ZOO ENTERTAINMENT, INC. Cincinnati, OH 45209
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▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
October
1, 2010
Mr. ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Dear ▇▇.
▇▇▇▇▇▇▇▇▇:
This
letter agreement (this “Agreement”) hereby amends and restates in its entirety
that certain letter agreement, by and between you and Zoo Entertainment, Inc.
(the “Company”), dated as of May 12, 2009, as amended on each of August 31, 2009
and November 20, 2009 (the “Original Letter Agreement”), pursuant to which the
Company agreed to provide compensation to you in consideration for you entering
into certain guarantees for the full and prompt payment and performance by the
Company and its subsidiaries of obligations in connection with certain financing
arrangements. For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, we hereby agree to amend and
restate the Original Letter Agreement in its entirety as follows:
1. Definitions.
As used in this Agreement, the following terms shall have the meanings set forth
below:
“Guarantees” means,
collectively, (i) the ▇▇▇▇▇ Fargo Guaranty, (ii) the Solutions 2 Go
Guaranty and (iii) the Working Capital Guaranty.
“Loans” means, collectively,
(i) the ▇▇▇▇▇ Fargo Loan, (ii) the Solutions 2 Go Loan and (iii) the Working
Capital Loan.
“Solutions 2 Go Loan” means the
indebtedness incurred pursuant to that certain Advance Agreement, by and among
the Company, Solutions 2 Go Inc. and Solutions 2 Go LLC, dated as of August 31,
2009, as amended from time to time.
“Solutions 2 Go Guaranty” means
that certain Guaranty, made by you to Solutions 2 Go Inc., dated as of August
31, 2009, pursuant to which you agreed to guaranty the full and prompt
performance of the Company’s obligations in connection with the Solutions 2 Go
Loan.
“▇▇▇▇▇ Fargo Loan” means that
certain purchase order financing arrangement pursuant to the Amended and
Restated Master Purchase Order Assignment Agreement, by and between the Company
and ▇▇▇▇▇ Fargo Bank, National Association, dated as of April 6, 2009, as
amended from time to time.
“▇▇▇▇▇ Fargo Guaranty” means
that certain Guaranty, made by you to ▇▇▇▇▇ Fargo Bank, National Association,
dated as of April 6, 2009, pursuant to which you agreed to guaranty the full and
prompt payment and performance of the Company’s obligations in connection with
the ▇▇▇▇▇ Fargo Loan.
“Working Capital Loan” means
that certain financing arrangement pursuant to the Factoring and Security
Agreement, by and between Working Capital Solutions, Inc. and Zoo Publishing,
Inc., dated as of September 9, 2009, as amended from time to time.
“Working Capital Guaranty”
means that certain Guaranty, made by you to Working Capital Solutions, Inc.,
dated as of September 9, 2009, pursuant to which you agreed to guaranty the full
and prompt payment and performance of the obligations in connection with the
Working Capital Loan.
2. Fees.
(a) The
Company hereby agrees to pay you a monthly fee of $7,000 (the “▇▇▇▇▇ Fargo
Monthly Fee”) (commencing on October 1, 2010 and continuing on the same date of
each month thereafter), for so long as the ▇▇▇▇▇ Fargo Loan and the ▇▇▇▇▇ Fargo
Guaranty remain in full force and effect; provided, however, that if for any
three consecutive months no amount of the ▇▇▇▇▇ Fargo Loan is due and owing (but
the ▇▇▇▇▇ Fargo Loan has not been terminated) for any one day during such
period, the ▇▇▇▇▇ Fargo Monthly Fee shall not be owed for the following
month.
(b) The
Company hereby agrees to pay you (i) $25,000 upon the execution and delivery of
this Agreement in consideration for your guaranty of the increased indebtedness
incurred by the Company under the Working Capital Loan and (ii) $25,000 on each
of January 1, 2011, April 1, 2011 and July 1, 2011, for so long as the Working
Capital Loan and the Working Capital Guaranty (or any comparable accounts
receivable factoring facility and guaranty by you are secured by the Company in
lieu thereof) remain in full force and effect.
(c) You
agree that so long as you remain employed by the Company or any of its
subsidiaries, you will not withdraw any of the Guarantees during the term of the
Loans.
In addition, the Company agrees that your employment will not be
terminated (except for “Cause” under the terms of your employment agreement with
the Company or its subsidiaries) and your status, compensation and benefits with
the company that employs you will not be diminished as long as the Guarantees
and the Loans are in effect. The Company agrees that in the event
you terminate your employment for any reason, the Company will use its best
efforts to have your name removed from the Guarantees as soon as possible
thereafter. If the ▇▇▇▇▇ Fargo Guaranty is not released by the end of the
month following termination of employment, the ▇▇▇▇▇ Fargo Monthly Fee shall be
doubled to $14,000 for each month thereafter until the ▇▇▇▇▇ Fargo Guaranty is
removed.
(d) The
fees set forth in this Section 2 shall be deemed to fully compensate you for
guaranteeing up to $20,000,000 of the full and prompt payment and performance by
the Company and its subsidiaries of obligations in connection with the ▇▇▇▇▇
Fargo Loan and the Working Capital Loan.
3.
Miscellaenous.
(a) This
Agreement sets forth the entire agreement and understanding of the parties
relating to the subject matter hereof and supersedes all prior and
contemporaneous agreements, negotiations and understandings between the parties,
both oral and written, relating to the subject matter hereof, including, but not
limited to, the Original Letter Agreement, which is hereby terminated and of no
force or effect. You acknowledge and agree that you are not entitled to
any further fees or other compensation under the Original Letter Agreement and
all obligations of the Company under the Original Letter Agreement have been
satisfied in full.
(b) The
terms, provisions and conditions of this Agreement are solely for the benefit of
the parties hereto and their respective heirs, successors and permitted assigns
and no other person or entity shall acquire or have a right by virtue of this
Agreement. This Agreement may not be assigned by any party without prior
written consent of the other parties.
(c) No
provision of this Agreement may be waived or amended except in a writing signed
by the parties. A waiver or amendment of any term or provision of this Agreement
shall not be construed as a waiver or amendment of any other term or
provision.
(d) This
Agreement may be executed by facsimile signatures and in multiple counterparts,
each of which shall be deemed an original. It shall not be necessary that each
party executes each counterpart, or that any one counterpart be executed by more
than one party so long as each party executes at least one
counterpart.
(e) This
Agreement shall be governed by and constructed under the laws of the State of
Delaware without regard to such state’s conflicts of law principles, and may be
amended, modified or supplemented only by written instrument executed by parties
hereto.
If the
foregoing correctly sets forth the entire understanding and agreement between
us, please so indicate by executing this Agreement as indicated below and
returning an executed copy, whereupon this Agreement shall constitute a binding
agreement as of the date first above written.
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Very
truly yours,
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COMPANY:
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By:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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Name:
▇▇▇▇▇ ▇▇▇▇▇▇
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Title:
Chief Financial Officer
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Accepted
and agreed as of
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the
date first written above:
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/s/
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