/or accountants acting in such capacities, and then
      only if such disclosure is solely for the purpose of effectuating the
      terms and conditions of this Agreement, and such individuals or entities
      shall be informed by the Recipient of the confidentiality of such
      Confidential Information and shall be directed by the Recipient in writing
      to treat such Confidential Information confidentially and to restrict the
      use of such Confidential Information to said purpose. In addition to the
      foregoing, Licensee will not disclose any Special Confidential Information
      to any third party for any 


                                       22


      purpose (including the exercise of its rights or performance of its
      obligations hereunder) unless Licensor otherwise agrees and such third
      party has executed a written confidentiality agreement in form and
      substance acceptable to Licensor, which confidentiality agreement shall
      restrict the use of any Special Confidential Information to the minimal
      extent necessary to effectuate the terms and conditions of this Agreement
      as they apply to such third party and requires such third party to use its
      best efforts to maintain all Special Confidential Information in the
      strictest confidence.

      Licensee further agrees and acknowledges that Licensor's sole purpose in
      disclosing Special Confidential Information to Licensee or allowing
      Licensee access to Special Confidential Information is for the sole
      purpose of aiding Licensee in performing its obligations hereunder.
      Licensee shall receive and hold all Special Confidential Information in
      the strictest confidence and Licensee acknowledges, represents, warrants
      and agrees to use its best efforts to protect the confidentiality of all
      Special Confidential Information.

      Licensee's obligations pursuant to Subparagraph 16.1 shall not apply to
      any Confidential Information or Special Confidential Information which:
      (A) is or becomes publicly available or part of public domain through no
      fault of the Recipient or of its employees; (B) is authorized in writing
      by Licensor to become publicly known; (C) is received from a third party
      authorized by Licensor to receive such information without restriction and
      without breach of this Agreement; or (D) is the minimum amount required to
      be publicly disclosed in order to comply with any applicable law,
      regulation, stock exchange rule, subpoena, or valid order of a court of
      competent jurisdiction.

      16.2. Publicity or Announcements. Subject to subparagraph 16.1(D)
      hereinabove, without limitation of the foregoing and notwithstanding
      anything to the contrary contained in this Agreement or otherwise, no
      announcements, press releases, or publicity about the existence of or any
      terms of this agreement, the relationship of the parties or about the
      rights relating to the Licensed Products to be exercised hereunder shall
      be made or authorized to be made by Licensor, any Licensor-Related Entity,
      Licensee or any Licensee Affiliate without the prior written approval of
      Licensor and Licensee in each instance.

      16.3. Rights of Publicity. Except as expressly set forth herein, Licensee
      acquires no right to use and will not use without Licensor's prior written
      approval the characters, artwork, designs, trade names, copyrighted
      materials, trademarks or service marks of Licensor or any Licensor-Related
      Entities in any Consumer Marketing, publicity or promotion, to express or
      imply any endorsement by Licensor or any Licensor-Related Entities of
      Licensee's services or products, or in any other manner except as
      expressly authorized in this Agreement. The foregoing provision shall
      survive expiration or termination of this Agreement.

17.   PRODUCT SAMPLES.

      17.1. General. Upon commercial release of each version of a Licensed
      Product SKU (including each language version or modified version) by or
      for Licensee, Licensee will furnish to Licensor at no cost the following
      items: [**].


                                       23


      If Licensor requests a reasonable number of additional items, Licensee
      will supply to Licensor such samples at Licensee's direct out-of-pocket
      cost of manufacture.

18.   INTENTIONALLY DELETED.

19.   REPRESENTATIONS AND WARRANTIES.

      19.1. Licensee. Licensee represents and warrants that:

            (a) Hasbro, Inc. has the full power and authority to enter into this
            Agreement on behalf of Licensee and all Permitted Licensee
            Affiliates and that Licensee including all Permitted Licensee
            Affiliates have the full power and authority to perform all of
            Licensee's material obligations pursuant to this Agreement;

            (b) it is and shall remain throughout the term a corporation in good
            standing in the jurisdiction of its incorporation;

            (c) it will not harm or misuse the Licensed Property or bring the
            Licensed Property into disrepute;

            (d) except as specifically provided in this Agreement, it will not
            create any expenses chargeable to Licensor without the prior written
            approval of Licensor;

            (e) it will comply in all material respects with all laws and
            regulations relating or pertaining to the manufacture, production,
            distribution, sale, Consumer Marketing and use of the Licensed
            Property, the Licensed Products and Copyright Materials, and will
            maintain the highest quality and standards of Licensee as of the
            date of this Agreement;

            (f) unless the parties have otherwise agreed pursuant to a mutually
            approved Marketing Plan with respect to a particular Sub-Territory,
            it will diligently and continuously at all times throughout the Term
            market and distribute the Licensed Products in each country
            throughout the Territory;

            (g) each and every Permitted Licensee Affiliate set forth in
            Schedule I meets the definition of a Licensee Affiliate in
            Subparagraph 24.69 hereinbelow; and

            (h) this Agreement has been duly authorized, executed and delivered
            by Licensee and constitutes the legal, valid and binding obligation
            of Licensee, enforceable against Licensee in accordance with its
            terms, subject to Subparagraph 8.3 hereinabove.

      19.2  Licensor. Licensor represents and warrants that:

            (a) Licensor has the full power and authority to enter into this
            Agreement and to perform all of Licensor's material obligations
            pursuant to this Agreement;


                                       24


            (b) this Agreement has been duly authorized, executed and delivered
            by Licensor and constitutes the legal, valid and binding obligation
            of Licensor, enforceable against Licensor in accordance with its
            terms; and

            (c)   [**].

20.   INDEMNITIES.

      20.1. By Licensor. Subject to Subparagraph 20.3 hereinbelow, Licensor
      shall indemnify and hold harmless Licensee from any and all loss,
      liability, damage, cost or expense (including reasonable counsel fees and
      costs, whether or not in connection with litigation) to the extent arising
      out of any claims or suits brought or made against Licensee by reason of
      any breach or alleged breach by Licensor of any warranty, covenant or
      obligation contained in this Agreement. Licensee shall provide Licensor
      with prompt written notice, cooperation and assistance relative to any
      such claim or suit. Licensor shall have the option to undertake and
      conduct the defense of any suit so brought, provided that Licensor
      regularly consults with Licensee regarding such defense. Licensor will not
      enter into any settlement of any claims or suits without the prior written
      consent of Licensee, which consent shall not be unreasonably withheld. If
      Licensor undertakes such defense and Licensee nevertheless retains its own
      counsel to monitor such defense, Licensee shall be solely responsible for
      the fees and any other expenses related to such counsel. Licensee shall
      not, however, be entitled to recover for lost profits. This agreement to
      indemnify shall survive the expiration or earlier termination of this
      Agreement.

      20.2. By Licensee. Except for Licensor's obligations under Subparagraph
      20.1 above, Licensee shall indemnify and hold harmless Licensor and all
      "Licensor-Related Entities" (as hereinafter defined) from any and all
      loss, liability, damage, cost or expense (including reasonable counsel
      fees and costs, whether or not in connection with litigation) to the
      extent arising out of any claims or suits brought or made against Licensor
      or any Licensor-Related Entities arising out of or in connection with:

            (a) any activities of Licensee related to this Agreement or to any
            of the matters herein contained;

            (b) any alleged defects or inherent dangers in the Licensed
            Products;

            (c) any breach or alleged breach by Licensee of any warranty,
            covenant or obligation contained in this Agreement;

            (d) any infringement or violation of any copyrights, patents,
            trademarks, trade secrets or other intellectual property or
            proprietary rights of any third party in connection with the
            Licensed Products, Copyright Materials or Production Materials
            except with respect to the Licensed Property (excluding any material
            added or changed by or on behalf of Licensee);


                                       25


            (e) libel, slander, or other forms of defamation except with respect
            to the Licensed Property (excluding any material added or changed by
            or on behalf of Licensee);

            (f) plagiarism, piracy or unfair competition resulting from the
            alleged unauthorized use of titles, formats, ideas, characters,
            plots, performers, or other material except with respect to the
            Licensed Property (excluding any material added or changed by or on
            behalf of Licensee); and/or

            (g) breach of contract, implied in fact or in law, resulting from
            the alleged submission, acquisition or use of program, musical or
            literary material used by Licensee.

      Licensor shall provide Licensee with prompt written notice, cooperation
      and assistance relative to any such claim or suit. Licensee shall have the
      option to undertake and conduct the defense of any suit so brought,
      provided, that Licensee regularly consults with Licensor regarding such
      defense. Licensee will not enter into any settlement of any claims or
      suits without the prior written approval of Licensor, which consent shall
      not be unreasonably withheld. If Licensee undertakes such defense and
      Licensor nevertheless retains its own counsel to monitor such defense,
      Licensor shall be solely responsible for the fees and any other expenses
      related to such counsel. This agreement to indemnify shall survive the
      expiration or earlier termination of this Agreement.

      20.3. [**].

      20.4. Notification. Licensee and Licensor agree to give each other prompt
      written notice of any claim or suit which may arise under the indemnity
      provisions set forth above. Without limiting the foregoing, Licensee
      agrees to give Licensor written notice of any product liability claim made
      with respect to any Licensed Product within seven (7) days of Licensee's
      receipt of notice thereof.

      20.5. Intellectual Property Protections. At Licensor's request, Licensee
      shall assist Licensor, to the extent reasonably necessary, in protecting
      any of Licensor's rights to the Licensed Property. Licensor may commence
      or prosecute any claims or suits in its own name or (with the approval of
      Licensee, which approval will not be unreasonably withheld) in the name of
      Licensee or may join Licensee as a party thereto. With respect to any
      apparent infringement of the Licensed Property by any third party,
      Licensor and Licensee will discuss the appropriate enforcement steps and
      which steps are taken shall be determined by Licensor in its reasonable
      discretion. If Licensor and Licensee both agree to participate in pursuing
      any protection or enforcement action, then Licensor and Licensee shall
      share equally all out-of-pocket costs and expenses related to any such
      action (including, without limitation, attorneys' fees and costs).
      Reimbursement payments required pursuant to this Subparagraph 20.5 from
      one party to the other not paid within thirty (30) days following receipt
      of invoices for such payments will accrue interest charges from the due
      date through the date of payment at an interest rate equal to three
      percent (3%) over the prime lending rate set by the Bank of America
      N.T.S.A., or the 


                                       26


      maximum legal rate, if such maximum legal rate is lower, and shall be
      payable upon demand. In the event any monies are recovered from any such
      action which are in excess of the costs and expenses of such action, then
      such monetary recoveries shall be shared equally between Licensor and
      Licensee. If Licensor declines to participate in or otherwise pursue any
      enforcement, Licensee may take steps to do so, provided that Licensee
      first obtains Licensor's prior written approval. Licensee in such
      circumstances agrees to provide current reports regarding the status of
      any action or negotiations concerning such alleged infringing activity,
      and shall proceed in consultation with Licensor and Licensor's counsel.
      Licensee's choice of counsel in any such proceeding shall be subject to
      Licensor's prior reasonable written approval. Licensee shall not settle or
      compromise any claim without Licensor's prior written approval, such
      approval not to be unreasonably withheld. Should Licensee recover any sums
      from the alleged infringer, it shall be entitled to retain the proceeds of
      any such actions to the extent of Licensee's reasonable out-of-pocket
      expenses for the proceeding, and the remainder will be shared equally
      between Licensee and Licensor.

21.   INSURANCE.

      21.1. Insurance. Licensee will, throughout the Term and for a period no
      less than three (3) years following the expiration or termination of this
      Agreement, maintain insurance in the amounts, for the purposes set forth
      in and in accordance with this Paragraph 21, covering any and all claims
      brought anywhere in the world relating to the Licensed Products, as
      follows:

            (a) Product Liability and Advertising Injury Liability. Licensee
            will carry Product Liability and Advertising Injury Liability
            Insurance obtained from a reputable carrier with a Best's rating of
            "A" or better, naming Licensor, George W. Lucas, Jr. and all
            Licensor-Related Entities as additional insureds, and covering any
            and all claims, demands and causes of action for personal injury or
            property damage arising out of or purporting to arise out of any
            defects in or failure to perform by any Licensed Product or arising
            out of or purporting to arise out of any advertising and/or any
            physical or intangible material used in connection therewith in a
            minimum amount of [**] combined single limit for each occurrence for
            personal injury and property damage.

            (b)   [**]

      21.2. Notification. Each policy shall provide for prompt written notice
      (not to exceed thirty [30] days) to Licensor from the insurer by
      registered mail, return receipt requested, in the event of any material
      modification, cancellation or termination of the policy referred to in
      Subparagraph 21.1(a) hereinabove. Licensee will furnish to Licensor within
      thirty (30) business days after the date of execution of this Agreement a
      Certificate of Insurance naming Licensor, George W. Lucas, Jr., and all
      Licensor-Related Entities as additional insureds on said policy.


                                       27


      21.3. Compliance. Licensee's compliance with this Paragraph 21 in no way
      affects Licensee's indemnity obligations, except to the extent that
      Licensee's insurance company actually pays Licensor amounts which Licensee
      would otherwise be obligated to pay Licensor.

22.   EXPIRATION AND TERMINATION.

      22.1. Term. This Agreement will continue in full force and effect during
      the Term, unless terminated earlier in accordance with the provisions of
      this Agreement, except with respect to those matters which by the terms of
      this Agreement or by their nature survive termination or expiration.

