<PAGE>   1

                                 EXHIBIT 10.26


                            The Walt Disney Company
                          500 South Buena Vista Street
                            Burbank, California 91521 

October 1, 1994


Sun Sportswear, Inc.
6520 South 190th Street
Kent, WA 98032

Re:  WINNIE THE POOH

Dear Sirs/Mesdames:

We hereby agree with you as follows:

1.  MEANING OF TERMS  As used in this Agreement:

    A.  "LICENSED MATERIAL" means the graphic depictions of the following:

                 WINNIE THE POOH, CHRISTOPHER ROBIN,
                 EEYORE, KANGA, ROO, RABBIT, PIGLET,
                 OWL, GOPHER, AND TIGGER, ALL IN THE STYLE AS
                 DESIGNED BY US.

    B.  "TRADEMARKS" means "WALT DISNEY" and "DISNEY", the names for and
        representations of Licensed Material included in Subparagraph 1.A.
        above.

    C.  "ARTICLES" means the following items on or in connections with which the
        Licensed Material and/or the Trademarks are reproduced or used:

             1.    Women's basic screen printed knit tops and bottoms
                   in sizes S, M, L, XL, XXL, XXXL and Maternity
             2.    Women's basic screen printed coordinates in sizes
                   S, M, L, XL, XXL, XXXL and Maternity
             3.    Girls' basic screen printed T-shirts in sizes 4 - 16
             4.    Girls' knit basic screen printed coordinates in sizes
                   7 - 16
             5.    Boys' basic screen printed knit tops and bottoms in
                   sizes 4 - 20
             6.    Boys' basic screen printed related knit separates in
                   sizes 4 - 20
             7.    Mens' basic screen printed knit tops and bottoms in
                   sizes S, M, L, XL AND XXL

    D.  "MINIMUM PER ARTICLE ROYALTY" means for each Article identified herein
        which is sold the sum indicated herein:

               None.

    E.  PRINCIPAL TERM" means the period commencing October 1, 1994, and ending
        December 31, 1996.






                                       69
<PAGE>   2



    F.  "TERRITORY" means the United States, United States PX's wherever
        located, and United States territories and possessions, excluding Puerto
        Rico.  However, if sales are made to chain stores in the United States
        which have stores in Puerto Rico, such chain stores may supply Articles
        to such stores in Puerto Rico.

    G.  "ROYALTIES" means a copyright royalty in the amounts set forth below in
        Subparagraphs 1.G.(1)(a), (b), and (c) and Royalties shall be further
        governed by the provisions contained in Subparagraphs 1.G.(2)-(5):

          (1)(a) ten percent (10%) of your Net Invoiced Billings to authorized
                 retailers for Articles shipped by you from a location in the
                 Territory for delivery to a customer located in the Territory
                 ("F.O.B. In Sales"); or

             (b) fourteen percent (14%) of your Net Invoiced Billings to
                 authorized retailers when your customer located in the
                 Territory bears the costs (e.g., shipping, duties, and the
                 like) of obtaining delivery in the Territory of Articles
                 manufactured outside the Territory ("F.O.B. Out Sales"); or

             (c) if a Minimum Per Article Royalty has been specified in
                 Subparagraph 1.D. above, and it would result in a higher
                 royalty to be paid for the Articles, you agree to pay the
                 higher royalty amount.

          (2) The sums which we are paid as Royalties on any sales to
              Affiliates shall be no less than the sums paid on sales to
              customers not affiliated with you, and if such Affiliate is a
              reseller of the Articles, the sale to such customer shall not be
              counted as a sale for Royalty calculation purposes; in such case,
              the relevant sale for Royalty calculation purposes shall be that
              of such Affiliate.

          (3) All sales of Articles shipped to a customer outside the
              Territory pursuant to a distribution permission shall bear a
              Royalty at the rate for F.O.B. Out Sales.

          (4) Royalties payable shall be not less for each Article sold than
              the Minimum Per Article Royalty, if such a Royalty has been
              specified in Subparagraph 1.D.  No Royalties are payable on the
              mere manufacture of Articles.

          (5) The full Royalty percentage shall be payable on close-out or
              other deep discount sales of Articles, including sales to
              employees, except that no Royalty shall be payable on Articles
              sold with our written permission at or below your acquisition cost
              or your cost of manufacture, excluding overheads.






                                       70
<PAGE>   3




    H.  "NET INVOICED BILLINGS" means the following:

        (1)      actual invoiced billings (i.e., sales quantity multiplied by
                 your selling price) for Articles sold, and all other receivable
                 of any kind whatsoever, received in payment for the Articles,
                 whether received by you or any parent, subsidiary or affiliate
                 of yours, except as provided in Subparagraphs 1.G.(2), and
                 1.H.(2), less "Allowable Deductions" as hereinafter defined.

        (2)      The following are not part of Net Invoiced Billings:  invoiced
                 charges for transportation of Articles within the Territory
                 which are separately identified on the sales invoice, and taxes
                 on the sale.

    I.  "ALLOWABLE DEDUCTIONS" means the following:

        (1)      volume discounts and other discounts separately identified on
                 your sales invoices as being applicable to sales of Articles
                 licensed hereunder or to combined sales of such Articles and
                 other products not licensed by us, and post-invoice credits
                 granted and properly documented as applicable to sales of
                 Articles licensed hereunder or to combined sales of such
                 Articles and other products not licensed by us; in the event
                 that a post- invoice credit is issued for combined sales of
                 Articles and other products not licensed by us, and you cannot
                 document the portion of the credit applicable to the Articles,
                 you may apply only a pro rata portion of the credit to the
                 Articles.

        (2)      The following are not Allowable Deductions, whether granted on
                 sales invoices or as post-invoice credits:  cash discounts
                 granted as terms of payment; early payment discounts;
                 allowances or discounts related to advertising; mark down
                 allowances; costs incurred in manufacturing, importing, selling
                 or advertising Articles; freight costs incorporated in the
                 selling price; and uncollectible accounts.

    J.  "ROYALTY PAYMENT PERIOD" means each calendar quarterly period during the
        Principal Term and during any other term.

    K.  "ADVANCE" means the following sum(s) payable by the following date(s) as
        an advance on Royalties to accrue in the following period(s):

                 $40,000.00 payable upon your signing of this Agreement for the
                 period commencing October 1, 1994, and ending December 31,
                 1996.

    L.  "GUARANTEE" means the following sum(s) which you guarantee to pay as
        minimum Royalties on your cumulative sales in the following period(s):

                 $200,000.00 for the period commencing October 1, 1994, and
                 ending December 31, 1996.






