<PAGE>   1

                                                                   EXHIBIT 10.46


                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT


        THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement") is
entered into as of the 16th day of August, 2000, between INTERVISUAL BOOKS,
INC., a California corporation (the "Company"), and Steven Ades (the
"Executive").

        A. The parties hereto desire to make certain changes to the original
Employment Agreement dated as of the 11(th) day of May, 1999 between the Company
and the Executive (the "Original Agreement"), as set forth and contained in this
Agreement.

        B. As part of a program to reduce the operating costs of the Company,
the parties desire to significantly reduce the compensation payable to the
Executive under the Agreement and to reduce the scope and extent of his duties
accordingly.

        C. In connection with the execution of this Agreement, the parties are
also entering into Amendment No. 2 to the Agreement and Plan of Merger (the
"Merger Amendment") and Amendment No. 1 to the Restricted Stock Agreement (the
"Restricted Stock Amendment"). The parties acknowledge that they have received
good and valuable consideration for entering into this Agreement, the Merger
Amendment and the Restricted Stock Amendment.

        For good and valuable consideration, the receipt and sufficiency of
which is hereby authorized, the parties hereto agree as follows:

        1. Employment.

                The Company hereby agrees to employ Executive, and Executive
hereby agrees to accept such employment with the Company, on the terms and
conditions set forth herein.

        2. Term.

                The employment of Executive by the Company as provided in this
Agreement will end on May 11, 2002, unless sooner terminated as hereinafter
provided. The Company and Executive shall attempt to negotiate in good faith
between May 1, 2001, and October 30, 2001 the terms of employment of Executive
by the Company for a period following the expiration of this Agreement.

        3. Position and Duties.

                Executive shall serve as President of the Company's Video and
New Media Division, or such other position or positions as may be agreed upon by
Executive and the Board of Directors. Executive shall perform his duties and
obligations

<PAGE>   2

faithfully and diligently and shall devote enough of his business time and best
efforts to the business of the Company to perform his duties hereunder.
Executive shall perform his duties under the supervision of and report to the
Board of Directors, the Chairman of the Board and the Chief Executive Officer of
the Company and shall accept and comply with all reasonable directions from and
all reasonable policies established from time to time by the Chairman of the
Board, Board of Directors and Chief Executive Officer of the Company.
Executive's primary duties shall include but are not limited to, consulting and
general oversight the for the overall operations of the Video and New Media
Division including Internet Marketing and maintaining business relationships
with the studios.

        Executive shall promote the trade and business of the Company to the
best of his ability and shall not willingly do anything to the prejudice of the
Company's trade or business. Executive shall not at any time intentionally make
any untrue statement regarding the Company and shall not after the termination
of employment by the Company represent himself as being employed or connected
with the Company. Provided that it does not materially interfere with his duties
hereunder or violate his covenant not to compete in the Merger Agreement,
Executive may render services of a business, commercial or professional nature
to any other person, entity or organization, whether for compensation or
otherwise, without the prior written consent of the Company's Board of
Directors. Executive shall adhere to all of the Company's policies and
procedures applicable to Company's employees generally.

        4. Place of Performance.

                In connection with Executive's employment by the Company and
except for required travel on Company business, Executive shall be based at the
principal executive offices of the Company. The Company agrees to provide
Executive with an office and a reasonable amount of office supplies and
administrative support, which support shall be on a non-exclusive basis. The
Company shall provide Executive with a parking space for Executive's car.