      22.2. Events of Termination. Without prejudice to any other right or
      remedy available to Licensor, Licensor will have the right to terminate
      this Agreement immediately upon written notice to Licensee:

            (a) if Licensee breaches any of the material terms of this Agreement
            and, if such breach is curable, and is not corrected within
            twenty-five (25) days after Licensor sends Licensee written notice
            thereof (or, in the event of a curable breach which cannot be
            corrected within twenty-five [25] days, if Licensee fails to
            commence such correction within twenty-five [25] days and thereafter
            diligently prosecutes it to completion);

            (b) if Licensee becomes insolvent or generally fails to pay, or
            admits in writing its inability to pay its debts as they become due,
            or makes any assignment for the benefit of creditors, or files a
            petition in bankruptcy, or is adjudged bankrupt, or is placed in the
            hands of a receiver, or if the equivalent of any such proceedings or
            acts occurs, though known by some other name or term;

            (c) if Licensee becomes the subject of a voluntary or involuntary
            petition in bankruptcy or any involuntary proceeding relating to
            insolvency, receivership, liquidation or composition for the benefit
            of creditors, if such petition or proceeding is not dismissed within
            sixty (60) days of filing; or

            (d) if Licensee attacks the title of Licensor in and to any Licensed
            Property (including, without limitation, any copyright or trademark
            pertaining thereto) or Licensee attacks the validity of any license
            granted hereunder.

      22.3. Effect of Expiration or Termination.

            (a) Cessation and Delivery. Upon the expiration or earlier
            termination of this Agreement, subject to Subparagraph 22.3(c)
            hereinbelow:

                  (i)   Licensee shall:

                        (A) immediately cease and cause the cessation of all of
                        its activities hereunder respecting the Licensed
                        Property including, 


                                       28


                        without limitation, the design, development,
                        manufacture, sale, Consumer Marketing, and distribution
                        of Licensed Products and, within thirty (30) days after
                        such expiration or termination, send Licensor a complete
                        inventory report of Licensed Products; and

                        (B) subject to the provisions of Subparagraph 13.2
                        hereinabove, at Licensor's election, [**]:

                              (1) [**]

                              (2) furnish Licensor with a sworn certificate of
                              destruction, signed by an officer of Licensee.
                              Without limitation of its rights and remedies,
                              Licensor shall have the right to enter the
                              premises where the Licensed Products are located
                              (to the extent such premises are controlled by
                              Licensee or a Licensee Affiliate) to verify
                              inventory of Production Materials, [**].

                  Licensee shall have no further right to exercise any of the
                  rights licensed hereunder or otherwise acquired in relation to
                  this Agreement. Licensee agrees that its failure to stop in
                  all respects the manufacture, sale and/or distribution upon
                  the termination of this Agreement will result in immediate
                  irreparable damage to Licensor for which there is not adequate
                  remedy at law, and in the event of such failure by Licensee,
                  Licensor shall be entitled to seek injunctive relief in
                  addition to its other rights and remedies in such event.
                  Licensor shall be entitled to recover from Licensee, in
                  addition to any other remedies in the event of material
                  default, reasonable attorneys' fees, costs and expenses,
                  including collection agency fees incurred by Licensor in the
                  enforcement of any provision hereof. Licensor's exercise of
                  any of the foregoing remedies shall not operate as a waiver of
                  any other rights or remedies which Licensor may have.

                  (ii) Licensee shall immediately cancel or terminate all
                  contracts, orders and requests for the manufacture, sale,
                  distribution or supply of any goods or services which involve
                  or may lead to any use, application or exploitation of the any
                  Licensed Product or the rights herein licensed or any part
                  thereof.

            (b) Reversion of Rights. Upon the expiration or earlier termination
            of this Agreement, subject to Subparagraph 22.3(c) hereinbelow, all
            rights licensed to Licensee hereunder will immediately revert to
            Licensor, Licensor may exploit such license rights itself or grant
            such rights to any third party.

            (c) Limited Sell-Off Rights. Licensee shall have the non-exclusive
            right, for a period of ninety (90) days after expiration or earlier
            termination of this Agreement (the "Sell-Off Period") to dispose of
            its inventory of Licensed Products "in hand" 


                                       29


            or "in process" (as such terms are commonly understood in the U.S.
            toy industry), which Licensed Products are manufactured during the
            Term pursuant to orders actually received by Licensee from its
            retail Customers prior to the close of the Sell-Off Period (the
            "Final Orders"); provided, however, that:

                  (i) this Agreement has not been terminated for breach or any
                  other reason set forth in Subparagraph 22.2 hereinabove;

                  (ii) Licensee shall not manufacture (or authorize or permit
                  the manufacture of) Licensed Products after the expiration of
                  the Term;

                  (iii) Licensee shall not distribute or sell (or authorize or
                  permit the distribution or sale of) Licensed Products after
                  the expiration of the Sell-Off Period;

                  (iv) Licensee shall only distribute and sell Licensed Products
                  in amounts necessary to fulfill such Final Orders;

                  [**]

            (d) Return of Confidential Information. Upon termination or
            expiration of this Agreement, the Recipient of Confidential
            Information will immediately return all Confidential Information
            within such Recipient's possession or control and Licensee will
            immediately return all Special Confidential Information received
            from Licensor that is in Licensee's possession or control, and an
            officer of Licensee or Licensor, as the appropriate party may be,
            will certify to the other party in writing that such Recipient has
            done so.

            (e) Payments. Upon termination of this Agreement or upon expiration
            of the Sell-Off Period, all monies owed Licensor will become
            immediately due and payable by Licensee to Licensor.

      22.4. No Damages for Termination. Licensor will not be liable to Licensee
      for damages of any kind, including incidental or consequential damages, on
      account of the expiration or termination of this Agreement in accordance
      with the terms and conditions of this Agreement. Licensee waives any right
      it may have to receive any compensation or reparations on account of
      expiration or termination of this Agreement by Licensor in accordance with
      the terms and conditions of this Agreement, other than as expressly
      provided in this Agreement. Without limiting the generality of this
      Subparagraph 22.4, Licensor will not be liable to Licensee, on account of
      such termination or expiration, for reimbursement or damages for the loss
      of goodwill, prospective profits or anticipated income, or on account of
      any expenditures, investments, leases or commitments made by either party
      or for any other reason whatsoever based upon or growing out of such
      termination or expiration.


                                       30


23.   RESERVED RIGHTS.

      23.1. Licensor's Retained Rights. Notwithstanding anything to the contrary
      contained in this Agreement or otherwise, Licensor retains all rights not
      expressly licensed to Licensee pursuant to this Agreement, including,
      without limitation, the right to manufacture, distribute and sell Gift
      Market Product through the Gift Market [**].

      23.2. Reversion of Rights. Notwithstanding anything to the contrary
      contained in this Agreement or otherwise, the parties understand and agree
      that

      (a) if Licensee fails to manufacture, distribute and sell any of the
      following applicable Licensed Products in any Sub-Territory on or before
      December 31 of the Calendar Year in which the initial theatrical release
      of Episode I within such Sub-Territory occurs, then all rights licensed to
      Licensee hereunder with respect to such applicable Standard Toys in such
      Sub-Territories shall terminate and shall immediately revert to Licensor:
      Molding Compound Toys, Coloring Toys, Mechanical Design Toys, Craft Kits
      or Novelty Candy; and

      (b) if Licensee fails to manufacture, distribute and sell the following
      Licensed Products in any Sub-Territory on or before the later of December
      31, 2001 and the end of the second Calendar Year following the initial
      theatrical release of Episode I in such Sub-Territory, then all rights
      licensed to Licensee hereunder with respect to such applicable Licensed
      Products pursuant to this Agreement for such Sub-Territory shall terminate
      and shall immediately revert to Licensor: electronic organizers, personal
      digital assistants and electronic diaries.

24.   DEFINITIONS.

      24.1.  [**].

      24.2.  [**].

      24.3.  "Advance" has the meaning set forth in Subaragraph 7.1 hereinabove.

      24.4.  [**].

      24.5.  [**].

      24.6.  [**].

      24.7.  [**].

      24.8.  "Basic Figures" means [**].

      24.9.  "Audio Board Games" has the meaning set forth in Schedule II
             hereinbelow.

      24.10. "Blocked Funds" has the meaning set forth in Subparagraph 9.3
             hereinabove.


                                       31


      24.11. "Board Games" has the meaning set forth in Schedule II hereinbelow.

      24.12. "Bundling" has the meaning set forth in Subparagraph 8.6
             hereinabove.

      24.13. "Calendar Month" means Licensee's fiscal month. Licensee's fiscal
             month alternates between four (4) and five (5) week periods,
             beginning on a Monday and ending on a Sunday, within Licensee's
             fifty-two (52) or fifty-three (53) week Calendar Year.

      24.14. "Calendar Quarter" means any of the following applicable
             consecutive successive three (3) month period during a Calendar
             Year: January 1 through and including March 31, April 1 through and
             including June 30; July 1 through and including September 30; and
             October 1 through and including December 31.

      24.15. "Calendar Year" means the time period from the first Monday
             following the last Sunday of the previous Calendar Year and
             including the last Sunday of the Calendar Year, except with respect
             to 1998 for which "Calendar Year" means the time period from
             September 28, 1998 through and including December 27, 1998.

      24.16. "Card Games" has the meaning set forth in Schedule II hereinbelow.

      24.17. "Carrying Cases" has the meaning set forth in Schedule II
             hereinbelow.

      24.18. "Chain" means a group of twenty (20) or more retail store outlets.

      24.19. "Classic Trilogy" has the meaning set forth in Subparagraph
             24.68(a)(i) hereinbelow.

      24.20. "Closeout Stores" means retailers that offer for sale a majority of
             their inventory initially on a so-called "closeout" basis (as such
             term is customarily understood in the U.S. toy industry).

      24.21. [**].

      24.22. "Confidential Information" has the meaning set forth in
             Subparagraph 16.1 hereinabove.

      24.23. "Consumer Marketing" means the solicitation and/or commercial
             enticement for the sale of any product, good or article by means of
             television, radio, print, outdoor, Internet, sweepstakes, 
             free-goods offers, cross-promotions with third parties (e.g.
             PepsiCo) or other promotions directed to consumers, retailer
             in-store display materials, point-of-purchase signage, roto print
             advertisements, public relations efforts, or by any other means,
             whether now or hereafter known, devised, invented or developed.

      24.24. "Consumer Marketing Materials" has the meaning set forth in
             Subparagraph 5.1(c) hereinabove.


                                       32


     24.25. [**].

     24.26. "Copyright Materials" has the meaning set forth in Subparagraph
            13.1 hereinabove.

     24.27. [**].

     24.28. "Creative Play Toys" has the meaning set forth in Schedule II
            hereinbelow.

     24.29. [**].

     24.30. "Customer" means an entity that is not a Licensee, a Licensee
            Affiliate (including any Permitted Licensee Affiliate) or a
            Sublicensee.

     24.31. [**].

     24.32. "Designs" has the meaning set forth in Subparagraph 5.1(b)
            hereinabove.
 
     24.33. "Disclosing Party" has the meaning set forth in Subparagraph 16.1
            hereinabove.

     24.34. "Dolls" has the meaning set forth in Schedule II hereinbelow.

     24.35. "Dump" means to distribute a Licensed Product in a manner which
            disparages the Licensed Property, materially diminishes the value of
            Licensor's goodwill, trademark or tradename rights pursuant to any
            applicable laws in the relevant country of the Territory [**].
 
     24.36. "Electronic Retailers," means retailers that market and sell
            products to consumers primarily through electronic media, including,
            without limitation, by means of television (such as, without
            limitation, QVC, HSN) or Internet.

     24.37. [**].

     24.38. [**].

     24.39. [**].

     24.40. "Electronic Target Games" has the meaning set forth in Schedule II
            hereinbelow.

     24.41. "Electronic Novelty Toys" has the meaning set forth in Schedule II
            hereinbelow.

     24.42. "Electronics/Hand-Held" or "E/H" has the meaning set forth in
            Schedule II hereinbelow.

     24.43. "Episode I" has the meaning set forth in Subparagraph 24.68(a)(ii)
            hereinbelow.

     24.44. "Episode II" has the meaning set forth in Subparagraph 24.68(a)(ii)
            hereinbelow.


                                       33


     24.45. "Episode III" has the meaning set forth in Subparagraph
            24.68(a)(ii) hereinbelow.

     24.46. "Episode I Outside Date" has the meaning set forth in Subparagraph
            2.1(b)(i) hereinabove.

     24.47. "Episode II Outside Date" has the meaning set forth in Subparagraph
            2.1(b)(ii) hereinabove.

     24.48. "Episode III Outside Date" has the meaning set forth in
            Subparagraph 2.1(b)(iii) hereinabove.

     24.49. [**].

     24.50. "Event Window" means a minimum four (4) week period associated with
            the theatrical release of a Picture, the video release of a Picture,
            the Christmas Holiday, or other key promotional event.

     24.51. "Excluded Distribution Channels" has the meaning set forth in
            Schedule IV hereinbelow.

     24.52. "Final Orders" has the meaning set forth in Subparagraph 22.3(c)
            hereinabove.

     24.53. [**].

