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                                                                   EXHIBIT 10.17
                              AMENDED AND RESTATED
                    INTELLECTUAL PROPERTY SECURITY AGREEMENT


     This AMENDED AND RESTATED INTELLECTUAL PROPERTY SECURITY AGREEMENT
("Agreement"), dated as of July 10, 2001, is entered into between LEAPFROG
ENTERPRISES, INC., a Delaware corporation (formerly known as Knowledge Kids
Enterprises, Inc.) ("Debtor") and FOOTHILL CAPITAL CORPORATION, a California
corporation ("Foothill"), as administrative agent for the Lenders under the Loan
Agreement ("Agent"), in light of the following:

     A. Debtor and Foothill Capital Corporation entered into that certain Loan
and Security Agreement dated as of November 8, 2000 (the "Existing Agreement").

     B. Debtor, Agent and the lenders thereunder have entered into that certain
Amended and Restated Loan and Security Agreement, dated as of July 10, 2001 (the
"Loan Agreement"), which has amended and restated the Existing Agreement in its
entirety. The Loan Agreement and other instruments, documents and agreements
contemplated by the Loan Agreement or related thereto shall be referred to as
the "Loan Documents".

     C. Debtor and Agent have entered into this Agreement for the purpose of
amending and restating in its entirety that certain Intellectual Property
Security Agreement, dated as of November 8, 2000 between Debtor and Foothill.

     D. Debtor is the owner of certain intellectual property, identified below,
in which Debtor is granting a security interest to Agent.

     NOW THEREFORE, in consideration of the mutual promises, covenants,
conditions, representations, and warranties hereinafter set forth and for other
good and valuable consideration, the parties hereto mutually agree as follows:

     1. DEFINITIONS AND CONSTRUCTION.

          1.1 Definitions. The following terms, as used in this Agreement, have
the following meanings:

               "Code" means the California Uniform Commercial Code, as amended
and supplemented from time to time, and any successor statute.

               "Collateral" means:

               (i) Each of the trademarks and rights and interest which are
          capable of being protected as trademarks (including trademarks,
          service marks, designs, logos, indicia, tradenames, corporate names,
          company names, business names, fictitious business names, trade
          styles, and other source or business identifiers, and applications
          pertaining thereto), which are presently, or in the future may be,
          owned, created, acquired, or used (whether pursuant to a license or


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          otherwise) by Debtor, in whole or in part, and all trademark rights
          with respect thereto throughout the world, including all proceeds
          thereof (including license royalties and proceeds of infringement
          suits), and rights to renew and extend such trademarks and trademark
          rights;

               (ii) Each of the patents and patent applications which are
          presently, or in the future may be, owned, issued, acquired, or used
          (whether pursuant to a license or otherwise) by Debtor, in whole or in
          part, and all patent rights with respect thereto throughout the world,
          including all proceeds thereof (including license royalties and
          proceeds of infringement suits), foreign filing rights, and rights to
          extend such patents and patent rights;

               (iii) Each of the copyrights and rights and interests capable of
          being protected as copyrights, which are presently, or in the future
          may be, owned authored, acquired, or used (whether pursuant to a
          license or otherwise) by Debtor, in whole or in part, and all
          copyright rights with respect thereto throughout the world, including
          all proceeds thereof (including license royalties and proceeds of
          infringement suits), and all tangible property embodying the
          copyrights (including books, records, films, computer tapes or disks,
          photographs, specification sheets, source codes, object codes, and
          other physical manifestations of the foregoing)

               (iv) All of Debtor's right, title, and interest in and to the
          trademarks and trademark registrations listed on Schedule A, attached
          hereto, as the same may be updated hereafter from time to time;

               (v) All of Debtor's right, title, and interest, in and to the
          patents and patent applications listed on Schedule B, attached hereto,
          as the same may be updated hereafter from time to time;

               (vi) All of Debtor's right, title, and interest, in and to the
          copyrights and copyright registrations listed on Schedule C, attached
          hereto, as the same may be updated hereafter from time to time;

               (vii) All of Debtor's rights to register trademark claims under
          any state or federal trademark law or regulation of any foreign
          country and to apply for, renew, and extend the trademark
          registrations and trademark rights, the right (without obligation) to
          sue or bring opposition or cancellation proceedings in the name of
          Debtor or in the name of Agent for past, present, and future
          infringements of the trademarks, registrations, or trademark rights
          and all rights (but not obligations) corresponding thereto in the
          United States and any foreign country, and the associated goodwill;

