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                                                                   EXHIBIT 10.39

                     AMENDED AND RESTATED LICENSE AGREEMENT


        THIS AMENDED AND RESTATED LICENSE AGREEMENT ("Agreement") is made and
entered as of the 10th day of April, 1997, by and between Stussy, Inc., a
California Corporation having its office and principal place of business at 1852
Langley, Irvine, California 92714 (hereinafter referred to as "STUSSY" or
"Licensor"), and Sungold Enterprises, Ltd., a New York corporation, having its
office and principal place of business at 2095 New Highway. Farmingdale, New
York 11735 (hereinafter referred to as 'Licensee").

                                    RECITALS

        A. Stussy owns the trademark "STUSSY' and the designs associated with
that mark, (collectively referred to herein as the ("Licensed Mark") and has
registered them in the United States of America and elsewhere. Licensee
recognizes the great value of the goodwill associated with the Licensed Mark;
that the Licensed Mark has acquired a secondary meaning to the public, and that
all rights to the Licensed Mark and its associated goodwill belong exclusively
to Stussy, the Licensor.

        B. Licensee is principally and presently engaged in the business of
importing, manufacturing, promoting and selling sunglasses (the 'Products') for
purposes of distribution at wholesale prices throughout the United States, and
in Canada. Licensee desires to use the Licensed Mark on, and in connection with,
the manufacture, promotion, sale and distribution of the Products.

        C. Stussy previous granted a license the exclusive right and license to
use the Licensed Mark on and in connection with the Products, pursuant to the
terms and conditions of the License Agreement dated October 2, 1992, to Sungold
Enterprises Limited ("Sungold"). Sungold has assigned all its rights and
obligations under the License Agreement to the current Licensee. Stussy and
Licensee intend that this Amended and Restated Agreement will completely
supersede the License Agreement.


                                    AGREEMENT

        1. Definitions. Whenever used in this Agreement, the term "Net sales"
shall mean gross sales of the Products by Licensee, less returns actually
received, normal trade discounts and allowances usually granted; provided,
however, that the amount of normal trade discounts and allowances actually
granted by Licensee shall not exceed an amount equal to twenty-five percent
(25%) of gross sales in any year of this-Agreement.
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        2. Grant.

               2.1 Territory. Upon the terms and conditions of this Agreement,
Stussy hereby grants to Licensee the exclusive right to use the Licensed Mark
throughout the world (the "Territory") on and in connection with the Products
manufactured from designs provided by Licensee.

               2.2 Use of Stussy Distributors. In the United States and Canada,
Licensee may distribute the Products as otherwise provided in this Agreement. In
any territory where Stussy has distributors for "STUSSY" products, the Licensee
shall distribute the Product only to such distributors. In all other
territories, Licensee shall distribute the Products only after Stussy has
approved a marketing plan and the specific retailers or wholesalers to whom
Licensee proposes to distribute the Products. In all territories where Stussy
has no distributors, Licensee shall only sell the Products in accordance with
the approved marketing plan and to the specific retailers or wholesalers
approved by Stussy. All sales to Stussy distributors in foreign territories
shall be made in accordance with Licensee's standard terms, including discounts
and distribution policies established by Licensee for sales of Product
throughout all foreign territories. Sales in foreign countries shall be
accounted for separately by each territory. The provisions of this Agreement,
and specifically Paragraphs 2.2 and 2.3 are not deemed for the benefit of any
Stussy distributor,

               2.3 Distribution of Products Only Within the Distributor's
Territory. This provision shall not apply in any territory where its enforcement
would be a violation of law. Licensee shall never offer, sell or ship the
Products to persons (i) other than them permitted by Section 2.2 or (ii) who
Licensee has reason to suspect will divert, attempt to divert, or assist in
diversion of the Products outside their territories as provided in distribution
agreements or in Stussy-approved marketing plans (hereinafter "Non-Diversion
Obligation"). Licensee will maintain complete and detailed documentation of
Licensee's disposition of the each of the Licensed Product so that it can show
compliance with the Non-Diversion Obligation. If upon Stussy's request, Licensee
does not within ten (10) calendar days of such request product documentation for
any of the Goods, Licensee will be presumed to have violated the Non-Diversion
Obligation.