        5. Compensation and Related Matters.

                (a) Salary. During the term of Executive's employment hereunder,
the Company shall pay to Executive a monthly salary of $6,500

                (b) Payment. The salary payable in (a) above shall be paid in
equal semi-monthly installments (or such shorter intervals as the Company may
elect) and shall accrue from day to day. Such salary shall be subject to any
withholding or taxes the Company is required by law to make or pay

                (c) Vacations. During the term of Executive's employment
hereunder, Executive shall be entitled to four weeks of vacation in each
calendar year, and to compensation with respect to earned but unused vacation
days determined in accordance with the Company's vacation policy



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<PAGE>   3

                (d) Expenses. During the term of Executive's employment
hereunder, Executive shall be entitled to receive reimbursement for reasonable
out-of-pocket travel expenses incurred by Executive in performing Executive's
services hereunder (excluding ordinary commuting expenses) approved in advance
by the Company, provided that:

                        1) Each such expenditure is of a nature qualifying it as
        a proper business expenditure of the Company and is approved by the
        Company; and

                        2) Executive furnishes to the Company adequate records
        and other documentary evidence required by the Company for the
        substantiation of such expenditures as proper business expenditures of
        the Company, and Executive otherwise complies with general Company
        policies with respect to expense reimbursement.

                (e) Medical Insurance. During the term of Executive's employment
hereunder, Executive will be entitled to participate in any medical insurance
plans from time to time generally applicable to full-time employees of the
Company.

                (f) 401(k). During the term of Executive's employment hereunder,
Executive will be entitled to participate in the Company's 401(k) plan, or other
similar plans established by the Company, generally applicable to full-time
employees of the Company.

        6. Termination.

                (a) Cause. The Company may at any time upon written notice to
Executive terminate this Agreement and Executive's employment hereunder for
Cause pursuant to the provisions of this Section 6(a). Executive shall be given
written notice by the Board of Directors of its intention to terminate Executive
for Cause, which notice shall state the acts or omissions that constitute
grounds on which the proposed termination for Cause is based. In the Board of
Director's reasonable business judgment, the Board may permit Executive an
opportunity to address the Board or a committee of one or more directors
regarding the grounds on which the proposed termination for Cause is based. In
the event the Executive disputes the determination by the Company that "Cause"
existed for the termination of Executive's employment hereunder, Executive shall
be entitled to submit the matter to arbitration as provided for in Section 11
below and the determination by the arbitrator as selected and determined
pursuant to Section 11 below shall be conclusive as to whether or not the
Company had "Cause" for such termination.

                For purposes of this Agreement, the Company shall have "Cause"
to terminate Executive's employment hereunder upon:



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<PAGE>   4

                (i) The breach by Executive of any material provision or
covenant of this Agreement, and if such breach is susceptible to cure by
Executive, the failure to effect such cure within twenty (20) days after written
notice of such breach is given to the Executive; or

                (ii) The willful failure or neglect of Executive to perform
Executive's duties hereunder or the gross negligence of Executive in the
performance of such duties, and if such failure or gross negligence is
susceptible to cure by Executive, the failure to effect such cure by Executive
within twenty (20) days after written notice of such failure or gross negligence
is given to Executive; or

                (iii) Executive's use of alcohol or illegal drugs, which use
interferes with the performance of Executive's duties hereunder; or

                (iv) Executive's conviction of a crime or for theft,
embezzlement, fraud, misappropriation of funds or any other alleged act of
dishonesty by Executive or Executive's conviction for any other felony or other
crime involving moral turpitude; or

                (v) Executive's violation of any law or ethical rule relating to
Executive's employment by the Company, including, but not limited to a violation
by Executive of Executive's fiduciary duty of loyalty to the Company which
Executive owes to the Company as an officer and/or director.

                For purposes of this Agreement, an action shall be considered
"willful" if it is done intentionally, purposely or knowingly.

                (b) Death. This Agreement and Executive's employment hereunder
shall terminate automatically upon Executive's death.

                (c) Incapacity. If Executive becomes incapacitated during
Executive's employment hereunder, this Agreement and Executive's employment
hereunder shall terminate on the date of determination by the Board of Directors
of the Company of such incapacity. As used herein, "incapacity" shall mean any
physical or mental illness or disability, or both, which renders Executive
incapable of performing substantially all of his managerial and executive
services hereunder for 120 days or more in the aggregate during any calendar
year, and which at any time after such 120 days the Company's Board of Directors
shall determine continues to render Executive incapable of performing
substantially all of his managerial and executive services hereunder. In every
case, any determination by an arbitrator (as defined and selected as per Section
11 herein) , shall be conclusive and binding upon Executive.

