AMENDMENT TO MANUFACTURING, DISTRIBUTION & LICENSE AGREEMENT

          This Amendment to  Manufacturing,  Distribution and License  Agreement
     (the  "Amendment")  is made this 31st day of  October,  2000 by and between
     L.A.  Gear,  Inc. (the  "Company")  and West Coast Sports S.A. de C.V. (the
     "Licensee").


         WHEREAS,   the  parties   entered  into  that  certain   Manufacturing,
Distribution and License Agreement dated as of March 12, 1998, as amended August
1,  1998,  November  19,  1998,  April 29,  1999,  and  November  16,  1999 (the
"Agreement"); and

         WHEREAS, the parties wish to amend the Agreement.

         NOW, THEREFORE, the parties agree as follows:

         1. A new Section 5(g) is added to the Agreement:

         "g) Licensee shall pay the Company in monthly  installments only actual
         Royalties  during the period October I, 2000 through  December 31, 2000
         at a rate of 4(degree)/O of Net Sales. The differential  between actual
         Royalties and the Minimum Royalty that would have been due from October
         1, 2000 through  December 3 1, 2000 (which is $ 18,750.00) must be paid
         at the end of the current license term,  December 31, 2002. However, if
         in any year prior to the  expiration  of the current  license  term the
         Licensee's Net Sales exceed the Minimum  Royalty in any one year, by an
         amount  equal to or  greater  than the  amount to have been paid in the
         period of October I, 2000 through  December 3 1, 2000,  the amount that
         would have been due for this period will be canceled.

         2. The following Section 14(h) is amended to read in its entirety:
         "h)  Notwithstanding the Company's right to terminate this Agreement as
         provided  herein,  the Company  shall have the right to terminate  this
         Agreement in the event any one of the following events occur:
                  (i) In the event there are no new L.A.  GEAR branded  footwear
                  sales by  Licensee of either  domestic or imported  product in
                  the  Territory  by March I, 2001;  or (ii) In the event actual
                  royalties  paid by  Licensee  from  December  1, 2000  through
                  November  30, 2001 are less than  US$100,000;  or (iii) In the
                  event actual  royalties paid by Licensee from December I, 2001
                  through November 30, 2002 are less than US $ 150,000."
         3.  This Amendment may be signed in  counterparts,  each of which shall
             be  deemed an  original.  For the  purposes  of this  Amendment,  a
             facsimile signature shall be deemed an original signature.
         4. All other terms and conditions of the Agreement shall remain in full
         force and effect. IN WITNESS WHEREOF,  the parties hereto have executed
         this Amendment as of the date and year first written above.

                  "Licensee"                                  "Company"

                  West Coast Sports S.A. DE C.V.    L.A. Gear, Inc.


                  By /s/ Carol Kolozs               By: /s/ William Sherman
                  --------------------           ---------------------------
                  Title: President                  Title: Vice-President




         LA GEAR

         Via Facsimilie: 011-525-260- 8408

         November 16, 1999
         Mr. Carol Kolozs
         West Coast Sports
         Lago Chalco 156
         Col. Anahuac
         11320 Mexico, D.F.
         Re: Amendment to Manufacturing, Distribution & License Agreement
         Dear Carol:
                  Reference is made to that certain Manufacturing,  Distribution
         & License  Agreement  dated as of March 12,  1998 by and  between  L.A.
         Gear,  Inc.  (the  "Company")  and  West  Coast  Sports  S.A.  de  C.V.
         ("Licensee"), as amended August 1, 1998, November 19,1998 and Apri1 29,
         1999 (the "Agreement"), This amendment to the Agreement formalizes your
         verbal agreement with David Gatto regarding  certain  provisions of the
         Agreement.  References to Section  numbers refer to the Section numbers
         in the Agreement.

                  The  Company  and  Licensee  agree to amend the  Agreement  as
follows:

          1. Section 5(e) is amended to delete any  requirement  for Licensee to
     pay the Company  Guaranteed  Minimum  Royalties through the Initial Term of
     the Agreement.
         2.       A new Section 5(f) is added to the Agreement:

          "f) The Company  agrees  that  during the period July I, 1999  through
     September 30, 2000, for Net Sales in excess of US  $2,000,000,  the Royalty
     Rate shall be 2%."

          3. Section 6(a) of the Agreement is amended to state in its entirety:

                  "a) Beginning with Licensee's  November 1999 sales,  royalties
         shall be paid to the  Company  in  monthly  installments.  The  monthly
         installments  shall  be due to  the  Company  within  sixty  (60)  days
         following  the end of the  sales  month  and  shall be  deemed  late if
         payment is not received on or before ninety (90) days following the end
         of the sales month.  For example,  a royalty  payment for November 1999
         sales  shall be due on February 1, 2000 and shall be deemed late if not
         paid on or before February 29, 2000.
                  In  addition,  with regard to past  royalty  payments  due the
         Company,  Licensee  agrees to pay the  Company  US $30,000 on or before
         December 15, 1999. Such payments may be made in several  payments or by
         a lump sum  payment so long as the funds are  received  by the  Company
         before December 15,1999.
         4.        The following sentence shall be added to Section 10(c):
                  "Licensee  agrees to provide to the Company  visual or written
         proof that  Licensee has expended not less that one percent (1%) of Net
         Sales for the Contract Year; such proof may be through  presentation of
         photo shoots for the Licensed  Articles,  point of sale  materials  and
         fixtures." 5. The following Section 14(h) is added to the Agreement:
                  "h  Notwithstanding  the  Company's  right to  terminate  this
         Agreement  as  provided  herein,  the  Company  shall have the right to
         terminate  this  Agreement  in the event  either  of the two  following
         events occur:
                               (i) In the  event  there  are  no new  L.A.  Gear
                               branded  footwear  sales by  Licensee  of  either
                               domestic or imported  product in the Territory by
                               May 1,2000; or (ii) In the event actual royalties
                               paid by  Licensee  from the date  hereof  through
                               November  30, 2000 are less than US  $75,000;  or
                               (iii)  In the  event  actual  royalties  paid  by
                               Licensee from  December 1, 2000 through  November
                               30,2001 are less than US $100,000; or (iv) In the
                               event  actual  royalties  paid by  Licensee  from
                               December 1, 2001  through  November  30, 2002 are
                               less than US $150,000."

          6. This Amendment may be signed in  counterparts,  each of which shall
     be deemed and  original.  For the purposes of this  Amendment,  a facsimile
     signature shall be deemed an original signature.

          7. All other terms and  conditions  of the  Agreement  shall remain in
     full force and effect.  If the above  correctly  sets forth our  agreement,
     please  sign in the space  provided  below  and fax a signed  copy to me at
     310-253-7740.

