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                                                                    EXHIBIT 10.3


                            DATED 1ST SEPTEMBER 1998








                           SAFETY 1st (EUROPE) LIMITED

                                   as borrower

                                       AND

                            BNY INTERNATIONAL LIMITED

                                    as lender








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

                                 LOAN AGREEMENT

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














                                WILDE & PARTNERS
                                 10 JOHN STREET
                                 LONDON WC1N 2EB
                                TEL 0171 831 0800
                                FAX 0171 430 0678
                                  DX 428 LONDON



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                                    CONTENTS

No:

1    CONSTRUCTION

2    THE FACILITIES

3    TERM & DRAWDOWN

4    CONDITIONS PRECEDENT & CONDITIONS SUBSEQUENT

5    INTEREST & FEES

6    REPAYMENT

7    PREPAYMENT

8    DEFAULT INTEREST

9    PAYMENTS

10   CHANGES IN CIRCUMSTANCES & INCREASED COSTS

11   REPRESENTATIONS & WARRANTIES

12   FINANCIAL INFORMATION

13   COVENANTS

14   SPECIAL CONDITIONS

15   EVENTS OF DEFAULT

16   ASSIGNMENT AND TRANSFER

17   NOTICES

18   WAIVERS

19   EXPENSES

20   ILLEGALITY

21   SET-OFF

22   GOVERNING LAW

23   DEMANDS & NOTIFICATION BINDING

24   POWER OF ATTORNEY


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SCHEDULE 1

Pre-Conditions Documents

SCHEDULE 2

Special Conditions relating to the Inventory Facility

SCHEDULE 3

Inventory Monitoring Fee

SCHEDULE 4

(Form of Inventory Valuation)

Form of Inventory Designation


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THIS LOAN AGREEMENT is made the 1ST day of SEPTEMBER 1998


BETWEEN

(1)      SAFETY 1st (EUROPE) LIMITED whose registered office is at 1st Floor,
         180 Fleet Street, London EC4A 2HD ("the Borrower"); and

(2)      BNY INTERNATIONAL LIMITED whose registered office is at Sovereign
         House, Church Street, Brighton, BN1 1SS ("BNY")

WHEREAS

BNY has agreed to make available to the Borrower an invoice discounting facility
and a loan facility upon the terms and subject to the conditions set out in this
Agreement and the Invoice Discounting Agreement.

IT IS AGREED as follows:-

1.       CONSTRUCTION

1.       DEFINITIONS

         In this Agreement, unless the context otherwise requires, the following
         words and expressions will have the meaning set out opposite them:-

         "Advance"                 means the principal amount of each advance
                                   made or to be made under the Facilities (or
                                   either of them) as from time to time reduced
                                   by repayment or prepayment, and "Advances"
                                   means all of them;



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"Agreement"                       means this agreement as the same may be
                                  amended or supplemented in writing by the
                                  parties from time to time and shall include
                                  the Schedules hereto;

"Available Inventory Facility"    means the Inventory Facility less the
                                  outstanding Inventory Advances;

"Business Day"                    means the day (other than a Saturday or
                                  Sunday) on which banks are open in London for
                                  business of the nature required for the
                                  purposes of this Agreement;

"Default Rate"                    means the rate which is 2 per cent per annum
                                  above the Interest Rate

"Direct Obligations"              means the aggregate of the Facilities, the
                                  aggregate amount payable by the Borrower in
                                  the event of BNY exercising its right of
                                  recourse under the Invoice Discounting
                                  Agreement and any other amounts directly (but
                                  not contingently) owed by the Borrower or any
                                  other Obligor to BNY;

"Drawdown Date"                   means any date after compliance with Schedule
                                  1 and in respect of the Inventory Facility
                                  after compliance with the first sentence of
                                  Schedule 2 and in each case with Clause 4 on
                                  which the whole or any part of the Facilities
                                  are drawn hereunder;



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"Eligible Inventory"              means the Inventory of all finished goods,
                                  work in progress and raw materials, located at
                                  the headquarters and warehouse locations (as
                                  such locations are agreed by BNY from time to
                                  time) of the Borrower which is in good
                                  condition and is readily saleable at prices
                                  not less than the lower of cost or market
                                  value as such criteria may be revised from
                                  time to time by BNY at BNY's sole discretion;

"Environmental Approval"          means any permit, licence, approval, ruling,
                                  exemption or other authorisation required
                                  under applicable Environmental Laws;

"Environmental Laws"              means any and all laws, rules, orders,
                                  regulations, statutes, ordinances or codes of
                                  any Governmental Authority regulating,
                                  relating to or imposing liability or standards
                                  of conduct concerning environmental protection
                                  matters, including without limitation, in
                                  relation to the manufacture, processing,
                                  distribution, use, treatment, storage,
                                  disposal, transport or handling of Materials
                                  of Environmental Concern, as now or may at any
                                  time hereafter be in effect;

"Event of Default"                means any of the events specified in
                                  Clause 15;

"Facilities"                      means the Inventory Facility and the Invoice
                                  Discounting Facility and "Facility" means




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                                  either of them;

"Facilities Limit"                means the aggregate utilisation of the
                                  Facilities from time to time by the Borrower
                                  which utilisation shall (subject to the limit
                                  of each Facility) not at any time exceed
                                  (pound)2,500,000 (two million five hundred
                                  thousand pounds);

"Governmental Authority"          means any nation or government, any
                                  state or political sub-division thereof and
                                  any entity exercising executive, legislative,
                                  judicial, regulatory or administrative
                                  functions of any of the foregoing;

"Group"                           means the Borrower and all of its Subsidiaries
                                  (excluding EEZI Air Services Limited Companies
                                  Registration Number 2481657) and any
                                  Subsidiaries of such Subsidiaries from time to
                                  time and "member of the Group" or "Group
                                  Company" means any of them;

"Interest Payment Date"           means the last Business Day of each calendar
                                  month after the date hereof,

"Interest Rate"                   means the rate which is 2 per cent per
                                  annum for the first 12 months from date of
                                  execution of this Agreement and thereafter
                                  2.25 per cent per annum above the Base Rate of
                                  Lloyds Bank Plc as fluctuating from time to



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                                  time, charged on the balance outstanding from
                                  day to day, debited to the Loan Account
                                  monthly in arrears and compounded monthly;