                (d) Without Cause. The Company shall be entitled to terminate
this Agreement and Executive's employment hereunder at any time without Cause.



                                      -4-
<PAGE>   5

                (e) Notice of Termination. Any termination of Executive's
employment by the Company or by Executive (other than termination pursuant to
subsection 6(b) above) shall be communicated by a written Notice of Termination
to the other party hereto. For purposes of this Agreement, a "Notice of
Termination" means a notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) sets forth the circumstances which
provide a basis for termination of Executive's employment under the provisions
so indicated, and (iii) if the termination date is other than the date of
receipt of such notice, specifies the termination date of this Agreement (which
date shall not be more than 30 days after the giving of such notice).

                (f) Date of Termination. "Date of Termination" shall mean the
date of death, the date of receipt of the Notice of Termination or the date
specified therein, as the case may be.

                (g) Arbitration Rights. Nothing contained in this Section 6
shall contravene the Company and Executive's right and obligation to arbitrate
disputes as provided for in Section 11 of this Agreement.

        7. Obligations of the Company Upon Termination.

                (a) Termination for Cause. If this Agreement is terminated
pursuant to Section 6(a), the Company shall have no further obligation or
liability to Executive, except that Executive shall be entitled to receive only
(i) the portion of Executive's salary as set forth in Section 5(a) which has
been earned up to the Date of Termination, (ii) compensation for any accrued and
unused vacation up to the Date of Termination, and (iii) reimbursement, subject
to the requirements set forth in Section 5(c), for business expenses incurred up
to the Date of Termination (collectively, the "Minimum Payments").

                (b) Termination for Death or Disability. If this Agreement is
terminated pursuant to Sections 6(b) or 6(c), the Company shall have no further
obligation or liability to Executive, except that Executive shall be entitled to
receive only the Minimum Payments.

                (c) Termination Without Cause. If this Agreement is terminated
by the Company pursuant to Section 6(d), the Company shall have no further
obligation or liability to Executive, except that Executive shall be entitled to
receive only (i) the Minimum Payments, (ii) an amount equal to the unpaid
portion as of the Date of Termination of the remaining payments due under the
initial term of this Agreement; and (iii) an amount equal to the sum of the
monthly premiums the Executive must pay upon electing to accept coverage for
medical insurance under COBRA for the remaining balance of the initial term of
this Agreement. The remaining payments provided in subclauses (ii) and (iii)
above shall be paid monthly at the monthly rate in effect as of the Date
Termination until paid in full.



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<PAGE>   6

                (d) Exclusivity of Payments. Upon termination of Executive's
employment hereunder, Executive shall not be entitled to any severance payments
or severance benefits from the Company or any payments by the Company on account
of any claim for wrongful termination, including but not limited to claims under
any federal, state or local human and civil rights or labor laws, other than the
payments provided in this Section 7, except for any benefits which may be due to
Executive in the normal course under any employee benefit plan of the Company
which provides for benefits after termination of employment. Executive agrees
that any right to receive payments hereunder upon termination of employment will
cease if Executive breaches any provision of Sections 8 or 9 below.

