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EXHIBIT 10.3
AMENDMENT NO. 1
TO
LOAN AND SECURITY AGREEMENT
This Amendment No. 1 (the "Amendment") to the Loan and Security Agreement,
dated May 13, 1999 (the "Agreement"), is entered into as of April 16, 2001, by
and between Zindart Limited, a Hong Kong Corporation ("Lender"), on the one
hand, and Intervisual Books, Inc., a California corporation ("IBI"), and FFM
Acquisition Corp, a California corporation, ("FFM"), on the other hand. IBI and
FFM are sometimes individually and collectively referred to as "Borrower," and
the representations, warranties, covenants and agreements of "Borrower"
contained in this Agreement, as well as the liability in respect of the
Obligations shall apply to IBI and FFM on a joint and several basis unless
expressly stated otherwise. Capitalized terms used herein but not otherwise
defined shall have the meanings set forth in the Agreement.
RECITALS
Whereas Borrower has requested the extension of the Maturity Date under the
Agreement and in consideration for a repayment of the principal amount of the
Obligations in the amount of $250,000 on the date hereof; and
Whereas Lender desires to extend the Maturity Date, subject to the
limitations and provisions set forth herein.
AGREEMENT
The parties agree as follows:
1. The Definitions are hereby amended to delete the definition of
"Maturity Date" and add the following in the correct alphabetical
order:
"Maturity Date" means June 30, 2002.
"Principal Payment Date" means the dates set forth on Schedule A
hereto.
2. Section 2.1 is hereby amended to add the following paragraphs:
"(d) Notwithstanding anything to the contrary set forth in this
Section 2.1 or in this Agreement, Lender shall not be required to make
any Advances or extend any credit or funds to Borrower subsequent to
April 16, 2001, including, without
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limitation, any Advances, credit or funds that have been repaid on or
subsequent to April 16, 2001.
(e) Borrower shall pay to Lender on the Principal Payment Dates the
amounts set forth on Schedule A hereto, and, as of such dates, such
amounts shall immediately be due and payable. All remaining Advances
under this SECTION 2.1 and other amounts not previously paid under
this Agreement and the Amendment, including, without limitations, all
unpaid Obligations, shall be immediately due and payable on the
Maturity Date."
3. Section 2.5 is amended to add the following provision:
"In addition, Borrower shall pay to Lender a fee of $10,000, which fee
shall be due on the date hereof and shall be fully earned and
non-refundable, the proceeds of which shall be used to offset Lender's
financial, accounting and legal fees and costs associated with
documenting this Amendment."
4. Representations and Warranties. Each Borrower represents, jointly and
severally, that the representations and warranties contained in the
Agreement are true and correct on and as of the date hereof. Borrower
represents and warrants that the Projections, as hereinafter defined
and delivered to Lender as of the date hereof, have been reasonably
prepared and represents management's reasonable and best assessment of
the projected operating results and financial condition of Borrower,
subject to the limitations and disclaimer set forth therein.
5. Affirmative Covenants. Section 6.3(a) is amended as follows:
"6.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. Borrower shall
deliver to Lender: (a) as soon as available, but in any event within
thirty (30) days after the end of each month of each fiscal quarter,
and within forty-five (45) days after the last month of each fiscal
quarter, a company prepared consolidated balance sheet, income
statement and cash flow statement together with supporting documents of
such balances, covering Borrower's consolidated operations during such
period, in a form and certified by an officer of Borrower reasonably
acceptable to Lender."
The balance of the Section 6.3 shall remain unamended.
Section 6 is hereby amended to include the following paragraphs:
"6.10. On the date hereof, Borrower shall provide Lender with
financial and operating projections used by management and to be
presented to the Board of Directors for each month in calendar 2001
and 2002 (the "Projections") with reasonable detail and explanation on
the assumptions used. Borrower shall promptly provide Lender with any
update to such Projections that is adopted by management or the Board
Directors. Commencing with the month ended April
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30, 2001, Borrower shall promptly provide Lender with written notice
of any known or reasonably anticipated material deviations from such
Projections."
6.11. Borrower shall promptly notify Lender in writing in the event
that Borrower determines that the representations and warranties made
in Section 5.8 ceases to be true on a continuous and ongoing basis."
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IN WITNESS WHEREOF, Zindart and Borrower have executed this Amendment.
INTERVISUAL BOOKS, INC.,
a California corporation
By: /s/ Xxxxx X. Xxxx
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Title: Chairman
FAST FORWARD MARKETING, INC.,
a California corporation
By: /s/ Xxx X. Xxxxxx
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Title: President
ZINDART LIMITED
By: /s/ Xxxxx X. Xxxxxxxx
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Title: Chairman
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