                                       71
<PAGE>   4




M.  "SAMPLES" means six (6) samples of each stock keeping unit ("SKU") of
    each Article, from the first production run of each supplier of each SKU
    of each Article.

N.  "PROMOTION COMMITMENT" means the following sum(s) which you agree
    to spend in the following way(s):

             None.

O.  "MARKETING DATE" means the following date(s) by which the following
    Article(s) shall be available for purchase by the public at retail outlets:

             By January 1, 1995, for all Articles.

P.  "AFFILIATE" means any corporation or other entity which directly or
    indirectly controls, is controlled by or is under common control with
    you. "Control" of an entity shall mean possession, directly or
    indirectly, of power to direct or cause the direction of management or
    policies of such entity, whether through ownership of voting securities,
    by contract or otherwise.

2.  RIGHTS GRANTED

    A.       In consideration for your promise to pay and your payment of all
             Royalties, Advances and Guarantees required hereunder, we grant
             you the non-exclusive right, during the Principal Term and any
             extension thereof, and only within the Territory, to reproduce the
             Licensed Material only on or in connection with the Articles, to
             use the Trademarks, but only such Trademarks and uses thereof as
             may be approved when the Articles are approved and only on or in
             connection with the Articles, and to manufacture, distribute for
             sale and sell (other than by direct marketing methods, including
             buy not limited to direct mail and door-to-door solicitation) the
             Articles only to mass market retailers (e.g., KMart, J.C. Penney,
             Co., Inc., Sears, Roebuck and Co., and Target) in the Territory.
             You will not sell the Articles to other retailers for resale to
             the public in the Territory or to wholesalers.  If there is a
             questions as to whether a particular customer falls within the
             category of a mass market retailer, our determination shall be
             binding.  If you wish to sell the Articles to wholesalers or
             distributors for resale to retailers, you must notify us and
             negotiate the applicable royalty rate for such sales, which you
             acknowledge shall be a higher royalty rate than the rate set forth
             in Subparagraphs 1.G.(1)(a) and (b) for sales to retailers.

    B.       Unless we consent in writing, you shall not sell or otherwise
             provide Articles for use as premiums (including those in
             purchase-with-purchase promotions), promotions, give-aways,
             fund-raisers, or entries in sweepstakes, or to customers for
             resale by direct mail or other direct marketing methods,
             including, without limitation, home shopping television programs,
             or to customers for inclusion in another product, unless such
             product has been licensed by us.  However, nothing






                                       72
<PAGE>   5



             contained herein shall preclude you from soliciting orders by mail
             from mass market retailers, nor from selling to mass market
             retailers which sell predominantly at retail, but which include
             the Articles in their mail order catalogs or otherwise sell
             Articles by direct marketing methods as well as at retail.  If you
             wish to sell the Articles to other customers  for resale through
             mail order catalogs, you must obtain our prior written consent in
             each instance.

    C.       Unless we consent in writing, you shall not give away or donate
             Articles, except minor quantities of samples, not for onward
             distribution, to your accounts or other persons for the purpose of
             promoting Article sales.

    D.       Nothing contained herein shall preclude you from selling Articles
             to us or to any subsidiary of ours, or to your or our employees,
             subject to the payment to us of Royalties on such sales.

    E.       We further grant you the right to reproduce the Licensed Material
             and to use the Trademarks, only within the Territory, on
             containers, packaging and display material for the Articles, and
             in advertising for the Articles.

    F.       Nothing contained in this Agreement shall be deemed to imply any
             restriction on your freedom and that of your customers to sell the
             Articles at such prices as you or they shall determine.

    G.       You recognize and acknowledge the vital importance to us of the
             characters and other proprietary material we own and create, and
             the association of the Disney name with them.  In order to prevent
             the denigration of our products and the value of their association
             with the Disney name, and in order to ensure the dedication of
             your best efforts to preserve and maintain that value, you agree
             that, during the Principal Term and any extension hereof, you will
             not manufacture or distribute any merchandise embodying or bearing
             any artwork or other representation which we determine, in our
             reasonable discretion, is confusingly similar to our Disney
             characters or other proprietary material.

3.  ADVANCE

    A.       You agree to pay the Advance, which shall be on account of
             Royalties to accrue during the Principal Term only, and only with
             respect to sales in the Territory; provided, however, that if any
             part of the Advance is specified hereinabove as applying to any
             period less than the Principal Term, such part shall be on account
             of Royalties to accrue during such lesser period only.  If said
             Royalties should be less than the Advance, no part of the Advance
             shall be repayable.

    B.       Royalties accruing during any sell-off period or extension of the
             Principal Term shall not be offset against the Advance unless
             otherwise agreed in writing.  Royalties accruing during any
             extension of the






                                       73
<PAGE>   6



             Principal Term or any other term shall be offset only against an
             advance paid with respect to such extended term.

    C.       In no event shall Royalties accruing by reason of any sales to us
             or a subsidiary of ours or by reason of sales outside the
             Territory pursuant to a distribution permission be offset against
             the Advance or any subsequent advance.

4.  GUARANTEE

    A.       You shall, with your statement for each Royalty Payment Period
             ending on a date indicated in Subparagraph 1.L. hereof defining
             "Guarantee," or upon termination if the Agreement is terminated
             prior to the end of the Principal Term, pay us the amount, if any,
             by which cumulative Royalties paid with respect to sales in the
             Territory during any period or periods covered by the Guarantee
             provision, or any Guarantee provision contained in any agreement
             extending the term hereof, fall short of the amount of the
             Guarantee for such period.

    B.       Advances applicable to Royalties due on sales in the period to
             which the Guarantee relates apply towards meeting the Guarantee.

    C.       In no event shall Royalties paid with respect of sales to us or to
             any subsidiary or affiliate of ours, or with respect to sales
             outside the Territory pursuant to a distribution permission, apply
             towards the meeting of the Guarantee or any subsequent guarantee.

5.  PRE-PRODUCTION APPROVALS

    A.       As early as possible, and in any case before commercial production
             of any Article, you shall submit to us for our review and written
             approval (to utilize such materials in preparing a pre-production
             sample) all concepts, all preliminary and proposed final artwork,
             and all three-dimensional models which are to appear on or in the
             Article.  Thereafter, you shall submit to us for our written
             approval a pre-production sample of each Article.  We shall
             endeavor to respond to such requests within a reasonable time, but
             such approvals should be sought as early as possible in case of
             delays.  In addition to the foregoing, as early as possible, and
             in any case no later than sixty (60) days following written
             conceptual approval, you shall supply to us for our use for
             internal purposes, a mock-up, prototype or pre-production sample
             of each style of each Article on or in connection with which the
             Licensed Material is used.  You acknowledge that we may not
             approve concepts or artwork submitted near the end of the
             Principal Term.