"Inventory"                       means the Unencumbered unsold finished goods,
                                  work in progress and raw materials of the
                                  Borrower but there being excluded from such
                                  definition Inventory in transit to the
                                  premises of the Borrower or Inventory which
                                  has been sold to customers or constructively
                                  delivered to customers or which is subject to
                                  any rights in favour of creditors or the
                                  subject of a reservation of title in favour of
                                  any third party or subject to any conditional
                                  delivery to the Borrower;

"Inventory Advance"               means the principal amount of each advance
                                  made under the Inventory Facility as from time
                                  to time reduced by repayment or prepayment,
                                  and "Inventory Advances" means all of them;

"Inventory Facility"              means the inventory facility to be made
                                  available by BNY to the Borrower pursuant to
                                  Clause 2.2. 1;

"Inventory Maturity Date"         means, in relation to the Inventory Facility,
                                  the date on which:-

                                  (a)  the Inventory Facility is voluntarily
                                       terminated by the Borrower or BNY


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                                       giving not less than 60 days prior
                                       written notice of termination to the
                                       other party provided that such notice
                                       cannot be given by either party prior to
                                       the third or any subsequent annual
                                       anniversary of the date hereof; or

                                  (b)  BNY notifies the Borrower at any time in
                                       writing of termination of the Inventory
                                       Facility pursuant to Clause 15;

"Inventory Monitoring Fee"        means the fee referred to in Clause 5.4 and
                                  Schedule 3;

"Inventory Valuation"             means a certificate signed by a director of
                                  the Borrower as to the value of the Inventory
                                  in the form shown in Schedule 4 (or in such
                                  other form as BNY shall from time to time
                                  reasonably require) and, at BNY's option, a
                                  valuation thereof by a qualified valuer
                                  nominated by BNY;

"Invoice Discounting Agreement"   means the agreement in a form acceptable to
                                  BNY dated on or before the date of this
                                  Agreement made between BNY and the Borrower in
                                  relation to the Invoice Discounting Facility;

"Invoice Discounting Facility"    means the invoice discounting facility of up
                                  to (pound)2,500,000 less the aggregate amount





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                                  outstanding from time to time under the
                                  Inventory Facility to be made available by BNY
                                  to the Borrower pursuant to the Invoice
                                  Discounting Agreement;

"Loan Account"                    means an account or accounts in the name of
                                  the Borrower with BNY opened in connection
                                  with the Inventory Facility ;

"Loan Account Balance"            means the debit balance on the Loan Account
                                  from time to time;

"Materials of                     means chemicals, pollutants, contaminants,
Environmental Concern"            wastes, toxic substances, petroleum and
                                  petroleum products and distillates, and all
                                  hazardous substances defined or regulated as
                                  such in or under any Environmental Law;

"Obligors"                        means the Borrower and each other member of
                                  the Group which has undertaken (or in the
                                  future undertakes) obligations to BNY pursuant
                                  to one or more of the Security Documents, and
                                  "Obligor" means any of them;

"Preferential Creditors"          means those creditors of an Obligor who, upon
                                  the insolvency of such Obligor would have
                                  preference or priority to payment over the
                                  holder of a floating charge;

"Prior Chargeholders"             means the holder or beneficiary of any




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                                  mortgage, charge, trust, lien, reservation of
                                  ownership, security interest or any other
                                  interest affecting the absolute and unfettered
                                  ownership of the charged property;

"Reserves"                        means such amounts of the Inventory or its
                                  proceeds of sale as BNY from time to time in
                                  its reasonable discretion determines might be
                                  unavailable to it upon the enforcement of
                                  BNY's security;

"Security Documents"              means those documents listed in Part II of
                                  Schedule 1 and any other documents for the
                                  time being securing (directly or indirectly)
                                  all or any of the Borrower's obligations under
                                  this Agreement and/or all or any other
                                  obligation (present or future, actual or
                                  contingent) of an Obligor to BNY and
                                  references to any such documents shall include
                                  the same as varied or amended in writing by
                                  the parties thereto from time to time;

 "Subsidiary"                     means:-

                                  (a)  a subsidiary as defined in Section 736 of
                                       the Companies Act 1985; and

                                  (b)  a subsidiary undertaking as defined in
                                       Section 21 of the Companies Act 1989;



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 "Transaction Documents"          means this Agreement, the Invoice Discounting
                                  Agreement and the Security Documents, ;

 "Unencumbered"                   means not subject to any mortgage, charge,
                                  trust, lien, reservation of ownership,
                                  security interest or any other interest
                                  affecting the Company's absolute and
                                  unfettered ownership;

 "Unused Line Fee"                means the sum equal to 0.5 per cent per
                                  annum of the average monthly difference
                                  between the Facilities Limit and:-

                                  (i)   (for the first period of 12 months after
                                        the Commencement Date) (pound)1,200,000
                                        (one million two hundred thousand
                                        pounds); and

                                  (ii)  (for the second period of 12 months
                                        after the Commencement Date),
                                        (pound)1,750,000 (one million seven
                                        hundred and fifty thousand pounds); and

                                  (iii) (for the third period of 12 months after
                                        the Commencement Date), (pound)2,500,000
                                        (two million five hundred thousand
                                        pounds).

                                  where the amounts detailed in (i), (ii) and
                                  (iii)



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                                 above exceed the Facilities Limit at the
                                 relevant time.


2.       INTERPRETATION

Any reference in this Agreement to:-

1.   a Clause, sub-clause or schedule shall (except where the context otherwise
     requires) be construed as a reference to the relevant clause or sub-clause
     in or schedule to (and forming a part of) this Agreement;

2.   a person shall include a body corporate, individual, firm or an
     unincorporated body of persons (as the case may be);

3.   the singular shall include the plural and vice-versa and the masculine, the
     feminine and the neuter;

4.   any statutory provision shall be deemed to mean and to include a reference
     to any modification, consolidation or re-enactment thereof for the time
     being in force and any analogous provision or rule under any applicable
     law;

5.   "Borrower" and "BNY" shall, where the context admits, include their
     respective personal representatives, successors in title or permitted
     assigns (whether immediate or derivative);

6.   any reference herein to any document, including to this Agreement includes
     such document as amended, novated, supplemented, substituted, extended,
     assigned or replaced from time to time and includes any document which is
     supplemental hereto or thereto;

7.   the meaning of general words introduced by the word "other" and the word




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     "otherwise" shall not be limited by reference to any preceding words or
      enumeration including a particular class of acts, matters or things;

8.   where a word or phrase has to be considered in relation to a jurisdiction
     outside England and there is no exact equivalent of such word or phrase
     then it shall have the meaning of the closest equivalent in such
     jurisdiction;

9.   words and expressions defined in the Invoice Discounting Agreement shall
     have the same meanings when used in this Agreement;

10.  "indebtedness" includes any obligation (whether incurred as principal,
     guarantor or surety) for the payment or repayment of money, whether present
     or future, actual or contingent.

