EXHIBIT 10.67
EXTENSION AND MODIFICATION AGREEMENT
This Agreement is made as of December 31, 2001, by and between US Bank National
Association, successor by merger to Santa Xxxxxx Bank ("Bank"), on the one hand,
and Intervisual Books, Inc. ("IB") and Fast Forward Marketing, Inc. formerly
known as FFM Acquisition Corp. ("FFM"), which are collectively referred to as
"Borrowers," Xxxxx X. Xxxx ("Xxxx") and Xxxxx X. Xxxx, as Trustee of The Xxxx
Family Trust ("Trust") (Xxxx and Trust are collectively referred to as
"Guarantors"), on the other hand.
RECITALS
This Agreement is made and entered into in reliance on the accuracy of
the following recitals which are acknowledged by Borrowers, Guarantors, and Bank
to be true and accurate:
A. Borrowers' Obligations to Bank. Borrowers are liable to Bank with respect to
a term loan ("the Loan") evidenced by that certain Amended and Restated Secured
Promissory Note dated April 17, 2001, in the maximum principal amount of
$2,475,000.00 ("the Note"), which Note calls for the accrual of interest at the
rate of 4.0 percentage points above the Wall Street Journal Prime Rate as
defined in the Note. The Loan is also evidenced by that certain Loan and
Security Agreement dated May 12, 1999 ("Loan Agreement"), as amended from time
to time, and further evidenced and governed by each of the amendments described
in that certain Amended Agreement Number Five to Loan and Security Agreement
dated April 17, 2001. The Note matures on June 30, 2002. As of December 18,
2001, the outstanding principal balance under the Note was $2,130,000.00,
together with accrued and unpaid interest in the amount of $8,971.25 (calculated
at the rate provided for in Section 2 of Note), together with all accruing
interest, fees, costs, and expenses provided in the Loan Documents, including,
without limitation, attorneys' fees.
B. Security for Borrowers' Obligations. To secure Borrowers' obligations to Bank
under the Note, Borrowers granted to Bank a security interest in certain of
their assets ("Personal Property Collateral") pursuant to the Loan Agreement.
The Personal Property Collateral includes, but is not limited to, all accounts,
equipment, financing assets, general intangibles, inventory, negotiable
collateral, any money and deposit accounts or other assets of Borrower, and the
proceeds of any such personal property collateral. In October, 2001, Bank
conducted an audit of its collateral and Borrowers paid to Bank the sum of
$4,593.41 to reimburse Bank for the expense of that audit.
C. Guarantees. On or about May 12, 1999, Guarantors each separately executed in
favor of Bank a document titled "Continuing Guaranty" as amended ("the Guaranty
Agreements") wherein Guarantors, and each of them, agreed to guarantee, subject
to certain limitations, the payment and performance by Borrowers of all of their
obligations owed to the Bank, including, but not limited to, the obligations of
Borrowers on the Note.
D. Loan Documents. The following documents evidence Borrowers obligations to and
relationship with Bank: this Agreement, the Note, the Loan Agreement, and the
Guaranty Agreements. (The documents described above, together with any other
documents executed by or among the parties in connection with the Loan, and any
and all amendments and modifications thereto, are referred to collectively in
this Agreement as "Loan Documents.") There are no written or oral agreements
between Borrowers, Guarantors, and Bank other than the Loan Documents.
E. Default. Borrower has defaulted in its obligations to Bank by failing to
achieve financial covenants provided for in the Loan Agreement ("the Existing
Defaults"). Borrowers acknowledge that they have received adequate and
reasonable notice of the Existing Defaults from Bank, and that Bank has not
waived any of such defaults or any of its rights with respect to the Existing
Defaults or any other breach by Borrower of the Loan Documents.
F. Bank's Default Rights. Because of the existence of the Existing Defaults,
Bank has the current right to exercise any and all of its rights and remedies
against Borrowers and Guarantors or otherwise under applicable law and the Loan
Documents. Such remedies include, without limitation, the right to foreclose
upon the Personal Property Collateral.