    B.       Approval or disapproval shall lie solely in our discretion, and
             any Article not so approved in writing shall be deemed unlicensed
             and shall not be manufactured or sold.  If any unapproved Article
             is being sold, we may, together with other remedies available to
             us, including but not limited to, immediate termination of this
             Agreement, by written notice require such Article to be
             immediately withdrawn from the market.  Any






                                       74
<PAGE>   7



             modification of an Article, including, but not limited to, change
             of materials, color, design or size of the representation of
             Licensed Material must be submitted in advance for our written
             approval as if it were a new Article.  Approval of an Article
             which uses particular artwork does not imply approval of such
             artwork for use with a different Article.  The fact that artwork
             has been taken from a Disney publication or a previously approved
             Article does not mean that its use will necessarily be approved in
             connection with an Article licensed hereunder.

    C.       If you submit for approval artwork from an article or book
             manufactured or published by another licensee of ours or of any
             subsidiary of ours, you must advise us in writing of the source of
             such artwork.  If you fail to do so, any approval which we may
             give for use by you of such artwork may be withdrawn by giving you
             written notice thereof, and you may be required by us not to sell
             Articles using such artwork.

    D.       Notwithstanding the above, as we rely primarily on you for the
             consistent quality and safety of the Articles and their compliance
             with applicable laws and standards, we will not unreasonably
             object to any change in the design of an Article or in the
             materials used in the manufacture of the Article or in the process
             of manufacturing the Articles which you advise us in writing is
             intended to make the Article safer or more durable.

    E.       If we have supplied you with forms for use in applying for
             approval of artwork, models, pre-production and production samples
             of Articles, you shall use such forms when submitting anything for
             our approval.

6.  APPROVAL OF PRODUCTION SAMPLES

    A.       Before shipping an Article to any customer, you agree to furnish
             to us, from the first production run of each supplier of each of
             the Articles, for our approval of all aspects of the Article in
             question, the number of Samples with packaging which is
             hereinabove set forth, which shall conform to the approved
             artwork, three-dimensional models and pre-production sample.
             Approval or disapproval of the artwork as it appears on the
             Article, as well as of the quality of the Article, shall lie in
             our sole discretion and may, among other things, be based on
             unacceptable quality of the artwork or of the Article as
             manufactured.  Any Article not so approved shall be deemed
             unlicensed, shall not be sold and, unless otherwise agreed by us
             in writing, shall be destroyed.  Such destruction shall be
             attested to in a certificate signed by one of your officers.
             Production samples of Articles for which we have approved a
             pre-production sample shall be deemed approved, unless within
             twenty (20) days of our receipt of such production sample we
             notify you to the contrary.

    B.       You agree to make available at no charge a reasonable number of
             additional samples of each Article as we may from time to time
             reasonably request for the purpose of comparison with earlier
             samples,






                                       75
<PAGE>   8


             or to test for compliance with applicable laws, regulations and
             standards, and to permit us upon reasonable request to inspect
             your manufacturing operations and testing records (and those of
             your suppliers) for the Articles.

    C.       It is specifically understood that we may disapprove an Article or
             a production run of an Article because the quality is unacceptable
             to us, and accordingly, we recommend that you submit production
             samples to us for approval before committing to a large original
             production run or to purchase a large shipment from a new
             supplier.

    D.       No modification of an approved production sample shall be made
             without our further prior written approval.  Articles being sold
             must conform in all respects to the approved production sample.
             It is understood that if in our reasonable judgment the quality of
             an Article originally approved has deteriorated in later
             production runs, or if the Article has otherwise been altered, we
             may, in addition to other remedies available to us, by written
             notice require such Article to be immediately withdrawn from the
             market.

    E.       The rights granted hereunder do not permit the sale of "seconds"
             or "irregulars".  All Articles not meeting the standard of
             approved samples shall be destroyed or all Licensed Material and
             Trademarks shall be removed or obliterated therefrom.

    F.       Notwithstanding the above, as we rely primarily on you for the
             consistent quality and safety of the Articles and their compliance
             with applicable laws and standards, we will not unreasonably
             object to any change in the design of an Article or in the
             materials used in the manufacture of the Article or in the process
             of manufacturing the Articles which you advise us in writing is
             intended to make the Article safer or more durable.

    G.       We shall have the right, by written notice to you, to require
             modification of any Article approved by us under any previous
             agreement between us pertaining to Licensed Material.  Likewise,
             if the Principal Term of this Agreement is extended by mutual
             agreement, we shall have the right, by written notice to you, to
             require modification of any Article approved by us under this
             Agreement.  It is understood that there is no obligation upon
             either party to extend the Agreement.

    H.       If we notify you of a required modification under Subparagraph
             6.G.  with respect to a particular Article, such notification
             shall advise you of the nature of the changes required, and you
             shall not accept any order for any such Article until the Article
             has been resubmitted to us with such changes and you have received
             our written approval of the Article as modified.  However, you may
             continue to distribute your inventory of the previously approved
             Articles until such inventory is exhausted (unless such Articles
             are dangerously defective, as determined by us.)

    I.       You agree to give us written notice of the first ship date for
             each Article.






                                       76
<PAGE>   9




7.  APPROVAL OF PACKAGING, PROMOTIONAL MATERIAL AND
    ADVERTISING

    A.       All containers, packaging, display material, promotional material,
             catalogs, and all advertising, including, but not limited to,
             television advertising and press releases, for Articles must be
             submitted to us and receive our written approval before use.  To
             avoid unnecessary expense if changes are required, our approval
             thereof should be procured when such is still in rough or
             storyboard format.  We shall endeavor to respond to requests for
             approval within a reasonable time.  Approval or disapproval shall
             lie in our sole discretion, and the use of unapproved containers,
             packaging, display material, promotional material, catalogs or
             advertising is prohibited.  Whenever you shall prepare catalog
             sheets or other printed matter containing illustrations of
             Articles, you will furnish to us five (5) copies thereof when they
             are published.

    B.       If we have supplied you with forms for use in applying for
             approval of artwork, models, pre-production and production samples
             of Articles, you shall use such forms when submitting anything for
             our approval.

    C.       We have designed character artwork to be used by all licensees in
             connection with the hang tags and garment labels of all
             merchandise using the Licensed Material.  We will supply you with
             reproduction artwork thereof, and you agree to use such artwork on
             the hang tags and garment labels of the Articles, which you will
             have printed and attached to each Article at your cost.  We
             recommend that you source the hang tags and garment labels from
             our authorized manufacturer of pre-approved hang tags and garment
             labels, the name of which will be provided to you upon request.
             However, you may use another manufacturer for the required hang
             tags and garment labels if the hang tags and garment labels
             manufactured are of equivalent quality and are approved by us in
             accordance with our usual approval process.

