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                                                                 EXHIBIT 10.36.1

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                                     WARRANT

                                   TO PURCHASE

                                    SHARES OF

                                  COMMON STOCK

                                       OF

                              NATURAL WONDERS, INC.




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                                TABLE OF CONTENTS

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1.       General Terms........................................................................................1
         1.1        Right to Acquire Securities...............................................................1
         1.2        Exercise of Warrant.......................................................................2
         1.3        Record Holder.............................................................................2
         1.4        Payment of Taxes..........................................................................2
         1.5        Transfer and Exchange.....................................................................3
2.       Transfer of Securities...............................................................................3
         2.1        Restrictions of Transfer..................................................................3
         2.2        Cooperation...............................................................................5
3.       Registration Rights..................................................................................5
         3.1        Definitions...............................................................................5
         3.2        Demand Registration.......................................................................6
         3.3        Piggyback Registration....................................................................7
         3.4        Expenses..................................................................................9
         3.5        Company Responsibilities..................................................................9
         3.6        Indemnification..........................................................................10
         3.7        Holder's Obligations.....................................................................11
         3.8        Assignment...............................................................................11
4.       Adjustments to Exercise Price and Warrant Shares....................................................11
         4.1        Subdivision or Combination...............................................................11
         4.2        Adjustment for Reorganization, Consolidation, Merger.....................................12
         4.3        Miscellaneous Exercise Matters...........................................................13
         4.4        No Dilution or Impairment................................................................13
         4.5        Notice of Adjustment.....................................................................13
         4.6        Duty to Make Fair Adjustments in Certain Cases...........................................13
5.       Miscellaneous.......................................................................................14
         5.1        Entire Agreement.........................................................................14
         5.2        Successors and Assigns...................................................................14
         5.3        Governing Law............................................................................14
         5.4        Notices, Etc.............................................................................14
         5.5        Delays or Omissions......................................................................14
         5.6        Survival.................................................................................14
         5.7        Waivers and Amendments...................................................................15
         5.8        Cashless Exercise........................................................................15
         5.9        Severability.............................................................................17
         5.10       Registered Holder........................................................................17
         5.11       Titles and Subtitles.....................................................................17

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                                     WARRANT
                      TO PURCHASE SHARES OF COMMON STOCK OF
                              NATURAL WONDERS, INC.

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (A) COVERED
BY AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT, (B) IN COMPLIANCE WITH
RULE 144 UNDER SUCH ACT, OR (C) THE COMPANY HAS BEEN FURNISHED WITH AN OPINION
OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT NO REGISTRATION IS REQUIRED
FOR SUCH TRANSFER.

                                                   37,500 Shares of Common Stock

     1. GENERAL TERMS.


        1.1      RIGHT TO ACQUIRE SECURITIES.


                  (a) This Warrant certifies that for value received Centennial
     Associates, L.P. (the "Holder"), or registered assigns, are entitled at any
     time before 5:00 p.m., San Francisco, California time, on the Expiration
     Date (as such term is defined herein) to purchase from NATURAL WONDERS,
     INC., a Delaware corporation (the "Company"), 37,500 shares (the "Warrant
     Shares") of the fully paid and non-assessable Common Stock of the Company
     ("Common Stock") as constituted on the date hereof (the "Issuance Date"),
     at a price of $1.50 per share (the "Exercise Price"), such number of shares
     and price per share subject to adjustment as provided herein and all
     subject to the conditions set forth herein. This Warrant may be exercised
     at any time on or before three years from the date hereof (the "Expiration
     Date").

     Upon any partial exercise hereof, there shall be issued to the Holder a
new Warrant or Warrants with respect to the shares of Common Stock not so
exercised. No fractions of a share of Common Stock will be issued upon the
exercise of this Warrant, but if a fractional share would be issuable upon
exercise the Company will pay in cash the fair market value thereof as
determined by the Board of Directors of the Company in good faith.

                  (b) The Warrant may be subdivided, at the Warrantholder's
     option, into several warrants to purchase the Warrant Shares (collectively,
     also referred to as the "Warrant"). Such subdivision may be accomplished in
     accordance with the provisions of Section 1.5 hereof.


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         1.2      EXERCISE OF WARRANT.

                  (a) The Holder or any person or entity to whom the Holder has
     assigned its right under this Warrant (collectively referred to as the
     "Warrantholder") may exercise the Warrant, in whole or in part, at any time
     or from time to time, prior to its expiration, on any business day, by
     delivering a written notice in the form attached hereto (the "Exercise
     Notice") to the Company at the offices of the Company designated in Section
     5.4 hereof, exercising the Warrant and specifying (i) the total number of
     shares of Common Stock the Warrantholder will purchase pursuant to such
     exercise and (ii) a place and date not less than one nor more than 20
     business days from the date of the Exercise Notice for the closing of such
     purchase.