     24.54. "F.O.B. Royalty" has the meaning set forth in Subparagraph 8.4(a)
            hereinabove.

     24.55. "Games and Puzzles" or "G/P" has the meaning set forth in Schedule
            II hereinbelow.

     24.56. "Games Agreement" has the meaning set forth in Subparagraph 5.3
            hereinabove.

     24.57. "Gift Market" has the meaning set forth in Schedule IX hereinbelow.

     24.58. "Gift Market Product" means the following: [**]

     24.59. [**].

     24.60. "Hand-Held Games" has the meaning set forth in Schedule II
            hereinbelow.

     24.61. [**].

     24.62. [**].

     24.63. [**].

     24.64. [**].


                                       34


     24.65. "Internet" means the computer-generated, computer-mediated or
            computer-assisted transmission, reception, recordation or display
            arising from any network or other connection of instruments or
            devices now or hereafter known, devised, invented or developed
            capable of transmission, reception, recordation and/or display (such
            instruments or devices to include, without limitation, computers,
            laptops, cellular or PCS telephones, pagers, PDAs, wireless
            transmitters or receivers, modems, radios, televisions, satellite
            receivers, cable networks, smart cards and set-top boxes).

     24.66. [**].

     24.67. "Licensed Products" means those products, goods and articles,
            within the enumerated categories set forth in Schedule II attached
            hereto, and which are based on or incorporating elements of the
            Licensed Property.

     24.68. "Licensed Property" means, subject to the terms, conditions and
            restrictions contained in Licensor's or any Licensor Related
            Entity's agreements with persons, firms or entities rendering
            services or granting rights,

      (a)   the original titles, designs, character names and likenesses,
            dialogue, music and sound effects, words, symbols, logographics and
            the footage, photographs, artwork, visual representations of the
            props, costumes, sets, special effects and any other original
            creative elements which appear in, have become directly associated
            with, and as are depicted in, the following motion pictures:

                  (i) those certain previously released theatrical motion
                  pictures (and the special editions thereof released
                  theatrically in 1997) entitled "STAR WARS: EPISODE IV - A NEW
                  HOPE," "STAR WARS: EPISODE V - THE EMPIRE STRIKES BACK" and
                  "STAR WARS: EPISODE VI - RETURN OF THE JEDI" (the "Classic
                  Trilogy"); and/or

                  (ii) each of the first three succeeding prequel theatrical
                  motion pictures to the Classic Trilogy tentatively entitled
                  "Episode I," "Episode II" and "Episode III," respectively
                  (each such prequel theatrical motion picture a "Prequel"
                  herein).

                  (Classic Trilogy and the Prequels are jointly, severally and
                  collectively referred to as the "Picture[s]");

            (b) such original titles, designs, character names and likenesses,
            dialogue, music and sound effects, words, symbols, logographics,
            photographs, artwork, visual representation of the props, costumes,
            sets, special effects, and any other original creative elements
            which do not exist in the Pictures but which are embodied in games,
            novels, comics, videogames, television programs or series (whether
            live action or animated) based on and derived from the Pictures, to
            the 


                                       35


            extent of Licensor's right to grant the rights licensed to Licensee
            pursuant to Paragraph 1 hereinabove (collectively "Spin-Off
            Properties"); and

            (c) such original trademarks, tradenames, servicemarks and
            servicenames owned by Licensor and arising out of and which have
            become directly associated with the Pictures or Spin-Off Properties,
            to the extent of Licensor's rights in each applicable country of the
            Territory under such country's applicable trademark laws, including,
            but not limited to, those specified in Schedule V (the "Licensor
            Trademarks").

     24.69. "Licensee Affiliate" means any entity that is directly or
            indirectly controlled by, under common control with or that 
            controls Licensee (including, without limitation, any Permitted
            Licensee Affiliate). For purposes of this definition of "Licensee
            Affiliate," an entity will control another entity, or be deemed to
            control another entity, if such entity: (a) has the ability to
            elect a majority of the directors, trustees (or other managers) of
            such other entity; (b) is a general partner or joint venturer of
            such other entity; (c) directly or indirectly holds (or has power to
            vote) twenty percent (20%) or more of the economic interests of such
            other entity; or (d) directly or indirectly holds (or has power to
            vote) five percent (5%) or more of the voting equity interests of
            such other entity.

     24.70. "Licensee's Records" has the meaning set forth in Subparagraphs
            9.5(e) and 11.1 hereinabove.

     24.71. "Licensor Channel" means [**].

     24.72. INTENTIONALLY OMITTED.

     24.73. "Licensor Trademarks" has the meaning set forth in Subparagraph
            24.63(c) hereinabove.

     24.74. "Licensor-Related Entities" means George W. Lucas, Jr. and all of
            Licensor's present and future affiliated, related and/or subsidiary
            entities, including, without limitation, Lucasfilm Ltd., LucasArts
            Entertainment Company, Lucas Digital Ltd. and/or Lucas Learning Ltd.
            and their respective divisions, subsidiaries, directors, employees,
            officers, successors, assigns, agents and joint venturers.

     24.75. "Manufacturer" has the meaning set forth in Subparagraph 15.1
            hereinabove.

     24.76. "Manufacturing Agreement" has the meaning set forth in Subparagraph
            15.1 hereinabove.

     24.77. [**].

     24.78. [**].


                                       36


     24.79. "Micro Toys" means the following: "Intermediate Vehicles," "Micro
            Vehicles," "Micro Playsets," and "Micro Figures" (as such terms are
            defined hereinbelow) [**].

     24.80. [**].

     24.81. "Minimum Sales Levels" has the meaning set forth in Subparagraph
            4.2 hereinabove.

     24.82. "Model Kits" has the meaning set forth in Subparagraph 3.4(a)
            hereinabove.

     24.83. [**].

     24.84. "Moral Rights" means any rights to claim authorship of a work, to
            object to or prevent the modification of a work, or to withdraw from
            circulation or control the publication or distribution of a work,
            and any similar right, existing under the law of any country in the
            world or under any treaty.

     24.85. "Net Sales" has the meaning set forth in Subparagraph 8.2
            hereinabove.

     24.86. "Non-Standard Board Games" means "Board Games," "Video Board Games"
            and "Audio Board Games" (as such terms are defined in Schedule II
            hereinbelow) [**].

     24.87. "Novelty Candy" has the meaning set forth in Schedule II
            hereinbelow.

     24.88. "Other Licensed Products" means all Licensed Products other than
            Basic Figures.

     24.89. "Other Product" has the meaning set forth in Subparagraph 3.5
            hereinabove.

     24.90. "Permitted Licensee Affiliates" means those Licensee Affiliates set
            forth in Schedule I and such additional Licensee Affiliates as
            Licensor shall approve, if at all, in writing.

     24.91. "Pictures" has the meaning set forth in Subparagraph 24.68(a)
            hereinabove.

     24.92. [**].

     24.93. "Plush" has the meaning set forth in Schedule II hereinbelow.

     24.94. [**].

     24.95. [**].

     24.96. "Prequel" has the meaning set forth in Subparagraph 24.68(a)(ii)
            hereinabove.

     24.97. "Prior Agreements" has the meaning set forth in Subparagraph 5.3
            hereinabove.

     24.98. [**].


                                       37


     24.99. "Production Materials" has the meaning set forth in Subparagraph
            13.2 hereinabove.

    24.100. "Puzzles" has the meaning set forth in Schedule II hereinbelow.

    24.101. "Puzzle Agreement" has the meaning set forth in Subparagraph 5.3
            hereinabove.

    24.102. [**].

    24.103. "Recipient" has the meaning set forth in Subparagraph 16.1
            hereinabove.

    24.104. "Retail Entity" means a Customer which is ordinarily in the
            business of selling goods and products directly to a public
            (non-business) consumer.

    24.105. "Role-Playing Toys" has the meaning set forth in Schedule II
            hereinbelow.

    24.106. "Royalties" means the applicable "Royalty Percentage" of "Net
            Sales," as such terms are defined and set forth in Subparagraphs 8.1
            and 8.2 hereinabove.

    24.107. "Royalty Percentage" has the meaning set forth in Subparagraph 8.1
            hereinabove.

    24.108. "Royalty Report Form" has the meaning set forth in Subparagraph
            9.4 hereinabove.

    24.109. [**].

    24.110. "Sell-Off Period" has the meaning set forth in Subparagraph
            22.3(c) hereinabove.

    24.111. [**].

    24.112. [**].

    24.113. [**].

    24.114. "Special Confidential Information" has the meaning set forth in
            Subparagraph 16.1 hereinabove.

    24.115. "Spin-Off Properties" has the meaning set forth in Subparagraph
            24.68(b) hereinabove.

    24.116. [**].

    24.117. "Standard Playsets" has the meaning set forth in Schedule II
            hereinbelow.

    24.118. "Standard Vehicles" has the meaning set forth in Schedule II
            hereinbelow.


                                       38


    24.119. "Standard Figures" has the meaning set forth in Schedule II
            hereinbelow.

    24.120. "Standard Toys" has the meaning set forth in Schedule II
            hereinbelow.

    24.121. "Sublicense Agreement" has the meaning set forth in Subparagraph
            3.3 hereinabove.

    24.122. "Sublicensee" has the meaning set forth in Subparagraph 3.3
            hereinabove.

    24.123. [**].

    24.124. "Sub-Territory" has the meaning set forth Subparagraph 2.2
            hereinabove.

    24.125. [**].

    24.126. [**].

    24.127. "Term" has the meaning set forth in Subparagraph 2.1 hereinabove.

    24.128. "Territory" has the meaning set forth in Subparagraph 2.2
            hereinabove.

    24.129. "Toy Agreement" has the meaning set forth in Subparagraph 5.3
            hereinabove.

    24.130. "Trademark License Agreement" has the meaning set forth in
            Subparagraph 1.2 hereinabove.

    24.131. [**].

    24.132. "U.S. Release Date" has the meaning set forth in Subparagraph 2.1
            hereinabove.

    24.133. "Video Board Games" has the meaning set forth in Schedule II
            hereinbelow.

    24.134. "VAT" has the meaning set forth in Subparagraph 8.8 hereinabove.

    24.135. "Warrant" has the meaning set forth in Subparagraph 8.11
            hereunder.

    24.136. "Water Toys" has the meaning set forth in Schedule II hereinbelow.

    24.137. [**].

25.   GENERAL.

      25.1. Assignment. Subject to the other terms and conditions of this
      Subparagraph 25.1, this Agreement will bind and inure to the benefit of
      each party and to their respective successors and permitted assigns.
      Except as expressly permitted herein, Licensee shall not voluntarily or by
      operation of law assign, sub-license, transfer, encumber or otherwise
      dispose of all or part of any right or privilege licensed to Licensee in
      this Agreement, 


                                       39


      including to a Licensee Affiliate, without Licensor's prior written
      approval, provided that the Licensee may assign its rights to any Licensee
      Affiliate so long as the Licensee directly or indirectly holds more than
      fifty percent (50%) of the equity economic and voting interests of such
      Licensee Affiliate. For purposes of this Subparagraph 25.1, any change in
      control of Licensee, whether through merger, acquisition, reorganization,
      liquidation, foreclosure, involuntary sale in bankruptcy, or the purchase
      of substantially all of Licensee's assets or otherwise, shall be deemed a
      purported assignment subject to Licensor's prior written approval. A
      "Change of Control" of Licensee shall have the meaning specified in the
      Warrant. Any attempted assignment, sublicense, transfer, encumbrance or
      other disposal without such approval will be null and void and constitute
      a material default and material breach of this Agreement.

      25.2. Governing Law. This Agreement will be governed by and construed in
      accordance with the laws of the federal laws of the United States and the
      laws of the State of California applicable to agreements entered into, and
      to be performed entirely, within California between California residents
      (and excluding the United Nations Convention on Contracts for the
      International Sale of Goods) without regard to choice of law provisions
      and regardless of the place or places of its actual execution or
      performance. Any suit, action or proceeding between or among any of the
      parties hereto arising out of or related to this Agreement will be brought
      solely in the federal or state courts in the Northern District of
      California, and Licensee hereby submits to the personal jurisdiction
      thereof and agrees to such courts as the appropriate venue.
      Notwithstanding the foregoing, Licensee agrees that, for purposes of
      collecting monies due pursuant to this Agreement, Licensee, at Licensor's
      election, may be subject to whatever local laws and courts have
      jurisdiction in any country of the Territory over Licensee. Process in any
      action or proceeding referenced to in this Subparagraph 25.2 may be served
      on Licensee at the address for notices set forth in Subparagraph 25.5
      hereinbelow.

      25.3. Attorneys' Fees. In the event of any legal proceeding between the
      parties arising out of or related to this Agreement, the prevailing party
      shall be entitled to recover, in addition to any other relief awarded or
      granted, its costs and expenses (whether or not in connection with
      litigation and including, without limitation, reasonable attorneys' fees
      and costs) incurred in connection with any such proceeding.

