Manufacturing Agreement

MANUFACTURING AGREEMENT


Agreement made this 21st day of December 1994 by and between Euro-Matic Limited, a company organized under the laws of the United Kingdom and having its offices and principal place of business at Sinclair House, The Avenue, Ealing, London W13 8NT England (hereinafter referred to as "Euro-Matic") and Hedstrom Corporation, a Delaware Corporation, having a place of business at 1401 Jacobson Avenue, Ashland, Ohio U.S.A. (hereinafter referred to as "Hedstrom").


Euro-Matic and Hedstrom are currently parties to two separate contracts dated July 21, 1987 and April 13, 1994 respectively regarding the production of playpen balls for both Hedstrom and Euro-Matic. All terms and conditions of the previous contracts remain in full force and effect and are not amended by the terms of this Agreement.


The purpose of this Agreement is to establish the terms and conditions for the manufacture and sale of additional playpen balls by Euro-Matic to Hedstrom.


The parties agree as follows:


1. Hedstrom Corporation currently projects the required annual volume of
playpen balls to be purchased by Hedstrom from Euro-Matic at 25,000,000
balls. Euro-Matic hereby agrees to purchase the necessary equipment
(blow molder, molds and support equipment) to produce from such
equipment and make available to Hedstrom 20,000,000 80mm playpen balls
annually. Euro-Matic also agrees to produce and make available to
Hedstrom an additional 5,000,000 balls from existing equipment at
Euro-Matic's Wilson, North Carolina facility.


2. In consideration of the investment by Euro-Matic from the purchase of
the required equipment, Hedstrom agrees to purchase a minimum of
40,000,000 playpen balls from Euro-Matic during the first two years
of this agreement, beginning January 1, 1995. If for any reason
Hedstrom shall have failed to purchase at least 40,000,000 playpen
balls by the end of the initial two year period, Hedstrom agrees to pay
to Euro-Matic an amount equal to $.0065 times the difference between
the number of balls actually purchased and 40,000,000.


3. During the third and fourth years of this agreement, the purchase price
for any balls purchased by Hedstrom shall be at $.0065 per ball
less than the then existing sell price for each ball as to which
Hedstrom paid $.0065 in accordance with paragraph 2 of this Agreement,
up to the amount previously paid to Euro-Matic for the failure to meet
the agreed upon minimum 40,000,000 balls.


4. If during the two year period starting January 1, 1995, ...