         Sincerely,

         /s/ William R. Sherman
         William R. Sherman
         Vice President, General Counsel and Secretary

          Agreed and  accepted  this -day of November  1999 by West Coast Sports
     S.A. de C.V.

         /s/ Carol Kolozs
         Carol Kolozs
         Cc: David Gatto
         Garn Anderson



<PAGE>


         LA GEAR.
         Carol Koloz                                             April 29, 1999
         West Coast Sports
         Lago Chalco 156
         Col. Anahuac
         11320 Mexico D.F.C.P.;Mexico
         Dear Carol:

         As we  discussed  April  28,  in  principal  we agree to your  proposed
         payment schedule;  however,  our acceptance has a condition and several
         clarifications.

         Since it still  remains that your  ultimate  success with the L.A. GEAR
         brand  depends on  securing  adequate  financing,  our  acceptance"  is
         conditioned upon your closing your current private placement financing.
         We request  for our files,  that you  provide us a copy of your  escrow
         statement  when you  break  escrow at  whatever  level of  finding  you
         achieve.

         Also, I wish to clarify that the $100,000  minimum payment will be paid
         by our fiscal year end of November 30, 1999  according to the following
         schedule:

         $20,000 by July 15. 1999
         $20,000 by August 15. 1999
         $20.000 by September 15, 1999
         $20,000 by October 15.1999
         $20,000 by November 15, 1999
         and an additional $20,000 minimum payment by December 15. 1999.

         Furthermore,  royalties  earned,  at 15% of Net Sales for calendar year
         1999 (up to a total of $150,000), will be paid on or before January 31,
         2000, that the amount is greater than the minimums paid.

         Finally,  by  September  1,  1999,  we will  agree on how to handle the
         amount of current  minimum  royalties  that have not been paid in 1999.
         (i.e. the difference between $230.000 and what would have been paid).

         Please  acknowledge  your acceptance of these terms by dating,  signing
and returning this letter.

         Best regards,

         /s/ William R. Sherman
         William R. Sherman
         Vice President, General Counsel and Secretary

          Agreed and  accepted  this 30 day of April,  1999 by West Coast Sports
     /s/ Carol Kolozs Carol Kolozs







         SECOND AMENDMENT TO MANUFACTURING, DISTRIBUTION AND LICENSE AGREEMENT

          This  Second  Amendment  to  Manufacturing,  Distribution  and License
     Agreement  (the  "Amendment")  is made  this  19th day of  November  by and
     between L.A. Gear, Inc. (the "Company") and West Coast Sports S.A. de C. V.
     ("Licensee").

          WHEREAS,   the  parties  entered  into  that  certain   Manufacturing,
     Distribution  and License  Agreement dated as of March 12, 1998, as amended
     September 20, 1998 (the "Agreement"); and

         WHEREAS, the parties wish to amend the Agreement.
                                                          -
         NOW, THEREFORE, the parties agree as follows:

          1. The Second  Contract year and Third  Contract Year Minimum  Royalty
     referred  to in  Section  5 (e) of the  Agreement  is  amended  to  read as
     follows:

         Year                                             Minimum       Royalty
         -----------------------------------------------------------    --------
         Second Contract Year                          $ 230,000*
         Third Contract Year                           $ 230,000*

         * The Second  Contract  Year and Third  Contract  Year Minimum  Royalty
         payments shall be made in equal quarterly  installments of $57,500 each
         on or before the  following  dates in 1999 and 2000:  January 30, April
         30, June 30 and October 30.

         2. This Amendment may be signed in counterparts, each of which shall be
         deemed an  original.  For the purposes of this  Amendment,  a facsimile
         signature shall be deemed an original signature.

          3. All other terms and  conditions  of the  Agreement  shall remain in
     full force and effect

         IN WITNESS  WHEREOF,  each of the  parties  hereto have  executed  this
Amendment as of the date and year first written above.


         "LICENSE                                          "COMPANY"

         L.A. GEAR, INC.                  WEST COAST SPORTS S. A. DE C. V


         By: /s/ illegible                By:/s/ Carol Kolozs
         -----------------                ---------------------

         Title:President                  Title: _President













<PAGE>





         AMENDMENT TO MANUFACTURING, DISTRIBUTION AND LICENSE AGREEMENT

          "This Amendment to  Manufacturing.  Distribution and License Agreement
     (the '. Amendment") is made this __day of August.  1998 by and between L.A.
     Gear,  Inc.  (the  "Company}  and West Coast Sports S.A- dc C.V.  (formerly
     Africa Holding5 S.A. de C. V.)("Licensee").

          WHEREAS,   the  parties  entered  into  that  certain   Manufacturing,
     Distribution  and  License  Agreement  dated  as of  March  12,  1998  (The
     "Agreement"); and

          WHEREAS, the parties wish, to amend the Agreement. NOW, THEREFORE, the
     parties agree as follows:

          1.  License has notified the Company that it has changed its name from
     Aarica  Holdings  S.A.  de C. V. to West Coast  Sports SA. de C. V. and the
     Company acknowledges and agrees to the name change.

         2. Section 5 (e) of the Agreement is amended to read as follows:

          "e) Notwithstanding the provisions of Articles 5(b) and 5(c). Licensee
     agrees to pay the Company a guaranteed  minimum royalty with respect to the
     Footwear and Non-Footwear Licensed Articles:
<TABLE>
               <S>                               <C>                           <C>


         Year                             Minimum Cumulative           Royalty Minimum Royalty
         ----                             ------------------           ------------------------


         First Contract Year                  $50.000                         $ 50,000
         Second Contract Year                 $150,000                        $200,000
         Third Contract Year                  $150,000                        $350.000
         Fourth Contract Year                 $150,000                        $500,000
         Fifth Contract Year                  $150,000                        $650.000
</TABLE>


         In the event this Agreement is terminated on a date other than the last
         day of a Contract Year, the Minimum  Royalty shall be prorated  through
         the date  termination.  Licensee  agrees to pay the  remaining  Minimum
         Royalty of $25,000 for the first Contact Year on or before  October 31,
         1998 3. This  Amendment  may be signed in  counterparts,  each of which
         shall be deemed an  original.  For the  purpose  of this  Amendment,  a
         facsimile signature shall be deemed an original signature.

          4. All other terms and  conditions  of the  Agreement  shall remain in
     full force and effect. IN WITNESS WHEREOF,  each of the parties hereto have
     executed this Amendment as of the date and year first written above.


         "LICENSEE"                                         "COMPANY"


         WEST COAST SPORTS S.A. C. V.             L.A. GEAR INC.