               2.4 Use of Licensed Mark. All Products manufactured from designs
approved by Stussy shall bear the Licensed Mark. During the term of this
Agreement, Licensee shall use its best effort to market the Products designs
approved by Stussy throughout the Territory. Licensee shall not attempt to
register the mark "STUSSY" in its own name for its own benefit in any country of
the world. Licensee agrees that it will not, directly or indirectly, infringe
upon the Licensed Mark in countries outside the Territory, and will not
contribute to or induce such infringement by selling Products to persons or
entities whom Licensee suspects, or should reasonably suspect, of intentions to
infringe upon the Licensed Mark.

               2.5 Requirement to Use. Nothing herein contained shall be
construed to require the Licensee to use the Licensed Mark on all of the goods
which it manufactures or imports, even if some of those goods may fall within
the definition of
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Products. However, Licensee shall not manufacture, market or distribute any
competing brands that conflict with Stussy's image and marketing. Stussy's
consent shall not be unreasonably withheld. In the event of a disagreement about
what constitutes a conflicting brand, the parties shall meet in an attempt to
resolve the disagreement. Stussy agrees that none of Licensee's current brands
constitute a conflict.

        3. Initial Term. The Initial Term of this Agreement shall commence as of
May 1, 1992, and expire on April 30, 1997, unless sooner terminated as provided
herein.

        4. Terms.

               4.1 First Renewal Term. Stussy agrees that Licensee has met all
of the conditions set forth in Sections 4.1 through 4.1.4 below, and this
License will be renewed for an additional five (5) years commencing May 1, 1997
and expiring on April 30, 2002.

                      4.1.1 During the Initial Term of this Agreement Licensee
has made not less than $500,000 of annual Net Sales of Products or has paid to
Stussy the minimum annual royalties on such amount as set forth in Section 6 of
this Agreement.

                      4.1.2 Licensee is in compliance with all of the terms and
conditions of this Agreement, both at the time the option is exercised and on
the last day of the Initial Term of this Agreement.

                      4.1.3 Written notice of the election to exercise such
option is delivered to Stussy in accordance with Section 25, "NOTICES", not less
than sixty (60) days prior to the expiration of the Initial Term.

                      4.1.4 Stussy consents to such renewal, which consent shall
not be unreasonably withheld.

               4.2 Second Renewal Term. If Licensee meets all of the conditions
set forth in Sections 4.2.1 through 4.2.4 below, then Licensee may, at its
option, renew this Agreement for an additional term of five (5) years commencing
May 1, 2002, and expiring April 30, 2007.

                      4.2.1 During the First Renewal Term of this Agreement.
Licenses has made not less than the annual Net Sales of the Products required by
Section 5 of ft Agreement or Licensee has paid the minimum annual royalty due on
such amounts to Stussy.

                      4.2.2 Licensee is in compliance with all of the terms and
conditions of this Agreement both at the time the Option is exercised and on the
last day of the First Renewal Term of this Agreement.
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                      4.2.3 Written notice of the election to exercise the said
option is delivered to Stussy at its address as set forth in Section 25 of this
Agreement, not less than sixty (60) days prior to the expiration of the First
Renewal Term.

                      4.2.4 Stussy consents to such renewal, which consent shall
not be unreasonably withheld.

               4.3 Third Renewal Term. If Licensee meets all of the conditions
set forth in Sections 4.3.1 through 4.3.4 below, then Licensee may, at its
option, renew this Agreement for an additional term of five (5) years commencing
May 1, 2007, and expiring April 30, 2012.

                      4.3.1 During the Second Renewal Term of this Agreement,
Licenses has made not less than the annual Net Sales of the Products required by
Section 5 of this Agreement or Licensee has paid the minimum annual royalty due
on such amounts to Stussy.

                      4.3.2 Licensee is in compliance with all of the terms and
conditions of this Agreement both at the time the option is exercised and on the
last day of the First Renewal Term of this Agreement.

                      4.3.3 Written notice of the election to exercise the said
option is delivered to Stussy at its address as set forth in Section 25 of this
Agreement, not less than sixty (60) days prior to the expiration of the First
Renewal Term.

                      4.3.4 Stussy consents to such renewal, which consent shall
not be unreasonably withheld.

        5. Royalties.

               5.1 Amount of Royalty. Licensee shall pay Stussy a royalty of [*]
Percent [* %] of Licensee's Net Sales of Products bearing the Licensed mark.
Such royalties shall be distinct from and in addition to any commissions earned
by Stussy, as a Sales Representative of Licensee.