      25.4. Equitable Relief. Licensee recognizes and acknowledges that a breach
      by Licensee of any covenants, agreements or undertakings made or assumed
      by it will cause Licensor irreparable damage, which cannot be readily
      remedied in damages in an action at law, and may, in addition thereto,
      constitute an infringement of Licensor's intellectual property and other
      rights in the Licensed Property, thereby entitling Licensor to equitable
      remedies (including, without limitation, injunctive relief), costs
      (including, without limitation, whether or not in connection with
      litigation) and reasonable attorney's fees. For purposes of this
      Subparagraph 25.4, Licensee acknowledges that (by way of example and not
      limitation) infringement of Licensor's intellectual property rights
      include any use of the Licensed Property by Licensee other than those
      licensed under this Agreement, failure to obtain approvals required under
      this Agreement, use or release of any Licensed Product or 


                                       40


      Confidential Information in violation of this Agreement, and failure to
      secure permissions and transfers of rights from third parties as required
      pursuant to this Agreement.

      25.5. Notices. Any notice to be given or served under this Agreement shall
      be in writing and shall be delivered to the parties addressed as set forth
      below, or to such other address as either party shall notify the other
      party of in writing, as follows: personally or sent by cable, telegram or
      telemessage or by facsimile, telex, telecopy or other print out
      communication mechanism or by first class, prepaid, registered or
      certified mail (if available) post (air mail if posted to another country)
      to the party to be served at the address set forth below in this
      Subparagraph 25.5 or to such other address as either party may from time
      to time notify in writing to the other. Such notice shall be deemed to
      have been served: (a) immediately in the case of personal delivery; (b) in
      the case of a cable, telegram or telemessage, on the first business day
      after the receipt by the relevant service of the order therefor; (c) in
      the case of facsimile, telex, telecopy or other print out mechanism, on
      the expiration of four (4) hours from the time of transmission subject in
      the case of telex or facsimile to proof by the sender that he/she holds an
      acknowledgment (whether in mechanical form other otherwise) confirming its
      receipt at its destination and subject in the case of facsimile or other
      print out transmission in the absence of a written acknowledgment to the
      original notice being sent by post or by personal delivery in accordance
      with this Subparagraph 25.5 not later than the next business day after
      such transmission; and (d) in the case of postal delivery, on the second
      business day following the date of posting (the fifth business day if
      posted to another country) or on acknowledgment of receipt if earlier.

            If to Licensor:

            For notices to Licensor: P. O. Box 2009, San Rafael, CA 94912,
            Attention: Vice President; with a copy to: General Counsel.

            For all approvals by Licensor pursuant to Paragraph 5 above: P. O.
            Box 2009, San Rafael, CA 94912, Attention: Approvals Coordinator

            For all other approvals by Licensor including, without limitation,
            pursuant to Paragraph 4 above: P.O. Box 2009, San Rafael, CA 94912,
            Attention: Vice President

            For statements and payments to Licensor: P. O. Box 2009, San Rafael,
            CA 94912, Attention: Cashier

            For wire transfers: pursuant to Licensor's written wire transfer
            instructions

            For deliveries requiring Licensor's street address: 5858 Lucas
            Valley Road, Nicasio, CA 94946


                                       41


            If to Licensee:

            Hasbro, Inc.
            1027 Newport Avenue
            Pawtucket, RI 02862
            Attention:  General Counsel
            Fax: 401-727-5089

            and

            Hasbro, Inc.
            615 Elsinore Place
            Cincinnati, OH 45202
            Attention:  Vice President-Law
            Fax: 513-579-4757

      25.6. No Waiver. No action taken by either party pursuant to this
      Agreement, and no waiver by either party, whether express or implied, of
      any provision or right in this Agreement or any breach thereof, and no
      failure of either party to exercise or enforce any of its rights under
      this Agreement, will constitute a continuing waiver with respect to such
      provision or right or as a breach or waiver or any other provision or
      right, whether or not similar.

      25.7. Independent Contractors. The parties to this Agreement are and shall
      remain independent contractors. There is no relationship of partnership,
      employer, employee, principal, agent, joint venture, employment, franchise
      or agency between the parties. Except as expressly provided in this
      Agreement, neither party will have the power to bind the other or incur
      obligations on the other's behalf without the other's prior written
      approval and shall not represent that it has such right.

      25.8. Nonexclusive Remedy. The exercise by either party of any remedy
      under this Agreement will be without prejudice to its other remedies under
      this Agreement or otherwise.

      25.9. Severability. This Agreement is severable. If any provision of this
      Agreement is found invalid or unenforceable in any jurisdiction, that
      provision, as to that jurisdiction, will be ineffective to the extent of
      such invalidity or unenforceability without rendering invalid or
      unenforceable the other remaining provisions of this Agreement, which
      other remaining provisions will not be affected and shall remain in force,
      to the maximum extent permissible.

      25.10. Approvals. Except as otherwise expressly stated herein, any and all
      Licensor approvals pursuant to this Agreement may be given or withheld in
      Licensor's reasonable discretion. Failure by Licensor to give written
      approval within fourteen (14) days from the date of a submission to
      Licensor will be deemed disapproval; provided, however, if Licensee
      thereafter notifies Licensor in writing that it has not received approval,
      and 


                                       42


      Licensor does not respond within forty-eight (48) hours of receipt of such
      notice, the submission will be deemed approved as if in writing hereunder.
      A delivery to or an approval made by an authorized representative of
      Hasbro, Inc. or Hasbro International, Inc. shall be deemed to constitute a
      delivery to and an approval, as the case may be, made by Hasbro, Inc. or
      Hasbro International, and all Permitted Licensee Affiliates. A delivery to
      or an approval made by an authorized representative of Lucas Licensing
      Ltd. shall be deemed to constitute a delivery to or an approval, as the
      case may be, made by Licensor.

      25.11. Headings, Captions and Names. The name of this Agreement, and all
      headings and captions herein contained, are for reference and convenience
      only and do not define, limit or expand the scope or intent of any
      provision hereof and shall not be relied upon in or in connection with the
      construction or interpretation of this Agreement. The words "herein,"
      "hereunder," "hereof" and similar terms refer to this entire Agreement and
      shall not be limited to the specific paragraphs or subparagraphs in which
      they are used.

      25.12. Counterparts. This Agreement may be executed in one or more
      counterparts, and by telefacsimile transmission, each copy of which shall
      be deemed an original and all of which, when taken together, shall
      constitute one and the same instrument, but this Agreement shall not be
      binding upon the parties until it has been signed by both parties. The
      parties hereto agree that facsimile signatures on a copy of this Agreement
      shall be effective and enforceable as if they were original signatures.

      25.13. Further Instruments. Except as otherwise expressly provided in this
      Agreement, each party shall furnish to the other (and shall deliver and
      cause to be executed, acknowledged and delivered to the other) any further
      instruments, which such other party may reasonably require or deem
      necessary from time to time to evidence, establish, protect, enforce,
      defend or secure to such other party any or all of its rights hereunder or
      to more effectuate or carry out the purposes, provisions or intent of this
      Agreement.

      25.14. Governmental Approval. Licensor and Licensee shall (i) as promptly
      as practicable, make all necessary filings required under the
      Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and (ii)
      use all commercially reasonable efforts to obtain the early termination of
      the waiting period under such Act. Licensor and Licensee agree to
      cooperate with each other in the preparation of the filings referred to in
      the preceding sentence and shall each bear fifty percent (50%) of the
      out-of-pocket filing fees required in connection with such filings.

      25.15. Conditioned Effectiveness of License. Notwithstanding anything in
      this Agreement to the contrary, this Agreement will not be deemed
      effective until the expiration or early termination of the waiting period
      applicable to the transactions contemplated hereby under the
      Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. Upon
      such expiration or early termination, this Agreement will be deemed
      effective, without any further action of Licensor or Licensee.

      25.16. Lucasfilm Ltd. Guarantee. Lucasfilm Ltd. hereby agrees to guarantee
      the performance of Licensor's obligations under this Agreement.


                                       43


      25.17. Force Majeure. In the event that China's loss of most favored
      nations trade status renders performance impossible or commercially
      impracticable and such impossibility or impracticability of performance
      can reasonably be expected to continue for at least ninety (90) days, then
      the parties shall discuss in good faith appropriate action to take in
      light of such circumstances.


                                       44


      25.18. Entire Agreement. This Agreement (including all Exhibits and
      Schedules attached hereto, which Exhibits and Schedules are incorporated
      herein by this reference), constitutes the complete and entire agreement
      between the parties with respect to the subject matter hereof, superseding
      and replacing the Prior Agreements and any and all prior agreements,
      negotiations, communications, and understandings (both written and oral)
      regarding such subject matter. This Agreement may only be modified, or any
      rights under it waived, by a written document executed by both parties.
      Notwithstanding the foregoing, the right to manufacture, distribute,
      market and sell Licensed Products under the terms of the Prior Agreements
      shall survive the execution and delivery of this Agreement, the "Royalty"
      set forth and defined in the Prior Agreements shall be applicable to the
      "Licensed Products" (set forth and defined in the Prior Agreements) in the
      "Territories" (set forth and defined in the Prior Agreements) for Net
      Sales occurring up to and including December 31, 1998 and, without
      limitation, the parties agree that Licensee shall no longer have the right
      to the "Sell-Off Period" (set forth and defined in the Prior Agreements).

LUCAS LICENSING LTD. ("Licensor")       HASBRO, INC.

By: /s/ GORDON RADLEY                   By: /s/ HAROLD P. GORDON
    --------------------------------       -----------------------------------
Title: President                        Title: Vice Chairman
      ------------------------------          --------------------------------

                                        And

                                        HASBRO INTERNATIONAL, INC. on behalf
                                        of itself and all Permitted Licensee
                                        Affiliates

                                        By: /s/ HAROLD P. GORDON               
                                           ----------------------------------- 
                                        Title: Vice Chairman                   
                                              -------------------------------- 

                                        (jointly and severally "Licensee")

LUCASFILM LTD.
(solely with respect to the
obligation contained in
Subparagraph 25.16
of the foregoing agreement)

By: /s/ GORDON RADLEY
   ---------------------------------
Title: President
      ------------------------------


                                       45


Toy License Agreement Between Lucas Licesning Ltd. and Hasbro dated as of
October 14, 1997

Schedule I - PERMITTED LICENSEE AFFILIATES

BYS Toys (Hong Kong) Limited
Claster Television, Inc.
Connector Set L.P.
Funskool (India) Ltd.
Groupe Hasbro France S.A.
Guangzhou Palmyra Bai-Yun-Shan Toys Limited
Hasbro Argentina S.A.
Hasbro Asia - Pacific Marketing Ltd.
Hasbro Australia Limited
Hasbro Aust Pty Ltd.
Hasbro B.V.
Hasbro Canada Inc.
Hasbro Chile LTDA
Hasbro Customer Services Limited
Hasbro de Mexico, S.A.de C.V.
Hasbro Deutschland GmbH
Hasbro Far East LTD
Hasbro Far East Services Limited
Hasbro Far East Venture Ltd.
Hasbro Finland OY
Hasbro Foreign Sales Corp.
Hasbro Hellas S.A.
Hasbro Hong Kong Limited
Hasbro Importatacao e Exportacao de Jogos e Brinquedos, Lda
Hasbro Industries (UK) Limited
Hasbro Interactive, Inc.
Hasbro Interactive Limited
Hasbro International Trading, Inc.
Hasbro International, Inc.
Hasbro Ireland Limited
Hasbro Israel Ltd.
Hasbro Italy S.r.l.
Hasbro Japan K.K.
Hasbro Latin America, Inc.
Hasbro Latin America Investments, Inc.
Hasbro Magyarorszag Kft
Hasbro Managerial Services, Inc.
Hasbro Mexicana S.A. de C.V.
Hasbro New Zealand Limited
Hasbro Norway AS
Hasbro Osterreich Ges.m.b.H.
Hasbro Peru S.A.
Hasbro Poland Sp.Zo.o.


SI-1


Toy License Agreement Between Lucas Licesning Ltd. and Hasbro dated as of
October 14, 1997

Hasbro Promotions and Direct, Inc.
Hasbro Sales Inc./Les ventes Hasbro Inc.
Hasbro Scandinavia AS
Hasbro Schweiz AG
Hasbro Servicios S.A. de C.V.
Hasbro Singapore Pte Ltd.
Hasbro Sweden AB
Hasbro Toy (Malaysia) Sdn Bhd
Hasbro U.K. Limited
HIAC V Corp.
HIAC VI Corp.
HIAC VIII Corp.
HIAC IX Corp.
HMS Juguetes S.A. de C.V.
Inter-Toy Equiutim Araclari Sanayl Ve Ticaret A.S.
ISIX, Inc.
Juguetrenes S.A. de C.V.
K=NEX France S.N.C.
K=NEX G.m.b.H.
K=NEX International U.K.
K=NEX International, L.P.
Larami Far East Limited
Larami Limited
MB Espana, S.A.
MB International B.V.
MB Internacional Brinquedos, Ltda.
MB Nederland B.V.
Milton Bradley Company (Georgia)
Milton Bradley Limited
Milton Bradley Storage Limited
NanHai County Yongnan Toy Manufacturing Company Limited
OddzOn/Cap Toys Far East Limited
OddzOn/Cap Toys Far East Services Limited
OddzOn/Cap Toys, Inc.
Palmyra Holdings Pte Ltd.
Palmyra (Hong Kong) Limited
Playskool Realty, Inc.
PromoToys S.r.l.
S.A. Hasbro N.V.
3D Licensing Limited
Toltoys (Australia) Pty Ltd.
Tonka International, Inc.
Tonka Manufacturing, Inc.
Tonka (UK) Ltd.
Wrebbit Inc.