8.  ARTWORK

    You shall pay us, within thirty (30) days of receiving an invoice therefor,
    for artwork done at your request by us or third parties under contract to
    us in the development and creation of Articles, display, packaging or
    promotional material (including any artwork which in our opinion is
    necessary to modify artwork initially prepared by you and submitted to us
    for approval, subject to your prior written approval) at our then
    prevailing commercial art rates.  Estimates of artwork charges are
    available upon request.  While you are not obligated to utilize the
    services of our Art Department, you are encouraged to do so in order to
    minimize delays which may occur if outside artists do renditions of
    Licensed Material which we cannot approve and to maximize the
    attractiveness of the Articles.






                                       77
<PAGE>   10




9.  PRINT, RADIO OR TV ADVERTISING

    You will obtain all approvals necessary in connection with print,
    radio or television advertising, if any, which we may authorize.  You
    represent and warrant that all advertising and promotional materials
    shall comply with all applicable laws and regulations.  Our approval
    of copy or storyboards for such advertising will not imply a
    representation or belief by us that such copy or storyboards are
    sufficient to meet any applicable code, standard, or other obligation.
    This Agreement does not grant you any rights to use the Licensed
    Material in animation.  You may not use any animation or live action
    footage from the motion picture from which the Licensed Material comes
    without our prior written approval in each instance.  In the event we
    approve the use of film clips of the motion picture from which the
    Licensed Material comes, for use in a television commercial, you shall
    be responsible for any re-use fees which may be applicable, including
    SAG payments for talent.  No reproduction of the film clip footage
    shall be made except for inclusion, as approved by us, in such
    commercial and there shall be no modifications of the film clip
    footage.  All film clip footage shall be returned to us immediately
    after its inclusion in such commercial.  We shall have the right to
    prohibit you from advertising the Articles by means of television
    and/or billboards.  Such right shall be exercised within our sole
    discretion, including without limitation for reasons of overexposure
    of the Licensed Material.

10. LICENSEE NAME AND ADDRESS ON ARTICLES

    A.       Your name, trade name (or a trademark of yours which you have
             advised us in writing that you are using) and your address (at
             least city and state) will appear on permanently affixed labeling
             on each Article or, if the Article is sold to the public in
             packaging or a container, printed on such packaging or a container
             so that the public can identify the supplier of the Article.  On
             soft goods "permanently affixed" shall mean sewn on.  RN numbers
             do not constitute a sufficient label under this paragraph.

    B.       You shall advise us in writing of all trade names or trademarks
             you wish to use on Articles being sold under this license.  You
             may sell the Articles only under mutually agreed upon trade names
             or trademarks.

11. COMPLIANCE WITH APPROVED SAMPLES AND APPLICABLE
    LAWS AND STANDARDS

    Each Article and component thereof distributed hereunder shall be of good
    quality and free of defects in design, materials and workmanship, and shall
    comply with all applicable laws, regulations and voluntary industry
    standards and such specifications, if any, as may have been specified in
    this Agreement, and shall conform to the Sample thereof approved by us.
    Both before and after you put Articles on the market, you shall follow
    reasonable and proper procedures for testing that Articles comply with such
    laws, regulations, and standards, and shall, upon reasonable notice, permit
    our designees to inspect testing, manufacturing and quality control records
    and procedures and to test the Articles for compliance.  You shall also
    give due consideration to any







                                       78
<PAGE>   11


    recommendations of ours that Articles exceed the requirements of applicable
    laws, regulations and standards.  Articles not complying with applicable
    laws, regulations and voluntary standards shall be deemed unapproved, even
    if previously approved by us, and shall not be shipped unless and until
    they have been brought into full compliance therewith.

12. DISNEY OWNERSHIP OF ALL RIGHTS IN LICENSED MATERIAL

    You acknowledge that the copyrights and all other proprietary rights in and
    to Licensed Material are exclusively owned by and reserved to us.  You
    shall neither acquire nor assert copyright ownership or any other
    proprietary rights in Licensed Material or in any derivation, adaptation,
    variation or name thereof.  Without limiting the foregoing, you hereby
    assign to us all your worldwide right, title and interest in the Licensed
    Material and in any material objects consisting of or incorporating
    drawings, paintings, animation cels, or sculptures of Licensed Material, or
    other derivations, adaptations, compilations, collective works, variations
    or names of Licensed Material, heretofore or hereafter created by or for
    you or any parent, subsidiary or Affiliate of yours.  All such new
    materials shall be included in the definition of "Licensed Material" under
    this Agreement.  If any third party makes or has made any contribution to
    the creation of any new materials which are included in the definition of
    Licensed Material under this Paragraph 12, you agree to obtain from such
    party a full assignment of rights so that the foregoing assignment by you
    shall vest full rights to such new materials in us.  The foregoing
    assignment to us of material objects shall not include that portion of your
    displays, catalogs or promotional material not containing Licensed
    Material, or the physical items constituting the Articles, unless such
    items are in the shape of the Licensed Material.

13. COPYRIGHT NOTICE

    As a condition to the grant of rights hereunder, each Article and any other
    matter containing Licensed Material shall bear a properly located
    permanently affixed copyright notice in our name (e.g., "(C)Disney"), or
    such other notice as we may notify to you in writing.  You will comply with
    such instructions as to form, location and content of the notice as we may
    give from time to time.  You will not, without our prior written consent,
    affix to any Article or any other matter containing Licensed Material a
    copyright notice in any other name.  If through inadvertence or otherwise a
    copyright notice on any Article or other such matter should appear in your
    name or the name of a third party, you hereby agree to assign to us the
    copyright represented by any such copyright notice in your name and, upon
    request, cause the execution and delivery to us of whatever documents are
    necessary to convey to us that copyright represented by any such copyright
    notice.  If by inadvertence a proper copyright notice is omitted from any
    Article or other matter containing Licensed Material, you agree at your
    expense to use all reasonable efforts to correct the omission on all such
    Articles or other matter in process of manufacture or in distribution.  You
    agree to advise us promptly and in writing of the steps being taken to
    correct any such omission and to make the corrections on existing Articles
    which can be located.





                                       79
<PAGE>   12




14. NON-ASSOCIATION OF OTHER FANCIFUL CHARACTERS WITH
    LICENSED MATERIAL

    To preserve our identification with our characters and to avoid
    confusion of the public, you agree not to associate other characters
    (other than such as constitute a trademark of yours) or licensed
    properties with the Licensed Material or the Trademarks either on the
    Articles or in their packaging, or, without our written permission, on
    advertising, promotional or display materials.