               5.2 Minimum Royalty. Licensee shall pay and account for minimum
royalties at the rate provided in Section 5.1 of this Agreement on Net Sales of
Products of at least $[*] per year, for the year commencing May 1, 1997 and
expiring April 30, 1998. Minimum royalties shall be credited against Royalty
payments due under Section 5.1 hereof. The minimum amount of Net Sales of
Products shall increase Four Percent (4%) per year. In each subsequent year, the
minimum amount of Net Sales of Products shall be increased by Four Percent (4%)
from the minimum amount of Net Sales of Products in the previous year. Licensee
may fall short of the required minimum amount of Net Sales of Products in any
one year by Twenty Percent (20%), but not more than once in any Renewal Term,
and the minimum amount of Net Sales of Products shall be made up in other years
within the Renewal Term.
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               5.3 Statements. Within thirty (30) days after the end of each
month during the term of this Agreement, or renewal thereof, Licensee shall
furnish to Stussy a full and accurate statement showing the number, description,
and invoice price of each Product sold, the gross sales, returns actually
received, normal trade discounts and allowances actually granted and sales
taxes, if any, deducted relative to the Products, and the Net Sales of all
Products sold under this Agreement during the preceding month. Such statements
shall be accompanied by a check for royalties due thereon. Receipt or acceptance
by Stussy of any of the statements furnished, or of any sums paid pursuant to
this Agreement, shall not preclude Stussy from questioning their correctness at
any time thereafter, but within the applicable period of limitation provided by
law.

               5.4 Payment Cure. At the end of each year during any year in
which this Agreement is in effect, if the statements and royalties paid
(referred to in Section 5.2 above) reflect Net Sales and resultant royalty
amounts which are less than those necessary to the annual requirement for
renewal of this License Agreement pursuant to Sections 4.1 and 4.2 of this
Agreement, then such deficit shall be cured at the time the statement for the
third month following the end of the year is filed, and such cure shall
constitute a cure of any breach under Section 5.2 of this Agreement.

               5.5 Books and Records. Licensee shall maintain appropriate books
of account in which accurate entries shall be made concerning all transactions
within the scope of this Agreement, and Stussy shall have the right, through any
accountant or other authorized representative of its choice, on reasonable
advance notice to Licensee, to examine and copy all or part of these books of
account and all other records, documents and material in the possession or under
the control of Licensee with respect to the subject matter of this Agreement.
All books of accounts and records shall be kept available by Licensee for at
least three (3) years after the year to which they relate.

                   Licensee shall also provide, at Stussy's request, a copy of
any computerized tape or disk if its sales records are kept on such computerized
tapes or disks.

        6. Exclusivity of Rights. Stussy will not grant any other license during
the term of this Agreement for the use of the Licensed Mark on or in connection
with the Products. Stussy may use or grant others the right to use the Licensed
Mark on or in connection with goods of all types and descriptions except the
Products. Licensee will not, during the term of this Agreement or thereafter,
use any business name utilizing the trade name "STUSSY", attack Stussy's title
in and to the Licensed Mark, attack the validity of the Licensed Mark, attack
the registrations in any country by Stussy of the Licensed Mark, or attack the
validity of this Licensed mark. However, in any other license agreement entered
into by Stussy for the use of the Licensed Mark in connection with the sale and
distribution of the Products outside the Territory, Stussy shall affirmatively
require in such agreement that said Products, may not be sold and/or distributed
in the Territory by that licensee.
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        7. Quality of Products.

               7.1 Stussy's Control Over Image. Stussy shall control the image
of the Licensed Mark. This includes image management, marketing, retail outlets,
marketing and suggested retail prices. Every effort shall be made to maintain a
consistent image that preserves the value of the Licensed Mark.


               7.2 Approval of Retail Outlets.. Stussy reserves the right to
review and, in its absolute discretion, approve or disapprove those retail
stores to which Licensee sells its Products. In addition Stussy reserves, in its
sole and absolute discretion, the right to approve or disapprove any distributor
or sales representative used by Licensor to market or sell the Products. If
Stussy notifies Licensee that it does not approve a distributor representatives
or retail store(s), then Licensee shall promptly terminate distributor or
representative, as the case may be, and discontinue sales of that Product to
such retail store(s).