SI-2


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

Schedule II - LICENSED PRODUCTS

The term "Licensed Products" as used in, and subject to the terms and conditions
of the Agreement, means: (A) "STANDARD TOYS," (B) "GAMES AND PUZZLES" AND (C)
"ELECTRONICS/HAND HELD" (as such terms are defined hereinbelow).

(A) STANDARD TOYS: The term "Standard Toys," as used in the Agreement, means the
following: "Standard Figures," "Standard Vehicles," "Standard Playsets,"
"Role-Playing Toys," "Dolls," "Plush," "Water Toys," "Carrying Cases," "Creative
Play Toys," and "Novelty Candy" (as such terms are defined hereinbelow).

[**]

(B) "GAMES AND PUZZLES": The term "Games and Puzzles," as used in the Agreement
means all "Board Games," "Video Board Games," "Audio Board Games," "Card Games"
and "Puzzles":

[**]

(C) "ELECTRONICS/HAND HELD": The term "Electronics/Hand-Held," as used in the
Agreement, means "Hand-Held Games," "Electronic Novelty Toys" and "Electronic
Target Games," but specifically excluding "Youth Electronics" (as such terms are
defined hereinbelow):

[**]

(D) EXCLUSIONS FOR INTERACTIVE PRODUCTS: Notwithstanding anything to the
contrary set forth above in this Schedule II or otherwise, and without
limitation, (a) expressly excluded from "Licensed Products" are: all items of
the kinds described in this Section (D) and [**]

In the event of any inconsistencies or conflict between the terms and conditions
in Sections A, B, or C of this Schedule II and the terms and conditions of
Section D of this Schedule II, the terms and conditions of Section D shall
prevail.


SII-1


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

         Schedule III - ADVANCES and MINIMUM SALES LEVELS (U.S. $000's)

                                      [**]


SIII-1



Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

                   Schedule IV -EXCLUDED DISTRIBUTION CHANNELS

                                      [**]


SIV-1



Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

        Schedule V - LICENSOR TRADEMARKS

        The Licensor Trademarks include, to the extent of Licensor's rights
        therein in the applicable country of the Territory, all of the
        trademarks, characters and other protectible elements as appearing in
        the Pictures and the Spin-Off Properties, including, without limitation:

              Admiral Akbar
              Artoo-Detoo (R2-D2)

              AT-AT
              A-Wing

              Ben (Obi-Wan) Kenobi
              Bib Fortuna
              Biggs Darklightner
              Boba Fett
              B=omarr Monk
              Bossk (Bounty Hunter)

              Chewbacca
              Cloud City
              Darth Vader
              Death Star
              Dengar
              Dewback
              Dr. Evazan

              Droid
              The Emperor
              Emperor Palpatine

              Endor

              Ewok

              Gamorrean Guard
              Grad Moff Tarkin
              Garindan
              Greedo

              Han Solo

              Hoth
              Ishi Tib
              Jabba the Hutt


SV-1


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

              Jawa
              Klaatu
              Lak Sivrak
              Lando Calrissian

              Lobot
              Logray
              Lord Darth Vader
              Luke Skywalker
              Malikili
              Max Rebo
              Millennium Falcon
              Mon Mothma
              Nien Numb
              Oola
              Ponda Baba
              Pote Snitkin

              Princess Leia Organa

              Rancor

              Ree-Yees

              Return of the Jedi
              Return of the Jedi Logo
              Ronto

              Saelt-Marae
              See-Threepio (C-3PO)
              Shadows of the Empire

              Star Wars
              Star Wars Logo

              Tauntaun

              The Empire Strikes Back
              The Empire Strikes Back Logo
              The Force
              TIE Fighter

              Tusken
              Ugnaught
              Wampa


SV-2


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997
  
              Weequay (Skiff Guard)
              Wicket
              Xizor

              X-Wing
              Yak Face
              Yoda
              Zuckus


SV-3


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

Schedule VI - EXCLUDED COUNTRIES

People's Republic of China (other than Hong Kong)


SVI-1


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

SCHEDULE VII  [**]


SVII-1


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

Schedule VIII - MARKET CATEGORIES

[**]


SVIII-1



Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

Schedule IX - GIFT MARKET DEFINITION

[**]


SIX-1


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

Exhibit A - TRADEMARK LICENSE AGREEMENT

AGREEMENT dated as of this _____ day of  ___________________,  _____,  between
Lucas Licensing Ltd.  ("Licensor") and Hasbro, Inc. and Hasbro  International,
Inc.  and all  "Permitted  Licensee  Affiliates"  (as  defined in the  License
Agreement) (collectively, "Licensee").

1. TRADEMARKS, PRODUCTS AND LICENSED TERRITORY: Licensor is, as between Licensor
and Licensee, the owner of the trademarks indicated on Schedule A-1 attached
hereto and made a part hereof ("Licensor Trademarks"). Licensor desires that
Licensee be permitted to use the Licensor Trademarks on those goods indicated on
Schedule A-2 attached hereto and made a part hereof ("Licensed Products") in the
country or countries ("Licensed Territory") listed on Schedule A-3 listed on
Schedule III attached hereto and made a part hereof pursuant to the terms and
conditions hereof. The parties acknowledge and agree that the designations of
the Licensed Products and Licensed Territory contained in Schedules A-2 and A-3,
respectively, are not intended to, and shall not, supersede or alter in any
manner the designations used with respect to these matters in any commercial
agreement between the parties related to the subject matter hereof including but
not limited to the Toy License Agreement dated as of October __, 1997 among the
parties hereto (the "License Agreement").

2. LICENSE: Licensor hereby grants to Licensee a license (as provided in the
License Agreement) to use the Licensor Trademarks on and in connection with the
Licensed Products and for the sole purpose to affix the Licensor Trademarks to
or on the Licensed Products and packaging, containers, display materials,
advertising and promotional materials sold, used or distributed in connection
with the Licensed Products. Licensee hereby agrees to limit its use of the
Licensor Trademarks in accordance with the foregoing and according to processes,
specifications and other quality standards established or approved by Licensor
pursuant to the License Agreement for the Licensed Products with respect to
which the Licensor Trademarks are used. Without limiting the generality of the
foregoing, the quality of all such Licensed Products shall be at least as high
as that of similar goods presently sold or distributed by Licensee, and shall be
subject to such approval procedures established by any commercial agreement
between the parties related to the subject matter hereof.

3. TERM: The Term of this Agreement shall be _______________, including any
so-called "sell-off period", to which Licensee is entitled, if at all.

4. LIMITED GRANT: All rights in the Licensor Trademarks other than those
specifically granted herein are reserved to Licensor for its own use and
benefit. Licensee acknowledges that it shall not acquire any rights of
whatsoever nature in the Licensor Trademarks as a result of Licensee's use
thereof, and that all use of the Licensor Trademarks by Licensee shall inure to
the benefit of Licensor.

5. DISPLAY OF TRADEMARKS AND PROPRIETARY NOTICES: Pursuant to the terms and
conditions of the License Agreement: (a) Licensee agrees that the Licensor
Trademarks shall be displayed only in such form and manner as shall be
specifically approved by Licensor; (b) Licensee shall cause to appear on all
material on or in connection with which the Licensor Trademarks are used, such
legends, markings and notices as Licensor may require; (c) Licensee 


Ex A-1


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

agrees that it shall use no markings, legends or notices relating to the
Licensor Trademarks on the Licensed Products and packaging and advertising
therefor other than as approved in advance in writing by Licensor; (d) Licensor
reserves the right to make such changes in the specified notices as Licensor
reasonably deems necessary or desirable to protect Licensor's interests in the
Licensed Trademarks, provided however that such changes shall not be required to
be made on Licensed Products and packaging or advertising therefor which have
already been manufactured or printed in accordance with Licensor's previous
instructions or approval. The foregoing shall not limit Licensor's ability to
reasonably require so-called "running changes" or to otherwise to enforce the
provisions of this Agreement or any other agreement between the parties.

The words "Registered User" and/or the symbol J or 7 shall be used on all
Licensed Products, packaging and advertising manufactured or printed after
Licensor notifies Licensee in writing that such words and symbol are legally
permitted in the specific country or countries in the Licensed Territory within
which the Licensed Products will be distributed.

6. COMPLIANCE WITH QUALITY STANDARDS: If the quality standards set forth herein
are not met, or if said quality standards are not maintained throughout the
period of manufacture of any Licensed Products hereunder, then, upon written
notice from Licensor, Licensee shall immediately discontinue the manufacture and
distribution of such Licensed Products that do not meet said quality standards.
The foregoing shall not limit Licensor's rights or remedies for failure to
maintain such quality standards as provided elsewhere herein or in any other
agreement between the parties hereto.

7. PRODUCTION SAMPLES: In accordance with the terms and conditions of the
License Agreement, Licensee agrees to submit to Licensor and to any other
recipient(s) which Licensor may from time to time designate in writing, on a
regular basis, representative samples of the Licensed Products and of any or all
materials bearing the Trademarks in order Licensor may be assured that the
provisions of this Agreement are being observed. Said samples should be
submitted to Licensor at the address specified by Licensor.

8. GOODWILL OF THE TRADEMARK: Licensee recognizes the great value of the
goodwill associated with the Licensor Trademarks and acknowledges that the
Licensor Trademarks and all rights therein and goodwill pertaining thereto
belong exclusively to Licensor.

9. SIMILAR TRADEMARKS: Licensee shall give Licensor prompt written notice of any
adverse use in the Licensed Territory of a trademark or other designation
similar to the Licensor Trademarks of which Licensee is or becomes aware.
Licensee further agrees that it shall not at any time apply for any registration
of any copyright, trademark or other designation, nor file any document with any
governmental authority, nor take any other action which would affect the
ownership of the Licensor Trademarks.

10. TERMINATION: Upon the expiration or earlier termination of this Agreement,
all rights to use the Licensor Trademarks or any other symbols of goodwill owned
by Licensor relative to the Licensed Products, together with the appurtenant
goodwill thereof shall revert automatically to Licensor, and Licensee shall
immediately discontinue all use of the Licensor Trademarks except as may herein
be provided.


Ex A-2


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

11. ASSIGNMENT UPON TERMINATION: Upon written request by Licensor, or in any
event upon the termination of this Agreement for whatever reason, Licensee shall
execute and deliver to Licensor a document, in form and substance reasonably
satisfactory to Licensor, assigning to Licensor all of Licensee's right, title
and interest, if any, in and to the Licensor Trademarks. In the event Licensee
fails to execute and deliver said document, Licensor shall have the right to
execute same as Licensee's attorney-in-fact, and Licensee does hereby
irrevocably appoint (such appointment being irrevocable and coupled with an
interest) Licensor its true and lawful attorney-in-fact only for the purpose of
executing such document.

12. RECORDATION OF AGREEMENT, REGISTERED USER: Licensor, at its discretion,
shall have the right to record this Agreement at the appropriate Registry or
governmental authority in the Licensed Territory at Licensor's expense, and
Licensee agrees to cooperate as requested by Licensor in arranging such
recordation, or in varying or canceling such recordation in the event of
amendments to, or termination of, this Agreement. Licensee hereby appoints
Licensor as its agent for the purpose of lodging, prosecuting and completing
registered user entries at the appropriate registry in the Territory and at
Licensor's expense, such appointment being irrevocable and coupled with an
interest.

13. GENERAL: The terms and conditions of this Agreement are subject to the terms
and conditions of the License Agreement and in the event of a conflict between
the terms or conditions herein contained and those of the License Agreement, the
latter shall prevail. Approvals hereunder shall be made subject to the terms of
the License Agreement. This Agreement does not constitute either party the agent
of the other or create a partnership or joint venture between the parties except
as provided herein, and Licensee shall have no power to obligate or bind
Licensor in any manner whatsoever. This Agreement shall be governed by the laws
of the State of California applicable to agreements made and fully performed in
California.

IN WITNESS WHEREOF, this Agreement is executed as of the day and year first
above written.