G. Extension and Modification. At Borrowers' request, Bank is willing to waive
the Existing Defaults, extend the term of the Loan and to otherwise modify the
Loan Documents as set forth herein, provided that the conditions set forth
herein are satisfied within the time periods required under this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, and for other
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Bank, Borrowers, and Guarantors hereby agree as follows:
1 Incorporation of Recitals. Each of the above recitals is incorporated herein
and deemed to be the agreement of the Bank, Borrowers, and Guarantors, and is
relied upon by each party to this Agreement in agreeing to the terms of this
Agreement.
2 Confirmation of Collateral. Borrowers hereby grant and confirm that all
obligations of Borrowers to Bank are secured by a first priority security
interest in the Personal Property Collateral, subject to Permitted Liens
pursuant to Section 6.11A of the Loan Agreement.
3 Conditions Precedent. Borrowers and Guarantors understand that this
Agreement shall not be effective, and Bank shall have no obligation to forbear,
or to amend the terms of the Loan Documents as provided herein, unless and until
each of the following conditions precedent has been satisfied not later than the
respective date set forth below, or waived by Bank (in Bank's sole discretion),
for whose sole benefit such conditions exist, with Bank's determination as to
whether they have been timely satisfied being conclusive absent manifest error:
3.1 Execution and Delivery. On or before December 31, 2001, Borrowers
and Guarantors shall have executed and delivered to Bank this Agreement.
3.2 Other Acts. On or before such time as Bank may require, Borrowers
and Guarantors shall have taken any and all actions and execute and deliver to
Bank any and all documents necessary or appropriate in Bank's sole discretion to
effectuate this Agreement;
3.3 Extension Fee. Concurrent with the execution of this Agreement,
Borrowers shall have paid to Bank the sum of $15,000.00 (the "Extension Fee"),
which fee will not reduce the outstanding balance of principal and/or interest
of the Note.
3.4 Attorney's Fees and Costs. Concurrent with the execution of this
Agreement, Borrowers shall also reimburse the Bank for all of its out-of-pocket
expenses incurred in the negotiation, underwriting, and documentation of this
Agreement, including but not limited to, the following items and amounts:
Bank's Attorneys Fees $5,799.00
3.5 Evidence of Insurance. Concurrent with the execution of this
Agreement, Borrowers shall provide to Bank evidence satisfactory to Bank that
all of the Personal Property Collateral, wherever located, is adequately covered
by insurance against any casualty loss, including, but not limited to, fire and
theft.
3.6 Principal Reduction. On or before December 31, 2001, Borrower shall
have paid to Bank the sum of $500,000.00 as a principal reduction of the Loan.
4 Representations and Warranties. To induce Bank to enter into this Agreement,
Borrower and Guarantors hereby represent and warrant to Bank as follows:
4.1 Representations and Warranties True and Correct; Survival. All
representations and warranties contained in this Agreement and in any and all of
the other Loan Documents are true and correct in all material respects as of the
date of this Agreement unless such representations and warranties refer to a
specific date, and all such representations and warranties shall survive the
execution of this Agreement;
4.2 No Breach. With the exception of the Existing Defaults, no event has
occurred or failed to occur that is or, with notice or lapse of time or both
would constitute a default, an event of default, or a breach or failure of any
condition under any Loan Document;
4.3 Unconditional Obligation; No Defenses. The Note represents the
unconditional, absolute, valid, and enforceable obligation of Borrowers.
Borrowers and Guarantors have no claims or defenses against Bank or any other
person or entity which would or might affect (a) the enforceability of any
provisions of the Loan Documents or (b) the collectibility of sums advanced by
Bank in connection with the Loan. Borrowers and Guarantors acknowledge that the
statement of the balance as reflected in Recital A. is true and correct. As of
the date of this Agreement, Borrowers and Guarantors understand and acknowledge
that the Bank is entering into this Agreement in reliance upon and in partial
consideration for this acknowledgment and representation, and agree that such
reliance is reasonable and appropriate;
4.4 Cooperation of Borrowers and Guarantors. Borrowers and Guarantors
shall take any and all actions of any kind or nature whatsoever, either directly
or indirectly, that are necessary to prevent Bank from being deprived of any
rights or remedies of Bank under the Loan Documents, or this Agreement in the
event of a default by Borrowers under this Agreement or any other Loan
Documents.