                  (b) At any closing under Section 1.2(a) hereof, (i) the
     Warrantholder will surrender the Warrant and make payment to the Company of
     the aggregate Exercise Price for the shares of Common Stock so purchased by
     delivering: (x) a bank, cashier's or certified check; or (y) a written
     notice of an election to effect a Cashless Exercise (as defined in Section
     5.8 hereof); and (ii) the Company will deliver to the Warrantholder a
     certificate or certificates for the number of shares of Common Stock
     issuable upon such exercise, together with cash, in lieu of any fraction of
     a share, as provided in Section 1.1(a) above. Upon any partial exercise, a
     new warrant or warrants of the same tenor and expiration date for the
     purchase of the number of such shares not purchased upon such exercise
     shall be issued by the Company to the registered holder thereof.

         1.3      RECORD HOLDER. A Warrant shall be deemed to have been
exercised immediately prior to the close of business on the date of its
surrender for exercise as provided in Section 1.2(b) above, and the person
entitled to receive the shares of Common Stock issuable upon such exercise
shall be treated for all purposes as the holder of such shares of record as
of the close of business on such date.

         1.4      PAYMENT OF TAXES. The Company shall pay all taxes and other
governmental charges that may be imposed in respect of the issue or delivery
of the Warrant Shares or any portion thereof. The Company shall not be
required, however, to pay any tax or other charge imposed in connection with
any transfer involved in the issue of any certificate for the Warrant Shares
or any portion thereof in any name other than that of the registered holder
of the Warrant surrendered in connection with the purchase of such shares,
and in such case the Company shall not be required to issue or deliver any
certificate until such tax or other charge has been paid or it has been
established to the Company's satisfaction that no tax or other charge is due.

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         1.5      TRANSFER AND EXCHANGE.

                  (a) Subject to the terms hereof, including, without
     limitation, Section 2.1, the Warrant and all rights thereunder are
     transferable, in whole or in part, on the books of the Company maintained
     for such purpose at its office designated in Section 5.4 hereof by the
     registered holder hereof in person or by duly authorized attorney, upon
     surrender of the Warrant properly endorsed and upon payment of any
     necessary transfer tax or other governmental charge imposed upon such
     transfer. Upon any partial transfer, the Company will issue and deliver to
     such holder a new warrant or warrants with respect to the Warrant Shares
     not so transferred. Each taker and holder of the Warrant, by taking or
     holding the same, consents and agrees that the Warrant when endorsed in
     blank shall be deemed negotiable, and that when the Warrant shall have been
     so endorsed, the holder may be treated by the Company and all other persons
     dealing with the Warrant as the absolute owner of such Warrant for any
     purpose and as the person entitled to exercise the rights represented
     thereby, or to the transfer on the books of the Company, any notice to the
     contrary notwithstanding; but until such transfer on such books, the
     Company may treat the registered holder of the Warrant as the owner for all
     purposes. The term "Warrant" as used herein shall include the Warrant and,
     any warrants delivered in substitution or exchange therefor as provided
     herein.

                  (b) The Warrant is exchangeable for a warrant or warrants for
     the same aggregate number of Warrant Shares, each new Warrant to represent
     the right to purchase such number of shares as the holder shall designate
     at the time of such exchange.

     2. TRANSFER OF SECURITIES.


         2.1      RESTRICTIONS OF TRANSFER. Neither the Warrant nor the
Warrant Shares shall be transferable except upon the conditions specified in
this Section 2.1, which conditions are intended to insure compliance with the
provisions of the Securities Act of 1933 (the "1933 Act") in respect to the
transfer of the Warrant and the Warrant Shares.

                  (a) Unless and until otherwise permitted by this Section 2.1,
     the Warrant and each certificate or other document evidencing any of the
     Warrant Shares shall be endorsed with a legend substantially in the
     following form:

     "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
     1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED
     UNLESS (A) COVERED BY AN EFFECTIVE REGISTRATION STATEMENT

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     UNDER SUCH ACT, (B) IN COMPLIANCE WITH RULE 144 UNDER SUCH ACT, OR (C) THE
     COMPANY HAS BEEN FURNISHED WITH AN OPINION OF COUNSEL REASONABLY ACCEPTABLE
     TO THE COMPANY TO THE EFFECT THAT NO REGISTRATION IS REQUIRED FOR SUCH
     TRANSFER"

                  (b) Neither the Warrant nor the Warrant Shares shall be
     transferred, and the Company shall not be required to register any such
     transfer, unless and until one of the following events shall have occurred:

                      (i) the Company shall have received an opinion of counsel,
        in form and substance reasonably acceptable to the Company and its
        counsel, stating that the contemplated transfer is exempt from
        registration under the 1933 Act as then in effect, and the Rules and
        Regulations of the Securities and Exchange Commission (the "Commission")
        thereunder. Within five business days after delivery to the Company and
        its counsel of such an opinion, the Company either shall deliver to the
        proposed transferor a statement to the effect that such opinion is not
        satisfactory in the reasonable opinion of its counsel (and shall specify
        in detail the legal analysis supporting any such conclusion) or shall
        authorize the Company's transfer agent to make the requested transfer;

                      (ii) the Company shall have been furnished with a letter
        from the Commission in response to a written request in form and
        substance acceptable to counsel for the Company setting forth all of the
        facts and circumstances surrounding the contemplated transfer, stating
        that the Commission will take no action with regard to the contemplated
        transfer;

                      (iii) the Warrant or the Warrant Shares are transferred
        pursuant to a registration statement which has been filed with the
        Commission and has become effective; or

                      (iv) the Warrant or the Warrant Shares are transferred in
        accordance with the provisions of Rule 144 promulgated by the Commission
        under the 1933 Act.

