<PAGE>   1
                                                                   Exhibit 10(r)

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:   POOH - JUVENILE BRAND

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 characters, but only depictions of such characters and
             accompanying design elements as may be designated by Disney:

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

         B.  "Trademarks" means "WALT DISNEY", "DISNEY", the representations of
             Licensed Material included in Paragraph 1.A. above, and the
             following brand name(s) (including the logo(s) Disney will provide
             to Licensee):

                  POOH (JUVENILE)

         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.

         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 January 1, 1999, and ending * .


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Page 2


         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 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 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 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.


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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 3

             (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).

             (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;




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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 4


                      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):

                  *

         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):

                  *

         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. 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,
                      Licensee shall pay 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 "CMF Guarantee" shall be the
                      amount equal to * percent ( * %) of the quotient of the
                      Guarantee divided by the Royalty rate for F.O.B. In Sales.
                      Licensee also may be required to pay 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.


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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 5


             (2)      Licensee's CMF payments shall be expended by 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, the
                      Trademarks and/or the brand(s) 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, the Trademarks and/or
                      the brand(s) should be spent. Licensee shall not be
                      entitled to any audit rights with regard to the 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.:

                  By January 1, 1999, for all Articles.

         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; "WHOLESALER" means a seller of items to retailers, not
             consumers, and includes the term "distributor". The following do
             not qualify as authorized





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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 6


             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 the following Retailers
                 in the Territory for resale to the public in the Territory: (1)
                 mass market Retailers (including such Retailers as Target, Toys
                 R Us, WalMart and Kmart), (2) value-oriented department stores
                 (including such Retailers as Sears and Mervyn's), (3)
                 value-oriented specialty stores, (4) drug chains, and (5)
                 supermarkets and food chains; provided, however, that the
                 Article identified as Article Number C.13 may be sold only to
                 the infant buyers of such Retailers. In addition, Licensee may
                 sell the Articles identified as Numbers A.1. through A.4.,
                 A.9., A.13., B.2., B.5., B.14., B.21., B.25., C.1., C.2., C.5.
                 through C.8., and C.11., to the following Retailers in the
                 Territory for resale to the public in the Territory: (1)
                 upscale Retailers (including such Retailers as Robinsons-May,
                 Nordstrom and Bloomingdale's), (2) better specialty stores
                 (including such Retailers as Bergstrom's), and (3) mid-tier
                 department stores (including such Retailers as J.C. Penney and
                 Kohl's). Licensee also may sell the Articles to Wholesalers
                 which sell to drug chains, supermarkets and food chains, and
                 value-oriented specialty stores. 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




<PAGE>   7

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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 7


                 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.

             (4) Licensee may sell the Articles to authorized customers for
                 resale through the pre-approved mail order catalogs listed on
                 the Mass Catalog Schedule to this Agreement. In addition,
                 Articles Numbers A.1 through A.4, A.9., A.13., B.2, B.5, B.14.,
                 B.21, B.25., C.1, C.2, C.5 through C.8 and C.11 may be sold
                 through Upscale Catalogs. 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 those Retailers authorized pursuant to Paragraph 2.A.(2)
             above, and Licensee may sell to such authorized 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.


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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 8


         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.

         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.

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.



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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 9


         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.

         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



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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 10


             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.

         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





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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 11


             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 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.


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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 12


         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.

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

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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 13


         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.

         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.


<PAGE>   14

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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 14


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 the 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).

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




<PAGE>   15

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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 15

        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.

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

<PAGE>   16

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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 16


             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
             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.


<PAGE>   17

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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 17


        (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.

        (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.


<PAGE>   18

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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 18


    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 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
    or its licensor. 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
    ----------------


<PAGE>   19

The First Years
Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 19


    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., "(C) 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. Without limiting the foregoing,
    Licensee agrees to include on the Article, or the packaging for the Article,
    or the hang tag for the Article (if applicable), the following language:
    Based on the "Winnie The Pooh" works, copyright A.A. Milne and E.H. Shepard.
    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 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 or, if such a date is not specified in Paragraph 1.O., by
    six (6) months from the commencement of the Term or the date of any
    applicable amendment, 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


<PAGE>   20

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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 20

    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 either invoke Disney's remedies under Paragraph 28,
    or withdraw such Article from the list of Articles licensed in this
    Agreement, or withdraw the applicable distribution channel, without
    obligation to Licensee other than to give Licensee written notice thereof.

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 or its licensor 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 or its licensor.


<PAGE>   21

The First Years
Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 21


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 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 or
        licensed by Disney in any way other than as herein authorized (or as is
        authorized in any other written contract in effect between the parties).
        In addition to any other remedy Disney may have, Licensee agrees that
        all revenues from any use thereof on 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 or its licensor'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


<PAGE>   22

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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 22


        incurred at Disney's request, including reasonable attorney's fees if
        Disney has requested Licensee to retain separate counsel.