               7.3 Product Quality. The quality of all Products produced and
sold by Licensee under this Agreement and bearing the Licensed Mark shall be of
a quality equal to or better than Products sold by Licensees in 1991, shall be
intended for sale at retail prices as prestige, better-priced merchandise, and
shall be marketed accordingly. All of the Products will be manufactured,
labeled, sold, distributed and advertised in accordance with all applicable
national, state and local laws and regulations.

               7.4 Sample Approval. Before producing Products bearing the
Licensed Mark, Licensee shall submit to Stussy for its approval, finished art
work sufficiently in advance of production to permit Stussy to correct to the
extent necessary, the legends, markings and notices and the form and manner in
which the Licensed Mark is displayed. Before selling or distributing any
Products bearing the Licensed Mark, Licensee shall submit to Stussy for its
approval, a sample of its Products, containers, packaging, labels, and like
items.

               7.5 Maintenance of Samples. During the term of this Agreement,
Licensee shall periodically, but at least once each six (6) months, submit then
current production samples of its Products, patterns, designs, material
selections, containers, labels, and like items, and of all advertising and
promotional material used in connection with them, or legends, markings and
notices as may be required by law or regulation in the Territory, of each
Product marketed under this Agreement so that Stussy may assure itself of the
maintenance of the quality standards.

        8. Stussy Quality. In order to maintain an image of high quality
Products bearing the Licensed Mark, Stussy agrees that it will maintain such an
image with other Products bearing the Licensed Mark that it sells, and that it
will require and enforce high design and quality standards from all other
licensees of the Licensed Mark outside the Territory.
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        9. Required Markings. Licensee shall display the Licensed Mark only in
such form and manner as specifically approved, in writing, by Stussy. Licensee
also shall cause to appear on the Products, or on its containers, labels and
like items, and on all advertising and promotional material used in connection
with them, such legends, markings and notices as may be required by law or
regulation in the Territory and as Stussy reasonably may request. All Products
shall contain Licensee's identifying mark so that the origin of the Products can
be determined.

        10. Approvals . The approval of Stussy shall not be withhold
unreasonably and any Product or art work submitted to Stussy which has not been
disapproved orally or in writing within ten (10) business days after receipt by
Stussy shall be deemed to have been approved. After any Product or art work has
been approved, Licenses shall not make any change without Stussy's prior
approval. If any Product or art work is disapproved by Stussy, Licensee shall
not release that Product or art work for public distribution without Stussy's
specific written authorization. Stussy's approval of any Product or art work
shall not be construed to mean that Stussy has determined that the Product or
art work conforms to the laws or regulations of any jurisdiction in the
Territory.

        11. Advertising and Promotion. Prior to public release, Licenses shall
submit its program for national advertising, and any and all advertisements,
trade releases or any other form of promotional material, to Stussy for prior
approval, including Licensee's announcements introducing the Products bearing
the Licensed Mark. Such prior approval of Stussy is extended to mean the
selection of appropriate Magazines, publications, or other media intended for
use of such advertising or promotional material. During each year of the
Agreement and each year of any renewal term, Licensee shall expend a reasonable
sum on advertising promoting the Products bearing the Licensed Mark within the
Territory in television, radio, newspaper, and/or periodical publications or
department store and trade catalogues. Advertising "expenses shall include fees
charged by the advertising agency, if such fees are not included with media
charges. No advertising or promotional material shall contain reference to
Licensee's name except that Licensee's tags and labels which have been approved
by Stussy may utilize the following statements: "Stussy, by Sungold Eyewear (a
Licensee of Stussy, Inc.)" only on approved Products.

        12. Use of Other Trademarks. Licensee may not use or associate the
Licensed Mark with any other trademark, except when used in combination with
prestige store labels and except as permitted in Section II hereof.

        13. Licensee's Indemnity. Licensee will indemnify and hold Stussy
harmless from any claim, suit, loss, damage or expense (including reasonable
attorneys' fees) arising out of any alleged defect in any Product produced by
Licensee under this Agreement, or relating to the manufacture, labeling, sale,
distribution or advertisement of any Product of Licensee. Stussy shall give to
Licensee notice of any such claim or suit.
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        14. Licensor's Indemnity

               14.1 Indemnification. Licensor will indemnify and hold the
Licensee harmless from any claim, suit, loss, damage or expense (including
reasonable attorney fees) arising out of any litigation in connection with the
use of the Licensed Mark by the Licensee in accordance with the terms of this
Agreement.

