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                                                                   Exhibit 10(s)

NOTE: THE OMITTED PORTIONS OF THIS DOCUMENT MARKED WITH AN ASTERISK ARE SUBJECT
TO A CONFIDENTIAL TREATMENT REQUEST AND HAVE BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.


                                LICENSE AGREEMENT
                                -----------------

Date:    November 16, 1998

Re:      DISNEY CLASSICS

This license agreement ("Agreement") is entered into by and between Disney
Enterprises, Inc. ("Disney"), with a principal place of business at 500 South
Buena Vista Street, Burbank, California 91521, and THE FIRST YEARS, INC.
("Licensee"), with its principal place of business at One Kiddie Drive, Avon, MA
02322-1171. Disney and Licensee agree as follows:

1.       MEANING OF TERMS

         A.       "LICENSED MATERIAL" means the graphic representations of the
                  following properties:

                  (1)      DISNEY BABIES (i.e., BABY MICKEY MOUSE, BABY MINNIE
                           MOUSE, BABY DONALD DUCK, BABY DAISY DUCK, BABY PLUTO,
                           AND BABY GOOFY), but only depictions of such
                           characters and accompanying design elements, as may
                           be designated by Disney;

                  (2)      DISNEY'S STANDARD CHARACTERS (i.e., MICKEY MOUSE,
                           MINNIE MOUSE, DONALD DUCK, DAISY DUCK, PLUTO AND
                           GOOFY (BUT NOT SPORT GOOFY)), but only depictions of
                           such characters, and accompanying design elements, as
                           may be designated by Disney;

                  and the following properties, collectively known as "DISNEY
                  CLASSICS" (hereinafter "DISNEY CLASSICS PROPERTIES"):

                  (3)      WALT DISNEY'S BAMBI characters, but only such
                           characters and depictions of such characters, and
                           accompanying design elements, as may be designated by
                           Disney;

                  (4)      WALT DISNEY'S SLEEPING BEAUTY characters, but only
                           such characters and depictions of such characters,
                           and accompanying design elements, as may be
                           designated by Disney;

                  (5)      WALT DISNEY'S SNOW WHITE AND THE SEVEN DWARFS
                           characters, but only such characters and depictions
                           of such characters, and accompanying design elements,
                           as may be designated by Disney;



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Disney Classics
Agreement dated November 16, 1998
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                  (6)      WALT DISNEY'S THE JUNGLE BOOK characters, but only
                           such characters and depictions of such characters,
                           and accompanying design elements, as may be
                           designated by Disney;

                  (7)      WALT DISNEY'S CINDERELLA characters, but only such
                           characters and depictions of such characters, and
                           accompanying design elements, as may be designated by
                           Disney;

                  (8)      WALT DISNEY'S DUMBO characters, but only such
                           characters and depictions of such characters, and
                           accompanying design elements, as may be designated by
                           Disney;

                  (9)      WALT DISNEY'S LADY AND THE TRAMP characters, but only
                           such characters and depictions of such characters,
                           and accompanying design elements, as may be
                           designated by Disney;

                  (10)     WALT DISNEY'S PINOCCHIO characters, but only such
                           characters and depictions of such characters, and
                           accompanying design elements, as may be designated by
                           Disney;

                  (11)     WALT DISNEY'S ALICE IN WONDERLAND characters, but
                           only such characters and depictions of such
                           characters, and accompanying design elements, as may
                           be designated by Disney;

                  (12)     WALT DISNEY'S PETER PAN characters, but only such
                           characters and depictions of such characters, and
                           accompanying design elements, as may be designated by
                           Disney;

                  (13)     DISNEY'S THE ARISTOCATS characters, but only such
                           characters and depictions of such characters, and
                           accompanying design elements, as may be designated by
                           Disney;

                  (14)     DISNEY'S ALADDIN characters, but only such characters
                           and depictions of such characters, and accompanying
                           design elements, as may be designated by Disney;

                  (15)     DISNEY'S BEAUTY AND THE BEAST characters, but only
                           such characters and depictions of such characters,
                           and accompanying design elements, as may be
                           designated by Disney;

                  and designated still scenes from the motion pictures
                  identified in Paragraph 1.B. hereafter.


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Disney Classics
Agreement dated November 16, 1998
Page 3

                  The Licensed Material as it appears under any of the
                  properties licensed hereunder shall not be used together with
                  the Licensed Material as it appears under any other property
                  licensed hereunder on the same Articles. Furthermore,
                  Licensee's right to use the adult representations of the
                  characters from Disney's Standard Characters property is
                  limited to the Article identified on Schedule A as Article
                  Number B.11, which Article shall be branded under the Disney
                  Babies brand.

         B.       "TRADEMARKS" means "WALT DISNEY", "DISNEY", the
                  representations of Licensed Material included in Paragraph
                  1.A. above, and the logos of the Disney Babies brand and the
                  following motion pictures in which Licensed Material included
                  in Paragraph 1.A. above appears:

                           WALT DISNEY'S BAMBI
                           WALT DISNEY'S SLEEPING BEAUTY
                           WALT DISNEY'S SNOW WHITE AND THE SEVEN DWARFS
                           WALT DISNEY'S THE JUNGLE BOOK
                           WALT DISNEY'S CINDERELLA
                           WALT DISNEY'S DUMBO
                           WALT DISNEY'S LADY AND THE TRAMP
                           WALT DISNEY'S PINOCCHIO
                           WALT DISNEY'S ALICE IN WONDERLAND
                           WALT DISNEY'S PETER PAN
                           DISNEY'S THE ARISTOCATS
                           DISNEY'S ALADDIN
                           DISNEY'S BEAUTY AND THE BEAST
                           DISNEY BABIES

         C.       "ARTICLES" means the items set forth on Schedule A, which is
                  attached to this Agreement and incorporated herein by this
                  reference, on or in connection with which the Licensed
                  Material and/or the Trademarks are reproduced or used, and
                  includes each and every stock keeping unit ("SKU") of each
                  Article. Notwithstanding the foregoing, the Licensed Material
                  from the DISNEY BABIES and DISNEY'S STANDARD CHARACTERS
                  properties, and the DISNEY BABIES Trademark, may be used only
                  on or in connection with the Article identified on Schedule A
                  as Article Number B.11.


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Disney Classics
Agreement dated November 16, 1998
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         D.       "MINIMUM PER ARTICLE ROYALTY" means for each Article
                  identified herein which is sold the sum indicated herein:

                           None.

         E.       "TERM" means the period commencing October 26, 1998, and
                  ending * .

         F.       "TERRITORY" means the United States, United States PX's
                  wherever located, and United States territories and
                  possessions, excluding Puerto Rico, Guam, Commonwealth of
                  Northern Mariana Islands and Palau. 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 royalty in the amounts set forth below in
                  Paragraphs 1.G.(1)(a), (b), and (c) and Royalties shall be
                  further governed by the provisions contained in Paragraphs
                  1.G.(2)-(6):

                  (1) (a)       *  percent ( * %) of Licensee's Net Invoiced
                              Billings to authorized Retailers and Wholesalers
                              for Articles shipped by or on behalf of Licensee
                              from a location within or outside the Territory
                              for delivery to a customer located in the
                              Territory ("F.O.B. In Sales"); or

                      (b)       *  percent (* %) of Licensee's Net Invoiced
                              Billings to authorized Retailers and Wholesalers
                              when Licensee's customer located in the Territory
                              takes title to the Articles outside the Territory
                              and/or bears the risk of loss of Articles
                              manufactured and shipped to the customer from
                              outside the Territory ("F.O.B. Out Sales"); or

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

                  (2)         The sums paid to Disney as Royalties on any sales
                              to Licensee's Affiliates shall be no less than the
                              sums paid on sales to customers not affiliated
                              with Licensee.

                  (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. However, sales of Articles to
                              Disney's




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Disney Classics
Agreement dated November 16, 1998
Page 5


                              Affiliates outside the Territory shall bear a
                              Royalty at the rate for F.O.B. In Sales.

                  (4)         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.

                  (6)         Royalties reported on sales of Articles which have
                              been returned to Licensee 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 Licensee be entitled to a refund
                              of Royalties.

         H.       "NET INVOICED BILLINGS" means the following:

                  (1)      actual invoiced billings (i.e., sales quantity
                           multiplied by Licensee's selling price) for Articles
                           sold, and all other receivables of any kind
                           whatsoever, received in payment for the Articles,
                           whether received by Licensee or any of Licensee's
                           Affiliates, except as provided in Paragraph 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 sales taxes.

         I.       "ALLOWABLE DEDUCTIONS" means the following:

                  (1)      volume discounts, and other discounts from the
                           invoice price (or post-invoice credits) unilaterally
                           imposed in the regular course of business by
                           Licensee's customers, so long as Licensee documents
                           such discounts (or credits) to Disney's satisfaction.
                           In the event a documented unilateral discount (or
                           credit) is taken with respect to combined sales of
                           Articles and other products not licensed by Disney,
                           and Licensee cannot document the portion of the
                           discount (or credit) applicable to the Articles,
                           Licensee may apply only a pro rata portion of the
                           discount (or credit) to the Articles. Unilateral
                           discounts or credits are never deductible if they
                           represent items listed below in Paragraph 1.I.(2).



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Disney Classics
Agreement dated November 16, 1998
Page 6

                  (2)      The following are not Allowable Deductions, whether
                           granted on sales invoices or unilaterally imposed as
                           discounts or as post-invoice credits: cash discounts
                           granted as terms of payment; early payment discounts;
                           allowances or discounts relating to advertising; mark
                           down allowances; new store allowances; defective
                           goods allowances or allowances taken by customers in
                           lieu of returning goods; 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 Term and during the sell-off period, if granted.

         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):

                           $  *  payable upon Licensee's signing of this
                           Agreement for the Term.

         L.       "GUARANTEE" means the following sum(s) which Licensee
                  guarantees to pay as minimum Royalties on Licensee's
                  cumulative sales in the following period(s):

                           $  *  for the Term.

         M.       "SAMPLES" means six (6) samples of each 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
                  Licensee agrees to spend in the following way(s):

                  (1)      Licensee agrees to participate in Disney's common
                           marketing and promotional fund (the "Common Marketing
                           Fund" or "CMF") as provided in this Paragraph 1.N.
                           Licensee agrees to make its CMF payments within
                           fifteen (15) days after Disney's request(s), or on a
                           calendar quarterly or other periodic basis if so
                           requested by Disney. Licensee's CMF obligation shall
                           not exceed * percent ( * %) of Disney's reasonable
                           advance estimate of Licensee's Net Invoiced Billings
                           for Articles (with no subsequent adjustment if actual
                           Net Invoiced Billings are less than the reasonable
                           advance estimate); and Licensee's total CMF
                           obligation shall never be less than * percent ( * %)
                           of the quotient of the Guarantee divided by the
                           Royalty rate for F.O.B. In Sales. Licensee's CMF
                           payments shall be expended by




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Disney Classics
Agreement dated November 16, 1998
Page 7


                           Disney and Disney's designees (but not paid to
                           Disney's own employees for services they render) in
                           the amounts and in the manner Disney deems most
                           appropriate in order to provide national or local
                           advertising, marketing and promotion, and related
                           market research, regarding the Licensed Material and
                           the Trademarks licensed hereunder or other Disney
                           properties in the same property classification.
                           However, Disney does not ensure that Licensee or any
                           other particular licensee will benefit directly or
                           pro-rata from the operation of the Common Marketing
                           Fund. Disney will apprise Licensee of the operations
                           and proposed expenditures of the Common Marketing
                           Fund from time to time and seek Licensee's advice on
                           how the CMF monies relating to the Licensed Material
                           and the Trademarks should be spent. Licensee shall
                           not be entitled to any audit rights with regard to
                           the Common Marketing Fund.