5 Modification of Loan Documents. To induce Bank to enter into this Agreement,
Borrowers and Guarantors agree that the Loan Documents are hereby supplemented
and modified as follows, which modifications shall supersede and prevail over
any conflicting provisions of the Loan Documents:
5.1 Modification of the Note and Loan Agreement. The Note and the Loan
Agreement are modified as follows:
5.1.1 The monthly principal payment provided for in the Note
shall be increased from $15,000.00 to $25,000.00 commencing on January 1, 2002,
and continuing on a monthly basis on the first day of each month for the
remaining term of the Note, as modified by this Agreement.
5.1.2 The maximum amount of principal of the Note is reduced to
the current outstanding balance of principal as reflected in Recital A, above,
less the sum of $500,000.00 being paid as set forth in Section 3.6, above.
Further, notwithstanding any payments by Borrowers which further reduce the
outstanding principal balance below the maximum amount of principal as amended
by this Agreement, Borrowers are no longer entitled to reborrow such repaid sums
nor is Bank obligated to make any further advances to Borrower under the Note or
the Loan Agreement, absent a separate written amendment and/or agreement by and
among the parties and the consent of Guarantors.
5.1.3 Section 3.1A of The Loan Agreement, as previously
modified, is modified by deleting the existing paragraph in full and replacing
it with the following: "This Agreement shall have a term commencing on the date
hereof and concluding on December 31, 2002."
5.1.4 Section 3.d. of the Note is modified to change the date
provided therein from "thirtieth (30th) day of June, 2002," to "thirty-first
(31st) day of December, 2002."
5.1.5 The Loan Agreement, as previously modified, is modified by
deleting in its entirety Section 7.10, retroactive to September 29, 2001.
5.2 Modification of All Loan Documents. All of the Loan Documents are
modified as follows:
5.2.1 The agreement for the submission of any dispute arising
under the Loan Documents to arbitration according to the rules of the American
Arbitration Association is deleted. Neither party shall have the right to compel
arbitration of any disputes.
5.2.2 The parties to the Loan Documents agree to waive their
right to trial of any disputes by a jury, and that all disputes shall be tried
by a Court of competent jurisdiction located in Los Angeles County, California,
sitting without a jury.
5.3 Except as modified by this Agreement, all of the remaining terms of
Note and the Loan Agreement remain unmodified and in full force and effect.
6 Borrowers' and Guarantors' Covenants and Agreements. Unless Bank otherwise
consents in writing, Borrowers and Guarantors, respectively, covenant and agree
as follows:
6.1 Compliance. Borrowers and Guarantors will comply with all
requirements of all Loan Documents to the extent not inconsistent with this
Agreement;
6.2 Financial Information. Borrowers will provide to Bank the following
financial information:
6.2.1 On a semi-monthly basis, on the 20th day of the month for
the preceding first 1/2 of the month and on the 5th day of the month for
preceding second 1/2 of the month, a borrowing certificate in the Bank's usual
and customary form.
6.2.2 On a monthly basis, and not later than 20 days following
the end of each month, the Borrowers' financial statements which shall include a
balance sheet, an income statement, receivables aging, payables aging, and such
other financial information as Bank shall require.
6.2.3 On a monthly basis and not later than 25 days following
the end of each month, a detailed inventory report which will include all
inventory held by Borrowers, including but not limited to, Xxxx Pak (Chicago),
and at a minimum will include a stock listing by title, along with a collateral
certificate acceptable to Bank defining total inventory and the ineligible
inventory.
6.2.4 On a semi-annual basis, a complete customer list.
6.2.5 On an annual basis, and not later than 15 days following
its submission to federal and state taxing authorities, the Borrowers' state and
federal corporate tax returns.
6.2.6 On an annual basis, and not later than 30 days after the
end of each calendar year, a personal financial statement for each of the
Guarantors, on the Bank's pre-printed form, and certified by the Guarantors to
be a true and accurate representation of their financial condition.