         By: /s/ Carol Kolozs                 By: _/s/ illegible_________
             -----------------                 --------------------------

         Title: _President_                   Title: President___________
                 ------------                  ---------------- ---------



<PAGE>




          MANUFACTURING,  DISTRIBUTION & LICENSE  AGREEMENT  BETWEEN L. A. GEAR,
     INC. and AARICA HOLDING S.A. DE C. V. AGREEMENT, made as of the 12th day of
     March,  1998,  by and between L. A. Gear,  Inc., a California  corporation,
     having its principal place of business at 2850 Ocean Park Boulevard,  Santa
     Monica,  California  90405  ("Company") and Aarica Holding S.A. de C. V , a
     corporation  duly  registered  and  existing  under the laws and having its
     principal  office and business at Lago Chalco 156,  Col.  Anahuac,  Mexico,
     D.F.C.P. 11320 ("Licensee").


         WHEREAS,  Company is in the  business  of  manufacturing,  advertising,
         distributing and selling athletic and leisure footwear,  activewear and
         accessories  and is the  exclusive  owner of the valuable name and mark
         "L.A. GEAR" both alone and in various logo forms,  marks containing and
         consisting of the designation  "L.A." and other trademarks,  of certain
         trade  names,  and of various  patents,  logos and  designs  associated
         therewith;  and WHEREAS,  Licensee  desires to manufacture  and sell in
         Mexico on an exclusive basis,  athletic and leisure footwear  identical
         or substantially identical to the footwear,  activewear and accessories
         manufactured  by or for the Company  and sold by the Company  under the
         "L.A.  Gear" name and trademarks,  and to obtain the advisory  services
         and assistance of the Company in connection therewith.
         NOW,   THEREFORE,   in   consideration   of   the   mutual   covenants,
         representations and promises herein contained, the Company and Licensee
         agree as follows:
         1.  DEFINITIONS
         For the purposes of this  Agreement,  the following  definitions  shall
apply:
         a)  "Company  Marks"  shall  mean all logos and  trademarks,  including
         without  limitation  the name and mark "L. A. Gear",  both alone and in
         various  logo  forms  and  marks   containing  and  consisting  of  the
         designation "L.A.", names, emblems,  symbols or identifying designs now
         utilized  or which  shall be  utilized  in the future or which shall be
         utilized in the future by the Company in connection with the conduct of
         its business and the sale of its products. b) "Licensed Articles" shall
         mean the  athletic and leisure  footwear,  activewear  and  accessories
         identical  or  substantially  identical  to the  athletic  and  leisure
         footwear, activewear and accessories manufactured by or for the Company
         and sold by the  Company.  As set forth  herein,  athletic  and leisure
         footwear is sometimes  referred to as "Footwear  Licensed Articles" and
         activewear and  accessories is sometimes  referred to as  "Non-Footwear
         Licensed  Articles".  c) "Net  Sales"  shall mean the dollar  amount of
         gross sales of all Licensed  Articles  bearing any of the Company Marks
         invoiced by Licensee to its  customers for all  transactions  including
         without   limitation   all  sales  made   pursuant  to  any   bartering
         arrangements,  after deducting credits for returns, trade discounts and
         related sales taxes. d) "Territory" shall mean Mexico.
         e) "Contract Period" shall mean that period of time commencing on March
         12, 1998 and ending on December 31, 2002. f) "Contract Year" shall mean
         a period of twelve (12) successive  months  commencing on any first day
         of January  during the  Contract  Period  and  ending on  December  31;
         however,  for the purposes of this  Agreement,  "First  Contract  Year"
         shall mean March 12 through December 31, 1998.
         g)  "Contract  Year  Quarter"  shall  mean a  three  (3)  month  period
         commencing  on January 1, April,  July I and October I of any  Contract
         Year.
         2. GRANT OF LICENSE
            -----------------
         Company hereby grants to Licensee,  subject to the terms and conditions
         herein,  the exclusive right and license to utilize the "Company Marks"
         throughout the Territory  during the Contract Period in connection with
         the manufacture, advertisement, promotion, distribution and sale to the
         wholesale and retail trade of Licensed Articles.  This license does not
         authorize  and  expressly  forbids  Licensee  to  manufacture,  export,
         distribute  or sell such  Licensed  Articles  in any other  part of the
         world, unless specifically authorized by Company in writing or required
         by law. 3. USE OF COMPANY  MARKS a) Licensee  agrees to use the Company
         Marks only within the  Territory  and during the Contract  Period,  and
         only  with  respect  to  the  manufacture,   promotion,  advertisement,
         distribution  and sale of the  Licensed  Articles and only after it has
         received  the  written  approval  of the  Company  as to samples of the
         Licensed Articles intended to be manufactured and sold by Licensee, and
         as  to  the  specific  Company  Marks  Licensee  intends  to  affix  to
         particular  Licensed  Articles  and  any and all  other  marks,  names,
         lettering, words, or designs of any description Licensee intends to use
         on  or in  relation  to  the  Licensed  Articles.  Licensee  shall  not
         thereafter apply or use any new or additional marks, names,  lettering,
         words,  or designs of any description on or in relation to the Licensed
         Articles without the express prior written consent of the Company.
         b) Licensee  agrees that it will  reasonably  comply with the Company's
         standards  which may be published  from time to time by the Company and
         distributed  to  Licensee  in the  future.  c) The  license  to use the
         Company Marks is granted upon the express  condition  that all Licensed
         Articles manufactured by Licensee bearing any of the Company Marks will
         conform to the  standards  for  grade,  quality,  and style  reasonably
         established from time to time by the Company.  In the event the Company
         reasonably  changes  its  standards,  Licensee  shall have one  hundred
         eighty (180) days to comply with any new standards  established  by the
         Company.  Any  Licensed  Articles  bearing  any  of the  Company  Marks
         manufactured  by Licensee which are seconds or irregulars  shall not be
         sold by Licensee  without the prior written consent the Company,  which
         consent shall not be unreasonably withheld. d) The Company shall at any
         and all times have the right to inspect the Licensed  Articles  bearing
         any of the Company Marks  manufactured by Licensee to determine whether
         such Licensed Articles in fact conform to the established standards and
         other terms of this  Agreement.  If at any time the Company shall be of
         the opinion that  Licensed  Articles  bearing .any of the Company Marks
         manufactured by Licensee do not conform to the required  standards,  it
         may give  notice of the  deficiency  to Licensee  which shall  promptly
         thereafter  remove or cause to be removed any of the Company Marks from
         such non-conforming products, shall cease to affix the Company Marks to
         other  Licensed  Articles  which do not meet the  standards,  and shall
         cease  thereafter to  manufacture,  promote,  advertise,  distribute or
         offer for sale any such non- conforming  Licensed  Articles bearing any
         of the Company Marks.  All factories at which Licensee  desires to have
         Licensed  Articles  manufactured,  and all  agents  from whom  Licensee
         desires to import  Licensed  Articles,  shall be approved in advance in
         writing by the Company.  It is understood and specifically  agreed that
         upon termination of this Agreement,  Licensee shall  immediately  cease
         using the Company Marks in the manufacture,  promotion,  advertisement,
         sale or  distribution  of the  Licensed  Articles,  except as otherwise
         provided In this Agreement.
         4. TERM OF AGREEMENT
         Unless sooner terminated  pursuant to the provisions of this Agreement,
         this  Agreement  shall remain in effect for the Contract  Period.  This
         Agreement will automatically renew for an additional five (5) year term
         beginning  January 1, 2003 and ending  December 31, 2007 provided:  (i)
         Licensee has not breached the Agreement  during the initial term of the
         Agreement,  and (ii) Licensee  agrees to pay a minimum royalty of $200,
         000 per year  (cumulative  minimum  royalty  of$1,000,000)  during  the
         additional five year term.
         5. ROYALTIES
         a) In consideration  for the license granted to Licensee by the Company
         herein,  Licensee, for the First Contract Year, shall pay the Company a
         royalty of $ 25,000 with respect to all Footwear  Licensed Articles and
         Non-Footwear Licensed Articles sold by Licensee.  This lump sum royalty
         shall be paid by  Licensee  to  Company  within  sixty (60) days of the
         execution of this Agreement.
         b)  Beginning  with the First  Contract  Year,  Licensee  shall pay the
         Company a royalty,  less  applicable  withholding  taxes,  equal to the
         following percent of the Net Sales made by Licensee of the Footwear and
         Non-Footwear Licensed Articles (the "Earned Royalties").
         FOOTWEAR AND NON-FOOTWEAR LICENSED ARTICLES
         --------------------------------------------
         FIRST CONTRACT YEAR    4 %
         SECOND CONTRACT YEAR   4 %
         THIRD CONTRACT YEAR    4 %
         FOUR CONTRACT YEAR     4 %
         FIFTH CONTRACT YEAR    4 %
         c) In the event this  Agreement is  terminated on a date other than the
         last day of a Contract Year, the Earned  Royalties  shall be based upon
         actual Net Sales  through the date of  termination.  d) Licensee  shall
         remove the Company Marks from any defective  products which do not meet
         the Company's  standards for first or second quality merchandise and no
         royalty  shall be payable  hereunder  with  respect to the sale of such
         substandard  products.  This  requirement  to remove all Company  Marks
         shall be  operative  irrespective  of the fact  that  such  substandard
         products may be customarily sold in the Territory for the same price as
         first quality merchandise. The Company shall have the right to prohibit
         Licensee from selling such substandard products,  if, in the opinion of
         the Company,  such  products may tend to be confused by the public with
         any of the Licensed Articles  manufactured under this Agreement bearing
         Company Marks,  or which,  in the opinion of the Company,  infringes in
         any manner Company Marks. e) Notwithstanding the provisions of Articles
         5(b) and 5(c),  Licensee agrees to pay The Company a guaranteed minimum
         royalty  with  respect  to the  Footwear  and  Non-  Footwear  Licensed
         Articles:
                                    MINJMUM          CUMULATIVE
         YEAR                       ROYALTY        MINIMUM ROYALTY
         ---------------------------------------------------------------------
         FIRST CONTRACT YEAR        $75,000           $ 75,000
         SECOND CONTRACT YEAR       $120,000          $195,000
         THIRD CONTRACT YEAR        $140,000          $335,000
         FOUR CONTRACT YEAR         $150,000          $ 485,000
         FIFTH CONTRACT YEAR        $150,000          $ 635,000