               14.2 Notice. Licensee shall give to Licensor written notice of
any infringement or potential infringement of Licensor's name or mark by third
parties which may come to its notice. Licensor and Licenses shall thereupon
confer together as to what steps are to be taken to stop or prevent such
infringement. Licensor agrees to use its best efforts to stop any such
infringement, but shall not be obligated to commence proceedings against the
infringer. If Licensor decides to commence proceedings, however, Licensor shall
be responsible for any legal costs incurred, and will be entitled to retain any
damages recovered. Should Licensor decide not to commence proceedings, Licensor
shall be entitled to do so in its own name against the infringer, in which event
Licensee shall be responsible for all legal costs incurred, without recourse to
Licensor, but will be entitled to retain any damages recovered.

        15. Insurance-Policy. At all times during which Products bearing the
Licensed Mark are being sold, Licensee shall, at its own expense, maintain in
full force and effect with a responsible insurance carrier acceptable to Stussy,
at least One Million Dollars ($1,000,000) of product liability insurance with
respect to the Products. This insurance shall name Stussy as an additional
insured, be for the benefit of Stussy, and be endorsed for the insurance carrier
to provide Stussy at least ten (10) days prior written notice of the
cancellation of, or any substantial modification in, such insurance policy. A
copy of such policy or certificate of insurance together with any applicable
riders and/or endorsements shall be provided to Stussy by the carrier. This
insurance may be obtained for Stussy by Licensee in conjunction with a policy
which covers products other than the Products bearing the Licensed Mark.

        16. Trademarks.

               16.1 Trademark Ownership. Licensee acknowledges Stussy's
ownership of the Licensed Mark, and agrees not to challenge its validity and
ownership by Stussy. All use of the Licensed Mark by Licensee shall inure to the
benefit of Stussy. Licensee shall not do or commit any act which would affect
the validity of the Licensed Mark, or Stussy's ownership thereof. Licensee shall
at any time, whether during or after the term of this Agreement, execute any
documents reasonably requested by Stussy to confirm its ownership rights. All
rights in the Licensed Mark other than those specifically granted in this
Agreement are reserved by Stussy for its own use and benefit. This Section shall
also include all future trademarks of Stussy using the name "STUSSY" or its
logos.

               16.2 Trademark Ownership. Licensee shall not register any
trademark, trade name, copyright or other right relating to this Agreement in
its own name. In the event Licensee determines that registrations are necessary
or appropriate, Licensee 
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shall contact Stussy. Licensee shall reimburse Stussy
for all expenses incurred during the, term hereof relating to the registration
of the Licensed Mark in International Class 9 (or the national equivalent). Any
applications or registrations for any of the Stussy,s names or trademarks shall
be immediately assigned to Stussy.

               16.3 Enforcement. Licensee shall police the STUSSY trademark on
and in connection with the Products. Subject to Stussy's approval, Licensee may
enforce the STUSSY trademark at licensee's own expense. Licensee shall keep
Stussy fully informed about such enforcement efforts. Stussy shall have the
absolute right to give instructions and about such enforcement efforts, and to
select the investigators or attorneys should they be retained.

        17. Design Ownership. All rights (including copyright rights) to
designs for the Products, and to any package design, label, advertising or
promotional material or the like bearing the Licensed Mark (hereinafter the
"Design Rights") shall be the property of Stussy (regardless of whether such
designs were created by Stussy, Licensee, or Licensee's employees, 
officers, directors, stockholders or independent contractors). Licensee shall
make or procure all assignments necessary for this purpose. Licensee shall place
appropriate notices on the Products, packages, labels, and advertising and
promotional materials in order to protect the Design Rights (including
copyrights) therein. During the term of this Agreement, Licensee may use the
Design Rights in the Territory in connection with its exercise of the Licensed
Mark as set forth in Section 2. All Products manufactured from designs submitted
by Licenses and approved by Stussy shall bear the Licensed Mark. Licensor shall
provide prompt notice and information about any designs that are capable of
being protected by a design patent so that Stussy can timely file patent
applications if Stussy deems it appropriate, in Stussy's sole discretion.

        18. Registration. Licensee shall cooperate with Stussy in the execution,
filing and prosecution of any trademark or copyright applications that Stussy
may desire to file, and for that purpose, Licensee shall supply to Stussy from
time to time such Products, containers, labels and similar material as may be
reasonably required. The rights of Licensee, pursuant to Section 2, hereof,
shall include, to the extent necessary, the right to use any registered
trademarks or copyrights secured by Stussy hereunder.