The headings in this Agreement are inserted for convenience only and shall not
affect its construction or interpretation.

Any right or power which may be exercised or any determination which may be made
hereunder by BNY may be exercised or made in the absolute and unfettered
discretion of BNY which shall not be under any obligation to give reasons
therefor.

2.   THE FACILITIES

1.   On the terms and subject to the conditions of this Agreement, BNY will make
     available to the Borrower the Facilities which shall when aggregated with
     the total of all other Direct Obligations at no time exceed an aggregate
     amount of (pound)2,500,000 (two million five hundred thousand pounds) and
     otherwise shall be in accordance with the remaining provisions of this
     Clause 2.

2.   On the terms and subject to the conditions of this Agreement, BNY agrees to
     make available to the Borrower:-


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      1.    an Inventory Facility in a principal amount equal to the lesser of
            (1) (pound)1,250,000, and (2) a principal sum equal to 60% of the
            aggregate of the book value of (a) finished goods forming part of
            the Eligible Inventory and (b) raw materials forming part of the
            Eligible Inventory (in each case as evidenced by the most recently
            delivered Inventory Valuation) less Reserves and any liability
            estimated by BNY (acting reasonably) as being owed by the Borrower
            to Preferential Creditors; and

      2.    an Invoice Discounting Facility in a principal amount of
            (pound)2,500,000 on the terms and conditions of the Invoice
            Discounting Agreement.

      3.    The Facilities will be used by the Borrower:-

            1.    to fund the working capital requirements of the Group; and

            2.    for such other purposes as BNY shall agree;

            but BNY shall not be bound to enquire as to, nor shall it be
            responsible for, the use or application by the Borrower of all or
            any part of the Facilities.

3.   TERM AND DRAWDOWN

Subject to Clause 4, the Facilities shall be available for drawing by the
Borrower as follows:-

1.   the Inventory Facility shall be available for drawing each month up to (and
     including) the date falling 5 Business Days prior to the Inventory Maturity
     Date. Only one tranche may be drawn in any one calendar month unless BNY
     otherwise agrees. Any advance requested under the Inventory Facility shall
     not


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     exceed the Available Inventory Facility; and

2.   the Invoice Discounting Facility shall be available for drawing subject to
     and upon the terms and conditions of the Invoice Discounting Agreement.

4.   CONDITIONS PRECEDENT AND CONDITIONS SUBSEQUENT

The Facilities will only be available for drawing under Clause 3 if:-

1.   BNY has received, in form and substance satisfactory to it, all of the
     documents and evidence listed in Parts I and II of Schedule 1 and any
     listed and set out in Schedule 2;

2.   there is no Event of Default and no event has occurred which, with the
     lapse of time or giving of notice or both, would constitute an Event of
     Default;

3.   the representations and warranties set out in Clause 11 are true and
     accurate in all material respects as of the date of the proposed Drawdown
     Date and would remain true following such drawdown;

4.   other than in respect of the first drawing hereunder, the Borrower has
     given BNY at least two Business Days' prior written notice of its intention
     to make the relevant drawing and specifying to BNY the account number to
     which the funds are to be remitted;

5.   the Borrower acknowledges that any notice given in accordance with Clause
     4.4 shall be irrevocable and shall oblige the Borrower to borrow the amount
     specified on the relevant Drawdown Date;

6.   the requirements set out in Schedule 2 have been complied with; and



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7.   the Borrower shall have entered into the Invoice Discounting Agreement and
     the Invoice Discounting Agreement is then in full force and effect and the
     Borrower is not in default thereunder.

5.   INTEREST AND FEES

1.   Interest on the Inventory Facility will be charged on the Loan Account
     Balance at the Interest Rate and will be debited to the Loan Account on
     each Interest Payment Date.

2.   Interest on the Inventory Facility shall be paid in accordance with
     Clause 9.

3.   Interest on the Inventory Facility shall accrue from day to day and shall
     be computed on the basis of a 365 day year and the number of days elapsed.

4.   The Inventory Monitoring Fee shall be payable in accordance with
     Schedule 3.

5.   BNY shall debit to the Loan Account an arrangement fee of (pound)12,500
     upon the date of this Agreement.

6.   BNY shall debit to the Loan Account on the first Business Day of the
     following month any Unused Line Fee due in respect of the immediately
     preceding month.

7.   Early Termination Fee: If this Agreement is terminated prior to the third
     anniversary of the Commencement Date, the client shall pay to BNY on such
     termination a sum equal to:

     (i)    3% of the Facilities Limit if terminated on or prior to the first
            anniversary of the Commencement Date; or

     (ii)   2% of the Facilities Limit if terminated on or prior to the second



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            anniversary of the Commencement Date; or

     (iii)  1% of the Facilities Limit if terminated on or prior to the third
            anniversary of the Commencement Date.

6.   REPAYMENT

The Inventory Facility shall terminate on the Inventory Maturity Date, and all
amounts outstanding hereunder in respect of the Inventory Facility shall be
repaid on that date.

7.   PREPAYMENT

1.   The Borrower may voluntarily prepay the whole (but not part) of the
     Inventory Facility provided that (1) BNY has received from the Borrower not
     less than 60 days prior written notice of the proposed date of prepayment,
     (2) such written notice cannot be given by the Borrower prior to the third
     anniversary of the date hereof and (3) on receipt of such written notice,
     the whole (but not part) of the Inventory Facility shall become prepayable
     by the Borrower on such proposed prepayment date. Such written notice when
     given shall be irrevocable.