               (viii) All of Debtor's right, title, and interest in all
          patentable inventions, and rights to file applications for patent
          under federal patent law or regulation of any foreign country, and to
          request reexamination and/or reissue of


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          the patents, the right (without obligation) to sue or bring
          interference proceedings in the name of Debtor or in the name of Agent
          for past, present, and future infringements of the patents, and all
          rights (but not obligations) corresponding thereto in the United
          States and any foreign country;

               (ix) All of Debtor's rights to register copyright claims under
          any federal copyright law or regulation of any foreign country and to
          apply for registrations on original works, compilations, derivative
          works, collective works, and works for hire, the right (without
          obligation) to sue in the name of Debtor or in the name of Agent for
          past, present, and future infringements of the copyrights, and all
          rights (but not obligations) corresponding thereto in the United
          States and any foreign country;

               (x) All general intangibles relating to the foregoing; and

               (xi) All proceeds of any and all of the foregoing (including,
          without limitation, license royalties and proceeds of infringement
          suits) and, to the extent not otherwise included, all payments under
          insurance, or any indemnity, warranty, or guaranty payable by reason
          of loss or damage to or otherwise with respect to the Collateral.

               "Obligations" means all obligations, liabilities, and
indebtedness of Debtor to Agent and Lenders, whether direct, indirect,
liquidated, or contingent, and whether arising under this Agreement, the Loan
Agreement, or any other of the Loan Documents.

          1.2 CONSTRUCTION. Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular, references to
the singular include the plural, and the term "including" is not limiting. The
words "hereof," "herein," "hereby," "hereunder," and other similar terms refer
to this Agreement as a whole and not to any particular provision of this
Agreement. Any initially capitalized terms used but not defined herein shall
have the meaning set forth in the Loan Agreement. Any reference herein to any of
the Loan Documents includes any and all alterations, amendments, extensions,
modifications, renewals, or supplements thereto or thereof, as applicable.
Neither this Agreement nor any uncertainty or ambiguity herein shall be
construed or resolved against Agent or Debtor, whether under any rule of
construction or otherwise. On the contrary, this Agreement has been reviewed by
Debtor, Agent, and their respective counsel, and shall be construed and
interpreted according to the ordinary meaning of the words used so as to fairly
accomplish the purposes and intentions of Agent and Debtor.

     2. GRANT OF SECURITY INTEREST.

          Debtor hereby grants to Agent a first-priority security interest in
all of Debtor's right, title, and interest in and to the Collateral to secure
the Obligations.

     3. REPRESENTATIONS, WARRANTIES AND COVENANTS.

          Debtor hereby represents, warrants, and covenants that:


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          3.1 COPYRIGHTS; TRADEMARKS; SERVICE MARKS; PATENTS.

               (i) A true and complete schedule setting forth all federal and
     state trademark and service mark registrations owned or controlled by
     Debtor or licensed to Debtor, together with a summary description and full
     information in respect of the filing or issuance thereof and expiration
     dates is set forth on Schedule A;

               (ii) A true and complete schedule setting forth all patent and
     patent applications owned or controlled by Debtor or licensed to Debtor,
     together with a summary description and full information in respect of the
     filing or issuance thereof and expiration dates is set forth on Schedule B;
     and

               (iii) A true and complete schedule setting forth all federal
     copyright registrations owned or controlled by Debtor or licensed to
     Debtor, together with a summary description and full information in respect
     of the filing or issuance thereof and expiration dates is set forth on
     Schedule C.

          3.2 VALIDITY; ENFORCEABILITY. Each of Debtor's copyrights, patents,
service marks and trademarks is valid and enforceable, and Debtor is not
presently aware of any past, present, or prospective claim by any third party
that any of its copyrights, patents, service marks, or trademarks are invalid or
unenforceable, or that its use of any copyrights, patents, service marks, or
trademarks violates the rights of any third person, or of any basis for any such
claims;

          3.3 TITLE. Other than as disclosed to Agent in writing prior to the
Closing Date and other than licensing by Debtor, on a non-exclusive basis, of
patents, trademarks, copyrights, and other intellectual property rights in the
ordinary course of Borrower's business (whether prior or subsequent to the
Closing Date), Debtor is the sole and exclusive owner of the entire and
unencumbered right, title, and interest in and to each of the copyrights,
copyright registrations, patents, patent applications, service marks, service
mark registrations, trademarks, and trademark registrations set forth on
Schedules A, B, and C, free and clear of any liens, charges, and encumbrances,
including pledges, assignments, licenses, shop rights, and covenants by Debtor
not to sue third persons;