        8. Proprietary Information.

                (a) Definition. Executive hereby acknowledges that Executive
possesses and may make use of, acquire, and, within the scope of his duties as
an employee of the Company may create, develop or add to certain confidential
and/or proprietary information regarding the Company and its business (whether
in existence prior to, as of or after the date hereof, collectively,
"Proprietary Information"), which Proprietary Information shall include, without
limitation, all of the following materials and information (whether or not
reduced to writing and whether or not patentable or protected by copyright):
trade secrets, inventions, processes, formulae, programs, technical data,
"know-how," procedures, manuals, confidential reports and communications,
marketing methods, product sales or cost information, new product ideas or
improvements, new packaging ideas or improvements, research and development
programs, identities or lists of suppliers, vendors or customers, financial
information and financial projections of the Company of any nature whatsoever,
or any other confidential or proprietary information relating to the Company
and/or its business. The term "Proprietary Information" does not include any
information that (i) at the time of disclosure is generally available to and
known by the public (other than as a result of its disclosure by Executive),
(ii) was available to Executive prior to disclosure by the Company, provided
that the person who was the source of such information was not known by
Executive to be subject to an obligation of confidentiality to the Company, or
(iii) becomes available to Executive on a non-confidential basis from a person
other than the Company or its representatives, provided that the source of such
information was not known by Executive to be subject to an obligation of
confidentiality to the Company.

                (b) Nondisclosure. During the term of this Agreement and
thereafter, Executive will not, without the prior express written consent of the
Board of Directors, disclose or make any use of any Proprietary Information
except as may be required in the course of the performance of Executive's
services under this Agreement.

                (c) Ownership. Executive acknowledges and agrees that all right,
title and interest in and to any Proprietary Information shall be and shall
remain the exclusive property of the Company. Without limiting the foregoing,
Executive shall



                                      -6-
<PAGE>   7
assign to the Company any and all right, title or interest which Executive may
have in all Proprietary Information made, developed or conceived of in whole or
in part by Executive during his employment hereunder in his capacity as an
employee of the Company.

                (d) Agreement Not to Solicit Customers. To protect the
Proprietary Information and trade secrets of the Company, Executive agrees,
during the term of this Agreement and for a period of one year after termination
of this Agreement, not to, directly or indirectly, either on Executive's own
behalf or on behalf of any other person or entity, attempt to intentionally
persuade any customer of the Company to cease to do business or to reduce the
amount of business which any customer of the Company has customarily done or
contemplates doing with the Company. Executive agrees that the covenants
contained in this paragraph are reasonable and desirable.

                (e) Agreement Not to Solicit Employees. To protect the
Proprietary Information and trade secrets of the Company, Executive agrees,
during the term of this Agreement and for a period of one year after termination
of this Agreement, not to, directly or indirectly, either on Executive's own
behalf or on behalf of any other person or entity, solicit any person who is an
employee of the Company. Executive agrees that the covenants contained in this
paragraph are reasonable and desirable.

                (f) Proprietary Information Agreement. The Company's Proprietary
Information Agreement attached as Exhibit B to the Original Agreement is hereby
modified to exclude from the effect of that agreement any "Inventions" that are
made by Executive independently of his duties as an employee hereunder. By
execution of this Agreement, Executive agrees and acknowledges that he shall be
bound by all of the terms of the Proprietary Information Agreement as so
amended. Executive has reviewed such Proprietary Information Agreement and
agrees that any breach by Executive of any term or covenant contained therein
shall constitute a breach by Executive of this Agreement.

        9. Protection of Property.

                All records, files, manuals, documents, specifications, lists of
customers, banks, forms, materials, supplies, computer programs and other
materials furnished to the Executive by the Company, used on its behalf or
generated or obtained during the course of the performance of the Executive's
services hereunder, shall be and remain the property of the Company. Executive
shall be a holder thereof for the sole use and benefit of the Company, and shall
safely keep and preserve such property, except as consumed in the normal
business operations of the Company. Executive acknowledges that this property is
not readily accessible to the Company's competitors. Upon termination of
Executive's employment with the Company for any reason, Executive shall
immediately deliver to the Company, or its authorized representative, all such
property, including all copies, remaining in Executive's possession or control.



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<PAGE>   8

        10. Specific Performance.

                In the event of the breach by Executive of any of the provisions
of Sections 8 or 9, the Company, in addition and supplementary to all other
rights and remedies existing in its favor and notwithstanding the provisions of
Section 11 hereof, may apply to any court of law or equity of competent
jurisdiction for specific performance and/or injunctive or other relief in order
to enforce or prevent any violations of the provisions thereof.