2.   Any amount prepaid may not be re-borrowed and shall be applied by BNY in
     repayment of amounts debited to the Loan Account in such order as BNY
     shall, in its absolute discretion, deem appropriate.

3.   If at any time the aggregate outstanding amount of the Inventory Advances
     exceeds in accordance with Clause 2.2.1 60% of the aggregate of the book
     value of (a) finished goods forming part of the Eligible Inventory and (b)
     raw materials forming part of the Eligible Inventory (in each case as
     evidenced by the most recently delivered Inventory Valuation) less Reserves
     and any liability estimated by BNY (acting reasonably) as being owed by the
     Borrower to



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     Preferential Creditors, the Borrower shall promptly prepay to BNY such
     amount as is necessary to ensure that the aggregate amount of outstanding
     Inventory Advances is, after such prepayment, equal to or less than the
     said 60% and until such prepayment no further Advances shall be made under
     the Inventory Facility.

4.   Any notice of prepayment of the whole of the Inventory Facility shall, in
     addition, be deemed to be a notice of termination under clause 19.1 of the
     Invoice Discounting Facility.

8.   DEFAULT INTEREST

     INTENTIONALLY LEFT BLANK

9.   PAYMENTS

1.   The Borrower will make all payments due under this Agreement:-

     1.     in cleared funds for value on the relevant date; and

     2.     without set-off or counterclaim and, except when required by law,
            without any deduction for taxes or for any other reason. If the
            Borrower is compelled by law to make any deductions, the Borrower
            shall pay such additional amounts ("Additional Amounts") as are
            necessary to ensure receipt by BNY of the full amount which BNY
            would have received but for such deduction. Without prejudice to the
            foregoing, in the event of any such deduction for tax, the Borrower
            will within 7 days of effecting any such deduction provide BNY with
            any appropriate certificate (Rl85 or similar certificate) in favour
            of BNY in relation to such tax deduction and shall provide BNY with
            evidence satisfactory to BNY of payment to the Inland Revenue of the
            tax deducted within 7 days of the due date for



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            payment of the same to the Inland Revenue. On receipt by BNY of such
            appropriate certificate, BNY shall repay to the Borrower an amount
            equal to the relevant Additional Amounts.

     3.     BNY shall be entitled (and is hereby authorised by the Borrower) to
            debit all payments (including, without limitation, principal and
            interest) due under this Agreement or any of the Security Documents
            either to the Loan Account or any other account(s) of the Borrower
            with BNY.

10.  CHANGES IN CIRCUMSTANCES AND INCREASED COSTS

1.   If at any time it becomes unlawful or impossible for BNY to advance,
     maintain or fund the whole or any part of the Facilities or the Loan
     Account Balance BNY may at any time by written notice to the Borrower
     require the Borrower to repay the whole or any part of the Facilities or
     the Loan Account Balance immediately, together with any outstanding
     interest and all other sums due under this Agreement and the Security
     Documents.

2.   The Borrower shall pay to BNY on demand such amount as BNY may from time to
     time certify as being necessary to compensate it for any increase in the
     cost of funding the Facilities or the Loan Account Balance or for any
     reduction in the rate of return under this Agreement, incurred by BNY as a
     result of compliance with any official directives, requirements or requests
     of any regulatory authority (whether or not having the force of law) or any
     law or regulation (including, without limitation, those relating to reserve
     assets, special deposits, taxes (other than tax on its overall net income),
     capital adequacy and/or asset ratios).

11.  REPRESENTATIONS AND WARRANTIES

The Borrower hereby represents and warrants in relation to itself and each other
Obligor that:-



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1.   it is a limited liability company incorporated under the laws of England
     and Wales and has the power to own its property and assets and carry on its
     business as it is now being and will be conducted;

2.   it has the power to enter into and perform its obligations under each of
     the Transaction Documents to which it is a party and all necessary action
     (corporate or otherwise) has been taken to authorise its unconditional
     entry into and performance of its obligations under each of the Transaction
     Documents to which it is a party and the borrowing of the Facilities upon
     the terms and conditions contained herein;

3.   all authorisations, approvals, consents, licences, exemptions, filings,
     registrations, notarisations and other matters required in connection with
     the entry into, performance and validity of the Transaction Documents, the
     borrowing of the Facilities and the granting of the Security Documents have
     been obtained and are in full force and effect, and any requirements
     thereof have been or will be at the appropriate time complied with or
     fulfilled;

4.   the Transaction Documents to which it is party constitute its legal, valid,
     binding and enforceable obligations;

5.   the entry into and performance of the Transaction Documents to which it is
     party and the transactions contemplated hereby and thereby do not and will
     not conflict with (i) any law or regulation or any official or judicial
     order, or (ii) its Memorandum or Articles of Association; or (iii) any
     agreement or document to which it is a party or which is binding upon it or
     its assets;

6.   no member of the Group is in default under any agreement to which it is a
     party which may have a material adverse effect on it as a whole, no
     petition has been presented or effective resolution passed for the
     winding-up of any member of the Group nor has any other step under the
     Insolvency Act 1986 been taken against



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     any Group Company and no litigation, arbitration or administrative
     proceedings are current or pending or threatened (save for any litigation
     disclosed to BNY prior to the date of this Agreement) which might affect
     the ability of an Obligor to perform and observe the obligations and
     provisions binding upon it under the Transaction Documents (or any of
     them);

7.   it is not aware of any material fact or circumstances that has not been
     disclosed to BNY which, if disclosed, would be likely at the date of this
     Agreement to be relevant in relation to (1) any material liability of or
     which may become due to BNY in its capacity as lender under this Agreement
     or (2) in respect of Environmental Laws;

8.   it is in all material respects in full compliance with all Environmental
     Laws as presently applied and enforced which are currently applicable to
     its operations and all Environmental Approvals required in respect thereof
     have been obtained from the appropriate authorities and are in full force
     and effect;

9.   the financial and other business information furnished to BNY from time to
     time under this Agreement and/or the Security Documents :-

     1.     is true and accurate in all material respects and does not contain
            any misstatement or omit any material fact; and

     2.     in the case of audited accounts gives a true and fair view of the
            results and financial position for the relevant period for the
            Borrower and since then there has been no material adverse change in
            the business, assets, conditions and operation of the Borrower;