          3.4 NOTICE. Debtor has used and will continue to use proper statutory
notice in connection with its use of each of its material copyrights, patents,
service marks, and trademarks;

          3.5 QUALITY. Debtor has used and will continue to use consistent
standards of quality consistent with Debtor's past practices in the manufacture,
sale, and delivery of products and services sold or delivered under or in
connection with its service marks and trademarks, including, to the extent
applicable, in the operation and maintenance of its merchandising operations,
and will continue to maintain the validity of its material service marks and
trademarks;

          3.6 PERFECTION OF SECURITY INTEREST. Except for the filing of a
financing statement with the Secretary of State of Delaware and filings with the
United States Patent and


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Trademark Office and the United States Copyright Office necessary to perfect the
security interests created hereunder, no authorization, approval, or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required either for the grant by Debtor of the security
interest hereunder or for the execution, delivery, or performance of this
Agreement by Debtor or for the perfection of or the exercise by Agent of its
rights hereunder to the Collateral in the United States.

     4.   AFTER-ACQUIRED COPYRIGHT, PATENT, SERVICE MARK, OR TRADEMARK RIGHTS.

          Subject to the terms of Section 4.4 of the Loan Agreement, if Debtor
shall obtain rights to any new copyright, service marks, trademarks, any new
patentable inventions or become entitled to the benefit of any patent
application or patent for any reissue, division, or continuation, of any patent,
the provisions of this Agreement shall automatically apply thereto. At the
beginning of each calendar month Debtor shall give notice in writing to Agent
with respect to any such new service marks, trademarks or patents, or renewal or
extension of any service mark or trademark registration arising or occurring
during the prior calendar month. Debtor shall bear any expenses incurred in
connection with future patent applications or service mark or trademark
registrations.

     5.   LITIGATION AND PROCEEDINGS.

          Debtor shall commence and diligently prosecute in its own name, as the
real party in interest, for its own benefit, and its own expense, such suits,
administrative proceedings, or other action for infringement or other damages as
are in its reasonable business judgment necessary to protect the Collateral.
Debtor shall provide to Agent any information with respect thereto requested by
Agent. Agent shall provide at Debtor's expense all necessary cooperation in
connection with any such suits, proceedings, or action, including, without
limitation, joining as a necessary party. Following Debtor's becoming aware
thereof, Debtor shall notify Agent of the institution of, or any adverse
determination in, any proceeding in the United States Patent and Trademark
Office, the United States Copyright Office, or any United States, state, or
foreign court regarding Debtor's claim of ownership in any of the material
copyrights, patents, service marks or trademarks, its right to apply for the
same, or its right to keep and maintain such copyright, patent, service mark or
trademark rights.

     6.   POWER OF ATTORNEY.

          Debtor grants Agent power of attorney, having the full authority, and
in the place of Debtor and in the name of Debtor, from time to time following an
Event of Default in Agent's reasonable discretion, to take any action and to
execute any instrument which Agent may deem reasonably necessary or advisable to
accomplish the purposes of this Agreement, including, without limitation, as may
be subject to the provisions of this Agreement: to endorse Debtor's name on all
applications, documents, papers, and instruments necessary for Agent to use or
maintain the Collateral; to ask, demand, collect, sue for, recover, impound,
receive, and give acquittance and receipts for money due or to become due under
or in respect of any of the Collateral; to file any claims or take any action or
institute any proceedings that Agent may deem


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necessary or desirable for the collection of any of the Collateral or otherwise
to enforce Agent's rights with respect to any of the Collateral and to assign,
pledge, convey, or otherwise transfer title in or dispose of the Collateral to
any person.

     7.   INTENTIONALLY OMITTED.

     8.   EVENTS OF DEFAULT.

          An Event of Default under the Loan Agreement shall constitute an Event
of Default under this Agreement.

