<PAGE>


                             AMENDMENT NUMBER ONE TO
                AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

         This Amendment Number One to Amended and Restated Loan and Security
Agreement ("Amendment") is entered into as of November 10, 1999, by and among
WELLS FARGO BANK, NATIONAL ASSOCIATION, as a lender and as Agent ("Wells
Fargo"), FOOTHILL CAPITAL CORPORATION, a California corporation, as a lender and
as Administrative Agent ("Foothill"), and NATURAL WONDERS, INC., corporation
("Borrower"), in light of the following:

         A.   Borrower, Wells Fargo and Foothill have previously entered into
that certain Amended and Restated Loan and Security Agreement, dated as of
June 15, 1999 (the "Agreement"). Wells Fargo and Foothill shall jointly be
referred to as Lenders.

         B.   Borrower and Lenders desire to amend the Agreement as provided for
and on the conditions herein.

         NOW, THEREFORE, Borrower and Lenders hereby amend and supplement the
Agreement as follows:

         1.   DEFINITIONS. All initially capitalized terms used in this
Amendment shall have the meanings given to them in the Agreement unless
specifically defined herein.

         2.   AMENDMENTS.

              (a) Section 7.20 of the Agreement is hereby amended to read as
follows:

                  7.20 FINANCIAL COVENANT. Fail to maintain Tangible Net Worth
         of at least the following amounts, measured on a fiscal quarter-end
         basis:

<TABLE>
<CAPTION>
         QUARTER ENDING EACH YEAR ON OR ABOUT        MINIMUM TANGIBLE NET WORTH
         ------------------------------------        --------------------------
         <S>                                         <C>
                  July 31                                     $40,103,000
                  October 31                                  $37,402,000
                  January 31                                  $49,026,000
                  April 30                                    $42,107,000
</TABLE>

         3.   REPRESENTATIONS AND WARRANTIES. Borrower hereby affirms to
Lenders that all of Borrower's representations and warranties set forth in
the Agreement are true, complete and accurate in all respects as of the date
hereof.

         4.   NO DEFAULTS. Borrower hereby affirms to Lenders that no Event
of Default has occurred and is continuing as of the date hereof.


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<PAGE>

         5.   CONDITION PRECEDENT. The effectiveness of this Amendment is
expressly conditioned upon receipt by Lenders of an executed copy of this
Amendment.

         6.   COSTS AND EXPENSES. Borrower shall pay to Foothill all of
Foothill's out-of-pocket costs and expenses (including, without limitation,
the fees and expenses of its counsel, which counsel may include any local
counsel deemed necessary, search fees, filing and recording fees,
documentation fees, appraisal fees, travel expenses, and other fees) arising
in connection with the preparation, execution, and delivery of this Amendment
and all related documents.

         7.   LIMITED EFFECT. In the event of a conflict between the terms
and provisions of this Amendment and the terms and provisions of the
Agreement, the terms and provisions of this Amendment shall govern. In all
other respects, the Agreement, as amended and supplemented hereby, shall
remain in full force and effect.

         8.   COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in
any number of counterparts and by different parties on separate counterparts,
each of which when so executed and delivered shall be deemed to be an
original. All such counterparts, taken together, shall constitute but one and
the same Amendment. This Amendment shall become effective upon the execution
of a counterpart of this Amendment by each of the parties hereto.

         IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first set forth above.

                                  WELLS FARGO BANK, NATIONAL ASSOCCIATION,
                                  as Agent and as a Lender

                                  By:    /s/ Karen Barone
                                         Title:  Vice President

                                  FOOTHILL CAPITAL CORPORATION,
                                  a California corporation, as Administrative
                                  Agent and as a Lender

                                  By:    /s/ Robert Castine
                                         Title:  Vice President

                                  NATURAL WONDERS, INC.,
                                  a Delaware corporation

                                  By:    /s/ Peter G. Hanelt
                                  Title:  Chief Executive Officer


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<PAGE>

         The undersigned has executed a Continuing Guaranty in favor of the
above described Lenders respecting the obligations of Natural Wonders, Inc.
("Borrower") owing to Lenders. The undersigned acknowledges the terms of the
above Amendment and reaffirms and agrees that: its Continuing Guaranty remains
in full force and effect; nothing in such Continuing Guaranty obligates Lenders
to notify the undersigned of any changes in the financial accommodations made
available to Borrower or to seek reaffirmations of the Continuing Guaranty; and
no requirement to so notify the undersigned or to seek reaffirmations in the
future shall be implied by the execution of this reaffirmation.

                                   NW CAPITAL MANAGEMENT, INC.,
                                   a California corporation

                                   By:   /s/ Peter G. Hanelt
                                   Name: Peter G. Hanelt
                                   Title: Chief Executive Officer


Due to system issues, Form 10-Q was not completed and reviewed within the
prescribed time period.

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