         In the event this Agreement is terminated on a date other than the last
         day of a Contract Year, the Minimum Royalty shall be pro-rated  through
         the date of termination. 6. SCHEDULE OF ROYALTY PAYMENTS a) The Minimum
         Royalty  for  each  year  shall  be paid to the  Company  in  quarterly
         installments  on or before the thirtieth  (30th) day of the first month
         of each Contract Year Quarter.
         b) Licensee  shall  deliver to the  Company on or before the  fifteenth
         (15th) day  following  the  conclusion  of each Contract Year Quarter a
         complete and accurate itemized statement, certified by Licensee's chief
         fiscal   officer  as  accurate  and   complete,   stating  the  number,
         description,  gross sales price,  itemized  deductions from gross sales
         price  and net  sales  price  of the  Licensed  Articles  manufactured,
         distributed  or sold by Licensee  during the  preceding  Contract  Year
         Quarter.  Concurrently with the delivery of the itemized  statement for
         the preceding Contract Year Quarter,  Licensee shall pay the Company an
         amount  equal  to the  total  Earned  Royalties  during  the  preceding
         Contract  Year Quarter,  minus the Minimum  Royalty paid to the Company
         whether or not any  Licensed  Articles  bearing any Company  Marks have
         been sold or distributed by Licensee during the preceding Contract Year
         Quarter.  Receipt  or  acceptance  by the  Company  of  any  statements
         furnished  pursuant to this Agreement or any sums  hereunder  shall not
         preclude the Company from questioning the accuracy thereof at any time,
         and in the event that any  inconsistency  or mistake is  discovered  in
         such statement or payments, they shall be rectified immediately and the
         appropriate payments made by Licensee.
         c) Licensee  covenants  and agrees that it will keep full and  accurate
         books of accounts and records covering all business  transactions  made
         pursuant to this Agreement,  including original  invoices,  production,
         accounts  receivable and other records,  and these accounts and records
         shall at all reasonable  times be open and available to the Company and
         its representatives for inspection, examination and audit. All books of
         account and records  shall be kept  relative  to this  Agreement  for a
         period  of not less than two (2) years  after the  termination  of this
         Agreement   and   Licensee   agrees  to  allow  the   Company  and  its
         representatives to examine same at reasonable times during such period.
         In the  event  that any  inspection,  examination  or  audit  conducted
         pursuant  to  this  paragraph   discovers   errors   resulting  in  the
         underpayment  of  royalties  by Licensee to the Company of Five Percent
         (5%) or more,  all expenses of such  inspection,  examination  or audit
         (including travel and room and board) shall be paid by Licensee.
         d) In addition  to  royalties,  Licensee  shall pay the Company for all
         materials,  samples, and merchandise  furnished to Licensee pursuant to
         Article  7(a)  hereof in an amount  ~equal to the cost of such items to
         the  Company,  including  the  Company's  cost of  preparing,  packing,
         shipping and  transporting  such items.  All such purchases by Licensee
         from the Company shall be by letter of credit F.O.B.  the nearest point
         of exit, or, at the Company's sole  discretion,  by some other means of
         payment,  and payment shall be made not more than sixty (60) days after
         shipment.
         7. RESPONSIBILITY OF THE COMPANY
         In  order  to  facilitate  the  manufacture,  distribution,  promotion,
         advertisement  and sale of Licensed  Articles  by  Licensee  under this
         Agreement,  the Company shall use good faith efforts to: (a) furnish or
         cause to be furnished to Licensee such  information  and advice,  as in
         the opinion of the Company,  is necessary to implement this  Agreement.
         Such  information  and  advice  may  include,  but is not  limited  to,
         drawings  and  specifications  of  the  Licensed  Articles,  names  and
         addresses of suppliers of materials,  copies of advertisements and sale
         promotional material or such other information  reasonably necessary to
         carry out this Agreement.  Licensee shall pay the Company promptly upon
         billing for any articles supplied under this Article 7(a) in accordance
         with Article 6(d);  (b) at the Company's  discretion,  to permit one or
         more of  Licensee's  representatives  to  attend,  at  Licensee's  sole
         expense,  sales conferences or other sales events sponsored or attended
         by  Company   representatives;   (c)  make  arrangements   under  which
         representatives  of Licensee may, at their sole  expense,  visit one or
         more factories in which products  similar to the Licensed  Articles are
         being  manufactured  by or for the Company bearing the Company Marks to
         enable the  representatives to study methods of manufacture and related
         matters.  8. LICENSEE'S USE OF THE COMPANY'S  INFORMATION AND ADVICE a)
         Licensee  agrees that it will not, unless upon prior written consent of
         the  company,  use,  permit  the use  of,  release,  give or  otherwise
         distribute  or  disclose  to any third  party  any of the  information,
         advice,  reports,  instructions,  designs,  specifications,   technical
         knowledge,  methods, processes,  samples or materials ("Trade Secrets")
         furnished to it by the Company or the Company's contract  manufacturers
         or  licensees,  except  in the  manufacture,  distribution,  promotion,
         advertisement,  and sale of Licensed Articles bearing the Company Marks
         pursuant to this Agreement.
         b) All Trade  Secrets shall remain the sole property of the Company and
         shall be  deemed  to be  strictly  confidential  and  shall be  treated
         accordingly.  c) The undertakings of Licensee as to the Company's Trade
         Secrets shall not apply to information and materials which Licensee can
         demonstrate by means of documentary evidence: (i) were already known at
         or prior to the time this  Agreement  is  executed;  (ii) were known by
         Licensee  at or prior to the time this  Agreement  is  executed;  (iii)
         become  publicly known through no fault of Licensee after  execution of
         this Agreement;  or (iv) through no fault of Licensee,  are revealed to
         Licensee  by a  third  party  who is not  bound  by this  Agreement  or
         otherwise in privity with the Company as to the Trade Secrets.
         9. ASSIGNMENT OF SUBLICENSE BY LICENSEE
         None of Licensee's  rights granted by this Agreement for the use of any
         Company Marks, Trade Secrets, or other property may be assigned,  sold,
         sublicensed  or  otherwise  disposed of by  Licensee  without the prior
         written consent of the Company in each instance.
         10. LICENSE SALES PROGRAM