10.  all of its assets, property and undertaking are Unencumbered (other than as
     constituted by the Security Documents or liens arising by operation of law
     or contract in the ordinary course of business the rights to which have not
     been



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     asserted) and it is not a party to, nor are its assets bound by any order,
     agreement or instrument under which it is, or in certain events may be,
     required to create, assume or permit to arise any mortgage, charge or
     encumbrance;

11.  no Event of Default has occurred or is outstanding and no event has
     occurred which with the giving of notice or the lapse of time or both would
     constitute an Event of Default; and

12.  no litigation, arbitration or administrative proceeding or claim exists
     which might reasonably be expected to have by itself or together with any
     other such proceedings or claims either:-

     1.     a material adverse effect on the business, assets or condition of an
            Obligor; or

     2.     a material adverse effect on the ability of an Obligor to observe or
            perform its obligations under the Transaction Documents (or any of
            them), is current or pending or, to the best of the knowledge of the
            Borrower, threatened.

The representations and warranties set out in this Clause 11 shall be deemed to
be repeated on each Drawdown Date and on each Interest Payment Date with
reference to the facts and circumstances then subsisting as if made at each such
time.

12.  FINANCIAL INFORMATION

1.   As soon as available and in any event within 120 days after the end of each
     of its financial years the Borrower will deliver to BNY copy audited
     accounts of the Borrower as at the end of such financial year which shall
     have been audited or certified by an accountant acceptable to BNY.



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2.   No later than 28 days after the end of each calendar month the Borrower
     will deliver to BNY monthly management accounts for the most recent
     calendar month certified as true and correct in all material respects by
     the Financial Director of the Borrower.

3.   If required by BNY the Borrower will provide to BNY within 30 days after
     the end of any financial half year of the Borrower an Inventory Valuation
     signed by the Financial Director of the Borrower or, if required by BNY, by
     the Borrower's auditor.

4.   From time to time the Borrower will provide to BNY annual projections and
     monthly cash flow statements at the time and in the form required by BNY.
     At BNY's option those projections and/or cash flows will be compiled by an
     independent accountant reasonably acceptable to BNY.

5.   Notwithstanding the specific provisions set out in Clauses 12.1 to 12.4
     (inclusive) BNY reserves the right so long as the Facilities (or either of
     them) remain in place to require the Borrower to provide BNY (at the
     Borrower's cost) with such financial information or other information about
     the Borrower as BNY may from time to time reasonably require.

13.  COVENANTS

So long as the Facilities (or either of them) remain in place:-

1.   no member of the Group shall without BNY's prior written consent:-

     1.     create or permit to subsist any mortgage, charge, assignment, right
            of set-off or other form of encumbrance whatsoever over any of its
            assets, property or undertaking (except pursuant to the Security
            Documents to which it is a party); or



                                       21
   25
     2.     make any loans or otherwise make credit (other than normal trade
            credit) available to any person or grant any guarantee (except
            pursuant to the Security Documents); or

     3.     by one or a series of transactions, whether related or not, sell or
            otherwise dispose of all or any material part of its property,
            assets or undertaking including without limitation by any form of
            sale and leaseback or factoring (except in the normal course of it
            business).

2.   the Borrower will promptly notify BNY if any Event of Default arises under
     Clause 15 and of anything which might result in an Event of Default ;

14.  SPECIAL CONDITIONS

The Borrower agrees to perform, observe and comply with any special conditions
set out in Schedule 2 and also to provide BNY with any documents required by BNY
as set out in Part II of Schedule 1.

15.  EVENTS OF DEFAULT

In the event that:-

1.   any Obligor fails to pay on the due date any amount payable by it under
     this Agreement or under any other agreement with BNY (including, without
     limitation, the Invoice Discounting Agreement) or under any Security
     Documents to which it is a party or any of them; or

2.   any Obligor:-

     1.     fails to comply with any of its obligations in Clause 13.1.1
            (negative 



                                       22
   26

            pledge); or

     2.     fails to perform any of its respective obligations under this
            Agreement or any other agreement with BNY (including, without
            limitation, the Invoice Discounting Agreement) or the Security
            Documents or any of them (other than those specified in Clause 15.1
            or 15.2.1) and where such failure is capable of remedy fails to
            remedy the same within 14 Business Days of a notice from BNY
            requiring such remedy; or

3.   any representation, warranty or statement made under or in connection with
     this Agreement or any other agreement with BNY (including, without
     limitation, the Invoice Discounting Agreement) or the Security Documents or
     any of them is or proves to be untrue in any material respect on the date
     as of which it was made or deemed to be made or repeated; or

4.   any other of an Obligor's present or future indebtedness is declared or
     becomes capable of being declared due and payable prior to the stated
     maturity thereof or is not paid on the due date therefor or the relevant
     Obligor falls to pay when due any amount payable by it under any present or
     future guarantee or indemnity or the security therefore becomes
     enforceable; or

5.   a distress or other execution is levied against any part of an Obligor's
     property or assets or undertaking; or

6.   the Company:-

     1.     is deemed to be unable to pay its debts within the meaning of
            Section 123 of the Insolvency Act 1986 or any statutory modification
            or re-enactment thereof, or

     2.     shall convene a meeting of or shall propose or enter into any



                                       23
   27
            arrangement or composition for the benefit of its creditors 
            generally; or

     3.     ceases or threatens to cease to carry on all or a substantial part
            of its business or disposes of or threatens to transfer or dispose
            of the whole or a substantial part of its undertaking or assets
            (other than in the normal course of trading); or

7.   an encumbrancer takes possession of or a receiver, liquidator,
     administrative receiver, administrator or similar officer is appointed in
     respect of all or any part of the Company's undertaking, property or assets
     or any part of such assets is subject to diligence, distress, attachment or
     other form of legal enforcement; or

8.   any order is made, petition presented (unless the Borrower demonstrates to
     the satisfaction of BNY that the petition is vexatious and frivolous and is
     discharged within 7 Business Days) or effective resolution passed for the
     winding-up (except for the purposes of amalgamation or reorganisation (not
     involving or arising out of insolvency) the terms of which shall have
     received BNY's prior written approval) of the Company or any order is made
     or petition presented for the appointment of an administrator in relation
     to the Company; or