        19. Termination.

               19.1 Breach. If Licensee breaches any of its obligations under
this Agreement, including, without limitations, its obligations pursuant to
Sections 2 and 9 of this Agreement, Stussy shall have the right, without
prejudice to any other rights which Stussy may have, to terminate this
Agreement, by giving fifteen (15) days' notice to Licenses, and this notice will
automatically become effective unless Licensee completely cures such breach
within the fifteen (15) day period.

               19.2 Insolvency. If Licensee is adjudicated a bankrupt, or if a
petition in bankruptcy is filed against the Licensee, or if Licensee makes any
assignment for the benefit of its creditors, or if Licensee commits any act of
bankruptcy or takes the benefit 
<PAGE>   10
of any insolvency law, or if Licensee, defaults
on any obligation which is secured by a security interest, in whole or in part
in the Products bearing the Licensed Mark, or if a receiver is appointed for
Licensee or a substantial part of its business interests, this Agreement shall
automatically terminate as of the earliest date on which any of the above events
occur, without prejudice to any other rights which Stussy may have. Invalidity
or unenforceability of this Section 19.2 shall not affect or render any other
clause of this Agreement invalid.

               19.3 Change of Business. If Licensee sells or otherwise disposes
of substantially all of its business or assets to a third party, or control of
Licensee is transferred and the management thereby changed, Stussy will have the
right, without prejudice to any other right it may have, to terminate this
Agreement by giving notice to Licensee, effective immediately.

        20. Effect of Termination. Upon expiration or termination of this
Agreement for any reason whatsoever, all rights in the Licensed Mark shall
automatically revert to Stussy. Licensee shall cease all uses of the Licensed
Mark which have been embodied in Products bearing the Licensed Mark, except
that, if the Agreement is terminated other than pursuant to Section 19.2 
of this Agreement, Licensee, shall then have six (6) months from the date of
termination to sell out its then existing inventory of Products bearing the
Licensed Mark. Licensee shall account for, and pay royalties on, all these sales
not later than thirty (30) days after the close of the six (6) month period.
Upon the date of termination, Licensee will promptly compute and inform Stussy
of the amount of its then existing inventory of Products bearing the Licensed
Mark. If, at any time during the three (3) month period, Licensee is willing to
sell all or substantially all of its then remaining inventory to a single
purchaser or group of related purchasers, Licensee will advise Stussy of the
identity of the proposed buyer and terms of sale. Following notice to Stussy of
such proposed sale, Stussy will thereupon have thirty (30) days in which to
exercise a right of first refusal to buy the remaining inventory upon the same
terms.

        21. Infringements. If Licensee learns of any use by any person of a
trademark or design similar to the Licensed Mark or a licensed design, it shall
promptly notify Stussy and, if requested by Stussy, shall join with Stussy, at
Stussy's expense, in such action as Stussy, in its reasonable discretion, may
deem advisable for the protection of its rights. Licensee shall have no right to
take any action with respect to the Licensed Mark or designs without Stussy's
prior written approval.

        22. Representation and Warranty. The parties respectively represent and
warrant that they are under no legal impediment which would prevent their
signing this Agreement or consummating the same.

        23. Relation of Parties. Nothing contained in this Agreement shall be
construed to place the parties in the relationship of legal representatives,
partners, joint venturers, or agents, and Licensee shall have no power to
obligate or bind Stussy in any manner except as provided herein.
<PAGE>   11

        24. Assignability. Licensee may not assign or sublicense any or all of
its rights or delegate any of its duties under this Agreement without the
written consent of Stussy. Any attempted assignment or sublicense in violation
of this provision shall be void.

        25. Any notice or other communications under this Agreement shall be in
writing and shall be considered given when delivered personally or by registered
mail, return receipt requested, to the parties at the following addresses (or at
such address as each party may specify by notice to the other):

        TO STUSSY:                          Stussy, Inc.
                                            Mr. Frank Sinatra, President
                                            1852 Langley Ave.
                                            Irvine, CA 92714
                                            (714) 474-9255
                                            Fax: (714) 474-8229

        WITH COPY TO:                       John R. Sommer, Esq.
                                            Baker & Hostetler LLP
                                            600 Wilshire Blvd., #1200
                                            Los Angeles, California 90017
                                            (213) 624-2400
                                            Fax: (213) 975-1740.