          a)  Licensee  shall  faithfully,  diligently  and to the  best  of its
     ability  endeavor to promote,  advertise,  market and increase the sales of
     Licensed  Articles bearing the Company Marks in the Territory.  It shall be
     the  responsibility  of Licensee  to provide  active and  continuous  sales
     representation  in the Territory by actual salesman contact with customers,
     both  existing  and   prospective.   Licensee   shall   maintain   adequate
     manufacturing,  sales and service personnel and adequate  inventory levels;
     conduct  advertising  and  promotional  programs  and  perform  such  other
     necessary  functions  to  accomplish  maximum  sales  and  distribution  of
     Licensed  Articles within the Territory.  Licensee shall not adopt,  engage
     in, permit or otherwise use any pricing  policies,  advertising  campaigns,
     merchandising  techniques or other  commercial  practices which are illegal
     under the laws of the  Territory  or which,  in the  opinion of the Company
     detract from the good will and reputation of the Company.

b)       Licensee shall  manufacture,  distribute,  promote,  advertise and sell
         Licensed  Articles  bearing the Company Marks only within the Territory
         and shall not  export or cause to be  exported  any  products  to other
         countries  without the express written  permission of the Company.  The
         restrictions  of this  paragraph  shall not apply if found  contrary to
         applicable  law or held unlawful by a court,  administrative  tribunal,
         commission,  or other authorized public  adjudicatory body of competent
         jurisdiction.


          c) During each Contract Year, Licensee shall expend reasonable sums of
     money for advertising and promoting  Licensed  Articles bearing the Company
     Marks.  Such  expenditures  shall be spread  over each  Contract  Year in a
     manner  consistent  with  advertising  practices  in this  business  in the
     Territory.   During  each  Contract  Year  the  amount  expended  for  said
     advertising  shall be not less than one percent (1 %) of Licensee's  actual
     Net Sales for the First  Contract  Year and one percent (1 %) of actual Net
     Sales for each Contract Year  thereafter.  Licensee also agrees to keep the
     Company  continually  informed as to all  advertising,  promotion and media
     programs  undertaken pursuant to this Agreement and agrees not to advertise
     or promote any of the Licensed Articles without receiving the prior written
     approval thereof from the Company, which approval shall not be unreasonably
     withheld or delayed.  In the event the  Company  has not  commented  on the
     programs after fifteen (15) days,  the programs  shall be deemed  approved.
     All advertising copy and promotional material shall prominently feature the
     Company's  logos used in accordance with the Company's  trademark  policies
     and in accordance with the Company's creative  guidelines  established from
     time to time.


d)       Licensee agrees to receive a minimum of one pair or unit sample of each
         new product  introduced by the Company.  Licensee agrees to pay for the
         cost and freight on the samples. Such samples shall be delivered by the
         Company to Licensee when available.
e)       Licensee  agrees to provide the Company,  no later than  September 1 of
         the Current Contract year for the subsequent Contract Year,  Licensee's
         sales,  marketing and media plans, including promotions and advertising
         (collectively  the"Plans")  for the subsequent  Contract year.  Company
         shall have fifteen (15) days to approve or disapprove the Plans. In the
         event the Company has not  commented  on the Plans after said fifteen (
         15) days, the Plans shall be deemed approved.


          f) Licensee  agrees to provide the Company with a quarterly  financial
     report  of  results  within  sixty  (60) days  following  the close of such
     period.  Such financial  report shall include:  sales by style by customer,
     the  selling  price net of any returns  and an  inventory  by style for all
     Licensed Articles. In addition,  Licensee shall provide Company with a copy
     of its audited  financial  statements  and all generally  available  public
     information about Licensee's-  financial standing on an annual basis within
     sixty (60) days following the end of Licensee's fiscal year.