                  (2)      Effective on or before January 1, 1999, upon prior
                           written notice from Disney, the foregoing CMF system
                           shall be converted to a different system to provide
                           greater efficiency in its administration.

                           (i) The amount of the CMF contribution shall be
                           calculated as * percent ( * %) of Licensee's Net
                           Invoiced Billings and shall be payable concurrently
                           with Royalties (but by separate payment to such
                           account as Disney specifies) due each Royalty Payment
                           Period, as set forth in greater detail in Paragraph
                           20.A. hereof. Any subsequent reduction of Net
                           Invoiced Billings for any reason shall not result in
                           any adjustment of any CMF payment. In addition, such
                           modified CMF system shall require Licensee's payment
                           of a "CMF Guarantee", meaning the sum(s) which
                           Licensee guarantees to pay Disney as a minimum amount
                           of the CMF payment on Licensee's cumulative sales in
                           the relevant period. The amount of the CMF Guarantee
                           shall be in an amount as agreed between the parties,
                           but in no event less than * percent ( * %) of the
                           quotient of the Guarantee divided by the Royalty rate
                           for F.O.B. In Sales. The revised CMF system shall
                           also call for a payment of one or more payments of
                           "CMF Advances" which shall be non-refundable
                           installments of the CMF Guarantee, each to be due and
                           payable on a date to be specified by Disney, in its
                           absolute discretion, and which may be as much as six
                           to nine months prior to the release date for the
                           filmed entertainment property that is the subject of
                           this Agreement, based on Disney's assessment of the
                           appropriate marketing requirements for the property.

                           (ii) As with the prior system, Licensee's CMF
                           payments shall be expended by Disney and Disney's
                           designees (but not paid to Disney's




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Disney Classics
Agreement dated November 16, 1998
Page 8

                           own employees for services they render) in the
                           amounts and in the manner Disney deems most
                           appropriate in order to provide national or local
                           advertising, marketing and promotion, and related
                           market research, regarding the Licensed Material and
                           the Trademarks licensed hereunder or other Disney
                           properties in the same property classification.
                           However, Disney does not ensure that Licensee or any
                           other particular licensee will benefit directly or
                           pro-rata from the operation of the Common Marketing
                           Fund. Disney will apprise Licensee of the operations
                           and proposed expenditures of the Common Marketing
                           Fund from time to time and seek Licensee's advice on
                           how the CMF monies relating to the Licensed Material
                           and the Trademarks should be spent. Licensee shall
                           not be entitled to any audit rights with regard to
                           the modified CMF system.

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

                  (1)      Any time during the Term of this Agreement for all
                           Articles (except Article Number B.11) using all
                           Disney Classics Properties constituting the Licensed
                           Material; and

                  (2)      By July 1, 1999 for Article Number B.11.

         P.       "AFFILIATE" means, with regard to Licensee, any corporation or
                  other entity which directly or indirectly controls, is
                  controlled by, or is under common control with Licensee; with
                  regard to Disney, "Affiliate" means any corporation or other
                  entity which directly or indirectly controls, is controlled
                  by, or is under common control with Disney. "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.

         Q.       "LAWS" means any and all applicable laws, rules, and
                  regulations, including but not limited to, local and national
                  laws, rules and regulations, treaties, voluntary industry
                  standards, association laws, codes or other obligations
                  pertaining to the grant and exercise of the license granted
                  herein and to any of Licensee's activities under this
                  Agreement, including but not limited to those applicable to
                  any tax, and to the manufacture, pricing, sale and/or
                  distribution of the Articles.

         R.       "RETAILER" means independent and chain retail outlets which
                  have storefronts and business licenses, and which customers
                  walk into, not up to;




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Disney Classics
Agreement dated November 16, 1998
Page 9


                  "WHOLESALER" means a seller of items to retailers, not
                  consumers, and includes the term "distributor". The following
                  do not qualify as authorized sales outlets for Articles under
                  this Agreement under any circumstances: swap meets, flea
                  markets, street peddlers, unauthorized kiosks, and the like.

         S.       "MANUFACTURER" means any of Licensee's third-party
                  manufacturers, suppliers and facilities (and their
                  sub-manufacturers, suppliers and facilities) which reproduce
                  or use the Licensed Material and/or Trademarks on Articles, or
                  components thereof, and/or which assemble such Articles.

2.       RIGHTS GRANTED

         A.       (1)      In consideration for Licensee's promise to pay and
                           Licensee's payment of all monetary obligations
                           required hereunder, Disney grants Licensee the
                           non-exclusive right, during the Term, and only within
                           the Territory, to reproduce the Licensed Material
                           only on or in connection with the Articles, to use
                           such Trademarks and uses thereof as may be approved
                           when each SKU of the Articles is approved and only on
                           or in connection with the Articles, and to
                           manufacture, distribute for sale and sell the
                           Articles as authorized by this Paragraph 2.A.

                  (2)      Licensee will sell the Articles only to Retailers in
                           the Territory for resale to the public in the
                           Territory; provided, however, that the Article
                           identified on Schedule A as Article Number A.2 (bibs)
                           may be sold only to mass market Retailers (including
                           such Retailers as Target, Toys R Us, WalMart and
                           Kmart). For purposes of this Agreement, "Retailers"
                           shall include drug chains, supermarkets and food
                           chains. Licensee may also sell the Articles to
                           Wholesalers which sell to drug chains, supermarkets
                           and food chains and value-oriented specialty stores.
                           Licensee will not sell the Articles to other
                           Retailers, or to other Wholesalers. If there is a
                           question as to whether a particular customer falls
                           within any of the categories specified above,
                           Disney's determination shall be binding.

                  (3)      Licensee may not sell the Articles by direct
                           marketing methods, which includes but is not limited
                           to, computer on-line selling, direct mail and
                           door-to-door solicitation. Licensee may not sell the
                           Articles to Retailers selling merchandise on a
                           duty-free basis, unless such Retailer has a
                           then-current license agreement with Disney or any of
                           Disney's Affiliates permitting it to make such
                           duty-free sales.


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Disney Classics
Agreement dated November 16, 1998
Page 10


                  (4)      Licensee may sell the Articles to authorized
                           customers for resale through the pre-approved mail
                           order catalogs listed on the Catalog Schedules to
                           this Agreement, and Licensee shall pay Royalties on
                           such sales at the rate specified for Retailers in
                           Paragraph 1.G.(1)(a) or (b), as applicable.

                  (5)      All rights not expressly granted to Licensee herein
                           are reserved to Disney.

         B.       Unless Disney consents in writing, Licensee 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
                  through unapproved direct marketing methods, including but not
                  limited to, home shopping television programs, or to customers
                  for inclusion in another product. Licensee shall not sell
                  Articles to any customer who Licensee knows or reasonably
                  should know engages in illegal business practices or ethically
                  questionable distribution methods. If Licensee wishes to sell
                  the Articles to customers for resale through mail order
                  catalogs other than those listed on the Catalog Schedules
                  hereto, Licensee must obtain Disney's prior written consent in
                  each instance. However, Licensee may solicit orders by mail
                  from Retailers, and Licensee may sell to 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.

         C.       The prohibition of computer on-line selling referenced in
                  Paragraph 2.A. includes, but is not limited to, the display,
                  promotion or offering of Articles in or on any on-line venues
                  (e.g. Websites), except as specifically permitted in the next
                  two sentences. Articles approved by Disney may be displayed
                  and promoted on Disney-controlled on-line venues, only within
                  the Territory. In addition, Articles approved by Disney may be
                  displayed and promoted on Licensee's own on-line venue, and
                  may be displayed, promoted and sold on authorized Retailers'
                  on-line venues, subject to Disney's applicable policies and
                  guidelines; however, Licensee must obtain Disney's prior
                  written approval of all creative and editorial elements of
                  such uses, in accordance with the provisions of Paragraph 7 of
                  this Agreement.

         D.       Unless Disney consents in writing, Licensee shall not give
                  away or donate Articles to Licensee's accounts or other
                  persons for the purpose of promoting sales of Articles, except
                  for minor quantities or samples which are not for onward
                  distribution.



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Disney Classics
Agreement dated November 16, 1998
Page 11

         E.       Nothing contained herein shall preclude Licensee from selling
                  Articles to Disney or to any of Disney's Affiliates, or to
                  Licensee's or Disney's employees, subject to the payment to
                  Disney of Royalties on such sales.

         F.       Disney further grants Licensee the right to reproduce the
                  Licensed Material and to use the approved Trademarks, only
                  within the Territory, during the Term, on containers,
                  packaging and display material for the Articles, and in
                  advertising for the Articles.

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

         H.       Licensee recognizes and acknowledges the vital importance to
                  Disney of the characters and other proprietary material Disney
                  owns and creates, and the association of the Disney name with
                  them. In order to prevent the denigration of Disney's products
                  and the value of their association with the Disney name, and
                  in order to ensure the dedication of Licensee's best efforts
                  to preserve and maintain that value, Licensee agrees that,
                  during the Term and any extension hereof, Licensee will not
                  manufacture or distribute any merchandise embodying or bearing
                  any artwork or other representation which Disney determines,
                  in Disney's reasonable discretion, is confusingly similar to
                  Disney's characters or other proprietary material.

         I.       Licensee acknowledges that the individual Disney Classics
                  Properties constituting the Licensed Material are Disney's
                  original animated features, some or all of which may be
                  released on video during the Term, and include any theatrical
                  re-releases of said Disney Classics Properties. Licensee
                  further acknowledges that Licensee's license hereunder does
                  not extend to any live action versions of these Disney
                  Classics Properties (whether or not animation is included in
                  such versions), any remakes, prequels or sequels of these
                  Disney Classics Properties, any direct to video remakes,
                  prequels or sequels of these or any other derivation or
                  adaptation of these Disney Classics Properties in any media
                  whatsoever. All of the foregoing variations shall be referred
                  to as "Alternative Releases." In the event there is an
                  Alternative Release of any of the Disney Classics Properties
                  during the Term of this Agreement, upon written notice from
                  Disney, Licensee shall have the right to negotiate with Disney
                  as to the terms and conditions applicable to a license for any
                  such Alternative Release. If after good faith negotiations for
                  up to thirty (30) days, the parties are not able to reach
                  agreement as to the terms and conditions for any such license,
                  Disney may, upon written notice to Licensee, withdraw the
                  affected Disney Classics Property(ies) from the Licensed
                  Material. In such case, Licensee will immediately cease




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Disney Classics
Agreement dated November 16, 1998
Page 12


                  manufacturing Articles using such Disney Classics
                  Property(ies) except as necessary to fulfill orders in hand,
                  and Licensee may continue to sell its then current inventory
                  of Articles using such Disney Classics Property(ies) until the
                  end of the Term or ninety (90) days after Disney's written
                  notice, whichever is earlier. Disney shall also consider, in
                  good faith, whether there should be a reduction of the
                  Guarantee because of the deletion of any Disney Classics
                  Property.