        11. Arbitration.

                The parties hereto acknowledge that it is in their best
interests to facilitate the informal resolution of any disputes arising out of
this Agreement or otherwise by mutual cooperation and without resorting to
litigation. As a result, if any party has a dispute arising hereunder or
otherwise, including but not limited to any claim for breach of any contract or
covenant (express or implied), tort claims, claims for discrimination
(including, but not limited to, race, sex, religion, national origin, age,
handicap or disability), claims for compensation or benefits (except where a
benefit plan or pension plan or insurance policy specifies a different claims
procedure) and claims for violation of any federal, state or other governmental
law, statute, regulation or ordinance (except for claims involving workers'
compensation benefits), and the parties are unable to reach agreement among
themselves, then a settlement conference must be held within thirty (30) days
upon receipt of a notice by the complaining party describing in detail the
complaint and setting forth a proposed solution to the complaint. The settlement
conference will be held in any Los Angeles office of the Judicial Arbitration
and Mediation Services, Inc. ("JAMS"). The complaining party must contact JAMS
to schedule the conference and the parties must agree on a retired judge from
the JAMS panel. If the parties are unable to agree upon such a retired judge,
JAMS shall provide a list of three available judges and each party may strike
one judge. The remaining judge will serve as the mediator at the settlement
conference.

                If the dispute is not settled by the above-described format, the
parties agree to submit the dispute to JAMS for binding arbitration. A
three-judge panel will be selected to arbitrate the dispute. JAMS will provide
the names of five potential arbitrators, giving each party the opportunity to
strike one name. The remaining three arbitrators will serve as the arbitration
panel. The parties agree that the arbitration must be initiated within six
months after the claimed breach occurred and that failure to initiate
arbitration within the six-month period constitutes an absolute bar from the
institution of any new proceedings. Arbitration may be initiated by the
aggrieved party by sending written notice of an intent to arbitrate by
registered certified mail to all parties and to JAMS. The notice must contain a
description of the dispute, the amount involved and the remedies sought. If and
when a demand for arbitration is made by either party, the parties agree to
execute a Submission Agreement provided by JAMS, setting forth the



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<PAGE>   9

rights of the parties if the case is arbitrated and rules and procedures to be
followed at the arbitration hearing.

                Nothing contained in this Section 11 shall prevent the Company
from seeking and obtaining equitable relief in a court to enforce any of its
rights under Sections 8 or 9 hereof.

        12. [Intentionally deleted]

        13. Additional Covenants, Representations and Warranties of Executive.

                (a) Executive hereby represents and warrants that the execution,
delivery and performance of this Agreement by Executive does not (i) breach, or
result in a default under, any agreement to which Executive is a party or by
which Executive is bound, (ii) breach or otherwise violate any order, writ,
judgment or decree binding upon Executive, or (iii) violate any applicable law
or regulation.

                (b) Upon Executive's cessation of employment with the Company
for any reason whatsoever, Executive shall thereupon be deemed to have resigned
from the Board of Directors of the Company, every parent or subsidiary of the
Company on which he is then serving as a director, and any other company on
which Executive is then serving as a director at the request of the Company, in
each case effective as of the date of cessation of employment.

        14. Representation by Counsel.

                (a) Executive acknowledges that he has been represented by legal
counsel in connection with this Agreement and has consulted with such legal
counsel. The Company shall reimburse Executive for all reasonable attorneys'
fees and expenses actually incurred by Executive, but not to exceed $4,000 (plus
incidental costs normally incurred in connection with the rendering of
professional services), in connection with the negotiation and preparation of
this Agreement

        15. Reimbursement of Expenses.

                (a) Executive shall promptly furnish to the Company adequate
records and other documentary evidence as requested by the Company to
substantiate any costs or expenses for which reimbursement is sought hereunder.