("Licensee")                             Lucas Licensing Ltd. ("Licensor")

------------------------------------     -----------------------------------
Name:                                    Name:
     -------------------------------          ------------------------------
Title:                                   Title:
      ------------------------------           -----------------------------


Ex A-3


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

Schedule A-1 to TRADEMARK LICENSE AGREEMENT

LICENSOR TRADEMARKS

The Licensor Trademarks include such original trademarks, tradenames,
servicemarks and servicenames owned by Licensor and arising out of and which
have become directly associated with the "Pictures" or the "Spin-Off Properties"
(as such terms are defined in the License Agreement), to the extent of
Licensor's rights in each applicable country of the Territory under such
country's applicable trademark laws, including, but not limited to:

      Admiral Akbar
      Artoo-Detoo (R2-D2)

      AT-AT
      A-Wing

      Ben (Obi-Wan) Kenobi
      Bib Fortuna
      Biggs Darklightner
      Boba Fett
      B=omarr Monk
      Bossk (Bounty Hunter)

      Chewbacca
      Cloud City
      Darth Vader
      Death Star
      Dengar
      Dewback
      Dr. Evazan

      Droid
      The Emperor
      Emperor Palpatine
      Endor

      Ewok

      Gamorrean Guard
      Grad Moff Tarkin
      Garindan
      Greedo

      Han Solo

      Hoth


Ex A-4


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

      Ishi Tib
      Jabba the Hutt
      Jawa
      Klaatu
      Lak Sivrak
      Lando Calrissian

      Lobot
      Logray
      Lord Darth Vader
      Luke Skywalker
      Malikili
      Max Rebo
      Millennium Falcon
      Mon Mothma
      Nien Numb
      Oola
      Ponda Baba
      Pote Snitkin

      Princess Leia Organa

      Rancor

      Ree-Yees
      Return of the Jedi
      Return of the Jedi Logo
      Ronto

      Saelt-Marae
      See-Threepio (C-3PO)
      Shadows of the Empire

      Star Wars
      Star Wars Logo

      Tauntaun

      The Empire Strikes Back
      The Empire Strikes Back Logo
      The Force
      TIE Fighter

      Tusken
      Ugnaught


Ex A-5


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

      Wampa
      Weequay (Skiff Guard)
      Wicket
      Xizor

      X-Wing
      Yak Face
      Yoda
      Zuckus


Ex A-6


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

Schedule A-2 to TRADEMARK LICENSE AGREEMENT

LICENSED PRODUCTS


Ex A-7


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

Schedule A-3 to TRADEMARK LICENSE AGREEMENT

LICENSED TERRITORY


Ex A-8


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

Exhibit B - APPROVAL OF SUBLICENSEE AGREEMENT

THIS AGREEMENT, dated as of __________________, is made by and among LUCAS
LICENSING LTD., a California corporation, P.O. Box 2009, San Rafael, California
94912, U.S.A. (hereinafter referred to as "Licensor"), (sublicensee company
name), _________________ [address] (hereinafter referred to as "Company") and
Hasbro, Inc., Hasbro International and all "Permitted Licensee Affiliates" (as
defined in the License Agreement) (jointly and severally "Licensee"),
____________________ [address].

                  WHEREAS: Reference is made to that certain license agreement
between Licensor and Hasbro, Inc., Hasbro International and all "Permitted
Licensee Affiliates" (as defined in the License Agreement) (jointly and
severally "Licensee") (the "License Agreement"), pursuant to which License
Agreement Licensee is licensed the right to distribute and sell, subject to the
terms and conditions of the License Agreement, certain products, goods or
articles governed thereby (the "Licensed Products") based on the "Licensed
Property" (as defined therein); and

                  WHEREAS: Company and Licensee have entered into an agreement
dated ____, (the "Sublicense Agreement"), whereby Licensee has sublicensed to
Sublicensee the right to distribute and/or sell certain Licensed Products based
on or incorporating the Licensed Property in the country or countries set forth
therein (the "Territory") and for a term set forth in the Sublicense Agreement;

                  NOW, THEREFORE, for the promises set forth herein by the
parties and for other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, the parties hereto agree as follows:

1. RESPONSIBILITY OF LICENSEE. Subject to the terms and conditions of the
License Agreement, nothing contained in this Agreement or in the Sublicense
Agreement shall in any manner whatsoever affect or otherwise diminish or relieve
Licensee of any of its obligations under the License Agreement.

2. SUBLICENSE AGREEMENT: In order to induce Licensor to execute this Agreement,
Licensee and Company hereby represent and agree that, subject to the approval of
Licensor, Company has executed the Sublicense Agreement. A copy of such
Sublicense Agreement is attached hereto as Attachment B-1 and is incorporated
herein by this reference. Without limitation of Licensor's rights, if Company
breaches a material term of the Sublicensee Agreement, and, as a result of such
breach, Licensee is in material breach of the License Agreement, subject to the
provisions of Subparagraph 22.2(a) of the License Agreement, then,
notwithstanding anything to the contrary contained in the Sublicense Agreement,
Licensor shall have the right, pursuant to the License Agreement to send to
Company a notice of termination ("Termination Notice") in the name of Licensee
and the Sublicense Agreement shall be deemed terminated as of the date Company
receives such Termination Notice.

3. APPROVAL BY LICENSOR: Subject to the terms and conditions hereof, Licensor
hereby approves Company to act for Licensee as a sublicensee of the rights and
obligations of Licensee solely with respect to the sale and distribution of
Licensed Products governed by the Sublicense Agreement. It is expressly
understood and agreed that the rights sublicensed 


Ex B-1


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

hereunder do not include the right to manufacture of Licensed Products for which
Company must, with Licensor's prior written approval, execute an Approval of
Manufacturer Agreement in accordance with the terms and conditions of the
License Agreement

4. ACKNOWLEDGMENT OF LICENSE AGREEMENT: Company hereby represents that Company
has reviewed and is familiar with all of the provisions of the License Agreement
identified in Subparagraph 8.3 of the License Agreement as being relevant to
Company's activities hereunder, and Company agrees that in performing under this
Agreement, Company shall perform, be bound by and comply with each and all of
such terms and conditions of the License Agreement as they apply to Company.
Without limitation of Licensor's rights and remedies, in the event of a breach
or threatened breach by Licensee of any term or condition of the License
Agreement and/or in the event of a breach or threatened breach by Company of any
term or condition of the Sublicense Agreement that would result in a breach of
Licensee's obligations pursuant to the License Agreement, Licensor shall be
entitled to seek legal and/or equitable relief by way of injunction or otherwise
against Licensee and/or against Company, at the discretion of Licensor, to
restrain, enjoin and/or prevent any such breach or threatened breach.

5. OBLIGATIONS OF COMPANY: Company hereby agrees that in exercising the rights
authorized herein:

(a) Company shall only distribute and/or sell a Licensed Product pursuant to the
Sublicense Agreement in accordance with the instructions of Licensee;

(b) Except as provided in Subparagraph 10(a) herein below, Company shall not
assign or license, in any manner whatsoever, the rights granted to Company
herein or delegate any of its obligations under the Sublicense Agreement or
under this Agreement to any party;

(c) Company shall execute a Trademark License Agreement with Licensor, or with
any entity designated by Licensor, with respect to the Licensed Products in a
form substantially identical to the Trademark License Agreement executed by
Licensee with respect to the Licensed Products; and

(d) Without limitation of Licensor's rights hereunder, Company shall upon
execution of the Sublicense Agreement and of this Agreement assume all of
Licensee's obligations with respect to rights sublicensed in the Sublicense
Agreement for the Licensed Products governed thereby.

6. EFFECT OF EXPIRATION OR TERMINATION: Without limitation, upon the expiration
or earlier termination of the Sublicense Agreement, Company shall comply with
and be bound by the terms and conditions as are imposed upon Licensee pursuant
to subparagraph 22.3 of the License Agreement and (a) immediately cease all
activities authorized hereunder respecting the Licensed Products including,
without limitation, the distribution and sale of Licensed Products and, within
thirty (30) days after such expiration or termination, Company shall send
Licensor and Licensee a complete inventory report of all Licensed Products
within its possession or control; and (b) at Licensor's election, [**] furnish
Licensor with a sworn certificate of destruction of such Production Materials,
signed by an officer of Company. Upon the expiration or termination of the
Sublicense Agreement, including a sell-off period thereunder, if any, except as
otherwise expressly 


Ex B-2


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

provided herein, Company shall have no further right to exercise the rights
sublicensed hereunder or otherwise acquired in relation to this Agreement or the
Sublicense Agreement.

7.    COMPANY RECORDS AND AUDITS:

(a) Company will maintain complete and accurate records during and for five (5)
years after the termination or expiration of the Sublicense Agreement, related
to this Agreement and/or the rights sublicensed pursuant to the Sublicense
Agreement. The obligation to maintain records and to grant Licensor and
Licensor's representatives access to such records shall survive the expiration
or earlier termination of this Agreement.

(b) An independent certified public accountant selected by Licensor may, upon
reasonable notice and during normal business hours, inspect any and all records
of Company related to the exercise of Company's rights under this Agreement
and/or the Sublicense Agreement, including without limitation its payment
obligations. If, upon performing such audit, it is determined that Company owes
Licensor monies, Company will immediately make full payment thereof. If the
amount of such payment exceeds [**], Company will bear all out-of-pocket
expenses and costs of such audit in addition to its obligation to make full
payment. All underpayments and late payments will accrue interest charges from
the due date through the date of payment at an interest rate equal to [**], and
shall be payable upon demand.

8. LICENSOR AS THIRD PARTY BENEFICIARY. In addition to Licensor's other rights
and remedies pursuant to the License Agreement and to this Agreement, Licensor
is a third party beneficiary of the obligations of Company under any and all
agreements, whether oral or written, between Company and Licensee respecting the
Licensed Products, including, without limitation, the Sublicense Agreement, and
Licensor shall have the right at any time to enforce such obligations related to
the Licensed Property and to exercise any of Licensee's rights and remedies
directly against Company as if Licensor were a direct party thereto if Licensee
fails to enforce such obligations or to exercise any such rights or remedies
within twenty-five (25) days following Licensee's receipt of Licensor's written
request therefor.

9.    CONFIDENTIALITY.

(a) Confidential Information. Company acknowledges and agrees that the terms and
conditions contained in this Agreement, the Sublicense Agreement and/or any
other agreement between or among any or all of the parties are confidential, as
well as any and all information and material concerning or pertaining to: (i)
any script, concept, marketing plan, schedule of Licensor or of any
Licensor-Related Entity (including, without limitation, any pre-production,
production or post-production schedule or release schedule for any "Prequel" [as
defined in the License Agreement] or for any derivative work thereof); (ii) any
project, product, good or article pertaining to the Licensed Property; (iii) any
term or condition of any agreement between Licensor and any individual or entity
relating to any Licensed Product (including, without limitation, any talent
agreement); and (iv) any "Copyright Material" (as such term is defined in the
License Agreement) are confidential and proprietary to Licensor (individually
and collectively the "Confidential Information"). Company further acknowledges
and agrees that, except as otherwise expressly provided in this Subparagraph
10(a), Company shall not use, copy, or disclose, or authorize or permit the use,
copy or disclosure of, any Confidential Information in whole or in


                                     Ex B-3


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

part in any manner or to any person, firm, enterprise, organization, corporation
or entity unless authorized in advance in writing by Licensor. Company shall
receive and hold, and shall contractually obligate and cause all entities with
whom it contracts relative to the Licensed Products to maintain, all
Confidential Information in the strictest confidence and Company acknowledges,
represents, warrants and agrees to use its best efforts to protect the
confidentiality of all Confidential Information. Furthermore, Company will not
disclose any Confidential Information to any third party for any purpose
(including the exercise of its rights or performance of its obligations) unless
Licensor otherwise agrees in writing and such third party has executed a written
confidentiality agreement in form and substance acceptable to Licensor, which
confidentiality agreement, inter alia, shall restrict the use of any
Confidential Information to the minimal extent necessary to effectuate the terms
and conditions of this Agreement as they apply to such third party and requires
such third party to use its best efforts to maintain all Confidential
Information in the strictest confidence. Company's obligations pursuant to this
Subparagraph 9(a) shall not apply to any Confidential Information which: is
authorized in writing by Licensor to become publicly known; is rightfully
received from a third party authorized by Licensor to receive such information
without restriction and without breach of this Agreement; or is the minimum
necessary to comply with any law, regulation, stock exchange rule or valid order
of a court of competent jurisdiction.

(b) Publicity or Announcements. Without limitation of the foregoing, except to
the minimum extent necessary to comply with any law, regulation or stock
exchange rule, no announcements, press releases, or publicity about the
existence or any terms of this Agreement, the relationship of the parties or
about the rights relating to the Licensed Products to be exercised hereunder
shall be made by Company without the prior written approval of Licensor in each
instance.

(c) Rights of Publicity. Except as expressly set forth herein, Company acquires
no rights to use and will not use without Licensor's prior written approval the
characters, artwork, designs, trade names, copyrighted materials, trademarks or
service marks of Licensor in any advertising, publicity or promotion, to express
or imply any endorsement by Licensor of Company's services or products, or in
any other manner except as expressly authorized in this Agreement. The foregoing
provision shall survive expiration or termination of this Agreement.

10.   GENERAL.

(a) Assignment. This Agreement will bind and inure to the benefit of each party
and to their respective successors and assigns. Company shall not voluntarily or
by operation of law assign, sub-license, transfer, encumber or otherwise dispose
of all or part of any right or privilege granted to Company in this Agreement,
without Licensor's prior written approval. For purposes of this Paragraph, any
change in control of Company, whether through merger, acquisition,
reorganization, liquidation, foreclosure, involuntary sale in bankruptcy, or the
purchase of substantially all of Company's assets or otherwise, shall be deemed
a purported assignment subject to Licensor's prior written approval. Any
attempted assignment, sublicense, transfer, encumbrance or other disposal
without such approval will be null and void and constitute a material default
and material breach of this Agreement.


Ex B-4


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

(b) Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the federal laws of the United States and the laws
of the State of California applicable to agreements executed, and to be
performed entirely, within California between California residents (and
excluding the United Nations Convention on Contracts for the International Sale
of Goods) without regard to choice of provisions and regardless of the place or
places of its actual execution and performance. Any suit, action or proceeding
between or among the parties hereto arising out of or related to this Agreement
will be brought solely in the federal or state courts in the Northern District
of California, and Company hereby submits to the personal jurisdiction thereof
and agrees to such courts as the appropriate venue. Notwithstanding the
foregoing, Company agrees that, for purposes of collecting monies due pursuant
to this Agreement, Company, at Licensor's election, may be subject to whatever
local laws and courts have jurisdiction in any country of the Territory over
Company.