15. ACTIVE MARKETING OF ARTICLES

    You agree to manufacture (or have manufactured for you) and offer for
    sale all the Articles and to exercise the rights granted herein.  You
    agree that by the Marketing Date applicable to a particular Article
    or, in the absence of such a date being specified in Subparagraph
    1.O., by six (6) months from the commencement of the Principal Term,
    shipments to customers of such Article will have taken place in
    sufficient time that such Article shall be available for purchase by
    the public at the retail outlets authorized pursuant to Subparagraph
    2.A.  In any case in which such sales have not taken place or when the
    Article is not then and thereafter available for purchase by the
    public, we may either invoke our remedies under Paragraph 28, or
    withdraw such Article from the list of Articles licensed in this
    Agreement without obligation to you other than to give you written
    notice thereof.

16. PROMOTION COMMITMENT

    You agree to carry out the Promotion Commitment, if any, as defined in
    Subparagraph 1.N.

17. TRADEMARK RIGHTS AND OBLIGATIONS

    A.       All uses of the Trademarks by you hereunder shall inure to our
             benefit.  You acknowledge that we are the exclusive owner of all
             the Trademarks, and of any trademark incorporating all or any part
             of a Trademark or any Licensed Material, and the trademark rights
             created by such uses.  Without limiting the foregoing, you hereby
             assign to us all the Trademarks, and any trademark incorporating
             all or any part of a Trademark or any Licensed Material, and the
             trademark rights created by such uses, together with the goodwill
             attaching to that part of the business in connection with which
             such Trademarks or trademarks are used.  You agree to execute and
             deliver to us such documents as we require to register you as a
             Registered User or Permitted User of the Trademarks or such
             trademarks and to follow our instructions for proper use thereof
             in order that protection and/or registrations for the Trademarks
             and such trademarks may be obtained or maintained.

    B.       You agree not to use any Licensed Material or Trademarks, or any
             trademark incorporating all or any part of a Trademark or of any
             Licensed Material, on any business sign, business cards,
             stationery or forms (except as licensed herein), or to use any
             Licensed Material or







                                       80
<PAGE>   13


             Trademark as the name of your business or any division thereof,
             unless otherwise agreed by us in writing.

    C.       Nothing contained herein shall prohibit you from using your own
             trademarks on the Articles or your copyright notice on the
             Articles when the Articles contain independent material which is
             your property.  Nothing contained herein is intended to give us
             any rights to, and we shall not use, any trademark, copyright or
             patent used by you in connection with the Articles which is not
             derived or adapted from Licensed Material, Trademarks, or other
             materials owned by us.

18. REGISTRATIONS

    Except with our written consent, neither you, your parent, nor any
    subsidiary or affiliate of yours will register or attempt in any country to
    register copyrights in, or to register as a trademark, service mark, design
    patent or industrial design, or business designation, any of the Licensed
    Material, Trademarks or derivations or adaptations thereof, or any word,
    symbol or design which is so similar thereto as to suggest association with
    or sponsorship by us or any subsidiary of ours.  In the event of breach of
    the foregoing, you agree, at your expense and at our request, immediately
    to terminate the unauthorized registration activity and promptly to execute
    and deliver, or cause to be delivered, to us such assignments and other
    documents as we may require to transfer to us all rights to the
    registrations, patents or applications involved.

19. UNLICENSED USE OF LICENSED MATERIALS

    A.       You agree that you will not use the Licensed Material, or the
             Trademarks, or any other material the copyright to which is owned
             by us in any way other than as herein authorized (or as is
             authorized in any other written contract in effect between us).
             In addition to any other remedy we may have, you agree that the
             profits from any use thereof on products other than the Articles
             (unless authorized by us in writing), and all profits from the use
             of any other copyrighted material of ours without written
             authorization, shall be payable to us.

    B.       You agree to give us prompt written notice of any unlicensed use
             by third parties of Licensed Material or Trademarks, and that you
             will not, without our written consent, bring or cause to be
             brought any criminal prosecution, lawsuit or administrative action
             for infringement, interference with or violation of any rights to
             Licensed Material or Trademarks.  Because of the need for and the
             high costs of an effective anti-piracy enforcement program, you
             agree to cooperate with us, and, if necessary, to be named by us
             as a sole complainant or co-complainant in any action against an
             infringer of the Licensed Material or Trademarks and,
             notwithstanding any right of yours to recover same, legal or
             otherwise, you agree to pay to us, and hereby waive all claims to,
             all damages or other monetary relief recovered in such action by
             reason of a judgment or settlement whether or not such damages or
             other monetary relief, or any part thereof, represent or are
             intended to represent injury sustained by you as a licensee
             hereunder; in any such action against an






                                       81
<PAGE>   14


             infringer, we agree to reimburse you for reasonable expenses
             incurred at our request, including reasonable attorney's fees if
             we have requested you to retain separate counsel.

20. STATEMENTS AND PAYMENTS OF ROYALTIES

    A.       You agree to furnish to us by the 30th day after each Royalty
             Payment Period a full and accurate statement showing by Article,
             with stock number and item description, the quantities, Net
             Invoiced Billings and applicable Royalty rate(s) of Articles
             invoiced during the preceding Royalty Payment Period, and the
             quantities and invoice value of Articles returned for credit or
             refund in such period.  At the same time you will pay us all
             Royalties due on billings shown by such statement.  To the extent
             that any Royalties are not paid, you authorize us to offset
             Royalties due against any sums which we or any subsidiary of ours
             may owe to you or any parent, subsidiary or Affiliate of yours.
             No deduction or withholding from Royalties payable to us shall be
             made by reason of any tax.  Any applicable tax on the manufacture,
             distribution and sale of the Articles shall be borne by you.

    B.       If we at any time so request, your statements shall be made on
             statement forms which we shall provide, and you will fully comply
             with the instructions supplied by us for completing such forms.
             Except as otherwise agreed in writing, such statements shall
             separately reflect the sales and applicable Royalties for each
             individual Article.  Apparel Articles shall be reported separately
             by size range (e.g., "boys'", "girls'", "men's", etc.).  Your
             statements shall identify for each Article the character or other
             Licensed Material used on each such Article or the motion picture
             or television series from which such character derived.  However,
             Articles which differ only in that different characters or scenes
             appear on them may be reported as a single Article if the
             characters or scenes used on such Articles are from the same
             motion picture or television series.