9.   it becomes impossible or unlawful:-

     1.     for an Obligor or any member of the Group to perform any of its
            respective obligations contained in the Transaction Documents or any
            of them; or

     2.     for BNY to exercise any of its rights under this Agreement and/or
            the Invoice Discounting Agreement and/or the Security Documents or
            any of them; or

10.  this Agreement and/or the Invoice Discounting Agreement and/or the Security



                                       24
   28
     Documents or any of them does not come into or ceases to be in full force
     and effect or is not for any reason valid and binding upon and enforceable
     in all respects against an Obligor or BNY is of the opinion on reasonable
     grounds that any security conferred thereby is or may be in jeopardy; or

11.  BNY is of the opinion on reasonable grounds that there has been a material
     adverse change in the Borrower's trading or financial position or
     condition; or

12.  anything is done or permitted or omitted to be done by an Obligor which BNY
     reasonably believes may materially impair the security created by the
     Security Documents and/or prejudice or detract from an Obligor's ability to
     perform the obligations contained in the Transaction Documents or any of
     them; or

13.  subject to clause 15.18 below any of the events specified in Clauses 15.4
     to 15.11 above occurs in relation to any other company which is a
     subsidiary or holding company of the Borrower, or which is a subsidiary of
     any such holding company (if any); or

14.  BNY is not furnished with all (or any) information required to be delivered
     to it at the time indicated in Clause 12; or

15.  the Invoice Discounting Agreement is terminated for any reason or the
     Borrower is in default of obligations under the Invoice Discounting
     Agreement in circumstances which give BNY the immediate right to terminate
     the Invoice Discounting Agreement; or

16.  BNY exercises its rights pursuant to a request in accordance with Clause
     19.3.2 of the Invoice Discounting Agreement; or


17.  if there is any change of control of the Borrower (which for these purposes
     shall mean a change in the beneficial ownership of 50% or more of the
     issued share




                                       25
   29
     capital of the Borrower by any person); or

18.  Safety 1st Inc now or at any time hereafter breaches or otherwise commits
     an event of default under any agreement to which it and BNY Financial
     Corporation are parties which results in monies owed by Safety 1st Inc
     being declared due and payable by any party to any such agreement;

     then, in any such event BNY may by notice in writing (1) terminate the
     Facilities (or any of them) and/or (2) declare the Loan Account Balance and
     any other amounts due hereunder immediately due and payable, whereupon the
     Borrower will immediately comply with such demand by repaying the Loan
     Account Balance together with all outstanding Interest and any other
     amounts due under the Transaction Documents.

16.  ASSIGNMENT AND TRANSFER

     1.     The Borrower may not transfer or assign any of its rights under the
            Transaction Documents to which it is a party or any of them.

     2.     BNY may, without notice, transfer or assign all or any part of
            and/or grant co-participation in the Facilities (or either of them)
            and/or the Security Documents to any company, person or body and the
            Borrower hereby irrevocably consents to any such transfer,
            assignment or participation (and the disclosure by BNY to a
            transferee assignee or participant of any information about the
            Borrower and the Facilities as BNY may consider appropriate) and
            undertakes to execute any documentation BNY may require to effect
            any such transfer or assignment or participation.

17.  NOTICES

Any notice by BNY to the Borrower shall be sent to the address or telefax number
and



                                       26
   30
marked for the attention set out on the signature page to this Agreement or such
other address or telefax number as may from time to time be notified by the
Borrower to BNY in accordance with this clause and shall be deemed duly given,
if delivered personally or sent by facsimile, when so delivered or sent and, if
sent by first class, registered or recorded delivery post, two days after the
notice is posted. Notices to BNY shall be sent to the address specified above or
such other address as may be notified by BNY to the Borrower in writing and
shall be effective on actual receipt by BNY.

18.  WAIVERS

No failure or delay by BNY in exercising any right, power or privilege under the
Transaction Documents or any of them shall operate as a waiver thereof nor will
any single or partial exercise of any right, power or privilege preclude any
further exercise thereof or prejudice any other or further exercise by BNY of
any of its rights or remedies under the Transaction Documents or any of them.
Such rights and remedies are cumulative and not exclusive of any right or remedy
provided by law.

19.  EXPENSES

1.   The Borrower shall pay to BNY on demand on a full indemnity basis whether
     or not there is a drawing under the Facilities (or either of them):-

     1.     all funding breakage costs and/or costs in relation to arrangements
            incurred by BNY in connection with the funding of the Loan Account
            Balance and/or the Facilities (or any of them);

     2.     any stamp documentary registration and other similar duties or taxes
            in connection with the Transaction Documents or any of them;

     3.     all costs and expenses incurred in connection with the negotiation
            or



                                       27

   31
            enforcement of the Transaction Documents (including legal fees,
            charges, disbursements, survey and valuation fees, and value added
            tax) and BNY's costs and fees in administering the Facilities and/or
            the Loan Account; and

     4.     the Inventory Monitoring Fee;

     5.     any Unused Line Fees.

     On non-payment to BNY of any of the above amounts BNY is entitled to debit
     such amounts either to the Loan Account or any other account(s) of the
     Borrower with BNY.

2.   The Borrower shall also indemnify BNY against any loss or expense incurred
     by it as a consequence of the occurrence of any non-payment.

20.  ILLEGALITY

If any of the provisions of the Transaction Documents become invalid, illegal or
unenforceable in any respect under any law, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired.

21.  SET-OFF

In addition to any right of set-off or other similar right to which BNY may be
entitled in law, BNY (through any of its branches) may at any time and without
notice to the Borrower combine and consolidate all or any of the accounts
between the Borrower and BNY and/or set-off any monies and in any currency
whatsoever, which BNY may at any time hold for the account of the Borrower,
against any liabilities whatsoever which may be due or accruing due to BNY from
the Borrower.



                                       28
   32
22.  GOVERNING LAW

This Agreement shall be governed by and construed in accordance with English law
and the Borrower hereby submits to the exclusive jurisdiction of the English
Courts.

23.  DEMANDS AND NOTIFICATION BINDING

Any demand notification or certificate given by BNY in writing and signed by a
duly authorised officer of BNY specifying any rate of interest or any amounts
due and payable under or in connection with any provision of the Transaction
Documents or any of them shall be conclusive and binding upon the Borrower and
in any proceedings against the Borrower shall be conclusive evidence of such
rate of interest or amounts so due and payable unless the Borrower objects
thereto within 30 days.