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


<PAGE>   23

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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 23

        (4)  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;

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

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

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

        (8)  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,



<PAGE>   24

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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 24


        without limitation, correct century recognition, calculations that
        properly accommodate same century and multi-century 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.

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


<PAGE>   25

The First Years
Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 25


    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 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.


<PAGE>   26

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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 26


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).

    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


<PAGE>   27

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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 27


        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.,
        its licensor, and its and their parent, 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 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,





<PAGE>   28

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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 28


        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, 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.


<PAGE>   29

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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 29


    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 which by the Marketing Date or, if such a
    date is not specified in Paragraph 1.O., by six (6) months from the
    commencement of the Term or the date of any applicable amendment, is not
    being used on or in connection with the Articles. Disney may also withdraw
    any Licensed Material or Articles the use or sale of which under this
    Agreement would infringe or reasonably be claimed to infringe the rights of
    a third party, other than rights granted by 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 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



<PAGE>   30

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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 30

             Material or other material the copyright or other proprietary
             rights to which are owned or licensed 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

        (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


<PAGE>   31

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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 31


        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 three (3) calendar months from such expiration
        or earlier termination date to sell off and deliver such Articles as
        authorized under Paragraph 2.A. 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.



<PAGE>   32

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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 32


    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 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.


<PAGE>   33

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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 33


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 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,





<PAGE>   34

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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 34


        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 option
        plans, 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 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





<PAGE>   35

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Pooh - Juvenile brand
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Page 35


        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.

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.


<PAGE>   36

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Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 36

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.

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 or its licensor's copyrights and
    property rights, and, specifically, to conserve Disney's and its licensor's
    goodwill and good name, 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.


<PAGE>   37

The First Years
Pooh - Juvenile brand
Agreement dated November 16, 1998
Page 37

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.

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.

         /s/ Steve Cipolla
    By: ___________________________
    Title: Vice President, Licensing

          May 17, 1999
    Date: __________________________


    THE FIRST YEARS, INC.

        /s/ Ronald J. Sidman
    By: ___________________________

           President
    Title: __________________________





<PAGE>   38



                              THE FIRST YEARS, INC.
                              POOH - JUVENILE BRAND
                        AGREEMENT DATED NOVEMBER 16, 1998
                                   SCHEDULE A


    A.  FEEDING AND SOOTHING
        --------------------

        1.   Bottles (reusable and disposable)
        2.   Bibs
        3.   Cups
        4.   Pacifiers and attachers
        5.   Bowls
        6.   Dishes
        7.   Feeding utensils
        8.   Snack containers
        9.   Cool totes
        10.  Placemats
        11.  Floormats
        12.  Burp cloths
        13.  Toddler sports bottles

    B.  CARE AND SAFETY
        ---------------

        1.   Changing pads
        2.   Carriers (front and back)
        3.   Handheld showers
        4.   Sponges
        5.   Spout guards
        6.   Shampoo visors
        7.   Car organizers
        8.   Non-activity crib lights
        9.   Combs and brushes
        10.  Night lights
        11.  Car shades
        12.  Diaper pins
        13.  Tub thermometers
        14.  Tub organizers
        15.  Infant bath tubs
        16.  Baby bathers


<PAGE>   39


                              THE FIRST YEARS, INC.
                              POOH - JUVENILE BRAND
                        AGREEMENT DATED NOVEMBER 16, 1998
                             SCHEDULE A (continued)


    B.  CARE AND SAFETY
        ---------------

        17.  Hooded towels
        18   Wash cloths/wash mitts
        19.  Booster seats
        20.  Step stools
        21.  Infant toothbrushes and toothcare organizers
        22.  Bed rails
        23.  Monitors
        24.  Scratch mitts
        25.  Bath mats

    C.  PLAYTHINGS
        ----------

        1.   Hand-held rattles
        2.   Teethers
        3.   Suction toys
        4.   Linking toys
        5.   Electronic hand-held toys (with rattle or squeaker function)
        6.   Bath toys
        7.   Crib toys
        8.   Foot rattles and wrist rattles
        9.   Squeeze toys
        10.  Infant rings
        11.  Chime balls
        12.  Bouncy seats
        13.  Accessory toys (i.e., stroller toys, carrier toys, high chair toys)






<PAGE>   40



                               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:

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

    - the risk of business interruption

    - the risk of loss of quality, production or control

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

    - 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>   41


                        CODE OF CONDUCT FOR MANUFACTURERS

    At The Walt Disney Company, we are committed to:

    - a standard of excellence in every aspect of our business and in every
      corner of the world;
    - ethical and responsible conduct in all of our operations;
    - respect for the rights of all individuals; and
    - 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>   42



     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>   43


                          CODE OF CONDUCT FOR LICENSEES


At The Walt Disney Company, we are committed to:

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