3.       ADVANCE

         A.       Licensee agrees to pay the Advance, which shall be on account
                  of Royalties to accrue during the 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 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 Term shall not be offset against the Advance unless
                  otherwise agreed in writing. Royalties accruing during any
                  extension of the 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
                  Disney or any of Disney's Affiliates 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.       Licensee shall, with Licensee's statement for each Royalty
                  Payment Period ending on a date indicated in Paragraph 1.L.
                  hereof defining "Guarantee," or upon termination if the
                  Agreement is terminated prior to the end of the Term, pay
                  Disney 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.



<PAGE>   13

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Agreement dated November 16, 1998
Page 13


         C.       In no event shall Royalties paid with respect to sales to
                  Disney or to any of Disney's Affiliates, 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, Licensee shall submit to Disney for
                  Disney's 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 any and
                  all SKUs of the Article. Thereafter, Licensee shall submit to
                  Disney for Disney's written approval a pre-production sample
                  of each SKU of each Article. Disney 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, Licensee shall supply to Disney for
                  Disney's use for internal purposes, a mock-up, prototype or
                  pre-production sample of each SKU of each Article on or in
                  connection with which the Licensed Material is used. Licensee
                  acknowledges that Disney may not approve concepts or artwork
                  submitted near the end of the Term, or concepts or artwork
                  perceived to be for selling periods beyond the Term. Any
                  pre-production approval Disney may give will not constitute or
                  imply a representation or belief by Disney that such materials
                  comply with any applicable Laws.

         B.       Approval or disapproval shall lie solely in Disney's
                  discretion, and any SKU of any Article not so approved in
                  writing shall be deemed unlicensed and shall not be
                  manufactured or sold. If any unapproved SKU of any Article is
                  being sold, Disney may, together with other remedies available
                  to Disney, including but not limited to, immediate termination
                  of this Agreement, by written notice require such SKU of such
                  Article to be immediately withdrawn from the market. Any
                  modification of any SKU 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 Disney's written approval as if it were a new SKU
                  of an Article. Approval of any SKU 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.


<PAGE>   14

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Disney Classics
Agreement dated November 16, 1998
Page 14


         C.       If Licensee submits for approval artwork from an article or
                  book manufactured or published by another licensee of Disney's
                  or of any of Disney's Affiliates, Licensee must advise Disney
                  in writing of the source of such artwork. If Licensee fails to
                  do so, any approval which Disney may give for use by Licensee
                  of such artwork may be withdrawn by giving Licensee written
                  notice thereof, and Licensee may be required by Disney not to
                  sell Articles using such artwork.

         D.       Licensee is responsible for the consistent quality and safety
                  of the Articles and their compliance with applicable Laws.
                  Disney 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 Licensee advises Disney in writing is
                  intended to make the Article safer or more durable.

         E.       If Disney has supplied Licensee with forms for use in applying
                  for approval of artwork, models, pre-production and production
                  samples of Articles, Licensee shall use such forms when
                  submitting anything for Disney's approval.

6.       APPROVAL OF PRODUCTION SAMPLES

         A.       Before shipping an Article to any customer, Licensee agrees to
                  furnish to Disney, from the first production run of each
                  supplier of each of the Articles, for Disney's 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 any SKU of the Article, as well as of the
                  quality of the Article, shall lie in Disney's sole discretion
                  and may, among other things, be based on unacceptable quality
                  of the artwork or of the Article as manufactured. Any SKU of
                  any Article not so approved shall be deemed unlicensed, shall
                  not be sold and, unless otherwise agreed by Disney in writing,
                  shall be destroyed. Such destruction shall be attested to in a
                  certificate signed by one of Licensee's officers. Production
                  samples of Articles for which Disney has approved a
                  pre-production sample shall be deemed approved, unless within
                  twenty (20) days of Disney's receipt of such production sample
                  Disney notifies Licensee to the contrary. Any approval of a
                  production sample attributable to Disney will not constitute
                  or imply a representation or belief by Disney that such
                  production sample complies with any applicable Laws.

         B.       Licensee agrees to make available at no charge such additional
                  samples of any or all SKUs of each Article as Disney may from
                  time to time reasonably




<PAGE>   15

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Disney Classics
Agreement dated November 16, 1998
Page 15


                  request for the purpose of comparison with earlier samples, or
                  for Disney's anti-piracy efforts, or to test for compliance
                  with applicable Laws, and to permit Disney to inspect
                  Licensee's manufacturing operations and testing records (and
                  those of Licensee's Manufacturers) for the Articles in
                  accordance with Paragraphs 11 and 24.

         C.       Licensee acknowledges that Disney may disapprove any SKU of an
                  Article or a production run of any SKU of an Article because
                  the quality is unacceptable to Disney, and accordingly, Disney
                  recommends that Licensee submit production samples to Disney
                  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 Disney's further prior written approval. All SKUs of
                  Articles being sold must conform in all respects to the
                  approved production sample. It is understood that if in
                  Disney's reasonable judgment the quality of any SKU of an
                  Article originally approved has deteriorated in later
                  production runs, or if the SKU has otherwise been altered,
                  Disney may, in addition to other remedies available to Disney,
                  by written notice require such SKU of the 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.       Licensee is responsible for the consistent quality and safety
                  of the Articles and their compliance with applicable Laws.
                  Disney 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 Licensee advises Disney in writing is
                  intended to make the Article safer or more durable.

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


<PAGE>   16

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Disney Classics
Agreement dated November 16, 1998
Page 16


         H.       If Disney notifies Licensee of a required modification under
                  Paragraph 6.G. with respect to any SKU of a particular
                  Article, such notification shall advise Licensee of the nature
                  of the changes required, and Licensee shall not accept any
                  order for any such Article until the subject SKU has been
                  resubmitted to Disney with such changes and Licensee has
                  received Disney's written approval of the Article as modified.
                  However, Licensee may continue to distribute Licensee's
                  inventory of the previously approved Articles until such
                  inventory is exhausted (unless such Articles are dangerously
                  defective or are alleged to be violative of any third party
                  rights, as determined by Disney).

         I.       Upon Disney's request, Licensee agrees to give Disney written
                  notice of the first ship date for each Article.

         J.       If Disney has inadvertently approved a concept, pre-production
                  sample, or production sample of a product which is not
                  included in the Articles under this Agreement, or if Disney
                  has inadvertently approved an Article using artwork and/or
                  trademarks not included in the Agreement, such approval may be
                  revoked at any time without any obligation whatsoever on
                  Disney's part to Licensee. Any such product as to which
                  Disney's approval is revoked shall be deemed unauthorized and
                  shall not be distributed or sold by or for Licensee.

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 Disney and receive Disney's
                  written approval before use. To avoid unnecessary expense if
                  changes are required, Disney's approval thereof should be
                  procured when such is still in rough or storyboard format.
                  Disney shall endeavor to respond to requests for approval
                  within a reasonable time. Approval or disapproval shall lie in
                  Disney's sole discretion, and the use of unapproved
                  containers, packaging, display material, promotional material,
                  catalogs or advertising is prohibited. Disney's approval of
                  any containers, packaging, display material, promotional
                  material, catalogs or advertising under this Agreement will
                  not constitute or imply a representation or belief by Disney
                  that such materials comply with any applicable Laws. Whenever
                  Licensee prepares catalog sheets or other printed matter
                  containing illustrations of Articles, Licensee will furnish to
                  Disney five (5) copies thereof when they are published.


<PAGE>   17

The First Years, Inc.
Disney Classics
Agreement dated November 16, 1998
Page 17


         B.       If Disney has supplied Licensee with forms for use in applying
                  for approval of materials referenced in this Paragraph 7,
                  Licensee shall use such forms when submitting anything for
                  Disney's approval.

         C.       Disney has designed character artwork and/or a brand name
                  logo(s) to be used by all licensees in connection with the
                  packaging of all merchandise using the Licensed Material, and,
                  if applicable, on hang tags and garment labels for such
                  merchandise. Disney will supply Licensee with reproduction
                  artwork thereof, and Licensee agrees to use such artwork
                  and/or logo(s) on the packaging of the Articles, and, if
                  applicable, on hang tags and garment labels, which Licensee
                  will have printed and attached to each Article at Licensee's
                  cost. Disney recommends that Licensee source the hang tags and
                  garment labels from Disney's authorized manufacturer (if any)
                  of pre-approved hang tags and garment labels, the name of
                  which will be provided to Licensee upon request. However,
                  Licensee 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
                  Disney in accordance with Disney's usual approval process.

8.       ARTWORK

         Licensee shall pay Disney, within thirty (30) days of receiving an
         invoice therefor, for Style Guides and for artwork done at Licensee's
         request by Disney or third parties under contract to Disney in the
         development and creation of Articles, display, packaging or promotional
         material (including any artwork which in Disney's opinion is necessary
         to modify artwork initially prepared by Licensee and submitted to
         Disney for approval, subject to Licensee's prior written approval) at
         Disney's then prevailing commercial art rates. Estimates of artwork
         charges are available upon request. While Licensee is not obligated to
         utilize services of Disney's Art Department, Licensee is encouraged to
         do so in order to minimize delays which may occur if outside artists do
         renditions of Licensed Material which Disney cannot approve and to
         maximize the attractiveness of the Articles. Artwork will be returned
         to Licensee by overnight courier, at Licensee's cost (unless other
         arrangements are made).


<PAGE>   18

The First Years, Inc.
Disney Classics
Agreement dated November 16, 1998
Page 18

9.       PRINT, RADIO OR TV ADVERTISING

         Licensee will obtain all approvals necessary in connection with print,
         radio or television advertising, if any, which Disney may authorize.
         Licensee represents and warrants that all advertising and promotional
         materials shall comply with all applicable Laws. Disney's approval of
         copy or storyboards for such advertising will not constitute or imply a
         representation or belief by Disney that such copy or storyboards comply
         with any applicable Laws. This Agreement does not grant Licensee any
         rights to use the Licensed Material in animation. Licensee may not use
         any animation or live action footage from the motion picture from which
         the Licensed Material comes without Disney's prior written approval in
         each instance. In the event Disney approves the use of film clips of
         the motion picture from which the Licensed Material comes, for use in a
         television commercial, Licensee 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 Disney, in such commercial and there shall be
         no modifications of the film clip footage. All film clip footage shall
         be returned to Disney immediately after its inclusion in such
         commercial. Disney shall have the right to prohibit Licensee from
         advertising the Articles by means of television and/or billboards. Such
         right shall be exercised within Disney's absolute discretion, including
         without limitation for reasons of overexposure of the Licensed
         Material.