6.2.7 On an annual basis, and not later than 15 days following
their submission to federal and state taxing authorities, a copy of each of
Guarantors federal and state personal income tax returns.
6.3 Subordination. Any and all indebtedness owed by Borrowers to any
officer or shareholder of Borrower is, and shall remain, subordinate to
Borrowers' obligation to Bank under the Note. If requested to do so by Bank,
Borrowers shall obtain written subordination agreements from its/their officers
or shareholders evidencing such subordination.
6.4 Collateral Audits. Borrowers will permit Bank to conduct audits of
its collateral consisting of inventory and equipment on a quarterly basis (and
more often as the Bank deems either
appropriate or necessary), and they will promptly reimburse Bank for the
expenses incurred by Bank in conducting such audits upon the Bank's demand. The
next collateral audit will be scheduled on/or about February 15, 2002.
6.5 Partial Payments. Acceptance at any time by Bank of a partial
payment shall not be deemed to waive or excuse the making of the full monthly
payment by the time required under the Notes, as modified by this Agreement. Any
such partial payment received by the Bank shall be applied by Bank toward the
next monthly installment due under the Notes, as modified.
6.6 Capital Infusion. Borrowers will obtain an infusion of capital funds
into the business of at least $2,000,000.00 on or before January 31, 2002.
6.7 Prohibition on Capital Expenditures. Until all of the obligations of
Borrowers under the Note are satisfied in full, Borrowers will not make any
capital expenditure after the date hereof which in the aggregate of all capital
expenditures exceeds the sum of $75,000.00 (which includes entering into any
agreement for the payment of a capital expenditure, including entering into any
capital leases) without the prior written consent of Bank.
6.8 Prohibition on Distributions to Insiders. Until all of the
obligations of Borrowers under the Note are satisfied in full, Borrowers will
not make any distribution to officers, directors, or shareholders other than (a)
wages and benefits actually earned by such persons as employees and only to the
extent of wages and benefits historically provided to employees with similar
positions, and (b) advisory fees, commissions, bonuses, and severance payments
which Borrower are obligated to pay pursuant to employment or other contracts
entered into prior to the date of this Agreement.
6.9 Overdrafts Prohibited. Borrowers will not cause checks or other
orders for payment to be issued against their deposit accounts maintained with
Bank if such check or payment would result in the respective deposit account to
be overdrawn. Borrowers acknowledge that the Bank is not obligated to and will
not pay checks which create an overdrawn condition in any of Borrowers' deposit
accounts with Bank.
6.10 Collateral Coverage Maintenance. Borrowers will at all times
maintain a ratio of the outstanding balance of the Note to Collateral consisting
of Eligible Accounts and Inventory, as those terms are used in the Loan
Agreement, of not more than 65% ("Collateral Coverage Ratio.") In the event that
the Bank determines in good faith that the Collateral Coverage Ratio exceeds
65%, then Borrowers will, within 5 business days of the Bank's written demand,
repay the outstanding balance of the Note by the amount necessary to return the
Collateral Coverage Ratio to no more than 65%.
6.11 Prohibition on New Borrowing. Until all of the obligations of
Borrowers under the Note are satisfied in full, Borrowers will not incur any
additional indebtedness, except indebtedness owed by one borrower to the other
and trade debt incurred in the ordinary course of Borrowers' business, without
the prior written consent of Bank.
7 Bank's Covenant.
7.1 Notwithstanding the provisions of Section 8.4 L. of the Loan
Agreement, Bank agrees that it will not declare Borrowers to be in default under
the Note and the Loan Agreement as a result of, and hereby consents to, the
entry of Borrowers into that certain Amendment to Zindart Loan and Security
Agreement and Agreement dated as of December 31, 2001, whereby the Subordinated
Debt, as that term is used in the Loan and Security Agreement, is reduced to
$1,200,000.00.