                  (c) The restrictions on transfer imposed by this Section 2.1
     shall cease and terminate as to the Warrant and the Warrant Shares when (i)
     such securities shall have been effectively registered under the 1933 Act
     and sold by the holder thereof in accordance with such registration, (ii)
     an acceptable opinion as described in Section 2.l(b)(i) or a "no action"
     letter described in Section 2.l(b)(ii) states that future transfers of such
     securities by


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     the transferor or the contemplated transferee would be exempt from
     registration under the 1933 Act, or (iii) such securities may be sold in
     accordance with the provisions of Rule 144 promulgated under the 1933 Act.
     When the restrictions on transfer contained in this Section 2.1 have
     terminated as provided above, the holder of the securities as to which such
     restrictions shall have terminated or the transferee of such holder shall
     be entitled to receive promptly from the Company, without expense to him,
     new certificates not bearing the legend set forth in Section 2.1(a) hereof.


         2.2      COOPERATION. The Company shall cooperate in supplying such
information as may be reasonably requested by the Warrantholder to complete
and file any information reporting forms presently or subsequently required
by the Commission as a condition to the availability of an exemption,
presently existing or subsequently adopted, from the 1933 Act for the sale of
the Warrant or the Warrant Shares.

     3. REGISTRATION RIGHTS.


         3.1      DEFINITIONS. For purposes of Section 3 hereof, terms not
otherwise defined herein shall have the following meanings:

                  (a) The terms "register," "registered" and "registration"
     refer to the preparation and filing of a registration statement in
     compliance with the 1933 Act and the rules promulgated thereunder, and the
     declaration of the effectiveness of such registration statement, or the
     taking of similar action under a successor statute or regulation.

                  (b) The term "Registrable Securities" means the shares of
     Common Stock issuable upon conversion of the Debenture or exercise of the
     Warrant, and any securities issued or issuable with respect to such Warrant
     Shares by way of a stock dividend or stock split or in connection with a
     combination or shares, recapitalization, merger, consolidation or other
     reorganization.

                  (c) The term "Holder" means any registered holder or holders
     of Registrable Securities.

                  (d) The term "Prospectus" means a prospectus that complies
     with applicable provisions of the 1933 Act.

                  (e) The term "Debenture" refers to the Subordinated
     Convertible Debenture issued to Holders on September 11, 2000 along with
     the Warrants.


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         3.2      DEMAND REGISTRATION.

                  (a) On any date after March 15, 2001, the Holders of at least
     fifty percent (50%) of the Registrable Securities then outstanding (the
     "Initiating Holders") may request in writing registration under the 1933
     Act (a "Demand Registration"). The Demand Registration request shall
     specify the amount of the Registrable Securities proposed to be sold, the
     intended method of disposition thereof and the jurisdictions in which
     registration is desired. Upon the receipt of the Demand Registration
     request, the Company promptly shall take such steps as are necessary or
     appropriate to prepare for the registration of the Registrable Securities
     to be registered. Within fifteen (15) days after the receipt of such
     request, the Company shall give written notice thereof to all other Holders
     and include in such registration all Registrable Securities held by a
     Holder from whom the Company has received a written request for inclusion
     therein at least ten (10) days prior to the filing of the registration
     statement. Each such request will also specify the number of Registrable
     Securities to be registered, the intended method of disposition thereof and
     the jurisdictions in which registration is desired.

                  (b) The Company shall use its reasonable best efforts to cause
     any such Demand Registration to become effective not later than one hundred
     twenty (120) days after it receives a request under this Section 3.2. A
     registration requested pursuant to this Section 3.2 shall not count as the
     one Demand Registration to which the Holders are entitled to thereunder
     unless such registration statement is declared effective and remains
     effective for at least ninety (90) days.

                  (c) If Holders of a majority of the Registrable Securities
     proposed to be registered by the Initiating Holders so elect, the offering
     of such Registrable Securities pursuant to such Demand Registration shall
     be in the form of a firm commitment underwritten offering. If any Demand
     Registration of Registrable Securities is in the form of an underwritten
     offering, the Holders holding a majority of the Registrable Securities
     proposed to be registered by the Initiating Holders shall select and obtain
     an investment banking firm of national reputation to act as the managing
     underwriter of the offering (the "Approved Underwriter"); provided, that
     the Approved Underwriter shall, in any case, be acceptable to the Company
     in its reasonable judgment.