10.      LICENSEE NAME AND ADDRESS ON ARTICLES

         A.       Licensee's name, trade name (or Licensee's trademark which
                  Licensee has advised Disney in writing that Licensee is using)
                  and Licensee's address (at least city and state) will appear
                  on permanently affixed labeling on each Article and, 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.       Licensee shall advise Disney in writing of all trade names or
                  trademarks Licensee wishes to use on Articles being sold under
                  this license. Licensee may sell the Articles only under
                  mutually agreed upon trade names or trademarks.


<PAGE>   19

The First Years, Inc.
Disney Classics
Agreement dated November 16, 1998
Page 19


11.      COMPLIANCE WITH APPROVED SAMPLES AND
         APPLICABLE LAWS AND STANDARDS

         A.       Licensee covenants that 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, and such specifications, if any, as
                  may have been specified in connection with this Agreement
                  (e.g., Disney's Apparel Performance Specification Manual, if
                  the Articles are items of apparel), and shall conform to the
                  Sample thereof approved by Disney. Licensee covenants that it
                  will comply with all applicable Laws in performing this
                  Agreement, including but not limited to, those pertaining to
                  the manufacture, pricing, sale and distribution of the
                  Articles.

         B.       Without limiting the foregoing, Licensee covenants on behalf
                  of Licensee's own manufacturing facilities, and agrees to
                  require all Manufacturers to covenant by signing the
                  Consent/Manufacturer's Agreement (referenced in Paragraph 24),
                  as follows:

                  (1)      Licensee and the Manufacturers agree not to use child
                           labor in the manufacturing, packaging or distribution
                           of Disney merchandise. The term "child" refers to a
                           person younger than the local legal minimum age for
                           employment or the age for completing compulsory
                           education, but in no case shall any child younger
                           than fifteen (15) years of age (or fourteen (14)
                           years of age where local law allows) be employed in
                           the manufacturing, packaging or distribution of
                           Disney merchandise. Licensee and the Manufacturers
                           employing young persons who do not fall within the
                           definition of "children" agree also to comply with
                           any Laws applicable to such persons.

                  (2)      Licensee and the Manufacturers agree only to employ
                           persons whose presence is voluntary. Licensee and the
                           Manufacturers agree not to use any forced or
                           involuntary labor, whether prison, bonded, indentured
                           or otherwise.

                  (3)      Licensee and the Manufacturers agree to treat each
                           employee with dignity and respect, and not to use
                           corporal punishment, threats of violence, or other
                           forms of physical, sexual, psychological or verbal
                           harassment or abuse.

                  (4)      Unless required by applicable Laws to treat a
                           specific group of employees differently, Licensee and
                           the Manufacturers agree not to




<PAGE>   20

The First Years, Inc.
Disney Classics
Agreement dated November 16, 1998
Page 20

                           discriminate in hiring and employment practices,
                           including salary, benefits, advancement, discipline,
                           termination, or retirement, on the basis of race,
                           religion, age, nationality, social or ethnic origin,
                           sexual orientation, gender, political opinion or
                           disability.

                  (5)      Licensee and the Manufacturers recognize that wages
                           are essential to meeting employees' basic needs.
                           Licensee and Manufacturers agree to comply, at a
                           minimum, with all applicable wage and hour Laws,
                           including minimum wage, overtime, maximum hours,
                           piece rates and other elements of compensation, and
                           to provide legally mandated benefits. If local Laws
                           do not provide for overtime pay, Licensee and
                           Manufacturers agree to pay at least regular wages for
                           overtime work. Except in extraordinary business
                           circumstances, Licensee and the Manufacturers will
                           not require employees to work more than the lesser of
                           (a) 48 hours per week and 12 hours overtime or (b)
                           the limits on regular and overtime hours allowed by
                           local law, or, where local law does not limit the
                           hours of work, the regular work week in such country
                           plus 12 hours overtime. In addition, except in
                           extraordinary business circumstances, employees will
                           be entitled to at least one day off in every
                           seven-day period. Licensee and the Manufacturers
                           agree that, where local industry standards are higher
                           than applicable legal requirements, they will meet
                           the higher standards.

                  (6)      Licensee and the Manufacturers agree to provide
                           employees with a safe and healthy workplace in
                           compliance with all applicable Laws, ensuring, at a
                           minimum, reasonable access to potable water and
                           sanitary facilities, fire safety, and adequate
                           lighting and ventilation. Licensee and the
                           Manufacturers also agree to ensure that the same
                           standards of health and safety are applied in any
                           housing they provide for employees. Licensee and the
                           Manufacturers agree to provide Disney with all
                           information Disney may request about manufacturing,
                           packaging and distribution facilities for the
                           Articles.

                  (7)      Licensee and the Manufacturers agree to respect the
                           rights of employees to associate, organize and
                           bargain collectively in a lawful and peaceful manner,
                           without penalty or interference, in accordance with
                           applicable Laws.

                  (8)      Licensee and the Manufacturers agree to comply with
                           all applicable environmental Laws.


<PAGE>   21

The First Years, Inc.
Disney Classics
Agreement dated November 16, 1998
Page 21


                  (9)      Licensee and the Manufacturers agree to comply with
                           all applicable Laws, including those pertaining to
                           the manufacture, pricing, sale and distribution of
                           the Articles.

                  (10)     Licensee and the Manufacturers agree that Disney and
                           its designated agents (including third parties) may
                           engage in monitoring activities to confirm compliance
                           with this Paragraph 11, including unannounced on-site
                           inspections of manufacturing, packaging and
                           distribution facilities, and employer-provided
                           housing, such inspections to include reviews of books
                           and records relating to employment matters and
                           private interviews with employees. Licensee and the
                           Manufacturers agree to maintain on site all
                           documentation necessary to demonstrate compliance
                           with this Paragraph 11. Licensee agrees to promptly
                           reimburse Disney for the actual costs of inspections
                           performed pursuant to this Paragraph 11 when any of
                           Licensee's manufacturing facilities or any
                           Manufacturer does not pass the inspection(s).

                  (11)     Licensee and the Manufacturers agree to take
                           appropriate steps to ensure that the provisions of
                           this Code of Conduct are communicated to employees,
                           including the prominent posting of a copy of the Code
                           of Conduct for Manufacturers (copy attached) in the
                           local language and in a place readily accessible to
                           employees at all times.

         C.       Licensee agrees to be bound by the Code of Conduct for
                  Licensees (copy attached), including but not limited to,
                  taking appropriate steps, in consultation with Disney, to
                  develop, implement and maintain procedures to evaluate and
                  monitor the Manufacturers it uses to manufacture the Articles
                  or components thereof, and to ensure compliance with Paragraph
                  11.B., including but not limited to, unannounced on-site
                  inspections of manufacturing, packaging and distribution
                  facilities and employer-provided housing, reviews of books and
                  records relating to employment matters and private interviews
                  with employees.

         D.       Both before and after Licensee puts Articles on the market,
                  Licensee shall follow reasonable and proper procedures for
                  testing that Articles comply with all applicable product
                  safety Laws, and shall permit Disney's designees to inspect
                  testing, manufacturing and quality control records and
                  procedures and to test the Articles for compliance with
                  product safety and other applicable Laws. Licensee agrees to
                  promptly reimburse Disney for the actual costs of such
                  testing. Licensee shall also give due consideration to any
                  recommendations by Disney that Articles exceed the
                  requirements of




<PAGE>   22

The First Years, Inc.
Disney Classics
Agreement dated November 16, 1998
Page 22


                  applicable Laws. Articles not manufactured, packaged or
                  distributed in accordance with applicable Laws shall be deemed
                  unapproved, even if previously approved by Disney, 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

         Licensee acknowledges that the copyrights and all other proprietary
         rights in and to Licensed Material are exclusively owned by and
         reserved to Disney. Licensee shall neither acquire nor assert copyright
         ownership or any other proprietary rights in the Licensed Material or
         in any derivation, adaptation, variation or name thereof. Without
         limiting the foregoing, Licensee hereby assigns to Disney all
         Licensee's worldwide right, title and interest in the Licensed Material
         and in any material objects consisting of or to the extent that they
         incorporate drawings, paintings, animation cels, or sculptures of
         Licensed Material, or other adaptations, compilations, collective
         works, derivative works, variations or names of Licensed Material,
         heretofore or hereafter created by or for Licensee or any of Licensee's
         Affiliates. 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, Licensee agrees to obtain from such party a full
         assignment of rights so that the foregoing assignment by Licensee shall
         vest full rights to such new materials in Disney. Licensee further
         covenants that any such new materials created by Licensee or by any
         third party Licensee has engaged are original to Licensee or such third
         party and do not violate the rights of any other person or entity; this
         covenant regarding originality shall not extend to any materials Disney
         supplies to Licensee, but does apply to all materials Licensee or
         Licensee's third party contractors may add thereto. The foregoing
         assignment to Disney of material objects shall not include that portion
         of Licensee's 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 Disney's name (e.g., "SYMBOL
         211 \f "Symbol" Disney"), or such other notice as Disney specifies to
         Licensee in writing. Licensee will comply with such instructions as to
         form, location and content of the notice as Disney may give from time
         to time. Licensee will not, without Disney's 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 Licensee's name or the name of a third party, Licensee hereby
         agrees to assign to Disney the copyright represented by any such
         copyright notice in Licensee's name and, upon request, cause the
         execution and delivery to Disney of whatever documents are necessary to
         convey to Disney that copyright represented by any such copyright
         notice. If by inadvertence a proper copyright




<PAGE>   23

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Disney Classics
Agreement dated November 16, 1998
Page 23


         notice is omitted from any Article or other matter containing Licensed
         Material, Licensee agrees at Licensee's expense to use all reasonable
         efforts to correct the omission on all such Articles or other matter in
         process of manufacture or in distribution. Licensee agrees to advise
         Disney 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.

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

         To preserve Disney's identification with Disney's characters and to
         avoid confusion of the public, Licensee agrees not to associate other
         characters or licensed properties with the Licensed Material or the
         Trademarks either on the Articles or in their packaging, or, without
         Disney's written permission, on advertising, promotional or display
         materials. If Licensee wishes to use a character which constitutes
         Licensee's trademark on the Articles or their packaging, or otherwise
         in connection with the Articles, Licensee agrees to obtain Disney's
         prior written permission.

15.      ACTIVE MARKETING OF ARTICLES

         Licensee agrees to manufacture (or have manufactured for Licensee) and
         actively offer for sale all the Articles and to actively exercise the
         rights granted herein. Licensee agrees that by the Marketing Date
         applicable to a particular Article shipments to customers of such
         Article will have taken place in sufficient time that such Article
         shall be available for purchase in commercial quantities by the public
         at the retail outlets in all distribution channels authorized pursuant
         to Paragraph 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
         in commercial quantities by the public, Disney may invoke any and all
         remedies available to it, including but not limited to those arising
         under Paragraph 28.