(c) Attorneys' Fees. In the event of any legal proceeding between or among any
of the parties hereto arising out of or related to this Agreement, the
prevailing party shall be entitled to recover, in addition to any other relief
awarded or granted, its costs and expenses (whether or not in connection with
litigation and including, without limitation, reasonable attorneys' fees and
costs) incurred in connection with any such proceeding.

(d) Equitable Relief. Company recognizes and acknowledges that a breach by
Company of any covenants, agreements or undertakings made or assumed by it
hereunder or under the Sublicense Agreement will cause Licensor irreparable
damage, which cannot be readily remedied in damages in an action at law, and
may, in addition thereto, constitute an infringement of Licensor's intellectual
property and other rights in the Licensed Property, thereby entitling Licensor
to equitable remedies (including, without limitation, injunctive relief),
reasonable costs (including, without limitation, whether or not in connection
with litigation) and reasonable attorney's fees.

(e) Notices. All notices and approvals under this Agreement will be deemed
received when delivered personally, sent by confirmed facsimile transmission or
received through nationally-recognized express courier, to the address shown
below or as may otherwise be specified by either party to the other in
accordance with this Subparagraph 10(e). All such notices to Licensor will be
directed as follows:

      For notices to Licensor: P. O. Box 2009, San Rafael, CA 94903,Attention:
      Vice President, Licensing, with a courtesy copy to: General Counsel.

      For notices to Company: _________________________________

(f) No Waiver. No waiver by either party, whether express or implied, of any
provision of this Agreement or any breach thereof, and no failure of either
party to exercise or enforce any of its rights under this Agreement, will
constitute a continuing waiver with respect to such provision or right or as a
breach or waiver or any other provision or right, whether or not similar.

(g) Severability. This Agreement is severable. If any provision of this
Agreement is found invalid or unenforceable, that provision will be enforced to
the maximum extent permissible, and the other remaining provisions of this
Agreement will not be affected and shall remain in force.


Ex B-5


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

(h) Approvals. Any and all approvals of Licensor permitted, rendered or required
pursuant to this Agreement may be given or withheld by Licensor in the manner
provided in the License Agreement.

(i) Headings Captions and Definitions. The name of this Agreement, and all
headings and captions herein contained are for reference and convenience only
and do not define, limit or expand the scope or intent of any provision hereof
and shall not be relied upon in or in connection with the construction or
interpretation of this Agreement. Except as herein otherwise expressly defined,
all capitalized terms contained in this Agreement shall have the same meaning as
such words have in the License Agreement. The words "herein," "hereunder" and
similar terms refer to this entire Agreement and shall not be limited to the
specific paragraphs or subparagraphs in which they are used.

(j) Counterparts. This Agreement may be executed in one or more counterparts,
and by telefacsimile transmission, each copy of which shall be deemed an
original and all of which, when taken together, shall constitute one and the
same instrument, but this Agreement shall not be binding upon the parties until
it has been signed by all parties hereto. The parties hereto agree that
telecopied signatures hereto shall be effective and enforceable.

(k) Further Instruments: Except as otherwise expressly provided in this
Agreement, each party shall furnish to the others (and shall deliver and cause
to be executed, acknowledged and delivered to the other) any further
instruments, which any such other party may reasonably require or deem necessary
from time to time to evidence, establish, protect, enforce, defend or secure to
such other party any or all of its rights hereunder or to more effectuate or
carry out the purposes, provisions or intent of this Agreement.

(l) Entire Agreement. This Agreement constitutes the complete and entire
agreement by and among all of the parties with respect to the subject matter
hereof, superseding and replacing any and all prior agreements, negotiations,
communications, and understandings (both written and oral) by and among all of
the parties regarding such subject matter. This Agreement may only be modified,
or any rights under it waived, by a written document executed by all parties. By
signing in the spaces provided below, the parties hereto have accepted and
agreed to all of the terms and conditions set forth above.

LUCAS LICENSING LTD. ("Licensor")


By:___________________________________
   

Its:__________________________________


Ex B-6


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

THE FOREGOING IS ACCEPTED AND AGREED TO:


_________________________ ("Company")


By:___________________________________
   

Title:________________________________


HASBRO, INC., on behalf of itself and all "Permitted
Licensee Affiliates" (as defined in the License Agreement)


By:___________________________________
   

Title:________________________________


("Licensee")


Ex B-7


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

Attachment B-1 (SUBLICENSE AGREEMENT)


Ex B-8


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

Exhibit C - STANDARD APPROVAL FORM

                       STANDARD APPROVAL FORM
--------------------------------------------------------------------------------

Licensed      Star Wars                        Date sent to LHI
Property     ____________________________

Licensee     ____________________________      Date Received

_________________________________________      Date Called

_________________________________________      Date Returned

_________________________________________      Phone:

_________________________________________      Fax:

Attention: ______________________________

Article Enclosed (one form per item)           _________________________________

Checklist

____________ Art                               |_|

____________ Editorial                         |_|

____________ Legal                             |_|

____________ Marketing                         |_|

____________ Merchandising                     |_|

Comments (LHI use only) ________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

|_| See attached
                             ___________________________________________________
                             Merchandising Coordinator, Lucas Licensing Ltd.


                                     Ex C-1


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

Exhibit D - ROYALTY REPORT FORM  (To be provided)


                                     Ex D-1


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

Exhibit E - THIRD PARTY COPYRIGHT ASSIGNMENT FORM

Date: ______________________

[Name and Address of artist] (the "Artist") agrees to make for [Licensee]
("Company") the following original artwork, which shall be satisfactory to Lucas
Licensing Ltd. ("LIC"), for the project described below:

LIC is the owner of all worldwide rights in and to the films entitled [specify
films] (collectively the "Films") and is the owner of all rights, including all
copyrights, in and to the works based on or derived from the Films.

Company is a licensee of LIC with respect to use of the Films (and elements
thereof) with respect to ____________, and Company wishes to develop
[description of work] (the "Project").

Artist wishes to have Company commission artwork in connection with the Project.
Artist understands that Company will commission such artwork only on a
work-for-hire basis or on the condition that all rights in and to such artwork
are assigned by Artist to LIC.

1. Assignment: Artist hereby sells, transfers and assigns to LIC, exclusively
and perpetually, all worldwide rights, titles and interest of every kind and
nature in the artwork more particularly described on Schedule II attached hereto
(hereinafter the "Work"), including, but not limited to, (a) all copyrights
herein for the full term of such copyrights, including any periods of extension
or renewal, (b) the right of reproduction in any and all media of the Work, in
whole or in part, including, but not limited to, any characters or figures
depicted or developed therein, (c) the moral rights of authors in the Work in
whole or in part, and (d) all rights of manufacture, merchandising, recordation,
reproduction, display and exhibition of the Work in whole or in part, by any
means now known and/or hereafter devised.

2. Work for Hire: Should Artist be deemed an employee of Company, or any third
party licensee, or should the Work be deemed a work-for-hire, Artist agrees that
the Work was created within the scope of Artist's employment, or that the Work
is considered a work made-for-hire.

3. Assistance by Artist: Artist agrees to assist LIC at no cost or expense to
Artist in obtaining registration and enforcement of copyrights and other rights
of any kind or nature in the Work, or any portion of it, including, but not
being limited to, the execution of further assignments or other documents.

4. Consideration: Artist agrees and acknowledges that Company is not permitted
to commission artwork from third parties unless LIC grants its approval thereto.
Artist further agrees and acknowledges that Artist has executed this Agreement
in consideration of LIC's permission to allow Company to commission Artist to
participate in the Project. Artist agrees and acknowledges that Company (and
LIC) shall be solely responsible for all payment due Artist with respect to the
Work, and that any failure by Company to pay Artist, any breach by Company of
any agreement Company may have with Artist, or any act or omission of Company,
shall not


Ex E-1


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

effect a revocation of, diminish, limit, or otherwise affect in any manner LIC's
ownership of all rights in and to the Work under this Agreement.

5. Exercise of Rights: The rights granted by this agreement to LIC shall be
exercised by LIC and Company in their sole and exclusive discretion.

6. Artist's Warranty, Indemnity and Acknowledgment: Artist warrants that the
Work is and shall be wholly original, except for any materials provided Artist
by Company, and except for any materials utilized by Artist from the public
domain; that to Artist's knowledge no third party has any right, title or
interest in and to the Work; that Artist has the full right and authority to
make this assignment; that no rights in or to the Work are being retained or
reserved by Artist; that proper releases have been obtained from all persons
whose names or likenesses may be incorporated or used in the Work, unless
specifically excepted at the end of this Agreement; and that use by LIC and
Company of the Work will not infringe or violate the rights of any third party.
Artist agrees to indemnify and hold Company and LIC harmless against any and all
loss, cost, liability and expenses (including reasonable counsel fees) arising
out of any breach of the warranties contained in this agreement.

7. Moral Rights/Rental and Lending Rights: Artist hereby irrevocably transfers
and assigns to LIC, and waives and agrees never to assert, any and all "Moral
Rights" (defined below) in or with respect to the Work and/or the Licensed
Property, even after expiration or termination of this Agreement. "Moral Rights"
means any rights to claim authorship of a work, to object to or prevent the
modification of a work, or to withdraw from circulation or control the
publication or distribution of a work, and any similar right, existing under the
law of any country in the world or under any treaty. If and to the extent
applicable in respect of rights commonly known as moral rights, including but
without limitation, those defined in Sections 77-89 inclusive of the U.K.
Copyright Designs and Patents Act 1988, as amended, Artist hereby waives all
such rights in their entirety and Artist hereby warrants that Artist has
procured or shall procure, so far as the same is permissible, waivers of all
such rights in their entirety from all persons who may have such rights in and
to the Work and/or the Licensed Property, the intent that such waiver shall be
irrevocable and shall extend to Artist and/or Artist's assigns and successors in
title.

8. Company's Indemnity and Acknowledgment: To the best of Company's knowledge,
any contributions and changes Company makes to the Work will not infringe or
violate the rights of any third party. Company hereby indemnifies Artist and
shall hold Artist harmless from any loss, liability, damage, cost or expense
(including reasonable counsel fees), arising out of any claims or suits which
may be brought or made against Artist by reason of the breach by Company of the
warranties or representations made in this agreement.

9. Confidentiality and Acknowledgment of Ownership: Artist agrees to hold in
strictest confidence, and not disclose to any person or organization any
confidential information relating to LIC, Company, or the Films which Artist
obtains by virtue of the access to such information granted to Artist by Company
or LIC. Artist acknowledge that such information is the sole property of LIC,
and is considered to be trade secrets of LIC, and includes any information
relating to works-in-progress, business, trade secrets, scripts, plots, or any
other confidential 


Ex E-2


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

matter relating to the artistic creations or business of LIC and/or any of its
affiliated or related entities.

10. Successors and Assigns: This agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, successors,
agents, administrators and assigns.

11. Governing Law: This agreement shall be construed according to the laws of
the State of California, which courts sitting in Northern California shall have
exclusive jurisdiction.

By: ________________________________
("Artist")


Lucas Licensing Ltd.

By: ________________________________

Its: _______________________________


Ex E-3


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

Exhibit F - APPROVAL OF MANUFACTURER AGREEMENT

THIS AGREEMENT dated as of _______________ by and among LUCAS LICENSING LTD.
("Licensor"), 5858 Lucas Valley Road, Nicasio, California 94946 U.S.A. (mailing
address: P.O. Box 2009, San Rafael, California 94912 U.S.A.),
________________________ ("Company"), located at ______________________, and
Hasbro, Inc., Hasbro International and all "Permitted Licensee Affiliates" (as
defined in the License Agreement) ("Licensee"), located at ____________________.

                  WHEREAS: Reference is made to that certain license agreement
dated as of ________ (the "License Agreement") between Licensor and
_________________________________________________ Licensee under which Licensee
was granted the right to manufacture and distribute the products, goods and
articles of merchandise specified therein ("Licensed Products") relating to the
certain Licensed Property governed thereby; and

                  WHEREAS: Company and Licensee have executed an agreement dated
______, ____, (the "Manufacturing Agreement") whereby Company has been engaged
by Licensee to manufacture certain Licensed Products based on or incorporating
the Licensed Property in the country or countries set forth therein (the
"Territory") and for a term as set forth therein (the "term") commencing on
[term Effective Date] and continuing until [term end date];

                  NOW, THEREFORE, for the promises set forth herein by the
parties and for other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, the parties hereto agree, as follows:

1. RESPONSIBILITY OF LICENSEE: Subject to the terms and conditions of the
License Agreement, nothing contained in this Agreement or in the Manufacturing
Agreement shall in any manner whatsoever affect or otherwise diminish or relieve
Licensee of any of its obligations under the License Agreement.

2. MANUFACTURING AGREEMENT: In order to induce Licensor to execute this
Agreement, Licensee and Company hereby represent and agree that, subject to the
approval of Licensor, Company has executed the Manufacturing Agreement. Without
limitation of Licensor's rights, if Company breaches a material term of the
Manufacturing Agreement and, as a result of such breach, Licensee is in material
breach of the License Agreement, subject to the provisions of Subparagraph
22.2(a) of the License Agreement, then, notwithstanding anything to the contrary
contained in the Manufacturing Agreement, Licensor shall have the right,
pursuant to the License Agreement to send to Company a notice of termination
("Termination Notice") in the name of Licensee and the Agreement shall be deemed
terminated as of the date Company receives such Termination Notice.