         11. CURRENCY IN WHICH PAYMENTS ARE TO BE MADE
             -----------------------------------------

          a) All  payments  to the  Company  required  to be  made  by  Licensee
     pursuant to this  Agreement  shall be made in currency of the United States
     of America ("U.S. Funds"), payable by wire transfer to the L. A. Gear, Inc.
     account with Bank of America,  Los Angeles,  Account Number 1235202240,  or
     such other  account as may be  designated by the Company from time to time.
     If  required,  Licensee  agrees  it  will  seek  the  necessary  government
     approvals to make such payments to the Company in U.S. Funds.


         b) If the actions of any  government  or public body make it impossible
         for Licensee to pay the Company in U.S.  Funds,  the Company shall have
         the following options:
(i)   Terminate the Agreement with thirty (30) days written notice to Licensee;
         (ii)  Require  Licensee  to make  payment in the  currency of any other
         country selected by the Company by whose currency  Licensee may legally
         pay;  (iii)  Require  Licensee to deposit such payment to the Company's
         account in a bank selected by the Company in or outside the Territory.
         If the Company selects option (i) it may nevertheless  require Licensee
         to pay any sums then due or to become due in  accordance  with  options
         (ii) or (iii).  In the event the  Company  selects  option (i) or (ii),
         Licensee shall pay the cost of any conversion of a foreign  currency to
         U.S. Funds 12. OWNERSHIP OF COMPANY PATENTS.  TRADEMARKS AND DESIGNS a)
         Licensee  acknowledges  that the Company is the exclusive  owner of the
         Company Marks and Company  patents,  and covenants  that neither it nor
         any person  acting for or under it will ever contest such  ownership or
         the exclusive  rights of the Company with respect  thereto  anywhere in
         the world.  The restrictions of this paragraph shall not apply if found
         contrary to applicable law or held unlawful by a court,  administrative
         tribunal,  commission,  or other authorized public adjudicatory body of
         competent jurisdiction.
         b) Nothing in this Agreement shall constitute a warranty by the Company
         that there are currently no  infringements  of any of the Company Marks
         or Company  patents within the Territory.  Licensee  agrees that during
         the Contract Period it will diligently  investigate any infringement or
         threatened infringement of the Company patents,  trademarks,  logos, or
         trade names  within the  Territory  and shall notify the Company of any
         such  infringement  or  threatened   infringement  or  of  any  act  or
         threatened  act of  unfair  competition  which  may come to  Licensee's
         attention  and  Licensee  shall use its best  efforts to  prevent  such
         infringement or act of unfair  competition.  Should  litigation  become
         necessary to protect the Company's  interests in this regard,  Licensee
         shall cooperate fully with the Company to the extent requested. Company
         will  reimburse  Licensee  for  all  reasonable  expenses  incurred  in
         connection therewith. The restriction of this paragraph shall not apply
         if  found  contrary  to  applicable  law or held  unlawful  by a court,
         administrative  tribunal,   commission,   or  other  authorized  public
         adjudicatory body of competent jurisdiction.
         13. TERRITORIAL REGISTRATION OF THE COMP ANY TRADEMARKS
             ----------------------------------------------------
         The Company has registered,  or applied for registration of, certain of
         its trademarks in the  Territory.  In this regard,  Licensee  agrees to
         take all proper  actions  requested  by the Company to  facilitate  and
         expedite  the  registrations,  provided  that  the  Company  reimburses
         Licensee for all reasonable expenses incurred in connection  therewith.
         If the Company is prevented  from  registering  its  trademarks  in the
         Territory  by  virtue  of the  existence  of this  Agreement,  Licensee
         agrees, at the request of the Company,  to seek registration in its own
         name and convey to the  Company  all right,  title and  interest to the
         trademarks which Licensee may thereby obtain, provided that the Company
         shall reimburse Licensee for all reasonable expenses incurred. Licensee
         recognizes  and agrees that the Company  makes no  warranties  of quiet
         enjoyment regarding use of the Company Marks in the Territory.
         14. RIGHT OF TERMINATION
         In the event of the occurrence of anyone or more of the following,  the
         Company shall have the right to immediately terminate this Agreement by
         written  notice thereof to the other party but such  termination  shall
         not  prejudice  the rights of the  aggrieved  party to monies due or to
         become due under this Agreement.
         a)  insolvency,  bankruptcy,  reorganization,  suspension  of payments,
         assignment  for the benefit of  creditors,  appointment  of a receiver,
         institution of any proceedings by or against  Licensee under bankruptcy
         laws or other similar laws;
          b) liquidation or dissolution of either party or discontinuance of the
         active  operation of the enterprise of either party; c) the transfer or
         sale of all or a  majority  of the  voting  stock  or  other  equitable
         ownership of Licensee without the written consent of the Company, which
         consent shall not be unreasonably  withheld;  d) failure of Licensee to
         pay any royalty or other payment due the Company  under this  Agreement
         for a period of thirty (30) days from the date such  payment is due and
         payable;

          e) the failure of Licensee  to comply with each of the  following  for
     each Contract Year:

