SECURITY AGREEMENT AMENDMENT
Security Agreement Amendment (the "Amendment"), dated as of August
30, 1999, by and among Kideo Productions, Inc. (the "Company"), Xxxxxx
Investments, Ltd., Greatview Investments, Ltd. and Mermaid Investments, Ltd.
(collectively, the "Original Secured Parties") and White Ridge Investments, Ltd.
(the "Additional Secured Party").
WHEREAS, on May 11, 1999 the Company and the Original Secured
Parties entered into a Note and Warrant Purchase Agreement (the "Original
Purchase Agreement"), whereby the Original Secured Parties loaned an aggregate
of $1,400,001 to the Company (the "Original Loan") and in return the Company
issued to the Original Secured Parties certain promissory notes (the "Original
Notes") and warrants to purchase shares of the Company's common stock (the
"Original Warrants");
WHEREAS, in connection with the Original Loan, the Company and the
Original Secured Parties entered into a security agreement (the "Security
Agreement"), pursuant to which the Company granted to the Original Secured
Parties a security interest in certain Collateral (as defined in the Security
Agreement);
WHEREAS, the Company desires to borrow from the Additional Secured
Party, and the Additional Secured Party agrees to lend to the Company, an amount
equal to $300,000 (the "Additional Loan");
WHEREAS, in return for the Additional Loan, pursuant to a Note and
Warrant Purchase Agreement (the "New Purchase Agreement"), the Company is
issuing a promissory note (the "Additional Note") and a warrant to purchase
shares of the Company's common stock (the "Additional Warrant");
WHEREAS, in order to effect the Additional Loan, the Company and the
Original Secured Parties desire to amend the Security Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto hereby agree as follows:
1. Amendments. The Security Agreement is hereby amended as follows:
(a) all references to the Loan shall mean the Original Loan and
the Additional Loan;
(b) all references to the Notes shall mean the Original Notes and
the Additional Notes;
(c) all references to the Warrants shall mean the Original
Warrants and the Additional Warrants;
(d) all references to the Purchase Agreement shall mean the
Original Purchase Agreement and the New Purchase Agreement;
and
(e) all references to the Secured Parties shall mean the Original
Secured Parties and the Additional Secured Party.
Except for the specific changes provided for in this section, all terms and
conditions of the Security Agreement shall remain and are in full force and
effect.
2. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of laws.
3. Miscellaneous. This Amendment shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of the
parties hereto. The headings in this Agreement are for purposes of reference
only and shall not limit or otherwise affect the meaning hereof. This Agreement
may be executed in any number of counterparts, each of which shall be an
original, but all of which together shall constitute one instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment as of the date first above written.
KIDEO PRODUCTIONS, INC.
By: _______________________________
Name:
Title:
XXXXXX INVESTMENTS LTD.
By: _______________________________
Name:
Title:
GREATVIEW INVESTMENTS, LTD.
By: _______________________________
Name:
Title:
MERMAID INVESTMENTS, LTD.
By: _______________________________
Name:
Title:
WHITE RIDGE INVESTMENTS, LTD.
By: _______________________________
Name:
Title:
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