<PAGE>   24

The First Years, Inc.
Disney Classics
Agreement dated November 16, 1998
Page 24


16.      PROMOTION COMMITMENT

         Licensee agrees to carry out the Promotion Commitment, if any, as
         defined in Paragraph 1.N.

17.      TRADEMARK RIGHTS AND OBLIGATIONS

         A.       All uses of the Trademarks by Licensee hereunder shall inure
                  to Disney's benefit. Licensee acknowledges that Disney is 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, Licensee hereby assigns to
                  Disney 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. Licensee
                  agrees to execute and deliver to Disney such documents as
                  Disney requires to register Licensee as a Registered User or
                  Permitted User of the Trademarks or such trademarks and to
                  follow Disney's instructions for proper use thereof in order
                  that protection and/or registrations for the Trademarks and
                  such trademarks may be obtained or maintained.

         B.       Licensee agrees 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 Trademark as the
                  name of Licensee's business or any division thereof, unless
                  otherwise agreed by Disney in writing.

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

18.      REGISTRATIONS

         Except with Disney's written consent, neither Licensee nor any of
         Licensee's Affiliates 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




<PAGE>   25

The First Years, Inc.
Disney Classics
Agreement dated November 16, 1998
Page 25


         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 Disney or any
         of Disney's Affiliates. In the event of breach of the foregoing,
         Licensee agrees, at Licensee's expense and at Disney's request,
         immediately to terminate the unauthorized registration activity and
         promptly to execute and deliver, or cause to be delivered, to Disney
         such assignments and other documents as Disney may require to transfer
         to Disney all rights to the registrations, patents or applications
         involved.

19.      UNLICENSED USE OF LICENSED MATERIALS

         A.       Licensee agrees that Licensee will not use the Licensed
                  Material, or the Trademarks, or any other material the
                  copyright to which is owned by Disney in any way other than as
                  herein authorized (or as is authorized in any other remedy
                  Disney may have, Licensee agrees that all revenues from any
                  use thereof products other than the Articles (unless
                  authorized by Disney in writing), and all revenues from the
                  use of any other copyrighted material of Disney's without
                  written authorization, shall be immediately payable to Disney.

         B.       Licensee agrees to give Disney prompt written notice of any
                  unlicensed use by third parties of Licensed Material or
                  Trademarks, and that Licensee will not, without Disney's
                  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, Licensee agrees to cooperate with Disney, and, if
                  necessary, to be named by Disney as a sole complainant or
                  co-complainant in any action against an infringer of the
                  Licensed Material or Trademarks and, notwithstanding any right
                  of Licensee to recover same, legal or otherwise, Licensee
                  agrees to pay to Disney, and hereby waives 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 Licensee as a
                  licensee hereunder; in any such action against an infringer,
                  Disney agrees to reimburse Licensee for reasonable expenses
                  incurred at Disney's request, including reasonable attorney's
                  fees if Disney has requested Licensee to retain separate
                  counsel.


<PAGE>   26

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Disney Classics
Agreement dated November 16, 1998
Page 26


20.      STATEMENTS AND PAYMENTS OF ROYALTIES

         A.       Licensee agrees to furnish to Disney by the 25th day after
                  each Royalty Payment Period full and accurate statements on
                  statement forms Disney designates for Licensee's use, showing
                  all information requested by such forms, including but not
                  limited to, 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 Licensee will pay Disney all
                  Royalties and CMF payments (if applicable) due on billings
                  shown by such statements. To the extent that any Royalties or
                  CMF payments are not paid, Licensee authorizes Disney to
                  offset Royalties and/or CMF payments due against any sums
                  which Disney or any of Disney's Affiliates may owe to Licensee
                  or any of Licensee's Affiliates. No deduction or withholding
                  from Royalties payable to Disney shall be made by reason of
                  any tax. Any applicable tax on the manufacture, distribution
                  and sale of the Articles shall be borne by Licensee.

         B.       The statement forms Disney designates for Licensee's use may
                  be changed from time to time, and Licensee agrees to use the
                  most current form designated by Disney (including, for
                  example, forms to be sent by electronic transmission). If it
                  is necessary for Licensee to adapt its system to be able to
                  report statements by electronic transmission, all costs of
                  such adaptation shall be borne entirely by Licensee. Licensee
                  agrees to fully comply with all instructions supplied by
                  Disney for completing any reporting forms, or adhering to any
                  required format. Upon at least six (6) months' notice from
                  Disney, the Royalty Payment Period may be changed from
                  quarterly to monthly, unless this Agreement already provides
                  for a monthly Royalty Payment Period.

         C.       In addition to the other information requested by the
                  statement forms, Licensee's statement shall with respect to
                  all Articles report separately:

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

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

                  (3)         Licensee shall report all information required
                              under the Agreement separately by individual
                              Disney Classics Property;

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



<PAGE>   27

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Disney Classics
Agreement dated November 16, 1998
Page 27


                  (5)         Licensee's sales of Articles to any of Disney's
                              licensees or Disney's Affiliates' licensees who
                              are licensed to sell the Articles, and who are
                              reselling such Articles and paying Disney
                              royalties on such resales; in such cases, Licensee
                              need only report the sales on the statements,
                              because double royalties are not owed to Disney on
                              these sales;

                  (6)         sales of Articles to Disney or any of Disney's
                              Affiliates;

                  (7)         sales of Articles to Licensee's or Disney's
                              employees;

                  (8)         sales of Articles under any brand or property
                              identified in Paragraph 1.B. hereinabove;

                  (9)         sales of Articles to or for distribution through
                              any mail order catalogs approved under this
                              Agreement.

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

         E.       Licensee's statements and payments, including all Royalties,
                  shall be delivered to Wachovia South Metro Center, DEI
                  Account, P.O. Box 101947, Atlanta, Georgia 30392. A copy of
                  each statement must be sent to Disney at 500 South Buena Vista
                  Street, Burbank, California 91521-6687, to the attention of
                  the Contract Administrator, Consumer Products Division. If
                  Licensee wishes to send statements and payments by overnight
                  courier, please use the following address: Wachovia South
                  Metro Center, DEI Account, 3585 Atlanta Avenue, Hapeville, GA
                  30354, Attention Peggy Morris, Reference Lock box 101947.
                  However, Advances should be mailed directly to Disney at 500
                  South Buena Vista Street, Burbank, California 91521-6687, to
                  the attention of the Contract Administrator or Legal
                  Department, Consumer Products Division.

         F.       Insofar as is necessary to provide for full performance of
                  this Agreement, including but not limited to, proper payment
                  of Royalties, Licensee represents and warrants that it will
                  take all required steps to ensure that its information
                  systems, including, without limitation, all its proprietary
                  and all third party hardware and software, process dates
                  correctly prior to, during and after the calendar year 2000
                  ("Year 2000 Compliance"). Year 2000 Compliance shall include,
                  without limitation, correct century recognition, calculations
                  that properly accommodate same century and multi-century


<PAGE>   28

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Disney Classics
Agreement dated November 16, 1998
Page 28


                  formulas and date values, and interface values that reflect
                  the appropriate century. Necessary steps to ensure Year 2000
                  Compliance shall include, without limitation, analysis of all
                  components of Licensee's information systems and, as
                  necessary, development, installation and testing of software
                  fixes, patches, and updates. Licensee represents and warrants
                  that its information systems will be Year 2000 Compliant by
                  September 30, 1999. Such representation and warranty is a
                  material term of this Agreement. Upon a breach by Licensee of
                  its obligation under this paragraph, Disney shall be entitled
                  to terminate this Agreement in accordance with the provisions
                  for termination set forth herein.

21.      CONFIDENTIALITY

         Licensee agrees not to issue any press release regarding this Agreement
         without obtaining Disney's prior written consent. Licensee agrees to
         keep the terms and conditions of this Agreement confidential, and
         Licensee shall not disclose such terms and conditions to any third
         party without obtaining Disney's prior written consent; provided,
         however, that this Agreement may be disclosed on a need-to-know basis
         to Licensee's attorneys and accountants who agree to be bound by this
         confidentiality provision. In addition, Licensee may have access to
         information concerning Disney's and/or its Affiliates' business and
         operations, and/or information concerning works in progress, artwork,
         plots, characters or other matters relating to Disney's and/or its
         Affiliates' artistic creations, which information may not be accessible
         or known to the general public. Licensee agrees not to use or disclose
         such information to any third party without obtaining Disney's prior
         written consent. In the event Licensee is required to disclose this
         Agreement, or any part thereof, pursuant to any law, court order or
         process, the rules and regulations of any governmental department,
         agency or authority (including, but not limited to, the Securities and
         Exchange Commission) or any generally accepted accounting rules
         mandating disclosure in Licensee's financial statements, Licensee
         agrees to give Disney prior written notice and to use its best efforts
         to obtain confidential treatment of this Agreement. Upon Disney's
         request, Licensee agrees to incorporate Disney's comments into
         Licensee's request for confidential treatment, provided such request
         and comments are received in writing by Licensee within five (5)
         business days after Disney's receipt of the notice referred to in the
         preceding sentence.


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Disney Classics
Agreement dated November 16, 1998
Page 29


22.      INTEREST

         Royalties or any other payments due to Disney hereunder which are
         received after the due date shall bear interest at the rate of 18% per
         annum from the due date (or the maximum permissible by law if less than
         18%).

23.      AUDITS AND MAINTAINING RECORDS

         A.       Licensee agrees to keep accurate records of all transactions
                  relating to this Agreement and any prior agreement with Disney
                  regarding the Licensed Material, including, without
                  limitation, shipments to Licensee of Articles and components
                  thereof, inventory records, records of sales and shipments by
                  Licensee, 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.

         B.       Disney, or Disney's representatives, shall have the right from
                  time to time, during Licensee's normal business hours, but
                  only for the purpose of confirming Licensee's performance
                  hereunder, to examine and make extracts from all such records,
                  including the general ledger, invoices and any other records
                  which Disney reasonably deems appropriate to verify the
                  accuracy of Licensee's statements or Licensee's performance
                  hereunder, including records of Licensee's Affiliates and/or
                  unaffiliated sublicensees if they are involved in activities
                  which are the subject of this Agreement. In particular,
                  Licensee's invoices shall identify the Articles separately
                  from goods which are not licensed hereunder. Licensee
                  acknowledges that Disney may furnish Licensee with an audit
                  questionnaire, and Licensee agrees to fully and accurately
                  complete such questionnaire, and return it to Disney within
                  the designated time. Disney's use of an audit questionnaire
                  shall not limit Disney's ability to conduct any on-site
                  audit(s) as provided above. Licensee acknowledges that an
                  audit conducted by Disney or its representatives, may involve
                  one or more license agreements at a time.

         C.       If in an audit of Licensee's records it is determined that
                  there is a short fall of five percent (5%) or more in
                  Royalties reported for any Royalty Payment Period, Licensee
                  shall upon request from Disney reimburse Disney for the full
                  out-of-pocket costs of the audit, including the costs of
                  employee auditors calculated at $60 per hour per person for
                  travel time during normal working hours and actual working
                  time.