3. APPROVAL BY LICENSOR: Subject to the terms and conditions hereof, Licensor
hereby approves of Company as a manufacturer of the Licensed Products governed
by the Manufacturing Agreement, for the Term, as such Term shall expire or be
terminated hereunder, and for the Territory.


Ex F-1


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

4. ACKNOWLEDGMENT OF LICENSE AGREEMENT: Company hereby represents that Company
has reviewed and is familiar with all of the provisions of the License Agreement
identified in Subparagraph 15.1 of the License Agreement as being relevant to
Company's activities hereunder, and Company agrees that in performing under this
Agreement, Company shall perform, be bound by and comply with each of such terms
and conditions of the License Agreement as they apply to Company. Without
limitation of Licensor's rights and remedies, in the event of a breach or
threatened breach by Licensee of any term or condition of the License Agreement
and/or in the event of a breach or threatened breach by Company of any term or
condition of the Manufacturing Agreement that would result in a breach of
Licensee's Agreement, Licensor shall be entitled to seek legal and/or equitable
relief by way of injunction or otherwise against Licensee and/or against
Company, at the discretion of Licensor, to restrain, enjoin and/or prevent any
such breach or threatened breach.

5. OBLIGATIONS OF COMPANY: Company hereby agrees that in exercising the rights
authorized herein:

(a) Company shall only manufacture the Licensed Products pursuant to the
Manufacturing Agreement in accordance with the instructions of Licensee;

(b) Company shall not assign or license, in any manner whatsoever, the rights
granted to Company herein or delegate any of its obligations under the
Manufacturing Agreement or under this Agreement, to any party without Licensor's
prior written consent;

(c) Company shall execute a Trademark License Agreement with Licensor, or with
any entity designated by Licensor, with respect to the Licensed Products in a
form substantially identical to the Trademark License Agreement executed by
Licensee with respect to the Licensed Products; and

(d) Without limitation of Licensor's rights hereunder, Company shall upon
execution of the Manufacturing Agreement and this Agreement assume all of
Licensee's obligations with respect to manufacture of the Licensed Products
governed thereby.

6. EFFECT OF EXPIRATION OR TERMINATION: Without limitation, upon the expiration
or earlier termination of the Manufacturing Agreement, Company shall comply with
and be bound by the same terms and conditions as are imposed upon Licensee
pursuant to Subparagraph 22.3 of the License Agreement. Upon the expiration or
termination of the Manufacturing Agreement, except as otherwise expressly
provided herein, Company shall have no further right to exercise the rights
approved hereunder or otherwise acquired pursuant to the Manufacturing
Agreement.

7. COMPANY RECORDS AND AUDITS:

(a) Company will maintain complete and accurate records during and for five (5)
years after the termination or expiration of the Manufacturing Agreement related
to this Agreement and/or the rights granted to Company pursuant to the
Manufacturing Agreement. The obligation to maintain records and to grant
Licensor and Licensor's representatives access to such records shall survive the
expiration or earlier termination of this Agreement.


Ex F-2


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

(b) An independent certified public accountant selected by Licensor may, upon
reasonable notice and during normal business hours, inspect any and all records
of Company related to the exercise of Company's rights under this Agreement
and/or under the Manufacturing Agreement. If, upon performing such audit, it is
determined that Company owes Licensor monies, Company will immediately make full
payment thereof. If the amount of such payment exceeds [**], Company will bear
all expenses and costs of such audit in addition to its obligation to make full
payment. All underpayments and late payments will accrue interest charges from
the due date through the date of payment at an interest rate equal to [**], and
shall be payable upon demand.

8. LICENSOR AS THIRD PARTY BENEFICIARY: In addition to Licensor's other rights
and remedies pursuant to the License Agreement and this Agreement, Licensor is a
third party beneficiary of the obligations of Company under any and all
agreements, whether oral or written, between Company and Licensee respecting the
Licensed Products, including, without limitation, the Manufacturing Agreement,
and Licensor shall have the right at any time to enforce such obligations and to
exercise any of Licensee's rights and remedies directly against Company as if a
direct party thereto if Licensee fails to enforce such obligations or to
exercise any such rights or remedies within twenty-five (25) days following
Licensee's receipt of Licensor's written request therefor.

9. CONFIDENTIALITY:

(a) Confidential Information. Company acknowledges and agrees that the terms and
conditions contained in this Agreement, the Manufacturing Agreement and/or any
other agreement between or among any or all of the parties are confidential, as
well as any and all information and material concerning or pertaining to: (i)
any script, concept, marketing plan, schedule of Licensor or of any
Licensor-Related Entity (including, without limitation, any pre-production,
production or post-production schedule or release schedule for any "Prequel" [as
defined in the License Agreement] or for any derivative work thereof); (ii) any
project, product, good or article pertaining to the Licensed Property; (iii) any
term or condition of any agreement between Licensor and any individual or entity
relating to any Licensed Product (including, without limitation, any talent
agreement); and (iv) any "Copyright Material" (as such term is defined in the
License Agreement) are confidential and proprietary to Licensor (individually
and collectively the "Confidential Information"). Company further acknowledges
and agrees that, except as otherwise expressly provided in this Subparagraph
9(a), Company shall not use, copy, or disclose, or authorize or permit the use,
copy or disclosure of, any Confidential Information in whole or in part in any
manner or to any person, firm, enterprise, organization, corporation or entity
unless authorized in advance in writing by Licensor. Company shall receive and
hold, and shall contractually obligate and cause all entities with whom it
contracts relative to the Licensed Products to maintain, all Confidential
Information in the strictest confidence and Company acknowledges, represents,
warrants and agrees to use its best efforts to protect the confidentiality of
all Confidential Information. Furthermore, Company will not disclose any
Confidential Information to any third party for any purpose (including the
exercise of its rights or performance of its obligations) unless Licensor
otherwise agrees in writing and such third party has executed a written
confidentiality agreement in form and substance acceptable to Licensor, which
confidentiality agreement, inter alia, shall restrict the use of any
Confidential Information to the minimal extent necessary to effectuate the terms
and conditions of this Agreement as they apply to such third party shall require


Ex F-3


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

such third party to use its best efforts to maintain all Confidential
Information in the strictest confidence. Company's obligations pursuant to this
Subparagraph 9(a) shall not apply to any Confidential Information which: is
authorized in writing by Licensor to become publicly known; is rightfully
received from a third party authorized by Licensor to receive such information
without restriction and without breach of this Agreement; or is the minimum
amount necessary to comply with any valid order of a court of competent
jurisdiction.

(b) Publicity or Announcements. Without limitation of the foregoing, except to
the extent necessary to comply with any law, regulation or stock exchange rule,
no announcements, press releases, or publicity about the existence or any terms
of this Agreement, the relationship of the parties or about the rights relating
to the Licensed Products to be exercised hereunder shall be made by Company
without the prior written approval of Licensor in each instance.

(c) Rights of Publicity. Except as expressly set forth herein, Company acquires
no rights to use and will not use without Licensor's prior written approval the
characters, artwork, designs, trade names, copyrighted materials, trademarks or
service marks of Licensor in any Advertising, publicity or promotion, to express
or imply any endorsement by Licensor of Company's services or products, or in
any other manner except as expressly authorized in this Agreement. The foregoing
provision shall survive expiration or termination of this Agreement.

10. GENERAL:

(a) Assignment. This Agreement will bind and inure to the benefit of each party
and to their respective successors and assigns. Company shall not voluntarily or
by operation of law assign, sub-license, transfer, encumber or otherwise dispose
of all or part of any right or privilege granted to Company in this Agreement or
in the Manufacturing Agreement, without Licensor's prior written approval. For
purposes of this Subparagraph 10(a), any change in control of Company, whether
through merger, acquisition, reorganization, liquidation, foreclosure,
involuntary sale in bankruptcy, or the purchase of substantially all of
Company's assets or otherwise, shall be deemed a purported assignment subject to
Licensor's prior written approval. Any attempted assignment, sublicense,
transfer, encumbrance or other disposal without such approval will be null and
void and constitute a material default and material breach of this Agreement.

(b) Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the federal laws of the United States and the laws
of the State of California applicable to agreements executed, and to be
performed entirely, within California between California residents (and
excluding the United Nations Convention on Contracts for the International Sale
of Goods) without regard to choice of provisions and regardless of the place or
places of its actual execution and performance. Any suit, action or proceeding
between or among any of the parties hereto arising out of or related to this
Agreement will be brought solely in the federal or state courts in the Northern
District of California, and Company hereby submits to the personal jurisdiction
thereof and agrees to such courts as the appropriate venue. Notwithstanding the
foregoing, Company agrees that, for purposes of collecting monies due pursuant
to this Agreement, Company, at Licensor's election, may be subject to whatever
local laws and courts have jurisdiction in any country of the Territory over
Company.

Ex F-4


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

(c) Attorneys' Fees. In the event of any legal proceeding between or among any
of the parties hereto arising out of or related to this Agreement, the
prevailing party shall be entitled to recover, in addition to any other relief
awarded or granted, its costs and expenses (whether or not in connection with
litigation and including, without limitation, reasonable attorneys' fees and
costs) incurred in connection with any such proceeding.

(d) Equitable Relief. Company recognizes and acknowledges that a breach by
Company of any covenants, agreements or undertakings made or assumed by it
hereunder or under the Manufacturing Agreement will cause Licensor irreparable
damage, which cannot be readily remedied in damages in an action at law, and
may, in addition thereto, constitute an infringement of Licensor's intellectual
property and other rights in the Licensed Property, thereby entitling Licensor
to equitable remedies (including, without limitation, injunctive relief),
reasonable costs (including, without limitation, whether or not in connection
with litigation) and reasonable attorney's fees.

(e) Notices. All notices and approvals under this Agreement will be deemed
received when delivered personally, sent by confirmed facsimile transmission or
received through nationally-recognized express courier, to the address shown
below or as may otherwise be specified by either party to the other in
accordance with this Subparagraph 10(e). All such notices to Licensor will be
directed as follows:

      For notices to Licensor: P. O. Box 2009, San Rafael, CA 94903, Attention:
      Vice President, Licensing, with a courtesy copy to: General Counsel.

      For notices to Company: _________________________________

(f) No Waiver. No waiver by either party, whether express or implied, of any
provision of this Agreement or any breach thereof, and no failure of either
party to exercise or enforce any of its rights under this Agreement, will
constitute a continuing waiver with respect to such provision or right or as a
breach or waiver or any other provision or right, whether or not similar.

(g) Severability. This Agreement is severable. If any provision of this
Agreement is found invalid or unenforceable, that provision will be enforced to
the maximum extent permissible, and the other remaining provisions of this
Agreement will not be affected and shall remain in force.

(h) Approvals. Any and all approvals of Licensor permitted, rendered or required
pursuant to this Agreement may be given or withheld in Licensor's sole
discretion, subject to the terms of the License Agreement.

(i) Headings, Captions, and Definitions. The name of this Agreement, and all
headings and captions herein contained are for reference and convenience only
and do not define, limit or expand the scope or intent of any provision hereof
and shall not be relied upon in or in connection with the construction or
interpretation of this Agreement. Except as herein otherwise expressly defined,
all capitalized terms contained in this Agreement shall have the same meaning as
such words have in the License Agreement. The words "herein," "hereunder" and
similar terms refer to this entire Agreement and shall not be limited to the
specific paragraphs or subparagraphs in which they are used.


Ex F-5


Toy License Agreement Between Lucas Licensing Ltd. and Hasbro dated as of
October 14, 1997

(j) Counterparts. This Agreement may be executed in one or more counterparts,
and by telefacsimile transmission, each copy of which shall be deemed an
original and all of which, when taken together, shall constitute one and the
same instrument, but this Agreement shall not be binding upon the parties until
it has been signed by all parties hereto. The parties hereto agree that
telecopied signatures hereto shall be effective and enforceable.

(k) Further Instruments. Except as otherwise provided in this Agreement, each
party shall furnish to the others (and shall deliver and cause to be executed,
acknowledged and delivered to the other) any further instruments, which any such
other party may reasonably require or deem necessary from time to time to
evidence, establish, protect, enforce, defend or secure to such other party any
or all of its rights hereunder or to more effectuate or carry out the purposes,
provisions or intent of this Agreement.

(l) Entire Agreement. This Agreement constitutes the complete and entire
agreement by and among all of the parties with respect to the subject matter
hereof, superseding and replacing any and all prior agreements, negotiations,
communications, and understandings (both written and oral) by and among all of
the parties regarding such subject matter. This Agreement may only be modified,
or any rights under it waived, by a written document executed by all parties.

By signing in the spaces provided below, the parties hereto have accepted and
agreed to all of the terms and conditions hereof.

AGREED TO AND ACCEPTED:


                         ("Company")     LUCAS LICENSING LTD. ("Licensor")

By:________________________________      By:___________________________________

Its:_______________________________      Its:__________________________________

Date:______________________________      Date:_________________________________

HASBRO, INC. on behalf of itself and
all "Permitted Licensee Affiliates" (as
defined in the License Agreement"
("Licensee")

By:________________________________     

Its:_______________________________     

Date:______________________________     


Ex F-6