         (i) Minimum Royalty commitment; or
         (ii) Provide Contract Year Quarter financial data.
         f) the manufacture, distribution,  advertisement or sale by Licensee in
         the  Territory  of  athletic  and.  leisure  footwear,   activewear  or
         accessories  other than  pursuant  to this  License  Agreement  and not
         previously approved in writing by the Company, which approval shall not
         be unreasonably  withheld.  The subsection  shall not be interpreted to
         mean that Licensee may not conduct its existing  businesses through its
         wholly owned  subsidiaries- g) the breach of or failure by either party
         to perform or observe  any of the other  terms and  conditions  of this
         Agreement,  provided said breach or failure shall continue for a period
         of thirty (30) days after written  notice thereof from the other party.
         15.  EFFECT  OF  TERMINATION  OR  EXPIRATION  a)  From  and  after  the
         termination  of this  Agreement,  whether by expiration of the Contract
         Period or  termination  pursuant to Article 14 or for any other reason,
         any and all rights acquired by Licensee to the use of the Company Marks
         and Trade Secrets, shall terminate and cease absolutely,  and except as
         provided  in  subsection  (b)  of  this  Article,  Licensee  shall  not
         thereafter  manufacture,  advertise,  promote,  distribute  or sell any
         Licensed  Articles  in the  Territory  in  connection  with the Company
         Marks.  Licensee's  obligations  regarding use and dissemination of the
         Company's   Trade  Secrets  shall  survive  the   termination  of  this
         Agreement.  b) Any Licensed Articles  manufactured or in the process of
         manufacture  by Licensee prior to the expiration or termination of this
         Agreement and as to which any of the Company Marks has been attached or
         affixed may be sold by Licensee, but only during the one hundred-eighty
         (180) day period next following the date of expiration or  termination,
         subject to the  condition  that  Licensee pay to the Company all Earned
         Royalties and other  payments due and following the Company at the date
         of expiration or termination and to the further condition that Licensee
         continues to pay to the Company all Earned  Royalties  accruing  during
         such one  hundred-eighty  (180)  day  period  within  thirty  (30) days
         following the end of each calendar month and delivers to the Company at
         the time of such payment an itemized  statement in the form required by
         Article 6(b) hereof for each such calendar month.
                  Notwithstanding  anything to the  contrary  contained  herein,
         Licensee  shall not  manufacture,  distribute,  sell or  dispose of any
         articles licensed hereunder after the expiration or earlier termination
         of this  Agreement if Licensee  departs from the standards  required by
         the  Company  in  accordance  with  this  Agreement.   Licensee  hereby
         covenants that it will, upon  termination of this  agreement,  promptly
         assign and transfer to the Company any property  rights which  Licensee
         may have  acquired in the Company Marks and shall destroy or return all
         drawings, molds, dies and similar equipment or materials in its control
         or possession  used for the production or reproduction or imprinting of
         the Company  Marks on the Licensed  Articles and furnish to the Company
         satisfactory  evidence of such return or destruction.  Licensee agrees,
         subsequent  to the  expiration  of  this  Agreement,  not to  register,
         attempt to register  or use,  except as  provided  herein,  any Company
         Marks and trademarks that are confusingly similar to the Company Marks.
         16. FINAL  STATEMENT  UPON  TERMINATION OR EXPIRATION a) Licensee shall
         deliver, as soon as practicable,  to the Company a statement indicating
         the number and  description  of  Licensed  Articles  bearing any of the
         Company Marks under this Agreement on hand or in process of manufacture
         as of (i)  sixty  (60) days  prior to the  expiration  of the  Contract
         Period;  and (ii) sixty (60) days after receipt from the Company of any
         notice  terminating the license  granted  hereunder or, in the event no
         such notice is required,  sixty (60) days after the  occurrence  of any
         event which terminated such license.
         b) The  Company  shall  have the  option,  at its  expense,  to have an
         independent  certified public accountant  conduct a physical  inventory
         during  reasonable  business  hours  of  Licensee's  manufacturing  and
         distribution  facilities in order to ascertain or verify such inventory
         or statement.  In the event  Licensee  refuses to permit the Company to
         conduct  such  physical  inventory,  Licensee  shall  forfeit its right
         hereunder to dispose of such inventory.  In addition to such forfeiture
         the Company shall have recourse to all other legal  remedies  available
         to it. 17 COMPANY  RIGHT OF  INSPECTION  OF LICENSEE  FACTORIES  a) The
         Company  shall  have  the  right,  at its  own  expense,  to  have  its
         representatives  from time to time, during  reasonable  business hours,
         visit and  inspect  the  factory  or  factories  of  Licensee  in which
         Licensed Articles bearing any of the Company Marks are manufactured for
         the  purpose  of  observing  the  method  of  manufacture,  quality  of
         materials used, products produced, and any other matters relevant under
         this Agreement.
         b) Licensee  shall  reimburse the Company for any expense for travel to
         the Territory or elsewhere which may be incurred by  representatives of
         the Company at the request of Licensee and such payments  shall be made
         by Licensee to the Company in U.S.  Funds within  thirty (30) days from
         billing thereof.
         18. AGREEMENT COUNTERFEIT UNFAIR COMPETITION
             -----------------------------------------
         Licensee agrees to notify the Company, in writing, of any infringements
         or counterfeits of, or any unfair competition  affecting the trademarks
         licensed  hereunder  immediately upon gaining  knowledge thereof and to
         cooperate  fully in any action  thereon which the Company,  in its sole
         discretion,  deem appropriate.  Licensee shall, however, be entitled to
         take or institute any action thereon, either by way of informal protest
         or legal,  equitable or criminal proceedings,  with the express written
         approval  of the  Company,  which  approval  shall not be  unreasonably
         withheld,  but Licensee  shall not be entitled to call upon the Company
         to take action  thereof;  all such matters shall be entirety within the
         discretion of the Company.
         19 EMNIFICATION FOR PRODUCTS LIABILITY CLAIMS
         a) Licensee  agrees to  indemnify  the Company from any and all claims,
         demands or judgments,  including  incidental  costs and attorneys' fees
         incurred in  connection  therewith  against the Company for injuries or
         damages to purchasers or users of the Licensed Articles manufactured by
         Licensee.  The  foregoing  indemnification  of the  Company by Licensee
         shall  extend to any and all  products  liability  claims  arising as a
         result of the Company's  ownership and control of the trademarks  under
         which the  Licensed  Articles  are  manufactured  and sold by Licensee,
         including,  but not limited to, claims arising out of breach of implied
         or express warranties, strict tort liability or negligence.
         b) Licensee shall indemnify,  defend and hold Company harmless from any
         and all claims,  demands or judgments,  including  incidental costs and
         attorney's fees, incurred in connection with the use by Licensee of any
         marks, names, lettering, words, designs of any description,  other than
         the Company  Marks used by  Licensee on or in relation to the  Licensed
         Articles.
         c) Licensee shall,  at its own cost,  defend against any claims brought
         or actions  filed  against the Company on a products  liability  theory
         whether such claims or actions are rightfully or wrongfully  brought or
         filed, and the company shall execute all papers necessary in connection
         with such suit and shall testify in any such suit whenever  required to
         do so by Licensee all, however, at the expense of Licensee with respect
         to travel and similar out-of-pocket disbursements. d) The Company shall
         promptly  give  written  notice to Licensee  of any claims  against the
         Company with respect to the subject of indemnity contained herein.
         e) Licensee  agrees that should  insurance be required to be maintained
         within ~ the Territory, it shall comply with such laws and regulations.
         20. NOTICES
         Any written notice  authorized or required by this  agreement  shall be
         deemed to be duly given when sent by registered mail,  postage prepaid,
         or by express  mail or courier  service,  addressed to one party or the
         other,  as the case may be,  as stated in this  Article  unless  either
         party shall  previously have given to the other party written notice of
         a change of such address.