8 Additional Events of Default. In addition to the events of default set forth
in the Loan Documents, the occurrence of any of the following events of default
other than an Existing Default shall be an event of default and, at Bank's
option may make all obligations of Borrowers and Guarantors immediately due and
payable, all without demand, presentment or notice, all of which requirements
Borrower and Guarantors hereby waive:
8.1 Failure to Perform. Failure to perform any of the obligations set
forth in this Agreement or in any other Loan Documents (as the same may be
affected by this Agreement) subject to any applicable notice and grace periods,
if any;
8.2 Representations and Warranties. Any representation or warranty of
Borrowers or Guarantors herein or in any other Loan Document shall be false,
misleading, or incorrect in any material respect;
8.3 Material Adverse Changes. If there is any further material
impairment of the Borrowers' ability to satisfy its obligations to Bank.
9 Remedies. Upon the occurrence of an event of default and at all times
thereafter, Bank, without the necessity of obtaining court approval, shall be
entitled to exercise in respect of all of the collateral it may hold all rights
and remedies of a secured creditor available to it under applicable laws. Bank
shall also be entitled to exercise all rights and remedies available to Bank as
a creditor generally, including, without limitation, all remedies available to
Bank under the Loan Documents, as well as rights and remedies available to Bank
at law or in equity. All such rights and remedies shall be cumulative. No
failure or delay on the part of Bank in exercising any power, right, or remedy
under any of the Loan Documents shall operate as a waiver thereof, and no single
or partial exercise of any such power, right, or remedy shall preclude any
further exercise thereof or the exercise of any other party, right, or remedy.
10 Confirmation of Guaranty Agreements; Unconditional Obligations; Waiver.
Guarantors, and each of them, reaffirm their obligations under the Guaranty
Agreements, as amended, and reaffirm and restate each and every term, condition,
and provision of the Guaranty Agreements. In addition, Guarantors hereby agree
that their obligations under the Guaranty Agreements shall be unconditional,
irrespective of (i) the absence of any attempt to collect the Loan from Borrower
or any other guarantor or other action to enforce the same, (ii) the waiver or
consent by Bank with respect to any provision of any instrument evidencing the
Loan, or any part thereof, or any other agreement now or hereafter executed by
Borrowers and delivered to Bank, (iii) Bank's election, in any proceeding
instituted under chapter 11 of Title 11 of the United States code (11 U.S.C.
Section 101 et seq.) (the "Bankruptcy Code"), of the application of Section
1111(b)(2) of the Bankruptcy Code, (iv) any borrowing or grant of a security
interest by Borrowers, as debtor-in-possession, under Section 364 of the
Bankruptcy Code, or (v) the disallowance under Section 502 of the Bankruptcy
Code of all or any portion of Bank's claim(s) for repayment of the Loan.
Guarantors further reaffirm that their obligations under the Guaranty Agreements
are primary and are separate and distinct from Borrower's obligations.
Guarantors further represent and warrant that they have no defenses or claims
against Bank that would or might affect the enforceability of the Guaranty
Agreements and that the Guaranty Agreements remain in full force and effect.
Guarantors irrevocably and permanently (even if Guarantor pays said obligations
in full) waive any and all rights of subrogation, reimbursement, indemnity,
contribution or any other claim arising from the existence of performance of the
Guaranty Agreements which Guarantor may now or hereafter have against Borrower
or any other Person (or their respective properties) directly or contingently
liable for said obligations.
11 Release. Borrowers, Guarantors, and each of them, hereby, for themselves,
their successors, heirs, executors, administrators and assigns, release, acquit
and forever discharge Bank, its directors, officers, employees, agents,
affiliates, successors, administrators and assigns ("Released Parties") of and
from any and all claims, actions, causes of action, demands, rights, damages,
costs, loss of service, expenses, and compensation whatsoever which Borrowers,
Guarantors, or any of them, might have because of anything done, omitted to be
done, or allowed to be done by any of Released Parties and in any way connected
with the Loan, the Note, the Loan Agreement, this Agreement, the other Loan
Documents, and any deposit account which Borrowers and/or Guarantors have
maintained with Bank, as of the date of execution of this Agreement, WHETHER
KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, including, without limitation, any
settlement negotiations and also including, without limitation, any damages and
the consequences thereof resulting or to result from the events described,
referred to, or inferred herein above ("Released Matters"). Borrowers,
Guarantors, and each of them, further agree never to commence, aid, or
participate in (except to the extent required by order or legal process issued
by a court or governmental agency of competent jurisdiction) any legal action or
other proceeding based in whole or in part upon the
Released Matters. In furtherance of this general release, Borrowers, Guarantors,
and each of them, acknowledge and waive the benefits of California Civil Code
section 1542, which provides:
"A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the
debtor."