24.  POWER OF ATTORNEY

For the purpose of enabling BNY to exercise more readily and beneficially the
powers conferred on BNY hereunder the Borrower hereby irrevocably appoints BNY
and its directors and officers from time to time jointly and each of them
severally to be the Attorney of the Borrower for the purpose of executing all
such deeds and documents performing all such acts and things in the name of the
Borrower as may be expedient for the exercise by BNY of any of its said powers
or to secure the performance of any of the Borrowers obligations hereunder.

IN WITNESS whereof the parties have executed this Agreement as a Deed on the
date set out above.



                                       29
   33
                                   SCHEDULE 1

                            PRE-CONDITIONS DOCUMENTS

                                  (CLAUSE 4.1)

                                     PART I



(1)  Certified copy board resolutions of each Obligor approving and authorising
     the execution of the Transaction Documents (and containing specimen
     signatures of the person(s) authorised to execute the same ).

(2)  A certified true copy of the Certificate of Incorporation of each Obligor.

(3)  A certified true and up-to-date copy of the Memorandum and Articles of
     Association of each Obligor.

(4)  Such other documents, licences, waivers, approvals, resolutions and
     evidence as BNY and its advisers shall deem necessary or advisable and
     notified to the Borrower prior to the date hereof .

(5)  Originals (duly addressed to the satisfaction of BNY including confirmation
     from the person producing the report that the same may be relied upon by
     the successors, assignees and transferees) of:-

     (a) an Inventory Valuation;

     (b) the Invoice Discounting Agreement;

     (c) the Security Documents.

(6)  Executed blank stock transfers in respect of all shares charged under the
     Security Documents.



                                       30

   34
(7)  Evidence that the insurances required to be taken out pursuant to paragraph
     3 of Schedule 2 and/or the Security Documents have been (or will on
     Completion be) taken out and are in full force and effect.

(8)  A Waiver (in a form acceptable to BNY) of all or any reservation of title
     rights from Safety 1st Inc in respect of all or any Inventory supplied from
     time to time by Safety 1st Inc to the Borrower.








                                       31


   35
                                     PART II

                                  (CLAUSE 4.1)



(1)  The originals of the documents listed in part VI of the Schedule to the
     Invoice Discounting Agreement duly executed by the Borrower and all other
     relevant parties where appropriate.

(2)  Such other security or security documents and priority agreements, as BNY's
     advisers advise to be necessary or advisable in connection with the
     foregoing and notified to the Borrower prior to the date of this Agreement.




                                       32

   36
                                   SCHEDULE 2

              SPECIAL CONDITIONS RELATING TO THE INVENTORY FACILITY


1.   Within seven days of the last Business Day of each month the Borrower will
     render an Inventory Valuation in respect of its Inventory and Preferential
     Creditors as at such Business Day. From time to time the Borrower will
     repay on demand that portion of the Inventory Facility which when added to
     the Preferential Creditors and the Aggregate Prepayment (as defined in the
     Invoice Discounting Agreement) exceeds the amount of such Inventory
     Valuation.

2.   The Borrower irrevocably authorises BNY to debit any account which the
     Borrower may have with BNY with all or any amounts due to BNY in connection
     with the Facilities and/or to set off any such amount against any amount
     payable to the Borrower by BNY.

3.   The Borrower will at all times keep the Inventory in a good state of repair
     and insured with some insurance office approved by BNY (such approval not
     to be unreasonably withheld or delayed) against loss or damage by accident,
     fire and theft and such other risks as BNY may from time to time reasonably
     require to the full insurance value of such Inventory and with BNY noted
     upon such policy as loss payee. The Borrower will duly pay all premiums and
     other sums for this purpose and produce the receipts therefor to BNY upon
     reasonable request. In default of such payment BNY shall be at liberty (but
     shall not be obliged) to pay the said premiums and sums and the same shall
     thereupon be recoverable by BNY from the Borrower. Any sums received by the
     Borrower under such policy shall be held in trust for and payable on demand
     to BNY and may be applied by BNY in reduction of any amount owing by the
     Borrower to BNY on any account whatsoever.

4.   The Borrower will at all times ensure that all of its Preferential
     Creditors are duly and punctually paid on the due dates for payment to
     them.




                                       33

   37
5.   The Borrower will upon request advise BNY of the whereabouts of all
     Inventory and shall keep proper books of account and make true and proper
     entries of all dealings and transactions relating to Inventory and shall
     permit BNY and any person authorised by BNY at all reasonable times to
     inspect the same. BNY and any person so authorised shall have the right to
     enter upon any premises in which the Inventory or any part of it is for the
     time being kept or stored and may inspect the books and accounts and
     documents and shall at the expense of the Borrower supply to BNY or to such
     persons all information accounts and copies of documents as BNY or such
     person shall reasonably require.

6.   All or any payments due and owing by the Borrower to Safety 1st Inc
     (howsoever arising) are to be paid on credit terms of not less than 60 days
     from the date of invoice or supply of Goods (whichever is the later). The
     Borrower will not vary or otherwise amend such terms and conditions of
     trade entered into with Safety 1st Inc without the prior written consent of
     BNY.



                                       34

   38
                                   SCHEDULE 3

                            INVENTORY MONITORING FEE



1.   The Borrower shall pay an Inventory Monitoring Fee of fifteen thousand
     pounds ((pound)15,000) per annum by equal monthly instalments with payment
     due on the first Business Day in each month .

2.   In the event that BNY determines that security monitoring and/or analysis
     of the Inventory is required additional to that originally contemplated by
     BNY (such determination being made by BNY at its sole discretion acting
     reasonably) the Borrower shall additionally pay to BNY on the first
     Business Day of each calendar month following any month in which BNY
     performs such additional security monitoring, namely any audit visit to any
     premises of the Borrower where the Borrower's financial records are
     maintained or where any Inventory or other collateral is kept or other
     business analysis the need for which is determined by BNY, an additional
     collateral monitoring fee in an amount equal to BNY's standard rate
     (currently four hundred pounds ((pound)400) per day) for each BNY person
     performing such monitoring plus all costs and disbursements incurred by BNY
     in the performance of such additional examination or analysis and the fees
     and expenses of outside auditors as billed.