                  (d) The Company shall not be obligated to effect any
     registration under this Section 3.2 except in accordance with the following
     provisions:

                      (i) The Company shall not be obligated to use its
        reasonable best efforts to file and cause to become effective more than


                                      -6-
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        one registration statement with respect to Registrable Securities held
        by the Holders initiated pursuant to this Section 3.2; provided,
        however, that any registration proceeding begun pursuant to this Section
        3.2 that is subsequently withdrawn at the request of the Holders shall
        not be so counted if such withdrawal is based upon material adverse
        information relating to the Company or its condition, business, or
        prospects which is different from that generally known to the Rights
        Holders at the time of their request.

                      (ii) The Company may delay the filing or effectiveness of
        any registration statement for a period of up to ninety (90) days after
        the date of a request for registration pursuant to this Section 3.2 if
        (x) at the time of such request the Company is engaged, or has formal
        plans to engage within sixty (60) days of the time of such request, in
        an underwritten public offering of shares of Common Stock, (y) the Board
        of Directors of the Company determines in good faith that (A) it is in
        possession of material, non-public information concerning an
        acquisition, merger, recapitalization, consolidation, reorganization or
        other material transaction by or of the Company or concerning pending or
        threatened litigation and (B) disclosure of such information would
        jeopardize any such transaction or litigation or otherwise materially
        harm the Company, or (z) the Company shall furnish to the Holders a
        certificate signed by the Chief Executive Officer or President of the
        Company stating that, in the good faith judgment of the Board of
        Directors of the Company, it would otherwise be seriously detrimental to
        the Company and its investors for such registration statement to be
        filed and it is therefore essential to defer the filing of such
        registration statement.

        3.3       PIGGYBACK REGISTRATION.

                  (a) If, at any time, through and including the third
     anniversary of the date of this Warrant, the Company proposes to register
     any of its securities under the 1933 Act (other than in connection with a
     merger, acquisition, reorganization or similar transaction pursuant to a
     Form S-4 Registration Statement or an employee stock compensation plan
     pursuant to a Form S-8 Registration Statement), it will give written notice
     by registered mail, at least (30) days prior to the filing of each such
     registration statement, to the Holder of its intention to do so. If the
     Holder notifies the Company within 20 days after receipt of any such notice
     of its desire to include any Registrable Securities in such proposed
     registration statement, the Company shall afford such Holder the
     opportunity to have any of the Registrable Securities registered


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     under such registration statement and included in any underwriting involved
     with respect thereto.

                  (b) Notwithstanding the provisions of Section 3.3 hereof: (i)
     the Company shall have the right at any time after it shall have given
     written notice pursuant to this Section 3 (irrespective of whether a
     written request for inclusion of any Registrable Securities shall have been
     made) to elect not to file any such proposed registration statement, or to
     withdraw the same after the filing but prior to the effective date thereof;
     and (ii) in the event a registration under Section 3.3 hereof relates to an
     underwritten public offering which does not include any securities being
     offered and sold on behalf of selling shareholders, the inclusion of any
     Registrable Securities may, at the election of the Company, be conditioned
     upon the Holder agreeing that the public offering of such Registrable
     Securities shall not commence until 90 days after the effective date of
     such registration.

                  (c) The rights of the Holder pursuant to Section 3.3 hereof
     shall be conditioned upon such Holder's participation in the underwriting
     with respect thereto and the inclusion of such Holder's Registrable
     Securities in such underwriting (unless otherwise mutually agreed by the
     Company, the managing underwriter or, if none, a majority of the
     underwriters, and such Holder) to the extent provided herein.

                  (d) Notwithstanding any other provision of this Warrant, if
     the managing underwriter or, if none, a majority of the underwriters,
     determines that marketing factors require a limitation of the number of
     shares to be underwritten or a complete exclusion of such shares, such
     underwriter or underwriters may limit the number of Registrable Securities
     that may be included in the registration and underwriting or exclude all of
     the Registrable Securities, as appropriate. In the case of an underwritten
     registration in which the number of Registrable Securities that may be
     included is limited, the Company shall advise the Holder of the limited
     number of Registrable Securities that may be included in the registration,
     and the number of Registrable Securities that may be included in the
     registration and underwriting shall be allocated among all Holders thereof
     in proportion, as nearly as practicable, to the respective amounts of
     Registrable Securities entitled to inclusion in such registration held by
     such Holders at the time of filing the registration statement.

                  (e) The Company shall (together with all Holders proposing to
     distribute their securities through an underwriting) enter into an
     underwriting agreement in customary form with the underwriter or
     underwriters selected for the underwriting.


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         3.4      EXPENSES.

         All expenses incurred in connection with any registration pursuant to
this Warrant or Warrant Shares, including without limitation, all registration,
filing and qualification fees, printing expenses, fees and disbursements of
counsel for the Company, and expenses of any special audits incidental to or
required by such registration, shall be borne by the Company; provided however
the Company shall not be required to pay:

                  (a) fees of legal counsel of any Holder, or underwriters'
     fees, discounts, commissions or expenses relating to Registrable
     Securities; and

                  (b) for expenses that the Company is prohibited from paying
     under Blue Sky laws or by Blue Sky administrators.