 C.       Your statement shall with respect to all Articles report separately:

             (1)     F.O.B. In Sales;

             (2)     F.O.B. Out Sales;

             (3)     sales of Articles outside the Territory pursuant to a
                     distribution permission (indicating the country involved);

             (4)     your sales of Articles as a supplier to any of our or our
                     Affiliates' licensees for the Articles (which sales shall
                     not generate Royalties payable to us so long as such
                     licensees are reselling the Articles and paying us
                     royalties on such resales);

             (5)     sales of Articles to us or any subsidiary of ours;

             (6)     sales of Articles to your or our employees;




                                       82
<PAGE>   15



             (7)     sales of Articles under any brand or program identified in
                     Subparagraph 1.B. hereinabove.

    D.       Sales of items licensed under contracts with us other than this
             Agreement shall not be reported on the same statement as sales of
             Articles under this Agreement.

    E.       Your statements and payments shall be delivered to The Walt Disney
             Company, P.O. Box 101947, Atlanta, Georgia 30392.  However,
             Advances should be mailed directly to the Contract Administrator
             at 500 South Buena Vista Street, Burbank, California 91521-6880.
             A copy of each statement must be sent to us at 500 South Buena
             Vista Street, Burbank, California 91521-6880, to the attention of
             the Contract Administrator, Consumer Products Division.

21. ARTICLES RETURNED FOR CREDIT OR REFUND

    Royalties reported on sales of Articles which have been returned to you for
    credit or refund and on which a refund has been made or credit memo issued
    may be credited against Royalties due.  The credit shall be taken in the
    Royalty Payment Period in which the refund is given or credit memo issued.
    Unused credits may be carried forward, but in no event shall you be
    entitled to a refund of Royalties.

22. INTEREST

    Royalties or any other payments due to us hereunder which are received
    after the due date shall bear interest at the rate of 10% per annum from
    the due date (or the maximum permissible by law if less than 10%).

23. AUDITS AND MAINTAINING RECORDS

    You agree to keep accurate records of all transactions relating to this
    Agreement and any prior agreement with us, including, without limitation,
    shipments to you of Articles and components thereof, inventory records,
    records of sales and shipments by you, and records of returns, and to
    preserve such records for the lesser of seven (7) years or two (2) years
    after the expiration or termination of this Agreement.  We or our
    representatives, shall have the right from time to time, during  your
    normal business hours, but only for the purpose of confirming your
    performance hereunder, to examine and make extracts from all such records,
    including the general ledger, invoices and any other records which we
    reasonably deem appropriate to verify the accuracy of your statements or
    your performance hereunder, including records of your parent, subsidiary
    and affiliated companies, if they are involved in activities which are the
    subject of this Agreement.  In particular, your invoices shall identify the
    Articles separately from goods which are not licensed hereunder.  If in an
    audit of your records it is determined that there is a short fall of five
    percent (5%) or more in Royalties reported for any Royalty Payment Period,
    you shall upon request from us reimburse us for the full out-of-pocket
    costs of the audit, including the






                                       83
<PAGE>   16



    costs of employee auditors calculated at $60 per hour per person for travel
    time during normal working hours and actual working time.

24. MANUFACTURE OF ARTICLES BY THIRD PARTY MANUFACTURERS

    A.       If you at any time desire to have Articles or components thereof
             containing Licensed Material manufactured by a third party, you
             must, as a condition to the continuation of this Agreement, notify
             us of the name and address of such manufacturer and the Articles
             or components involved and obtain our prior written permission to
             do so.  If we are prepared to grant permission, we will do so if:

             (1)     In the case of manufacture outside the Territory:

                     (a)      you and each of your manufacturers and any
                              submanufacturers sign a Consent/Manufacturer's
                              Agreement in a form which we will furnish to you;
                              and

                     (b)      we receive all such agreements properly signed;
                              and

             (2)     In the case of manufacture in the Territory:

                     (a)      upon our request, you cause each such
                              manufacturer to sign an agreement in a form which
                              we will furnish to you; and

                     (b)      we receive all such agreements properly signed.

(A SAMPLE OF SAID AGREEMENT FORM IS AVAILABLE ON REQUEST.)

    B.       We will not normally require agreements from suppliers of yours
             who are manufacturing in the Territory, but your purchase of
             Articles from a third party manufacturer without such agreements
             as are required hereunder being signed and delivered to us shall
             be a violation of this Agreement.  It is not our policy to reveal
             the names of your suppliers to third parties or to any division of
             ours involved with buying products, except as may be necessary to
             enforce our contract rights or protect our trademarks and
             copyrights.

    C.       If any such manufacturer utilizes Licensed Material or Trademarks
             for any unauthorized purpose, you shall cooperate fully in
             bringing such utilization to an immediate halt.  If, by reason of
             your not having supplied the above mentioned agreements to us or
             not having given us the name of any supplier, we make any
             representation or take any action and are thereby subjected to any
             penalty or expense, you will fully compensate us for any cost or
             loss we sustain.







                                       84
<PAGE>   17


25. INDEMNITY

    A.       You shall indemnify us during and after the term hereof against
             all claims, liabilities (including settlements entered into in
             good faith with your consent, not to be unreasonably withheld) and
             expenses (including reasonable attorneys' fees) arising out of
             your activities hereunder, or out of any defect (whether obvious
             or hidden and whether or not present in any sample approved by us)
             in an Article, or arising from personal injury or any infringement
             of any rights of any other person by the manufacture, sale,
             possession or use of Articles, or their failure to comply with
             applicable laws, regulations and standards.  The parties
             indemnified hereunder shall include The Walt Disney Company and
             its subsidiaries, and their officers, directors, employees and
             agents.  The indemnity shall not apply to any claim or liability
             relating to any infringement of the copyright of a third party
             caused by your utilization of the Licensed Material and the
             Trademarks in accordance with the provisions hereof.

    B.       We shall indemnify you during and after the term hereof against
             all claims, liabilities (including settlements entered into in
             good faith with our consent, not to be unreasonably withheld) and
             expenses (including reasonable attorneys' fees) arising out of any
             claim that your use of any representation of the Licensed Material
             or the Trademarks approved in accordance with the provisions of
             this Agreement infringes the copyright of any third party or
             infringes any right granted by us to such third party.  You shall
             not, however, be entitled to recover for lost profits.

    C.       Additionally, if by reason of any claims referred to in
             Subparagraph 25.B., you are precluded from selling any stock of
             Articles or utilizing any materials in your possession or which
             come into your possession by reason of any required recall, we
             shall be obligated to purchase such Articles and materials from
             you at their out-of-pocket cost to you, excluding overheads, but
             we shall have no other responsibility or liability with respect to
             such Articles or materials.