        16. Successors.

                This Agreement is personal to the Executive and is not
assignable by the Executive otherwise than by will or the laws of descent and
distribution without the prior written consent of the Company's Board of
Directors. This Agreement shall



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<PAGE>   10

inure the benefit of and be enforceable by Executive's legal representatives.
This Agreement shall inure to the benefit of and be binding upon the Company and
its successors and assigns.

        17. Notice.

                For purposes of this Agreement, notices, demands and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or (unless otherwise specified)
mailed by United States registered mail, return receipt requested, postage
prepaid, addressed as follows:

<TABLE>
                <S>                   <C>
                If to Executive:      Executive's address as on file with the
                                      Company

                If to Company:        Intervisual Books, Inc.
                                      2716 Ocean Park Blvd., #2020
                                      Santa Monica, California 90405
                                      Attention: Chairman of the Board
</TABLE>

or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt thereof.

        18. Entire Agreement.

                This Agreement, together with the documents referenced herein
and resolutions of the Company's Board of Directors, contains the entire
agreement of the parties hereto with respect to the subject matter hereof. It
supersedes any and all other agreements, either oral or in writing, between the
parties hereto with respect to the employment of Employee by the Company. Each
party to this Agreement acknowledges that no representations, inducements,
promises or agreements, written, oral or otherwise, have been made by any party,
or anyone acting on behalf of any party, which are not embodied herein, and that
no other agreement, statement or promise not contained in this Agreement shall
be valid or binding.

                Without limiting the generality of the foregoing, this Agreement
replaces in its entirety the Original Agreement and the Original Agreement no
longer has any force or effect.

        19. Amendment; Waiver; Governing Law.

                No provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in a
writing signed by Executive and by such officer of the Company as may be
specifically designated by the Company's Board of Directors. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this



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<PAGE>   11

Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the State of California without
regard to conflict of law principles.

        20. Validity.

                The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.

        21. Counterparts.

                This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original, but all of which together will
constitute one and the same instrument.

        22. Attorneys' Fees.

                In the event of any dispute arising out of the subject matter of
this Agreement, the prevailing party shall be entitled to recover from the
nonprevailing party its costs and expenses (including reasonable attorneys'
fees) incurred in arbitrating or otherwise resolving such dispute.

        23. Withholding of Taxes; Tax Reporting.

                The Company may withhold from any amounts payable under this
Agreement all such Federal, state, city and other taxes, and may file with
appropriate governmental authorities all such information, returns or other
reports with respect to the tax consequences of any amounts payable under this
Agreement, as may, in its reasonable judgment, be required by law.

        24. Special Bonuses.

                (a) Bonus on Sale of Company. If the Company is sold before May
12, 2002, or is subject to contract or letter of understanding for its sale on
that date, the Company shall pay a bonus to Executive upon the consummation of
such sale as provided in this paragraph. For this purpose the sale of the
Company means either a sale of substantially all of the operating assets of the
Company or the direct or indirect acquisition of more than 50% of the common
stock of the Company from the Company's principal shareholders. The amount of
the bonus will depend on the sale price expressed as the per-share value of the
consideration received, whether that consideration is cash, notes or stock in
the acquiring company as follows:



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<PAGE>   12

<TABLE>
<CAPTION>
           Consideration
             Received                         Bonus
           <S>                              <C>
             .50 or less                           0
             .50 -  .74                     $ 25,000
             .75 -  .99                     $ 50,000
            1.00 - 1.49                     $ 75,000
            1.50 - 1.74                     $125,000
            1.75 - 1.99                     $175,000
            2.00 or more                    $200,000
</TABLE>

                (b) Survival. This Section 24 shall survive the termination of
this Agreement.

                IN WITNESS WHEREOF, this Agreement is executed as of the date
first written above.



                                       INTERVISUAL BOOKS, INC.


                                       By: /s/ Waldo H. Hunt
                                           -------------------------------------
                                       Waldo H. Hunt
                                       Chairman of the Board


                                       EXECUTIVE:
                                       /s/ Steven Ades
                                       -----------------------------------------
                                       Steven Ades



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