         D.       If Licensee has failed to keep adequate records for one or
                  more Royalty Payment Periods, Disney will assume that the
                  Royalties owed to Disney for




<PAGE>   30

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Disney Classics
Agreement dated November 16, 1998
Page 30

                  such Royalty Payment Period(s) are equal to a reasonable
                  amount, determined in Disney's absolute discretion, which may
                  be up to but will not exceed the highest Royalties owed to
                  Disney in a Royalty Payment Period for which Licensee has kept
                  adequate records; if Licensee has failed to keep adequate
                  records for any Royalty Payment Period, Disney will assume a
                  reasonable amount of Royalties which Licensee will owe to
                  Disney, based on the records Licensee has kept and other
                  reasonable assumptions Disney deems appropriate.

24.      MANUFACTURE OF ARTICLES BY THIRD PARTY MANUFACTURERS

         A.       Licensee agrees to supply Disney with the names and addresses
                  of all of its own manufacturing facilities for the Articles.
                  If Licensee at any time desires to have Articles or components
                  thereof containing Licensed Material and/or Trademarks
                  manufactured by a third party, whether the third party is
                  located within or outside the United States, Licensee must, as
                  a condition to the continuation of this Agreement, notify
                  Disney of the accurate name and complete address of such
                  Manufacturer and the Articles or components involved and
                  obtain Disney's prior written permission to do so. If Disney
                  is prepared to grant permission, Disney will do so if Licensee
                  and each of Licensee's Manufacturers sign a
                  Consent/Manufacturer's Agreement in a form which Disney will
                  furnish to Licensee and Disney receives all such agreements
                  properly signed. Licensee must immediately notify Disney if
                  Licensee is no longer using the Manufacturer to manufacture
                  Articles or components thereof.

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

         B.       It is not Disney's policy to reveal the names of Licensee's
                  Manufacturers to third parties or to any Disney division
                  involved with buying products, except as may be necessary to
                  enforce Disney's contract rights or protect Disney's
                  trademarks and copyrights.

         C.       If any such Manufacturer utilizes Licensed Material or
                  Trademarks for any unauthorized purpose, Licensee shall
                  cooperate fully in bringing such utilization to an immediate
                  halt. If, by reason of Licensee's not having supplied the
                  above mentioned agreements to Disney or not having given
                  Disney the name of any Manufacturer, Disney makes any
                  representation or takes any action and is thereby subjected to
                  any penalty or expense, Licensee will fully compensate Disney
                  for any cost or loss Disney sustains (in addition to any other
                  legal or equitable remedies available to Disney).


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Disney Classics
Agreement dated November 16, 1998
Page 31


         D.       If any Manufacturer fails to pass a compliance inspection as
                  referenced in Paragraph 11, and thereafter fails to remedy the
                  cited failure(s) within the time designated by Disney, or if
                  the Manufacturer otherwise breaches the Consent/Manufacturer's
                  Agreement, the Consent/Manufacturer's Agreement for such
                  Manufacturer may be terminated immediately by Disney, and
                  Licensee shall not thereafter use such Manufacturer to
                  manufacture Articles or components thereof. If Licensee fails
                  to notify Disney that it has ceased using a particular
                  Manufacturer, and Disney or its designated agent conducts a
                  compliance inspection of such Manufacturer, Licensee remains
                  obligated to work with the Manufacturer to remedy any cited
                  failure(s), or, in the alternative, the Consent/Manufacturer's
                  Agreement shall be deemed terminated for purposes of Paragraph
                  28.B. (8), and Licensee shall promptly reimburse Disney for
                  the actual costs of the compliance inspection.

25.      INDEMNITY

         A.       Licensee shall indemnify Disney during and after the term
                  hereof against all claims, demands, suits, judgments, losses,
                  liabilities (including settlements entered into in good faith
                  with Licensee's consent, not to be unreasonably withheld) and
                  expenses of any nature (including reasonable attorneys' fees)
                  arising out of Licensee's activities under this Agreement,
                  including but not limited to, any actual or alleged: (1)
                  negligent acts or omissions on Licensee's part, (2) defect
                  (whether obvious or hidden and whether or not present in any
                  Sample approved by Disney) in an Article, (3) personal injury,
                  (4) infringement of any rights of any other person by the
                  manufacture, sale, possession or use of Articles, (5) breach
                  on Licensee's part of any covenant, representation or warranty
                  contained in this Agreement, or (6) failure of the Articles or
                  by Licensee to comply with applicable Laws. The parties
                  indemnified hereunder shall include Disney Enterprises, Inc.
                  and its Affiliates and successors, and its 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 Licensee's utilization of
                  the Licensed Material and the Trademarks in accordance with
                  the provisions hereof, unless such claim or liability arises
                  out of Licensee's failure to obtain the full assignment of
                  rights referenced in Paragraph 12.

         B.       Disney shall indemnify Licensee during and after the term
                  hereof against all claims, demands, suits, judgments, losses,
                  liabilities (including settlements entered into in good faith
                  with Disney's consent, not to be unreasonably withheld) and
                  expenses of any nature (including reasonable attorneys' fees)
                  arising out of any claim that Licensee's 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



<PAGE>   32

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Disney Classics
Agreement dated November 16, 1998
Page 32

                  infringes any right granted by Disney to such third party,
                  except for claims arising out of Licensee's failure to obtain
                  the full assignment of rights referenced in Paragraph 12.
                  Licensee shall not, in any case, be entitled to recover for
                  lost profits.

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

         D.       Disney gives no warranty or indemnity 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 Disney. It is expressly agreed that
                  it is Licensee's responsibility to carry out such
                  investigations as Licensee may deem appropriate to establish
                  that Articles, packaging, and 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 Disney shall not be liable to Licensee if such
                  infringement occurs.

         E.       Licensee and Disney agree to give each other prompt written
                  notice of any claim or suit which may arise under the
                  indemnity provisions set forth above. Without limiting the
                  foregoing, Licensee agrees to give Disney written notice of
                  any product liability claim made or suit filed with respect to
                  any Article, any investigations or directives regarding the
                  Articles issued by the Consumer Product Safety Commission
                  ("CPSC") or other federal, state or local consumer safety
                  agency, and any notices sent by Licensee to, or received by
                  Licensee from, the CPSC or other consumer safety agency
                  regarding the Articles within fourteen (14) days of Licensee's
                  receipt or promulgation of the claim, suit, investigation,
                  directive, or notice.

26.      INSURANCE

         Licensee 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 on a per occurrence form, including broad
         form coverage for contractual liability,




<PAGE>   33

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Disney Classics
Agreement dated November 16, 1998
Page 33


         property damage, 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. Licensee also agrees to maintain in full force and
         effect at all times while this Agreement is in effect such Worker's
         Compensation Insurance as is required by applicable law and Employer's
         Liability Insurance with minimum limits of one million dollars (US
         $1,000,000.00) per occurrence. All insurance shall be primary and not
         contributory. Licensee shall deliver to Disney a certificate or
         certificates of insurance evidencing satisfactory coverage and
         indicating that Disney shall receive thirty (30) days unrestricted
         prior written notice of cancellation, non-renewal or of any material
         change in coverage. Licensee's insurance shall be carried by an insurer
         with a BEST Guide rating of B + VII or better. Compliance herewith in
         no way limits Licensee's indemnity obligations, except to the extent
         that Licensee's insurance company actually pays Disney amounts which
         Licensee would otherwise pay Disney.

27.      WITHDRAWAL OF LICENSED MATERIAL

         Licensee agrees that Disney may, without obligation to Licensee other
         than to give Licensee written notice thereof, withdraw from the scope
         of this Agreement 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
         Disney, in which case Disney's obligations to Licensee 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
         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 Disney:

         A.       Disney shall have the right at any time to terminate this
                  Agreement by giving Licensee written notice thereof, if
                  Licensee fails to manufacture, sell and distribute the
                  Articles in accordance with this Agreement, or fails to timely
                  furnish statements and timely pay Royalties or any other
                  payments due to Disney hereunder, or fails to notify Disney of
                  the accurate name and complete address of its own
                  manufacturing facilities or any Manufacturer of the Articles,
                  or fails to have any such Manufacturer execute the
                  Consent/Manufacturer's Agreement, or if Licensee otherwise
                  breaches the terms of this Agreement, and if any such failure
                  or other breach is not corrected within thirty (30) days (or,
                  in the case of non-payment of any




<PAGE>   34

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Disney Classics
Agreement dated November 16, 1998
Page 34

                  monetary obligations due Disney under the Agreement within
                  fifteen (15) days) after Disney sends Licensee written notice
                  thereof.

         B.       Disney shall have the right at any time to terminate this
                  Agreement immediately by giving Licensee written notice
                  thereof:

                  (1)         if Licensee delivers to any customer without
                              Disney's written authorization merchandise
                              containing representations of Licensed Material or
                              other material the copyright or other proprietary
                              rights to which are owned by Disney other than
                              Articles listed herein and approved in accordance
                              with the provisions hereof;

                  (2)         if Licensee delivers Articles outside the
                              Territory or knowingly sells Articles to a third
                              party for delivery outside the Territory, unless
                              pursuant to a written distribution permission or
                              separate written license agreement with Disney or
                              any of Disney's Affiliates;

                  (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 Disney has
                              previously given Licensee written notice;

                  (4)         if Licensee breaches any material term of any
                              other license agreement between the parties, and
                              Disney terminates such agreement for cause;

                  (5)         if Licensee shall make any assignment for the
                              benefit of creditors, or file a petition in
                              bankruptcy, or is adjudged bankrupt, or becomes
                              insolvent, or is 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;

                  (6)         if Licensee is not permitted or is unable to
                              operate Licensee's business in the usual manner,
                              or is not permitted or is unable to provide Disney
                              with assurance satisfactory to Disney that
                              Licensee will so operate Licensee's business, as
                              debtor in possession or its equivalent, or is not
                              permitted, or is unable to otherwise meet
                              Licensee's obligations under this Agreement or to
                              provide Disney with assurance satisfactory to
                              Disney that Licensee will meet such obligations;

                  (7)         if Licensee breaches any covenant set forth in
                              Paragraph 11 of this Agreement; and/or



<PAGE>   35

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Disney Classics
Agreement dated November 16, 1998
Page 35


                  (8)         if more than three Consent/Manufacturer's
                              Agreements are terminated in any twelve-month
                              period by Disney for the Manufacturers' failure to
                              pass compliance inspections as referenced in
                              Paragraphs 11 and 24.

         C.       If Disney terminates this Agreement pursuant to this Paragraph
                  28, Licensee shall not be permitted to seek injunctive relief
                  to contest Disney's determination that a termination event has
                  occurred or to otherwise affect Disney's full and absolute
                  control of the Licensed Material and the Trademarks; provided
                  however, Licensee may bring an action for damages, but prior
                  to and during any such action, Disney shall have full and
                  absolute control over the Licensed Material and the
                  Trademarks.