Borrowers, Guarantors, and each of them, agree that this waiver and release is
an essential and material term of this Agreement and that the agreements in this
paragraph are intended to be in full satisfaction of any alleged injuries or
damages in connection with the Released Matters. Borrowers, Guarantors, and each
of them, also understand that this release shall apply to all unknown or
unanticipated results of the transactions and occurrences described above, as
well as those known and anticipated. Borrowers, Guarantors, and each of them,
have consulted with legal counsel prior to signing this release, or had an
opportunity to obtain such counsel and knowingly chose not to do so, and execute
such release voluntarily with the intention of fully and finally extinguishing
all Released Matters.
12 Miscellaneous
12.1 Agreement to Cooperate. All the parties hereto agree to and will
cooperate fully with each other in the performance of this Agreement and the
Loan Documents, including, without limitation, executing any additional
documents reasonably necessary to the full performance of this Agreement.
12.2 Benefit of Agreement. This Agreement shall be binding upon, inure
to the benefit of, and be enforceable by the parties hereto, their respective
successors and assigns. No other person or entity shall be entitled to claim any
right or benefit hereunder, including, without limitation, the status of a third
party beneficiary hereunder.
12.3 Effect of Agreement. All the parties hereto agree that, except as
expressly provided herein, the Loan Documents shall remain in full force and
effect in accordance with their respective terms, and this Agreement shall not
be construed to:
12.3.1 Impair the validity, perfection, or priority of any lien
or security interest securing Borrowers' obligations to Bank;
12.3.2 Waive or impair any rights, powers, or remedies of Bank
under the Loan Documents;
12.3.3 Constitute an agreement by Bank or require Bank to grant
forbearance periods or extend the term of the Note or the time for payment of
any of Borrowers' obligations to Bank except as expressly provided herein, none
of which Bank agrees or has agreed to do, and all of which matters are in Bank's
sole and absolute discretion.
In the event of any inconsistency between the terms of this Agreement and any
other Loan Document, this Agreement shall govern. This Agreement shall be
construed without regard to any presumption or rule requiring that it be
construed against the party causing this Agreement or any part hereof to be
drafted. The headings used in this Agreement are for convenience only and shall
be disregarded in interpreting the substantive provisions of this Agreement.
12.4 Integration. This Agreement and the other Loan Documents
are intended by the parties as the final expression of their agreement and
therefore incorporate all negotiations of the parties hereto and are the entire
agreement of the parties hereto. Borrowers and Guarantors acknowledge that they
are relying on no written or oral agreement, representation, warranty, or
understanding of any kind made by Bank or any employee or agent of Bank except
for the agreements of Bank set forth herein or in the other Loan Documents.
Except as expressly set forth in this Agreement, the other Loan Documents remain
unchanged and in full force and effect.
12.5 Severability. In case any provision in this Agreement shall be
invalid, illegal, or unenforceable, such provision shall be severable from the
remainder of this Agreement and the validity, legality, and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
12.6 Reversal of Payments. If Bank receives any payments or proceeds of
the Real Property or the Personal Property Collateral which are subsequently
invalidated, declared to be fraudulent or preferential, set aside, or required
to be paid to a trustee, debtor-in-possession, receiver, or any other party
under any bankruptcy law, common law, equitable cause, or otherwise, then, to
such extent, the obligations or part thereof intended to be satisfied by such
payments or proceeds shall be reserved and continue as if such payments or
proceeds had not been received by Bank.
12.7 Modification. This Agreement may not be amended, waived, or
modified in any manner without the prior written consent of the party against
whom the amendment, waiver, or modification is sought to be enforced.
