SECOND AMENDMENT TO FACTORING AND SECURITY AGREEMENT
SECOND AMENDMENT TO
FACTORING AND SECURITY AGREEMENT
This
SECOND AMENDMENT TO FACTORING AND SECURITY AGREEMENT (this "Second Amendment") is
made and entered into this 1st day
of October, 2010, among Zoo Games, Inc., a Delaware corporation, Zoo
Entertainment, Inc., a Delaware corporation, and Zoo Publishing, Inc., a New
Jersey corporation (jointly, severally, and collectively "Seller"), and Working
Capital Solutions, Inc., a Delaware corporation ("Purchaser").
RECITALS:
WHEREAS,
Seller and Purchaser are party to that certain Factoring and Security Agreement
dated as of September 9, 2009, as amended by that certain First Amendment dated
April 1, 2010 (as amended, restated, supplemented, or otherwise modified, the
"Factoring
Agreement"); and
WHEREAS,
Purchaser and Seller desire to amend the terms of the Factoring Agreement as set
forth herein.
NOW,
THEREFORE, in consideration of the agreements contained herein, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. DEFINITIONS. In
addition to the defined terms appearing above, capitalized terms used in this
Second Amendment shall have the meanings provided therefor in the Factoring
Agreement.
2. JOINDER. Each
of Zoo Games, Inc. and Zoo Entertainment, Inc. is hereby made a party to the
Factoring Agreement, and from and after the date of this Second Amendment, each
reference to the “Seller” in the Factoring Agreement shall be deemed to refer to
Zoo Games, Inc., Zoo Entertainment, Inc., and Zoo Publishing, Inc., jointly,
severally, and collectively.
3. AMENDMENT TO SECTION 1 OF
FACTORING AGREEMENT. Section 1 of the Factoring Agreement is
hereby amended as follows:
3.1. By
deleting the definition of “Maximum Amount” in its entirety and substituting in
its stead the following new definition therefor:
“ “Maximum Amount” – $8,000,000;
provided that Seller
acknowledges that up to $6,000,000 of such Maximum Amount will be provided by
one or more participants of Purchaser, and Seller further agrees that Purchaser
has no obligation to fund any amount in excess of $2,000,000 if any participant
fails to fund its portion of such Maximum Amount.”
3.2. By
amending the definition of “Monthly Minimum Volume” by deleting the figure
“$600,000” contained therein and substituting the figure “$2,000,000” in its
place.
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3.3. By
amending the definition of “Minimum Monthly Fee” by deleting the figure
“$10,800” contained therein and substituting the figure “$20,000” in its
place.
3.4. By
adding the following new definition in appropriate alphabetical
order:
“Second Amendment Effective
Date” October 1, 2010.”
4. AMENDMENT TO SECTION 20 OF
FACTORING AGREEMENT. Section 20 of the Factoring Agreement is
hereby amended by deleting the first paragraph of Section 20 in its entirety and
substituting in its stead the following new paragraph:
“This
Agreement will be effective for two (2) years from the Second Amendment
Effective Date (the “Initial Term”), and
shall be automatically extended for successive one (1) year periods (each, a
“Renewal Term”)
subject to Purchaser approval unless Seller shall provide written notice to
Purchaser of its intention to terminate at least ninety (90) days prior to the
next anniversary date hereof. If Seller wants to terminate on a date
other than an anniversary date (the “Early Termination
Date”), Seller shall provide written notice to Purchaser at least thirty
(30) days prior, whereupon this Agreement shall terminate on the Early
Termination Date.”
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5.
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AMENDMENT TO SECTION
26 OF FACTORING AGREEMENT. Section 26 of the Factoring
Agreement is hereby amended by inserting the following provisions at the
end of Section 26:
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The
Seller shall indemnify, defend, and holder the Purchaser harmless of and from
any threat, loss, liability, or claim which may be asserted against the
Purchaser on account of, in respect to, or arising out of, the Purchaser’s
relationship with the Seller, for any and all reasons, whether based in
contract, intentional wrongdoing, or otherwise.
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6.
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CONDITIONS
PRECEDENT. This Second Amendment shall not be effective
until each of the following conditions precedent has been fulfilled to the
satisfaction of Purchaser:
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6.1. This
Second Amendment shall have been duly executed and delivered by the parties
hereto. Purchaser shall have received a fully executed copy hereof
and of each other document required hereunder.
6.2. No
Event of Default shall have occurred and be continuing.
6.3. Without
limiting any of the provisions of Section 6 of the Factoring Agreement, Seller
shall pay all out-of-pocket expenses (including, without limitation, all
reasonable attorneys’ fees) incurred by Purchaser in connection with this Second
Amendment and the documents and agreements executed in connection
herewith.
6.4. Seller
shall have provided such additional instruments and documents to Purchaser as
Purchaser and its counsel may have reasonably requested.
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7. RATIFICATION OF FACTORING
AGREEMENT, ETC.
7.1. Except
as provided herein, all terms and conditions of the Factoring Agreement and all
other documents, instruments and agreements executed in connection therewith
(collectively, the “Factoring Agreement
Documents”) remain in full force and effect. Seller, on behalf
of itself and its affiliates, hereby ratifies, confirms, and re-affirms all
terms and provisions of the Factoring Agreement Documents. Without
limiting the generality of the foregoing, Seller, on behalf of itself and its
affiliates, hereby acknowledges, confirms and agrees that all Collateral shall
continue to secure the Obligations.
7.2. Seller,
on behalf of itself and its affiliates, represents and warrants to Purchaser
that, as of the Second Amendment Effective Date, no Event of Default exists or,
solely with the passage of time or notice, would exist under the Factoring
Agreement Documents.