         COMPANY                                        LICENSEE

         L. A. Gear, Inc.                     Aarica Holding S.A. de C. v.
                                              Lago Chalco 156 Col. Anahuac
         2850 Ocean Park Boulevard
         3rd Floor
         Santa Monica, California 90405       Mexico, D.F.C.P. 11320
         ATTN: CEO                            ATTN: Carol Kolozs


         21. NO JOINT VENTURE
             -----------------
         Nothing  contained  herein  shall  be  construed  as  creating  a joint
         venture,   partnership,   agency,   employment  relationship  or  other
         enterprise  between the parties and neither  party shall have the power
         to obligate or bind the other in any manner whatsoever.
         22. APPLICABLE LAW
             ---------------
         The parties agree that the State of California  U.S.A.  law governs the
         provisions  and  interpretation  of this Agreement and that the English
         language version thereof shall be the controlling document.
         23  ARBITRATION
         The parties  shall  attempt to settle all  controversies  and  disputes
         arising  hereunder  amicably,  promptly and fairly.  Any controversy or
         claim  arising  out of our  relating  directly  or  indirectly  to this
         Agreement,  including but not limited to transactions pursuant thereto,
         rights and  obligations  of the  parties  thereunder,  the  capacity or
         authority of the parties  thereto,  the  performance or breach thereof,
         and the  termination,  renewal or non-renewal  thereof,  not capable of
         satisfactory  amicable resolution within thirty (30) days after written
         notice sent by one party to the other  setting  forth with  specificity
         any such  controversy  or claim,  shall be  settled by  arbitration  in
         accordance with the Rules of the American Arbitration Association.  The
         award shall be made by panel of three (3) arbitrators.  It is expressly
         agreed by the parties that arbitration  shall be held in the offices of
         the  American  Arbitration  Association,  in  Los  Angeles,  California
         U.S.A.,.  or such other locations within the State of California as the
         American Arbitration  Association may direct. Such arbitration shall be
         conducted in the English  language and the arbitrators  shall apply the
         laws of the State of California.  The  institution  of any  arbitration
         proceeding  hereunder  shall not relieve the Licensee of its obligation
         to  make  payments   accrued   hereunder  to  the  Company  during  the
         continuance of such proceeding.  The decision by the arbitrators  shall
         be binding  and  conclusive  upon the  parties,  their  successors  and
         assigns  and they shall  comply with such  decision in good faith,  and
         each party hereby submits itself to the  jurisdiction  of the courts of
         the place  where  the  arbitration  is held,  but only for the entry of
         judgment  with  respect to the decision of the  arbitrators  hereunder.
         Notwithstanding  the foregoing,  judgment upon the award may be entered
         in any court  where the  arbitration  takes  place,  or any other court
         having jurisdiction over the losing party.
         24. SIGNIFICANCE OF HEADINGS
             -------------------------
         Paragraph  headings  contained  herein are  solely  for the  purpose in
         aiding in speedy location of subject matter and are not in any sense to
         be given weight tin the construction of the Agreement.
         25. ASSIGNMENT NO W AIVER
             ----------------------
         This Agreement and any rights herein granted shall inure to the benefit
         of  and be  binding  upon  the  parties  hereto  and  their  respective
         successors or assigns, provided,  however, that this Agreement shall be
         freely   assignable   by  the  Company  but  shall  not  be   assigned,
         sublicensed,  or encumbered by Licensee  without the written consent of
         the  Company.  This  Agreement  constitutes  the entire  agreement  and
         understanding  between the parties  hereto and cancels,  terminates and
         supersedes any prior agreement or understanding relating to the subject
         matter  hereof.  None of the provisions of this Agreement can be waived
         or modified except  expressly in writing signed by both parties hereto,
         and there are no  representations,  promises,  agreements,  warranties,
         covenants or undertakings  other than those contained herein. No waiver
         or modification of any right or obligation arising under this Agreement
         shall be  construed as a waiver or  modification  of any other right or
         obligation.  No waiver of any breach of this Agreement shall constitute
         a waiver of any  subsequent  breach  of the same or any  other  term or
         condition  hereof.  Notwithstanding  the above  Licensee shall have the
         right to assign this Agreement to a wholly owned subsidiary of Licensee
         upon written notice to the Company.
         26. MODIFICATIONS
         No  modification  or  cancellation  of any  term or  condition  of this
         Agreement  shall be effective  unless  executed in writing by the party
         charged therewith.
         27  FORCE MAJEURE
         If either party to this Agreement is temporarily  unable to perform its
         obligations  hereunder  because  of fire,  strike,  freight  embargoes,
         government  restrictions or regulations,  war, emergency or other cause
         reasonably beyond its control,  then no liability to the other party or
         right to terminate  shall exist for failure of the one party to perform
         during such period.
          28. GOVERNMENT APPROVAL
              --------------------
         Licensee  shall be  responsible  for obtaining all necessary  approvals
         from the  government(s)  of Territory  with respect to this  Agreement.
         Licensee  warrants  and  agrees  that it shall  comply  with all  laws,
         regulations,  and rules of relevant public authorities in the Territory
         and shall  procure and maintain all  licenses,  permits,  approvals and
         authorizations  necessary  to  lawfully  conduct  business  under  this
         Agreement.  In the event  that  Licensee  is unable to obtain  all such
         approvals within one hundred-eighty (180) days of the execution of this
         Agreement,  the Company shall have the right to terminate the Agreement
         immediately upon written notice to Licensee.
         29. SEPARABILITY OF PROVISIONS
             ---------------------------
         If any term or  condition  of this  Agreement  is held to be invalid or
         unlawful by a court of competent jurisdiction,  such a finding shall in
         no way affect the remaining  obligations  of the parties  hereunder and
         the court may  substitute a lawful term or condition  for any provision
         found  to be  unlawful,  provided  that any  such  substituted  term or
         condition shall not deny the parties the benefits arising to them under
         this Agreement.
         30. CAPACITY
         Each of the parties  represents  and warrants  that it has the capacity
         and right to enter  into this  Agreement  and that its entry  into this
         Agreement in no way violates the  provisions of any existing  Agreement
         into which it has entered.
         31. FULL NEGOTIATION
             -----------------
         The parties state and agree that this  Agreement  was fully  negotiated
         between  them  and  that  none  of  the  provisions   hereof  shall  be
         interpreted  as having been drafted by either party to the exclusion of
         the other.
         32. COUNTERPARTS
         This Agreement may be executed in two (2)  counterparts,  each of which
         will be deemed an original, but both of which together shall constitute
         one and the same instrument.
         33. STANDARD OF REVIEW
         In  reviewing  any and all  required  or  requested  documentation,  or
         requests for information,  which may be provided in accordance with the
         terms  of this  Agreement,  including  but  not  limited  to,  budgets,
         marketing  plans,  promotional  campaigns,  standards  and  procedures,
         Company and Licensee agree to use the standard of a reasonably  prudent
         businessman  in all such  requests  or  review  of  materials  provided
         pursuant to such requests or requirements.
         34. RIGHT OF FIRST REFUSAL
             -----------------------
         In the event the laws and  regulations  of the United States of America
         are changed which would permit the granting of a license by the Company
         for the  territory  of Cuba,  Licensee  shall  have the  right of first
         refusal to accept such additional territory.
         IN WITNESS  WHEREOF,  each of the  parties  hereto have  executed  this
         Agreement  as of the date and year first  above  written  in  duplicate
         originals by its duly authorized representatives.

         "LICENSEE"                                "COMPANY"

         AARICA Holdings S.A. DE C.V.              L.A. GEAR, INC.

         By: /s/ illegible_______                  By: /s/Carol Kolozs
            -------------                         -------------------
         Title: President                          Title: President
          -------------------                  -------------------