12.8 Attorneys' Fees. Borrowers and Guarantors shall reimburse Bank
promptly upon demand for all costs and expenses, including, without limitation,
reasonable attorneys' fees and expenses, expended or incurred by Bank in any
arbitration, judicial reference, legal action, or otherwise in connection with
(i) the amendment and enforcement of this Agreement and the other Loan
Documents, including, without limitation, during any workout, attempted workout,
and/or in connection with the rendering of legal advice as to Bank's rights,
remedies, and obligations under this Agreement and the other Loan Documents,
whether or not any form of legal proceeding is recommended, (ii) collecting any
sum which becomes due Bank under this Agreement or any of the other Loan
Documents, (iii) any proceeding for declaratory relief, any counterclaim to any
proceeding, or any appeal, (iv) the protection, preservation, or enforcement of
any rights or remedies of Bank or any of the collateral, whether or not any form
of legal proceedings is commenced, or (v) any action necessary to defend,
protect, assert, or preserve any of Bank's rights or remedies as a result of or
related to any case or proceeding under Chapter 11 of the United States Code, as
amended, or any similar law of any jurisdiction. All of such costs and expenses
shall bear interest from the time of demand at the rate then in effect under the
Note.
12.9 Applicable Law. Except as otherwise provided herein, this Agreement
and all other Loan Documents and the rights and obligations of the parties
hereto shall be governed by the laws of the State of California.
12.10 Counterparts. This Agreement may be executed in any number of
counterparts which, when taken together, shall constitute but one agreement.
12.11 Survival. All representations, warranties, covenants, agreements,
waivers, and releases of Borrower and Guarantors contained herein shall survive
the payment in full of Borrower's obligations to Bank.
12.12 Notices. Any notices required or contemplated under this Agreement
or any other Loan Document shall be in writing and personally delivered, sent by
United States mail, postage prepaid, or sent by facsimile transmission, charges
prepaid and addressed as follows: "Borrowers"
INTERVISUAL BOOKS, INC.
FFM ACQUISITION CORP.
0000 Xxxxx Xxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx Xxxxxx, XX 00000
Fax No.: (000) 000-0000
"Guarantors"
Xxxxx Xxxx
Xxxxx Xxxx, as Trustee of The Xxxx Family Trust
0000 Xxxxx Xxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx Xxxxxx, XX 00000
Fax No.: (000) 000-0000
"Bank"
US BANK NATIONAL ASSOCIATION,
Attn: Xx. Xxxxx Xxxxxxxxxx
Special Assets Group
T-8
000 X.X. Xxxxx Xxx., Xxx 000
Xxxxxxxx, XX 00000
Fax No.: (000) 000-0000
Notice shall be deemed complete three days after the mailing of notice by U.S.
Mail, or upon the date of personal delivery or facsimile transmission. Any party
may change the address to which notices, requests and other communications are
to be sent by giving written notice of such change to each other party, which
shall be effective upon receipt of such written notice.
[The Balance of this Page is intentionally left blank]
IN WITNESS WHEREOF, Bank, Borrowers, and Guarantors have executed this Agreement
as of the date and year first set forth above.
"Borrower"
INTERVISUAL BOOKS, INC.,
a California corporation
By /s/ Xxxxx X. Xxxx
----------------------------------
Xxxxx X. Xxxx, Chairman
FAST FORWARD MARKETING, INC.,
formerly known as FFM ACQUISITION CORP.,
a California corporation
By /s/ Xxx X. Xxxxxx
----------------------------------
Xxx Xxxxxx, President
"Guarantors"
/s/ Xxxxx X. Xxxx
--------------------------------------
XXXXX X. XXXX, an Individual
/s/ Xxxxx X. Xxxx
--------------------------------------
XXXXX X. XXXX, Trustee of
THE XXXX FAMILY TRUST
"Bank"
US BANK NATIONAL ASSOCIATION
By /s/ Xxxxx Xxxxxxxxxx
----------------------------------
Xxxxx Xxxxxxxxxx, Vice President