3.   BNY hereby gives notice to the Borrower that without prejudice to the
     generality of paragraph 2 BNY will require an audit visit each month for
     the first 3 months during which the Inventory Facility is operated.




                                       35

   39
                                   SCHEDULE 4

                          (FORM OF INVENTORY VALUATION)

                           INVENTORY DESIGNATION FORM


To:-  BNY International Limited                     ............................
                                                                  Date Submitted

      Sovereign House
      Church Street
      Brighton
      Sussex

Attention:....................                       (All figures in(pound)000s)


Pursuant to the loan agreement ("the Loan Agreement") relating to the Loan that
you make available to us and to the mortgage debenture registered on the company
that we have executed in your favour, we hereby represent and report to you with
respect to our Inventory and to the Preferential Creditors outstanding as at the
date of this Valuation. The terms used herein shall where the context requires
have the same meanings as in the Loan Agreement.

I.   INVENTORY MOVEMENTS FOR THE MONTH

     The following is a record of the Inventory for the

     period _________________ through ________________









Opening Inventory as of:  ___________________                ___________________




                                       36


   40
Add Purchase for month                                       ___________________

Total goods available for sale                               ___________________

Less: Total Net Sales for Month  ___________________

Cost of Goods Sold                                           ___________________

Ending Inventory as of                                       ===================


II.  INVENTORY BREAKDOWN

________________________________________________________________________________
Locations              A     B     C     In     At Outside              Totals
                                                Transit Contractors
================================================================================
Raw Materials
________________________________________________________________________________
WIP
________________________________________________________________________________
Finished Goods
________________________________________________________________________________

________________________________________________________________________________
Totals
________________________________________________________________________________


LOCATIONS:


Address of locations:


A)
B)


Add additional location if necessary.


Identify any new locations. Attach listing of paid or unpaid, consigned and
unconsigned, in transits by vessel, L/C, beneficiary and amounts and location of
outside contractors or in bill/pack and hold.




                                       37

   41
Last Physical Inventory Check _________________ by________________________


Provide an estimate duty and freight on open L/C and in transits.

REPORTING BASIS - LOWER OF COST OR MARKET

Circle One:


BNY:     Reporting Basis - FIFO/LIFO/AVERAGE
GAAP:    Reporting Basis - FIFO/LIFO/AVERAGE


INSURANCE


Carrier: Max.  Insured Amount: ________________ Expires _______________


Agent:        Circle One: Insured at cost or selling price

              BNY-Name Loss Payee Yes_______ No_______



PREFERENTIAL CREDITORS


Creditor                Liability (pound)'000           Date of next payment
________________________________________________________________________________

PAYE
________________________________________________________________________________

VAT
________________________________________________________________________________

EMPLOYEE
________________________________________________________________________________


III. AVAILABILITY

                                                               Amount

(A)  Gross Reported Inventory

Less WIP



                                       38

   42
Less unpaid and/or unconsigned in transits
Less duty/freight on paid in transits consigned to BNY
Less unpaid royalties on finished goods (LDP and in transit) or prior shipments,
and unpaid distribution costs
Less estimated negative variances on manufacturing
Less capitalised overhead in Inventory
Less obsolete/impaired/distressed/Out of Season Inventory
Less other (list)

(B) Total Ineligibles

Total eligible inventory (A) - (B)           --------------------------
Advance Percentage    _________              --------------------------
Inventory Availability _________             --------------------------
                                             --------------------------
Less Preferential Creditors                  --------------------------
Less Miscellaneous                           --------------------------
Inventory Advance Available                  --------------------------



                                       39

   43
IV.  RECONCILE TO PLAN AND PRIOR PERIOD

________________________________________________________________________________
                         Designation     General     Budget     Last Year
                         Reported        Ledger                 Comparative
                                                                Period
________________________________________________________________________________
Raw Material
________________________________________________________________________________
WIP
________________________________________________________________________________
Finished
Goods
________________________________________________________________________________
In Transit
________________________________________________________________________________
Total Invent.
________________________________________________________________________________
Mo.
Purchases
________________________________________________________________________________
Tot.  Ineligibles
________________________________________________________________________________
Open L/C's
________________________________________________________________________________
Open A/R
________________________________________________________________________________
Reported G/M
________________________________________________________________________________
Annual Inv.
Turn
________________________________________________________________________________
Prior Mo.
Sales
________________________________________________________________________________
Next Mo.
Sales
________________________________________________________________________________

Circle One: Designation report based on perpetual run, gross margin method, or
physical count.

Attach discussion on variances to this report

V.   RECONCILE TO PLAN AND PRIOR PERIOD



                                       40

   44
I do hereby certify that I am authorised and qualified to compile, prepare and
complete this report, and acknowledge that BNY is relying on the information
contained in this report for credit accommodations to the company. I have also
advised my accountants that information submitted to BNY International Limited
is relied on for credit decisions.

I do also certify that the information in this report is accurate and complete.
The value of the Inventory scheduled this report is represented to be at cost or
lower of the market.

Company Name               ____________________________


Signature                  ____________________________


Title                      ____________________________




                                       41

   45
SIGNED AND DELIVERED AS A DEED BY
SAFETY 1ST (EUROPE) LIMITED acting by

 ......................... a Director and } .....................................


 ......................... a Director/Secretary*}................................

(Insert full names above and where
indicated by * clarify whether the person
is a Director or a Secretary)

EXECUTED AS A DEED by                        )
                                             )

as Attorney for BNY INTERNATIONAL            ) /s/ Charles Anderson

LIMITED in the presence of                   )

/s/ E. Malkin


                                       42


   46
SIGNED AND DELIVERED AS A DEED BY
SAFETY 1ST (EUROPE) LIMITED ACTING BY


Andrew Ratcliffe a Director and )  /s/ Andrew Ratcliffe

Robert Jones     Secretary      )  /s/ Robert Jones

(Insert full names above and where
indicated by "clarify whether the person
is a Director or a Secretary)


EXECUTED AS A DEED BY                )
                                     )
as Attorney for BNY INTERNATIONAL    )
LIMITED in the presence of           )







                                       42