        TO LICENSEE:                        Sungold Enterprises, Ltd.
                                            2095 New Highway
                                            Farmingdale, New York 11735
                                            (516) 752-8900
                                            Fax: (516) 752-8928

        WITH A COPY TO:                     Richard Krodow
                                            425 Broad Hollow Road
                                            Melville, New York 11747
                                            (516) 756-8300
                                            Fax: (516) 756-3684

        26. Waiver. The failure of a party to insist upon strict adherence to
any term of this Agreement on any occasion shall not be considered a waiver, nor
deprive or limit that party of the right thereafter to insist upon strict
adherence to that term in the particular instance of that term or any other term
of this Agreement in any instance. Any waiver must be in writing.

        27. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the United States (including but not limited to the
laws relating to Trademarks and Copyrights) and, to the extent not governed by
the foregoing, by the laws of the State of California.
<PAGE>   12
        28. Headings. The headings are solely for convenience of reference and
shall not affect the interpretation of this Agreement.

        29. Arbitrations.

               29.1 Any controversy arising out of or relating to this Agreement
shall be resolved by arbitration in the County of Orange in the State of
California pursuant to the rules then in force of the American Arbitration
Association. The panel of arbitration appointed to settle any controversy or
claim shall consist of three (3) arbitrators.

               29.2 Modification. The arbitrators sitting in any such
controversy shall have no power or jurisdiction to alter or modify any express
provision of this Agreement or to make any award which by its terms affects any
such provision. Nor shall they have any power or jurisdiction over Stussy's
trademarks or copyrights, all matters relating thereto are expressly excluded
from this Section 29.

               29.3 Consent to Jurisdiction. The parties consent to the
jurisdiction of the federal or state courts located in the State of California
and in the county in which Stussy has its principal place of business. The
parties further consent that any demand for arbitration or any process or notice
of motion or other application to the Court of a Judge thereof in connection
with the same may be served in or out of the State of California by registered
mail or by personal service, provided a reasonable time for appearance is
allowed. The parties waive jurisdiction, venue and all related or equivalent
rights as to such State and county.

               29.4 No Waiver. The provision for arbitration herein shall not be
deemed a waiver of any rights of either party to any provisional remedy provided
under California law. It is agreed that in the event of any violation hereof,
the other party hereto shall have the right to obtain a preliminary injunction
enjoining any further violation of this Agreement pending the arbitration
hearing.

               30. Service Charge. Licensee shall pay Stussy a service charge on
all overdue amounts payable under this Agreement at the prime rate, plus one
percent (1%) per annum, in effect at Bank of America, NT&SA covering the period
from the due date to the date of payment. However, such payment shall in no way
affect the rights of Stussy under this Agreement, including but not limited to
those specified in Section 19 hereof. However, nothing in this Section requires
the payment of interest in excess of the maximum rate allowed by law.

               31. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original copy and all of
which together shall constitute one agreement binding on all parties hereto,
notwithstanding that all the parties shall not have signed the same counterpart.

               32. Severability of Provisions. Each provision of this Agreement
shall be considered severable and if for any reasons any provision which is not
essential to the
<PAGE>   13
effectuation of the basic purposes of this Agreement is
determined to be invalid and contrary to any existing or future law, such
invalidity shall not impair the operation of or affect those provisions of this
Agreement which are valid.

               33. Warranties and Limitation of Liability. Stussy makes no
representation or warranties other than those expressly set forth above.
Stussy's liability related to this Agreement or to Licensee and persons
connected with it shall in no event exceed the royalties paid by Licensee in the
preceding year.

               34. Complete Agreement. This Agreement contains a complete
statement of all the arrangements among the parties with respect to its subject
matter, supersedes all prior agreements, understandings and commitments of the
parties with respect to the subject matter hereof, and cannot be changed or
terminated orally. This Agreement is deemed equally drafted by both parties and
shall not be construed for or against any party, except that it shall be
construed in a manner to give maximum protection to Stussy's trademark and
copyright rights.

        STUSSY, INC.


        By:    /S/ FRANK SINATRA
           -------------------------------    


               Frank Sinatra, President


        SUNGOLD ENTERPRISES, LTD.


        By:    /S/ SHELDON GOLDMAN
           -------------------------------    
               Sheldon Goldman, President