         3.5      COMPANY RESPONSIBILITIES.

         In the case of a piggyback registration of Warrant Shares, the Company
shall use its best efforts to keep the Holder advised in writing as to the
initiation, effectiveness and completion of such registration. At its expense
the Company shall:

                  (a) prepare and file a registration statement (and such
     amendments and supplements thereto) with respect to such Registrable
     Securities and use its best efforts to cause such registration statement to
     become and remain effective for a period of 180 days or until the Holder or
     Holders have completed the distribution described in the registration
     statement relating thereto, whichever first occurs;

                  (b) furnish such number of copies of a Prospectus in
     conformity with the requirements of applicable law, and such other
     documents incident thereto as a Holder from time to time may reasonably
     request; and

                  (c) use every reasonable effort to register or qualify the
     Registrable Securities covered by such registration statement under the
     state Blue Sky laws of such jurisdictions as the Company's Board of
     Directors may reasonably determine, and do any and all other acts and
     things which may be necessary under said Blue Sky laws to enable the
     sellers of the Registrable Securities to consummate the public sale or
     other disposition of the Registrable Securities owned by them in such
     jurisdictions, except that the Company shall not for any purpose be
     required to qualify to do business as a foreign corporation in any
     jurisdiction wherein the Registrable Securities are so qualified.


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         3.6      INDEMNIFICATION.

                  (a) The Company shall indemnify the Holder, with respect to
     such registration effected pursuant to Section 3 hereof, against all
     claims, losses, damages and liabilities (or actions in respect thereto)
     arising out of or based on any untrue statement (or alleged untrue
     statement) of a material fact contained in any registration statement or
     related Prospectus, or based on any omission (or alleged omission) to state
     therein a material fact required to be stated therein or necessary to make
     the statements therein not misleading, or any violation by the Company of
     any rule or regulation promulgated under any securities law applicable to
     the Company and relating to action or inaction required of the Company in
     connection with any such registration, and shall reimburse the Holder, for
     any legal and any other expenses reasonably incurred in connection with
     investigating or defending any such claim, loss, damage, liability or
     action, provided that the Company shall not be liable in any such case to
     the extent that any such claim, loss, damage or liability arises out of or
     is based on any untrue statement or omission based upon written information
     furnished to the Company in an instrument duly executed by such Holder
     specifically for use therein.

                  (b) The Holder shall, if Registrable Securities held by or
     issuable to the Holder are included in the securities as to which such
     registration is being effected, indemnify the Company, each of its
     directors and officers who sign such registration statement, each
     underwriter, if any, of the Company's securities covered by such a
     registration statement, each person who controls the Company within the
     meaning of the 1933 Act, and each other Holder, against all claims, losses,
     damages and liabilities (or actions in respect thereof) arising out of or
     based on any untrue statement (or alleged untrue statement) of a material
     fact contained in any such registration statement or related Prospectus, or
     any omission (or alleged omission) to state therein a material fact
     required to be stated therein or necessary to make the statements therein
     not misleading, and shall reimburse the Company and such Holders for any
     legal or any other expenses reasonably incurred in connection with
     investigating or defending any such claim, loss, damage, liability, or
     action, in each case to the extent, but only to the extent, that such
     untrue statement (or alleged untrue statement) or omission (or alleged
     omission) is made in such registration statement or related Prospectus in
     reliance upon and in conformity with written information furnished to the
     Company in an instrument duly executed by such Holder specifically for use
     therein.

                  (c) Each party entitled to indemnification under this Section
     3.4 (the "Indemnified Party") shall give notice to the party required to
     provide indemnification (the "Indemnifying Party") promptly after such


                                      -10-
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     Indemnified Party has actual knowledge of any claim as to which indemnity
     may be sought, and shall permit the Indemnifying Party to assume the
     defense of any such claim or any litigation resulting therefrom, provided
     that counsel for the Indemnifying Party, who shall conduct the defense of
     such claim or litigation, shall be approved by the Indemnified Party (whose
     approval shall not be unreasonably withheld), and the Indemnified Party may
     participate in such defense at such party's expense; and provided further
     that the failure of any Indemnified Party to give notice as provided herein
     shall not relieve the Indemnifying Party of its obligations under this
     Section 3.4. No Indemnifying Party, in the defense of any such claim or
     litigation, shall, except with the consent of each Indemnified Party,
     consent to entry of any judgment or enter into any settlement, which does
     not include as an unconditional term thereof, the giving by the claimant or
     plaintiff to such Indemnified Party of a release from all liability in
     respect to such claim or litigation.

         3.7      HOLDER'S OBLIGATIONS. The Holder shall furnish to the
Company such written information regarding such Holder and the distribution
proposed by such Holder as the Company may reasonably request in writing and
as shall be required in connection with any registration referred to in this
Warrant.

         3.8      ASSIGNMENT. The rights granted to the Holder pursuant to
this Warrant may be assigned to a transferee or assignee of the Warrant or
any of the Registrable Securities, provided that the transferee or assignee
is an affiliated entity of the Holder and the Company is given written notice
at the time of or within 10 days after said transfer, stating the name and
address of said transferee or assignee and identifying the Registrable
Securities with respect to which such registration rights are being assigned.