29.      RIGHTS AND OBLIGATIONS UPON EXPIRATION OR TERMINATION

         A.       Upon the expiration or termination of this Agreement, all
                  rights herein granted to Licensee shall revert to Disney, any
                  unpaid portion of the Guarantee shall be immediately due and
                  payable, and Disney shall be entitled to retain all Royalties
                  and other things of value paid or delivered to Disney.
                  Licensee agrees that the Articles shall be manufactured during
                  the 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 Term. Licensee
                  agrees that from the expiration or termination of this
                  Agreement Licensee shall neither manufacture nor have
                  manufactured for Licensee any Articles, that Licensee will
                  deliver to Disney any and all artwork (including Style Guides,
                  animation cels and drawings) which may have been used or
                  created by Licensee in connection with this Agreement, that
                  Licensee will at Disney's option either sell to Disney at cost
                  or destroy or efface any molds, plates and other items used to
                  reproduce Licensed Material or Trademarks, and that, except as
                  hereinafter provided, Licensee will cease selling Articles.
                  Any unauthorized distribution of Articles after the expiration
                  or termination of this Agreement shall constitute copyright
                  infringement.

         B.       If Licensee has any unsold Articles in inventory on the
                  expiration or termination date, Licensee shall provide Disney
                  with a full statement of the kinds and numbers of such unsold
                  Articles. If such statement has been provided to Disney and if
                  Licensee has fully complied with the terms of this Agreement,
                  including the payment of all Royalties due and the Guarantee,
                  upon notice from Disney, Licensee shall have the right for a
                  limited period of two (2) calendar months from such expiration
                  or earlier termination date to sell off and deliver such
                  Articles as authorized under Paragraph 2.A.




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Disney Classics
Agreement dated November 16, 1998
Page 36


                  Licensee shall furnish Disney statements covering such sales
                  and pay Disney Royalties in respect of such sales. Such
                  Royalties shall not be applied against the Advance or towards
                  meeting the Guarantee. If the sell-off period is extended by
                  Disney to a date which is not the last day of the Royalty
                  Payment Period, Licensee's statement and Royalties for such
                  sell-off period shall be due twenty-five (25) days after the
                  last day of the sell-off period. All rights and remedies
                  available to Disney during the Term shall be equally available
                  to Disney during the sell-off period.

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

         D.       Except as otherwise agreed by Disney in writing, any inventory
                  of Articles in Licensee's 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 Disney supplies Licensee with forms regarding compliance
                  with this Paragraph 29, Licensee agrees to complete, execute
                  and return such forms to Disney expeditiously.

         F.       Notwithstanding any provision to the contrary, in the case of
                  termination under Paragraph 28.B. (5) or (6), in order to
                  protect the value of the Articles and to avoid any
                  disparagement of the Articles which could occur as a result of
                  the circumstances of termination, Disney shall have the
                  option, in Disney's absolute discretion, to purchase any or
                  all unsold Articles in Licensee's inventory on the termination
                  date at 20% over Licensee's cost of goods for such Articles
                  (not including overhead).

30.      WAIVERS

         A waiver by either party 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




<PAGE>   37

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Agreement dated November 16, 1998
Page 37


         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 DISNEY

         If Disney wishes to purchase Articles, Licensee agrees to sell such
         Articles to Disney or any of Disney's Affiliates at as low a price as
         Licensee charges for similar quantities sold to Licensee's regular
         customers and to pay Disney Royalties on any such sales.

32.      NON-ASSIGNABILITY

         A.       This Agreement is personal to Licensee, who was specifically
                  chosen by Disney to be licensed hereunder because of
                  Licensee's particular expertise and ability to perform the
                  Agreement. Licensee shall not voluntarily or by operation of
                  law assign, sub-license, transfer, encumber or otherwise
                  dispose of all or any part of Licensee's interest in this
                  Agreement (including, but not limited to, any encumbrance of
                  the Articles) without Disney's prior written consent, to be
                  granted or withheld in Disney's absolute discretion. 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 Licensee or any
                  directly or indirectly controlling Affiliate(s) of Licensee
                  ("Controlling Affiliate"); any sale or transfer of all or
                  substantially all of Licensee's or its Controlling
                  Affiliate(s)' assets; any transfer of Licensee's rights and/or
                  obligations hereunder to a division, business segment or other
                  entity different from 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); any public offering, or series of public
                  offerings, whereby a cumulative total of thirty-three and
                  one-third percent (33 1/3%) or more of the voting stock of
                  Licensee or its Controlling Affiliate(s) is offered for
                  purchase; and any acquisition, or series of acquisitions, by
                  any person or entity, or group of related persons or entities,
                  of a cumulative total of thirty-three and one-third percent
                  (33-1/3%) or more of the voting stock of Licensee or its
                  Controlling Affiliate(s), or the right to vote such percentage
                  (or, if Licensee is a partnership, resulting in the transfer
                  of thirty-three and one-third percent (33-1/3%) or more of the
                  profit and loss participation in Licensee, or the occurrence
                  of any of the foregoing with respect to any general partner of
                  Licensee).

         B.       Licensee agrees to provide Disney with at least thirty (30)
                  days prior written notice of any desired assignment of this
                  Agreement or other transfer as




<PAGE>   38

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Page 38


                  defined in Paragraph 32.A. At the time Licensee gives such
                  notice, Licensee shall provide Disney with the information and
                  documentation necessary to evaluate the contemplated
                  transaction. Disney's consent (if given) to any assignment of
                  this Agreement or other transfer as defined in Paragraph 32.A.
                  shall be subject to such terms and conditions as Disney deems
                  appropriate, including but not limited to, payment of a
                  transfer fee. The amount of the transfer fee shall be
                  determined by Disney based upon the circumstances of the
                  particular assignment or transfer, taking into account such
                  factors as the estimated value of the license being assigned
                  or otherwise transferred; the risk of business interruption or
                  loss of quality, production or control Disney may suffer as a
                  result of the assignment or other transfer; the identity,
                  reputation, creditworthiness, financial condition and business
                  capabilities of the proposed assignee or other entity involved
                  in the transfer; and Disney's internal costs related to the
                  assignment or other transfer; provided, however, in no event
                  shall the transfer fee be in an amount less than $ * for each
                  Disney license, brand and/or property (if applicable) involved
                  in an assignment or other transfer. The foregoing transfer fee
                  shall not apply if this Agreement is assigned to one of
                  Licensee's Affiliates as part of a corporate reorganization
                  exclusively among some or all of the entities existing in
                  Licensee's corporate structure when this Agreement is signed;
                  provided, however, that Licensee must give Disney written
                  notice of such assignment and a description of the
                  reorganization. Notwithstanding the foregoing, a transfer fee
                  will not be triggered by any of the following transfers of
                  voting stock, unless occurring as part of a transaction that
                  would trigger a transfer fee: (1) distribution(s) on employee
                  stock options, or (2) transfers among the current shareholders
                  who are members of the Sidman family (including their spouses
                  and children), for estate planning purposes, so long as
                  Licensee maintains substantially the same management and
                  continues to operate in substantially the same fashion as
                  prior to such transfer; provided, however, that in any event,
                  any of the transfers described above shall remain subject to
                  Disney's consent as set forth in Paragraph 32.A. The
                  provisions of this Paragraph 32 shall supersede any
                  conflicting provisions on this subject in any merchandise
                  license agreement previously entered into between the parties
                  for this Territory.

         C.       Licensee acknowledges that it has read and understands the
                  Transfer Fee Policy attached hereto, which governs transfer
                  fee procedures under this Agreement. The Transfer Fee Policy
                  is incorporated herein by this reference.

         D.       Notwithstanding Paragraphs 32.A. and B., Licensee may, upon
                  Disney's prior written consent, sublicense Licensee's rights
                  and/or obligations hereunder to any of Licensee's Affiliates,
                  provided that each such Affiliate



<PAGE>   39

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Agreement dated November 16, 1998
Page 39


                  agrees to be bound by all of the terms and conditions of this
                  Agreement, and provided that each such Affiliate agrees to
                  guarantee Licensee's full performance of this Agreement
                  (including, but not limited to, Paragraph 25) and to indemnify
                  Disney for any failure of such performance, and further
                  provided that Licensee and each such Affiliate agree to
                  provide Disney with satisfactory documentation of such
                  agreement(s), guarantee(s), and indemnification upon Disney's
                  request therefor. Licensee hereby represents and irrevocably
                  and unconditionally guarantees that any and all Affiliates
                  sublicensed hereunder will observe and perform all of
                  Licensee's obligations under this Agreement, including, but
                  not limited to, the provisions governing approvals, and
                  compliance with approved samples, applicable Laws, and all
                  other provisions hereof, and that they will otherwise adhere
                  strictly to all of the terms hereof and act in accordance with
                  Licensee's obligations hereunder. Any involvement of an
                  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; however, unless
                  Licensee has obtained Disney's consent to sublicense an
                  Affiliate in each instance, such Affiliate shall be deemed to
                  be included in the term "Licensee" for all purposes under this
                  Agreement, and Disney may treat such unapproved involvement of
                  the Affiliate as a breach of the Agreement. In the event of
                  any sublicense to an Affiliate hereunder, the reference in
                  Paragraph 32.A. to "Controlling Affiliate" shall include such
                  Affiliate sublicensee.

33.      RELATIONSHIP

         This Agreement does not provide for a joint venture, partnership,
         agency or employment relationship between the parties, or any other
         relationship than that of licensor and licensee.


<PAGE>   40

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Disney Classics
Agreement dated November 16, 1998
Page 40


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.

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 authorized representatives
         of both parties; provided, however, that certain modifications shall be
         effective if signed by the party to be charged and communicated to the
         other party.

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 Disney
         shall be deemed to have been served with a notice of a request for
         approval of materials under this Agreement only upon Disney's actual
         receipt of the request and of any required accompanying materials. Any
         notice sent to Disney hereunder shall be sent to the attention of "Vice
         President, Licensing", unless Disney advises Licensee 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 Licensee may have
         signed pertaining to any of the Licensed Material, contains the entire
         agreement between the parties concerning the subject matter hereof and
         supersedes any pre-existing or contemporaneous agreement and any oral
         or written communications between the parties.



<PAGE>   41

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Disney Classics
Agreement dated November 16, 1998
Page 41


39.      CHOICE OF LAW AND FORUM

         This Agreement shall be deemed to be an executory agreement entered
         into in California and shall be governed and interpreted according to
         the laws of the State of California applicable to contracts made and to
         be fully performed in California. Any legal actions pertaining to this
         Agreement shall be commenced within the State of California and within
         either Los Angeles or Orange Counties, and Licensee consents to the
         jurisdiction of the courts located in Los Angeles or Orange Counties.

40.      EQUITABLE RELIEF

         Licensee acknowledges that Disney will have no adequate remedy at law
         if Licensee continues to manufacture, sell, advertise, promote or
         distribute the Articles upon the expiration or termination of this
         Agreement. Licensee acknowledges and agrees that, in addition to any
         and all other remedies available to Disney, Disney shall have the right
         to have any such activity by Licensee restrained 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
         Disney posting any bond.