7.3. Seller,
on behalf of itself and its affiliates, acknowledges and agrees that, to its
actual knowledge: (i) there is no basis nor set of facts on which any amount (or
any portion thereof) owed by any of Seller or its affiliates under any Factoring
Agreement Document could be reduced, offset, waived, or forgiven, by rescission
or otherwise; (ii) nor is there any claim, counterclaim, off set, or defense (or
other right, remedy, or basis having a similar effect) available to any of
Seller or its affiliates with regard thereto; (iii) nor is there any basis on
which the terms and conditions of any of the Obligations could be claimed to be
other than as stated on the written instruments which evidence such
Obligations.
8. RELEASE OF
CLAIMS. Seller, on behalf of itself and its affiliates,
acknowledges and agrees that it has no offsets, defenses, claims, or
counterclaims against Purchaser or its parents, affiliates, predecessors,
successors, or assigns, or its officers, directors, employees, attorneys, or
representatives (the foregoing, collectively, the “Purchaser Parties”),
with respect to the Obligations, or otherwise, and that if any of Seller or its
affiliates now has, or ever did have, any offsets, defenses, claims, or
counterclaims against such Purchaser Parties, whether known or unknown, at law
or in equity, from the beginning of the world through this date and through the
time of execution of this Second Amendment, all of them are hereby expressly
WAIVED, and each of Seller and its affiliates hereby RELEASES such Purchaser
Parties from any liability therefor.
9. MISCELLANEOUS.
9.1. IN
RECOGNITION OF THE HIGHER COSTS AND DELAY WHICH MAY RESULT FROM A JURY TRIAL,
THE PARTIES HERETO WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION (A) ARISING HEREUNDER, OR (B) IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY FURTHER WAIVES
ANY RIGHT TO CONSOLIDATE ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED
WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED;
AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.
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9.2. This
Second Amendment and all transactions contemplated hereunder and/or evidenced
hereby shall be governed by, construed under, and enforced in accordance with
the internal laws of the Chosen State.
9.3. In
the event any one or more of the provisions contained in this Second Amendment
is held to be invalid, illegal or unenforceable in any respect, then such
provision shall be ineffective only to the extent of such prohibition or
invalidity, and the validity, legality, and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby.
9.4. This
Second Amendment may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if all signatures were upon the
same instrument. Delivery of an executed counterpart of the signature
page to this Second Amendment by facsimile or other electronic transmission
shall be effective as delivery of a manually executed counterpart of this Second
Amendment, and any party delivering such an executed counterpart of the
signature page to this Second Amendment by facsimile or other electronic
transmission to any other party shall thereafter also promptly deliver a
manually executed counterpart of this Second Amendment to such other party,
provided that the failure to deliver such manually executed counterpart shall
not affect the validity, enforceability, or binding effect of this Second
Amendment.
[SIGNATURE
PAGE FOLLOWS]
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IN
WITNESS WHEREOF, the Parties have duly executed this Second Amendment on the
date above first written.
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SELLER:
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ZOO
GAMES, INC.
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By:
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/s/
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Name:
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▇▇▇▇
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Title:
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Chief
Executive Officer
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SELLER:
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By:
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/s/
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Name:
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▇▇▇▇
▇▇▇▇▇▇▇
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Title:
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Chief
Executive Officer
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SELLER:
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ZOO
PUBLISHING, INC.
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By:
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/s/
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Name:
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Title:
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Chief
Executive Officer
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PURCHASER:
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WORKING
CAPITAL SOLUTIONS, INC.
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By:
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/s/
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Name:
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▇▇▇▇▇▇
▇. ▇▇▇▇▇
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Title:
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President
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Signature
Page to Second Amendment to Factoring and Security Agreement
Each of
the undersigned guarantors hereby ratifies, confirms and reaffirms, all and
singular, each of the terms and conditions contained in his Individual Guaranty
dated as of September 9, 2009 (each, an “Individual
Guaranty”), and acknowledges, confirms and agrees that such Individual
Guaranty shall remain in full force and effect and shall in no way be limited by
the execution of this Second Amendment.
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/s/
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▇▇▇▇
▇. ▇▇▇▇▇▇▇, an individual
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/s/
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▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇, an individual
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The
undersigned guarantor hereby ratifies, confirms and reaffirms, all and singular,
each of the terms and conditions contained in his Validity Guaranty dated as of
September 15, 2009 (the “Validity Guaranty”),
and acknowledges, confirms and agrees that such Validity Guaranty shall remain
in full force and effect and shall in no way be limited by the execution of this
Amendment.
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/s/
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▇▇▇▇▇
▇. ▇▇▇▇▇▇, as CFO of Zoo Publishing,
Inc.
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Each of
the undersigned guarantors hereby ratifies, confirms and reaffirms, all and
singular, each of the terms and conditions contained in its respective
Continuing Unconditional Guaranty dated as of September 15, 2009 (each, an
“Unconditional
Guaranty”), and acknowledges, confirms and agrees that such Unconditional
Guaranty shall remain in full force and effect and shall in no way be limited by
the execution of this Second Amendment.
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By:
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/s/
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Name:
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▇▇▇▇
▇▇▇▇▇▇▇
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Title:
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Chief
Executive Officer
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ZOO
GAMES, INC.
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By:
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/s/
▇▇▇▇ ▇▇▇▇▇▇▇
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Name:
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▇▇▇▇
▇▇▇▇▇▇▇
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Title:
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Chief
Executive Officer
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Signature
Page to Second Amendment to Factoring and Security Agreement