     4. ADJUSTMENTS TO EXERCISE PRICE AND WARRANT SHARES. The Exercise Price in
effect from time to time and the number of Warrant Shares shall be subject to
adjustment in certain cases as set forth in this Section 4.

         4.1      SUBDIVISION OR COMBINATION. In the event the outstanding
Common Stock shall be subdivided into a greater number of shares of Common
Stock, the Exercise Price for the Warrant Shares shall, simultaneously with
the effectiveness of such subdivision, be proportionately reduced and the
number of Warrant Shares proportionately increased, and conversely, in case
the outstanding Common Stock shall be combined into a smaller number of
shares of Common Stock, the Exercise Price shall, simultaneously with the
effectiveness of such combination, be proportionately increased and the
number of Warrant Shares proportionately reduced.

                                      -11-
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         4.2      ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER.

                  (a) In case of any reorganization of the Company (or any other
     corporation the stock or other securities of which are receivable on the
     exercise of the Warrant) after the date on which this Warrant is first
     issued (the "Issuance Date"), or in case, after such date, the Company (or
     any such other corporation) shall consolidate with or merge into another
     corporation or convey all or substantially all of its assets to another
     corporation, then and in each such case the Warrantholder, upon exercise of
     the Warrant as provided in Section 1.2 hereof at any time after the
     consummation of such reorganization, consolidation, merger or conveyance,
     shall be entitled to receive, in lieu of the stock or other securities and
     property receivable upon the exercise of the Warrant prior to such
     consummation, the stock or other securities or property to which the
     Warrantholder would have been entitled upon such consummation if the
     Warrantholder had exercised or converted the Warrant immediately prior
     thereto; in each such case, the terms of this Warrant, including the
     exercise provisions of Section 1.2, shall be applicable to the shares of
     stock or other securities or property receivable upon the exercise or
     conversion of the Warrant after such consummation.

                  (b) The Company shall not effect any consolidation, merger or
     conveyance of all or substantially all of its assets unless prior to the
     consummation thereof the successor corporation (if other than the Company)
     resulting from such consolidation or merger or the corporation into or for
     the securities of which the previously outstanding stock of the Company
     shall be changed in connection with such consolidation or merger, or the
     corporation purchasing such assets, as the case may be, shall assume by
     written instrument, in form and substance satisfactory to the
     Warrantholder, executed and delivered in accordance with Section 5.4
     hereof, the obligation to deliver to the Warrantholder such shares of
     stock, securities or assets as, in accordance with the foregoing
     provisions, the Warrantholder is entitled to purchase.

                  (c) If a purchase, tender or exchange offer is made to and
     accepted by the holders of more than 50% of the outstanding shares of
     Common Stock of the Company, the Company shall not effect any
     consolidation, merger or sale with the Person having made such offer or
     with any Affiliate of such Person, unless prior to consummation of such
     consolidation, merger or sale the Warrantholder shall have been given a
     reasonable opportunity to then elect to receive either the stock,
     securities or assets then issuable upon the exercise or conversion of the
     Warrant or, if different, the stock, securities or assets, or the
     equivalent, issued to previous holders of the Common Stock in accordance
     with such offer, computed as though the Warrantholder hereof had been, at
     the time of such offer, a holder of


                                      -12-
<PAGE>

     the stock, securities or assets then purchasable upon the exercise or
     conversion of the Warrant. As used in this paragraph (c), the term "Person"
     shall mean and include an individual, a partnership, a corporation, a
     trust, a joint venture, an unincorporated organization and a government or
     any department or agency thereof, and an "Affiliate" of any Person shall
     mean any Person directly or indirectly controlling, controlled by or under
     direct or indirect common control with, such other Person. A Person shall
     be deemed to control a corporation if such Person possesses, directly or
     indirectly, the power to direct or cause the direction of the management
     and policies of such corporation, whether through the ownership of voting
     securities, by contract or otherwise.

         4.3      MISCELLANEOUS EXERCISE MATTERS. The Company shall at all
times reserve and keep available out of its authorized but unissued Common
Stock the full number of Warrant Shares deliverable upon exercise of the
Warrant Shares, as such number may change from time to time. Also, the
Company shall, at its own expense, take all such actions and obtain all such
permits and orders as may be necessary to enable the Company lawfully to
issue the Warrant Shares upon the exercise of the Warrant.

         4.4      NO DILUTION OR IMPAIRMENT. The Company will not, by
amendment of its certificate of incorporation or through reorganization,
consolidation, merger, dissolution, issue or sale of securities, sale of
assets or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of the Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of
all such actions as may be necessary or appropriate in order to protect the
rights of the Warrantholder against dilution or other impairment. Without
limiting the generality of the foregoing, the Company will take all such
action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and non-assessable shares upon the
exercise or conversion of the Warrant.

         4.5      NOTICE OF ADJUSTMENT. When any adjustment is required to be
made in either the Exercise Price or the number of shares issuable upon
exercise of the Warrant, the Company shall promptly notify the Warrantholder
of such event, of the calculation by which such adjustment is to be made and
of the resulting Exercise Price or conversion rate, as the case may be.