41.      GOODWILL

         Licensee acknowledges that the rights and powers retained by Disney
         hereunder are necessary to protect Disney's copyrights and property
         rights, and, specifically, to conserve the goodwill and good name of
         Disney's products and company, and the name "Disney", and therefore
         Licensee agrees that Licensee will not allow the same to become
         involved in matters which will, or could, detract from or impugn the
         public acceptance and popularity thereof, or impair their legal status.

42.      POWER TO SIGN

         The parties warrant and represent that their respective representatives
         signing this Agreement have full power and proper authority to sign
         this Agreement and to bind the parties.

43.      SURVIVAL OF OBLIGATIONS

         The respective obligations of the parties under this Agreement, which
         by their nature would continue beyond the termination, cancellation or
         expiration of this Agreement, including but not limited to
         indemnification, insurance, payment of Royalties, and Paragraph 29,
         shall survive termination, cancellation or expiration of this
         Agreement.


<PAGE>   42

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Disney Classics
Agreement dated November 16, 1998
Page 42


44.      SEVERABILITY OF PROVISIONS

         The terms of this Agreement are severable and the invalidity of any
         term of this Agreement shall not affect the validity of any other term.

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


AGREED:

DISNEY ENTERPRISES, INC.

By: /s/ Steve Cipolla
    -----------------------------

Title:  Vice President, Licensing
        -------------------------

Date: June 15, 1999


THE FIRST YEARS, INC.

By: /s/  Ronald J. Sidman
    ------------------------------

Title:  President
       ---------------------------


<PAGE>   43


                              THE FIRST YEARS, INC.
                                 DISNEY CLASSICS
                        AGREEMENT DATED NOVEMBER 16, 1998
                                   SCHEDULE A


A.   FEEDING AND SOOTHING

     1.   Bottles
     2.   Bibs
     3.   Cups (sculpted and decorated)
     4.   Fork and spoon
     5.   Pacifiers
     6.   Toddler sports bottles

B.   PLAYTHINGS

     1.   Hand-held rattles (must contain teething or visible rattle component)
     2.   Electronic hand-held toys
     3.   Suction toys
     4.   Bath toys
     5.   Linking toys
     6.   Musical plush with teething and/or rattle
     7.   Crib activity toys
     8.   Crib activity lights
     9.   Teethers
     10.  Squeeze toys
     11.  Chime balls (DISNEY BABIES brand only)

C.   CARE AND SAFETY

     1.   Night lights
     2.   Car shades
     3.   Combs and brushes


<PAGE>   44


                               TRANSFER FEE POLICY


As provided in Paragraph 32.B. of the License Agreement, it is Disney's policy
to charge a transfer fee in connection with any permitted assignment of the
license or other "transfer," as that term is defined in Paragraph 32.A. The
amount of the transfer fee is based on the circumstances of the particular
assignment or transfer, taking into account such factors as:

     o  the estimated value of the license being assigned or involved in the
        transfer

     o  the risk of business interruption

     o  the risk of loss of quality, production or control

     o  the identity, reputation, creditworthiness, financial condition and
        business capabilities of the proposed assignee or entity involved in the
        transfer

     o  Disney's internal costs related to the assignment or transfer

At a minimum, the transfer fee will be $  *  , and it could be as high as  *  ,
depending on the circumstances of the particular case. No Licensee or any
company involved with a Licensee in an assignment or transfer situation should
rely upon any express or implied verbal representations that are purported to be
made on Disney's behalf as to the amount of any given fee to be assessed. Disney
Licensing's Finance Department will communicate the actual amount of the fee
calculated in each approved transaction.

In any prospective assignment or transfer situations, Licensees must inform the
persons and companies with which they are dealing that no assignment or transfer
may occur without Disney's prior written consent, to be granted or withheld in
Disney's absolute discretion, and that any approved transaction will also entail
a transfer fee. Licensees must give Disney at least 30 days prior written notice
of any desired assignment or other transfer, together with any information and
documentation necessary to evaluate the contemplated transaction. Licensees
should not endanger the closing of their desired transactions by failing to
comply with these provisions of the License Agreement.

If Disney grants consent to a proposed transaction subject to the payment of a
transfer fee, and the transaction is concluded but the transfer fee is not paid
within the designated time, the subject License Agreement(s) shall automatically
terminate and any Guarantee shortfall(s) shall be immediately due and payable to
Disney. If Disney does not grant consent to a proposed assignment or transfer
and the Licensee nevertheless closes the transaction, the subject License
Agreement(s) shall automatically terminate and any Guarantee shortfall(s) shall
be immediately due and payable to Disney.

Disney's consent to any assignment or other transfer should in no way be
understood to be a guarantee or promise by Disney of a grant of any future
license(s), as those determinations will continue to be made on a contract by
contract basis.


<PAGE>   45


                        CODE OF CONDUCT FOR MANUFACTURERS

At The Walt Disney Company, we are committed to:

     o  a standard of excellence in every aspect of our business and in every
        corner of the world;
     o  ethical and responsible conduct in all of our operations;
     o  respect for the rights of all individuals; and
     o  respect for the environment.

We expect these same commitments to be shared by all manufacturers of Disney
merchandise. At a minimum, we require that all manufacturers of Disney
merchandise meet the following standards:


CHILD LABOR                Manufacturers will not use child labor.

                           The term "child" refers to a person younger than 15
                           (or 14 where local law allows) or, if higher, the
                           local legal minimum age for employment or the age for
                           completing compulsory education.

                           Manufacturers employing young persons who do not fall
                           within the definition of "children" will also comply
                           with any laws and regulations applicable to such
                           persons.

INVOLUNTARY LABOR          Manufacturers will not use any forced or
                           involuntary labor, whether prison, bonded, indentured
                           or otherwise.

COERCION AND
     HARASSMENT            Manufacturers will treat each employee with dignity
                           and respect, and will not use corporal punishment,
                           threats of violence or other forms of physical,
                           sexual, psychological or verbal harassment or abuse.

NONDISCRIMINATION          Manufacturers will not discriminate in hiring and
                           employment practices, including salary, benefits,
                           advancement, discipline, termination or retirement,
                           on the basis of race, religion, age, nationality,
                           social or ethnic origin, sexual orientation, gender,
                           political opinion or disability.

ASSOCIATION                Manufacturers will respect the rights of employees to
                           associate, organize and bargain collectively in a
                           lawful and peaceful manner, without penalty or
                           interference.

HEALTH AND SAFETY          Manufacturers will provide employees with
                           a safe and healthy workplace in compliance with all
                           applicable laws and regulations, ensuring at a
                           minimum, reasonable access to potable water and
                           sanitary facilities, fire safety, and adequate
                           lighting and ventilation.

                           Manufacturers will also ensure that the same
                           standards of health and safety are applied in any
                           housing that they provide for employees.


<PAGE>   46



COMPENSATION               We expect manufacturers to recognize that wages are
                           essential to meeting employees' basic needs.
                           Manufacturers will, at a minimum, comply with all
                           applicable wage and hour laws and regulations,
                           including those relating to minimum wages, overtime,
                           maximum hours, piece rates and other elements of
                           compensation, and provide legally mandated benefits.
                           If local laws do not provide for overtime pay,
                           manufacturers will pay at least regular wages for
                           overtime work. Except in extraordinary business
                           circumstances, manufacturers will not require
                           employees to work more than the lesser of (a) 48
                           hours per week and 12 hours overtime or (b) the
                           limits on regular and overtime hours allowed by local
                           law or, where local law does not limit the hours of
                           work, the regular work week in such country plus 12
                           hours overtime. In addition, except in extraordinary
                           business circumstances, employees will be entitled to
                           at least one day off in every seven-day period.

                           Where local industry standards are higher than
                           applicable legal requirements, we expect
                           manufacturers to meet the higher standards.

PROTECTION OF THE
     ENVIRONMENT           Manufacturers will comply with all applicable
                           environmental laws and regulations.

OTHER LAWS                 Manufacturers will comply with all applicable laws
                           and regulations, including those pertaining to the
                           manufacture, pricing, sale and distribution of
                           merchandise.

                           All references to "applicable laws and regulations"
                           in this Code of Conduct include local and national
                           codes, rules and regulations as well as applicable
                           treaties and voluntary industry standards.

SUBCONTRACTING             Manufacturers will not use subcontractors for the
                           manufacture of Disney merchandise or components
                           thereof without Disney's express written consent, and
                           only after the subcontractor has entered into a
                           written commitment with Disney to comply with this
                           Code of Conduct.
MONITORING AND
     COMPLIANCE            Manufacturers will authorize Disney and its
                           designated agents (including third parties) to engage
                           in monitoring activities to confirm compliance with
                           this Code of Conduct, including unannounced on-site
                           inspections of manufacturing facilities and
                           employer-provided housing; reviews of books and
                           records relating to employment matters; and private
                           interviews with employees. Manufacturers will
                           maintain on site all documentation that may be needed
                           to demonstrate compliance with this Code of Conduct.

PUBLICATION                Manufacturers will take appropriate steps to ensure
                           that the provisions of this Code of Conduct are
                           communicated to employees, including the prominent
                           posting of a copy of this Code of Conduct, in the
                           local language and in a place readily accessible to
                           employees, at all times.


<PAGE>   47


                          CODE OF CONDUCT FOR LICENSEES


At The Walt Disney Company, we are committed to:

     o  a standard of excellence in every aspect of our business and in every
        corner of the world;
     o  ethical and responsible conduct in all of our operations;
     o  respect for the rights of all individuals; and
     o  respect for the environment.


We expect these same commitments to be shared by all Disney licensees and the
manufacturers with which they work in the production of Disney merchandise. At a
minimum, we require that all Disney licensees meet the following standards:

CONDUCT OF
     MANUFACTURING         Licensees that engage directly in the manufacturing
                           of Disney merchandise will comply with all of the
                           standards set forth in Disney's Code of Conduct for
                           Manufacturers, a copy of which is attached.

                           Licensees will ensure that each manufacturer other
                           than the licensee also enters into a written
                           commitment with Disney to comply with the standards
                           set forth in Disney's Code of Conduct for
                           Manufacturers.

                           Licensees will prohibit manufacturers from
                           subcontracting the manufacture of Disney merchandise
                           or components thereof without Disney's express
                           written consent, and only after the subcontractor has
                           entered into a written commitment with Disney to
                           comply with Disney's Code of Conduct for
                           Manufacturers.

MONITORING AND
     COMPLIANCE            Licensees will take appropriate steps, in
                           consultation with Disney, to develop, implement and
                           maintain procedures to evaluate and monitor
                           manufacturers of Disney merchandise and ensure
                           compliance with Disney's Code of Conduct for
                           Manufacturers, including unannounced on-site
                           inspections of manufacturing facilities and
                           employer-provided housing; review of books and
                           records relating to employment matters; and private
                           interviews with employees.

                           Licensees will authorize Disney and its designated
                           agents (including third parties) to engage in similar
                           monitoring activities to confirm Licensees'
                           compliance with this Code of Conduct. Licensees will
                           maintain on site all documentation that may be needed
                           to demonstrate such compliance.