    D.       No warranty or indemnity is given with respect to any liability or
             expense arising from any claim that use of the Licensed Material
             or the Trademarks on or in connection with the Articles hereunder
             or any packaging, advertising or promotional material infringes on
             any trademark right of any third party or otherwise constitutes
             unfair competition by reason of any prior rights acquired by such
             third party other than rights acquired from us.  It is expressly
             agreed that it is your responsibility to carry out such
             investigations as you may deem appropriate to establish that
             Articles, packaging, promotional and advertising material which
             are manufactured or created hereunder, including any use made of
             the Licensed Material and the Trademarks therewith, do not
             infringe such right of any third party, and we shall not be liable
             to you if such infringement occurs.

    E.       You and we agree to give each other prompt written notice of any
             claim or suit which may arise under the indemnity provisions set
             forth above.


                                       85
<PAGE>   18


             Without limiting the foregoing, you agree to give us written
             notice of any product liability claim made with respect to any
             Article within seven (7) days of your receipt of the claim.

26. INSURANCE

    You shall maintain in full force and effect at all times while this
    Agreement is in effect and for three years thereafter commercial general
    liability insurance, including broad form coverage for contractual
    liability, products liability and personal injury liability (including
    bodily injury and death), waiving subrogation, with minimum limits of no
    less than two million dollars (US $2,000,000.00) per occurrence, and naming
    as additional insureds those indemnified in Paragraph 25 hereof.  You shall
    deliver to us a certificate or certificates of insurance evidencing
    satisfactory coverage and indicating that we shall receive written notice
    of cancellation, non-renewal or of any material change in coverage at least
    thirty (30) days prior to the effective date thereof.  Your insurance shall
    be carried by an insurer with a BEST rating of B + VII or better.
    Compliance herewith in no way limits your indemnity obligations, except to
    the extent that your insurance company actually pays us amounts which you
    would otherwise pay us.

27. WITHDRAWAL OF LICENSED MATERIAL

    You agree that we may, without obligation to you other than to give you
    written notice thereof, withdraw from the scope of this Agreement any
    Licensed Material which by the Marketing Date or, in the absence of such a
    date being specified in Subparagraph 1.O., by six (6) months from the
    commencement of the Principal Term, is not being used on or in connection
    with the Articles.  We may also withdraw any Licensed Material or Articles
    the use or sale of which under this Agreement would infringe or reasonably
    be claimed to infringe the rights of a third party, other than rights
    granted by us, in which case our obligations to you shall be limited to the
    purchase at cost of Articles and other materials utilizing such withdrawn
    Licensed Material which cannot be sold or used.  In the case of any
    withdrawal under the preceding sentence, the Advances and Guarantees shall
    be adjusted to correspond to the time remaining in the Principal Term, or
    the number of Articles remaining under the Agreement, at the date of
    withdrawal.

28. TERMINATION

    Without prejudice to any other right or remedy available to us:

    A.       If you fail to manufacture, sell and distribute the Articles, or
             to furnish statements and pay Royalties as herein provided, or if
             you otherwise breach the terms of this Agreement, and if any such
             failure is not corrected within thirty (30) days after we send you
             written notice thereof (or, in the case of non-payment of
             Royalties within fifteen (15) days), we shall have the right at
             any time to terminate this Agreement by giving you written notice
             thereof.







                                       86
<PAGE>   19


    B.       We shall have the right at any time to terminate this Agreement by
             giving you written notice thereof:

             (1)     if you deliver to any customer without our written
                     authorization merchandise containing representations of
                     Licensed Material or other material the copyright or other
                     proprietary rights to which are owned by us other than
                     articles listed herein and approved in accordance with the
                     provisions hereof;

             (2)     if you deliver Articles outside the Territory or knowingly
                     sell Articles to a third party for delivery outside the
                     Territory, unless pursuant to a written distribution
                     permission or separate written license agreement with us
                     or any subsidiary of ours;

             (3)     if a breach occurs which is of the same nature, and which
                     violates the same provision of this Agreement, as a breach
                     of which we have previously given you written notice;

             (4)     if you breach any material term of any other license
                     agreement between us, and we terminate such agreement for
                     cause;

             (5)     if you shall make any assignment for the benefit of
                     creditors, or file a petition in bankruptcy, or are
                     adjudged bankrupt, or become insolvent, or are placed in
                     the hands of a receiver, or if the equivalent of any such
                     proceedings or acts occurs, though known by some other
                     name or term; and/or

             (6)     if you are not permitted or are unable to operate your
                     business in the usual manner, or are not permitted or are
                     unable to provide us with assurance satisfactory to us
                     that you will so operate your business, as debtor in
                     possession or its equivalent, or are not permitted, or are
                     unable to otherwise meet your obligations under this
                     Agreement or to provide us with assurance satisfactory to
                     us that you will meet such obligations.

29. RIGHTS AND OBLIGATIONS UPON EXPIRATION OR TERMINATION

    A.       Upon the expiration or termination of this Agreement, all rights
             herein granted to you shall revert to us, and we shall be entitled
             to retain all Royalties and other things of value paid or
             delivered to us.  You agree that the Articles shall be
             manufactured during the Principal Term in quantities consistent
             with anticipated demand therefor so as not to result in an
             excessive inventory build-up immediately prior to the end of the
             Principal Term.  You agree that from the expiration or termination
             of this Agreement you shall neither manufacture nor have
             manufactured for you any Articles, that you will deliver to us any
             and all artwork (including animation cels and drawings) which may
             have been used or created by you in connection with this
             Agreement, that you will at our option either sell to us at cost
             or destroy or efface any molds, plates and






                                       87
<PAGE>   20


             other items used to reproduce Licensed Martial or Trademarks, and
             that except as hereinafter provided, you will cease selling
             Articles.  Any unauthorized distribution of Articles after the
             expiration or termination of this Agreement shall constitute
             copyright infringement.

    B.       If you have any unsold Articles in inventory on the expiration or
             termination date, you shall provide us with a full statement of
             the kinds and numbers of such unsold Articles and shall thereupon,
             but only if such statement has been provided to us and if you have
             fully complied with the terms of this Agreement including the
             payment of all Royalties due and the Guarantee, have the right for
             a limited period of ninety (90) days from such expiration or
             earlier termination date to sell off and deliver such Articles.
             You shall furnish us statements covering such sales and pay us
             Royalties in respect of such sales.  Such Royalties shall not be
             applied against the Advance or towards meeting the Guarantee.

    C.       In recognition of our interest in maintaining a stable and viable
             market for the Articles during and after the Principal Term and
             any sell-off period, you agree to refrain from "dumping" the
             Articles in the market during any sell-off period granted to you.
             "Dumping" shall mean the distribution of product at volume levels
             significantly above your prior sales practices with respect to the
             Articles, and at price levels so far below your prior sales
             practices with respect to the Articles as to disparage the
             Articles; provided, however, that nothing contained herein shall
             be deemed to restrict your ability to set product prices at your
             discretion.