         4.6      DUTY TO MAKE FAIR ADJUSTMENTS IN CERTAIN CASES. If any
event occurs as to which in the opinion of the Board of Directors the other
provisions of this Section 4 are not strictly applicable or if strictly
applicable would not fairly protect the purchase and exercise rights of the
Warrant in accordance with the essential intent and principles of such
provisions, then the Board of Directors shall make an adjustment in the
application of such provisions, in accordance with such essential intent and
principles, so as to protect such purchase rights as aforesaid.

                                      -13-
<PAGE>



     5. MISCELLANEOUS.


         5.1      ENTIRE AGREEMENT. This Warrant constitutes the full and
entire understanding and agreements between the parties hereto with respect
to the subjects hereof and thereof.

         5.2      SUCCESSORS AND ASSIGNS. The terms and conditions of this
Warrant shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties hereto, except as expressly provided
otherwise herein.

         5.3      GOVERNING LAW. This Warrant shall be governed by and
construed under the laws of the State of California.

         5.4      NOTICES, ETC. All notices and other communications required
or permitted hereunder shall be in writing and shall be deemed effectively
given upon personal delivery or upon the seventh day following mailing by
registered air mail, postage prepaid, addressed (a) if to the Warrantholder,
at Centennial Associates, L.P., 900 3rd Avenue, Suite 1801, New York, New
York 10022, or at such other address as it shall have furnished to the
Company in writing, (b) if to the Company, a copy should be sent to 4209
Technology Drive, Fremont, CA 94538, and addressed to the attention of the
corporate secretary, or at such other address as the Company shall have
furnished in writing to the Warrantholder, or (c) if to any other holder of
any Warrant or of Warrant Shares issued upon conversion of the Warrant, at
such address as such holder shall have furnished to the Company in writing,
or, until such holder so furnishes an address to the Company, then to and at
the address of the last holder of such Warrant or Warrant Shares who so
furnished an address to the Company.

         5.5      DELAYS OR OMISSIONS. No delay or omission to exercise any
right, power or remedy accruing to any holder of any securities issued or
sold or to be issued or sold hereunder, upon any breach or default of the
Company under this Agreement, shall impair any such right, power or remedy of
such holder nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence therein, or in any similar breach or default
thereafter occurring, nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character
on the part of any holder of any breach or default under this Agreement, or
any waiver on the part of any holder of any provisions or conditions of this
Agreement, must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement or by law or otherwise afforded to any holder, shall be cumulative
and not alternative.

         5.6      SURVIVAL. The representations, warranties, covenants and
agreements made herein and or made pursuant to this Agreement shall survive
the

                                      -14-
<PAGE>


execution and delivery of this Agreement, except as expressly provided otherwise
herein.

         5.7      WAIVERS AND AMENDMENTS. With the written consent of the
record or beneficial holders of more than 50% of the Warrant Shares (treated
as if converted), the obligations of the Company and the rights of the
holders of the Warrant and the Warrant Shares may be waived (either generally
or in a particular instance, either retroactively or prospectively and either
for a specified period of time or indefinitely), and with the same consent
the Company, when authorized by resolution of its Board of Directors, may
enter into a supplemental agreement for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Warrant; provided, however, that no such waiver or supplemental agreement
shall reduce the aforesaid percentage of the Warrant Shares, the holders of
which are required to consent to any waiver or supplemental agreement,
without the consent of the record or beneficial holders of all of the Warrant
Shares (treated as if converted). Upon the effectuation of each such waiver,
consent, agreement of amendment or modification, the Company promptly shall
give written notice thereof to the record holders of the Warrant and the
Warrant Shares. This Warrant or any provision hereof may not be changed,
waived, discharged or terminated orally, but only by a statement in writing
signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, except to the extent provided in this
Section 5.7.

         5.8      CASHLESS EXERCISE.


                  (a) This Warrant may be exercised at any time or from time to
     time prior to the Expiration Date, by presentation and surrender of this
     Warrant to the Company at its principal executive offices with a written
     notice of the Holder's intention to effect a cashless exercise, including a
     calculation of the number of shares of Common Stock to be issued upon such
     exercise in accordance with the terms hereof (a "Cashless Exercise"). In
     the event of a Cashless Exercise in lieu of paying the Exercise Price in
     cash, the holder shall surrender this Warrant for that number of shares of
     Common Stock determined by multiplying (i) the number of Warrant Shares to
     which it would otherwise be entitled by (ii) a fraction, the numerator of
     which shall be the difference between the then current Market Price per
     share of the Common Stock and the Exercise Price, and the denominator of
     which shall be the Market Price per share of Common Stock.

                  (b) The following definitions shall apply to this Section 5.8.

                      (i) "Business Day" means any day, other than a Saturday or
        Sunday or a day on which banking institutions in the State of California
        are authorized or obligated by law, regulation or executive order to
        close.