     9.   SPECIFIC REMEDIES.

          Upon the occurrence of any Event of Default, Agent shall have, in
addition to, other rights given by law or in this Agreement, the Loan Agreement,
or in any other Loan Document, all of the rights and remedies with respect to
the Collateral of a secured party under the Code, including the following:

          9.1 Notification. Agent may notify licensees to make royalty payments
on license agreements directly to Agent;

          9.2 Sale. Agent may sell or assign the Collateral and associated
goodwill at public or private sale for such amounts, and at such time or times
as Agent deems advisable. Any requirement of reasonable notice of any
disposition of the Collateral shall be satisfied if such notice is sent to
Debtor 10 days prior to such disposition. Debtor shall be credited with the net
proceeds of such sale only when they are actually received by Agent, and Debtor
shall continue to be liable for any deficiency remaining after the Collateral is
sold or collected. If the sale is to be a public sale, Agent shall also give
notice of the time and place by publishing a notice one time at least 10 days
before the date of the sale in a newspaper of general circulation in the county
in which the sale is to be held. To the maximum extent permitted by applicable
law, Agent may be the purchaser of any or all of the Collateral and associated
goodwill at any public sale and shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion of
the Collateral sold at any public sale, to use and apply all or any part of the
Obligations as a credit on account of the purchase price of any collateral
payable by Agent at such sale.

     10.  CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

          THE VALIDITY OF THIS AGREEMENT, ITS CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS
ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT GIVING
EFFECT TO ITS CONFLICT OF LAWS PRINCIPLES. THE PARTIES AGREE THAT ALL ACTIONS OR
PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE


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COUNTY OF LOS ANGELES, STATE OF CALIFORNIA OR, AT THE SOLE OPTION OF AGENT, IN
ANY OTHER COURT IN WHICH AGENT SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND
WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY. EACH OF
DEBTOR AND AGENT WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT
EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO
VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION
10. DEBTOR AND AGENT HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS
OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.
DEBTOR AND AGENT REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY
AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.

     11.  GENERAL PROVISIONS.

          11.1 EFFECTIVENESS. This Agreement shall be binding and deemed
effective when executed by Debtor and Agent.

          11.2 SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to
the benefit of the respective successors and assigns of each of the parties;
provided, however, that Debtor may not assign this Agreement or any rights or
duties hereunder without Agent's prior written consent and any prohibited
assignment shall be absolutely void. Subject to the terms of the Loan Agreement,
Agent may assign this Agreement and its rights and duties hereunder and no
consent or approval by Debtor is required in connection with any such
assignment.

          11.3 SECTION HEADINGS. Headings and numbers have been set forth herein
for convenience only. Unless the contrary is compelled by the context,
everything contained in each section applies equally to this entire Agreement.

          11.4 INTERPRETATION. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against Agent, Lenders or
Debtor, whether under any rule of construction or otherwise. On the contrary,
this Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to fairly
accomplish the purposes and intentions of all parties hereto.

          11.5 SEVERABILITY OF PROVISIONS. Each provision of this Agreement
shall be severable from every other provision of this Agreement for the purpose
of determining the legal enforceability of any specific provision.


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          11.6 AMENDMENTS IN WRITING. This Agreement can only be amended by a
writing signed by both Agent and Debtor.

          11.7 COUNTERPARTS; TELEFACSIMILE EXECUTION. This Agreement may be
executed in any number of counterparts and by different parties on separate
counterparts, each of which, when executed and delivered, shall be deemed to be
an original, and all of which, when taken together, shall constitute but one and
the same Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile shall be equally as effective as delivery of a manually executed
counterpart of this Agreement. Any party delivering an executed counterpart of
this Agreement by telefacsimile also shall deliver a manually executed
counterpart of this Agreement but the failure to deliver a manually executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement.

          11.8 INTENTIONALLY OMITTED.

          11.9 NOTICES. Except as otherwise provided herein, all notices,
demands, and requests that either party is required or elects to give to the
other shall be in writing and shall be governed by the provisions of Section 12
of the Loan Agreement.

          11.10 TERMINATION BY AGENT. After termination of the Loan Agreement
and when Agent has received payment and performance, in full, of all
Obligations, Agent shall execute and deliver to Debtor a termination of all of
the security interests granted by Debtor hereunder.

          11.11 INTEGRATION. This Agreement, together with the other Loan
Documents, reflect the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.

     IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first written above.

                                     FOOTHILL CAPITAL CORPORATION,
                                     a California corporation, as Agent


                                     By: /s/ Trent A. Smart
                                     -------------------------------------------
                                     Title: Vice President


                                     LEAPFROG ENTERPRISES, INC.,
                                     a Delaware corporation


                                     By: /s/ Michael C. Wood
                                     -------------------------------------------
                                     Title: President


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