    D.       Except as otherwise agreed by us in writing, any inventory of
             Articles in your possession or control after the expiration or
             termination hereof and of any sell-off period granted hereunder
             shall be destroyed, or all Licensed Material and Trademarks
             removed or obliterated therefrom.

    E.       If we supply you with forms regarding compliance with this
             Paragraph 29, you agree to complete, execute and return such forms
             to us expeditiously.

30. WAIVERS

    A waiver by either of us at any time of a breach of any provision of this
    Agreement shall not apply to any breach of any other provision of this
    Agreement, or imply that a breach of the same provision at any other time
    has been or will be waived, or that this Agreement has been in any way
    amended, nor shall any failure by either party to object to conduct of the
    other be deemed to waive such party's right to claim that a repetition of
    such conduct is a breach hereof.

31. PURCHASE OF ARTICLES BY US

    If we wish to purchase Articles, you agree to sell such Articles to us or
    any subsidiary of ours at as low a price as you charge for similar
    quantities sold to your regular customers and to pay us Royalties on any
    such sales.






                                       88
<PAGE>   21




32. NON-ASSIGNABILITY

    A.      You shall not voluntarily or by operation of law assign,
            sub-license, transfer, encumber or otherwise dispose of all or
            any part of your interest in this Agreement without our prior
            written consent.  Any attempted assignment, sub-license,
            transfer, encumbrance or other disposal without such consent
            shall be void and shall constitute a material default and
            breach of this Agreement.  "Transfer" within the meaning of
            this Paragraph 32 shall include any merger or consolidation
            involving your company or your parent (if any); any sale or
            transfer of all or substantially all of your (or your parent)
            company's assets; any transfer of your rights hereunder to a
            division, business segment or other entity of yours other than
            the one specifically referenced on page 1 hereof (or any sale
            or attempted sale of Articles under a trademark or trade name
            of such division, business segment or other entity); and any
            transaction or series of related transactions resulting in the
            transfer of thirty-three and one-third percent (33-1/3%) or
            more of the voting stock of your (or your parent) company (or,
            if your company is a partnership, thirty-three and one-third
            percent (33-1/3%) or more of the profit and loss participation
            in your company, or the occurrence of any of the foregoing
            with respect to any general partner of your company).

    B.      However, you may, upon written notice to us, unless we have
            objected within thirty (30) days of receipt of such notice,
            sublicense your rights hereunder to your parent, subsidiary and
            Affiliated companies.  You hereby irrevocably and unconditionally
            guarantee that they will observe and perform all of your
            obligations hereunder, including, without limitation, the
            provisions governing approvals, and compliance with approved
            samples, applicable laws and standards, and all other provisions
            hereof, and that they will otherwise adhere strictly to all of the
            terms hereof and act in accordance with your obligations
            hereunder.  Any involvement of a parent, subsidiary or Affiliate
            in the activities which are the subject of this Agreement shall be
            deemed carried on pursuant to such a sublicense and thus covered
            by such guarantee, but, unless notified to us and not timely
            objected to, such involvement may be treated by us as a breach of
            this Agreement.

33. RELATIONSHIP

    This Agreement does not provide for a joint venture, partnership, agency or
    employment relationship between us.

34. CONSTRUCTION

    The language of all parts of this Agreement shall in all cases be construed
    as a whole, according to its fair meaning and not strictly for or against
    any of the parties.  Headings of paragraphs herein are for convenience of
    reference only and are without substantive significance.






                                       89
<PAGE>   22



35. MODIFICATIONS OR EXTENSIONS OF THIS AGREEMENT

    Except as otherwise provided herein, this Agreement can only be extended or
    modified by a writing signed by both parties.

36. NOTICES

    All notices which either party is required or may desire to serve upon the
    other party shall be in writing, addressed to the party to be served at the
    address set forth on page 1 of this Agreement, and may be served personally
    or by depositing the same addressed as herein provided (unless and until
    otherwise notified), postage prepaid, in the United States mail.  Such
    notice shall be deemed served upon personal delivery or upon the date of
    mailing; provided, however, that we shall be deemed to have been served
    with a notice of a request for approval of materials under this Agreement
    only upon our actual receipt of the request and of any required
    accompanying materials.  Any notice sent to us hereunder shall be sent to
    the attention of "Vice President, Licensing", unless we advise you in
    writing otherwise.

37. MUSIC

    Music is not licensed hereunder.  Any charges, fees or royalties payable 
    for music rights or any other rights not covered by this Agreement shall be
    additional to the Royalties and covered by separate agreement.

38. PREVIOUS AGREEMENTS

    This Agreement, and any confidentiality agreement you may have signed
    pertaining to any of the Licensed Material, contains the entire agreement
    between us concerning the subject matter hereof and supersedes any
    pre-existing agreement and any oral or written communications between us.
    However, if pursuant to any such pre-existing agreement there was any
    agreement(s) in effect permitting you to sell or distribute Articles
    outside the Territory or to cause to be manufactured any Articles outside
    the Territory, such agreement(s) shall be deemed to remain in effect to the
    extent that they relate to Licensed Material and Articles licensed
    hereunder.

39. CHOICE OF LAW AND FORUM

    This Agreement shall be deemed to be entered into in California and shall
    be governed and interpreted according to the laws of the State of
    California.  Any legal actions pertaining to this Agreement shall be
    commenced within the State of California and within either Los Angeles or
    Orange Counties.  The prevailing party shall be entitled to recover
    reasonable attorney's fees and costs incurred therein.

40. EQUITABLE RELIEF

    You acknowledge that we will have no adequate remedy at law for your
    failure to comply with the terms herewith, including your obligation to
    cease the manufacture, sale, advertisement, promotion or distribution of
    the Articles upon





                                       90
<PAGE>   23



    termination.  Accordingly, in the event you fail to comply with the terms
    of this Agreement, you acknowledge and agree that, in addition to any and
    all other remedies available to us, we shall have the right to have any
    breach by you of this Agreement remedied by equitable relief, including,
    but not limited to, a temporary restraining order, a preliminary
    injunction, a permanent injunction, or such other alternative relief as may
    be appropriate without the necessity of our posting any bond or proving any
    damages.

Please sign below under the word "Agreed".  When signed by both parties this
shall constitute an agreement between us.


THE WALT DISNEY COMPANY


By:  /s/ Doug Mangino
    -------------------

Title:  VP/DMM
       -----------------

Date:  10/27/94
       -----------------

AGREED:

SUN SPORTSWEAR, INC.


By:  /s/ L. Kaye Counts
     -------------------
     
Title:  Executive Vice. Pres., COO
        --------------------------





                                       91