                                      -15-
<PAGE>


                      (ii) "Closing Price" shall mean for the Common Stock as of
        any date, the last price of such security on the principal United States
        securities exchange or trading market on which such security is listed
        or traded as reported by the Research Service of Nasdaq Trading and
        Market Services (or a comparable reporting service of national
        reputation selected by the Holder and reasonably acceptable to the
        Company if the Research Service of Nasdaq Trading and Market Services is
        not then reporting last price of such security) (collectively, "NTMS"),
        or if the foregoing does not apply, the last reported sale price of such
        security in the over-the-counter market on the electronic bulletin board
        for such security as reported by NTMS, or, if no sale price is reported
        for such security by NTMS, the average of the bid prices of any market
        makers for such security as reported in the "pink sheets" by the
        National Quotation Bureau, Inc., in each case for such date or, if such
        date was not a Trading Day (as defined below) for such security, on the
        next preceding day which was a Trading Day. If the Closing Price cannot
        be calculated for a share of Common Stock as of either of such dates on
        any of the foregoing bases, the Closing Price of such security on such
        date shall be the fair market value as determined by an investment
        banking firm selected by mutual agreement of the Holder and the Company,
        with the costs of such appraisal to be borne equally by the Company and
        the Holder. The manner of determining the Closing Price of the Common
        Stock set forth in the foregoing definition shall apply with respect to
        any other security in respect of which a determination as to market
        value must be made.

                      (iii) "Market Price" shall mean, with respect to any date
        of determination, the average Closing Price during the ten (10) Trading
        Days ending on the Trading Day immediately preceding such date of
        determination, appropriately adjusted to reflect any stock dividend,
        stock split or similar transaction during either such relevant period.
        The manner of determining the Market Price of the Common Stock set forth
        in the foregoing definition shall apply with respect to any other
        security in respect of which a determination as to market value must be
        made hereunder.

                      (iv) "Trading Day" shall mean a Business Day on which at
        least 1,000 shares of Common Stock are traded on the principal United
        States securities exchange or trading market on which such security is
        listed or traded as reported by NTMS.

                                      -16-
<PAGE>


         5.9      SEVERABILITY. If one or more provisions of this Warrant are
held to be invalid, illegal or unenforceable under applicable law, such
provision shall be modified in such manner as to be valid, legal and
enforceable, but so as to most nearly retain the intent of the parties, and
if such modification is not possible, such provision shall be severed from
this Agreement as if such provision were not included, in either case, and
the balance of this Warrant shall not in any way be affected or impaired
thereby and shall be enforceable in accordance with its terms.

         5.10      REGISTERED HOLDER. The Company may deem and treat the
registered Holder(s) hereof as the absolute owner(s) of this Warrant
(notwithstanding any notation of ownership or other writing hereon made by
anyone), for the purpose of any exercise or conversion hereof, of any
distribution to the Holder(s) hereof, and for all other purposes, and the
Company shall not be affected by any notice to the contrary. Other than as
set forth herein, this Warrant does not entitle any Holder hereof to any
rights of a stockholder of the Company.

         5.11      TITLES AND SUBTITLES. The titles of the sections and
subsections of this Warrant are for convenience and are not to be considered
in construing this Warrant.

     IN WITNESS WHEREOF, Company has caused this Warrant to be signed by its
duly authorized officer and issued as of the date set forth below.

Dated:  September 11, 2000

                                    NATURAL WONDERS, INC.

                                    By:
                                       ----------------------------------------

                                    Its:
                                        ---------------------------------------



                                      -17-
<PAGE>


                                 EXERCISE NOTICE

                 (To be executed only upon exercise of Warrant)


         The undersigned registered owner of a Warrant of NATURAL WONDERS, INC.
(the "Company"), originally issued to _________________ irrevocably exercises
such Warrant for the purchase of shares of Common Stock of the Company,
purchasable with the Warrant, and hereby sets the place and date for the closing
of such purchase as follows, all on the terms and conditions specified in the
Warrant.

Place of Closing:
                  --------------------------

Date of Closing:
                  --------------------------







         The undersigned requests that a certificate for such shares be
registered in the name of __________________________________________________,
whose address is____________________________________________________. If said
number of shares is less than all of the shares of Common Stock purchasable
under the Warrant, the undersigned requests that a new Warrant representing the
remaining balance of such shares be registered in the name of
__________________________________________________, whose address is

_________________________________________________________.


Dated:  ____________________

                                   ---------------------------------------------
                                   Signature of Registered Owner

                                   ---------------------------------------------
                                   Street Address

                                   ---------------------------------------------
                                   City             State               Zip


                                      -18-
<PAGE>


                               FORM OF ASSIGNMENT

         FOR VALUED RECEIVED, the undersigned registered owner of this Warrant
issued by NATURAL WONDERS, INC. hereby sells, assigns and transfers unto the
Assignee named below all of the rights of the undersigned under the within
Warrant, with respect to the number of Shares of Common Stock set forth below:

Name of Assignee                Address                           No. of Shares







and does hereby irrevocably constitute and appoint ____________________________
attorney to make such transfer on the books of _________________________
maintained for such purpose, with full power of substitution in the premises.

Dated:  ____________________



                                   ---------------------------------------------
                                   Signature of Registered Owner



                                   ---------------------------------------------
                                   Witness


                                      -19-