AMENDMENT NO. 3 TO SENIOR SECURED CONVERTIBLE PROMISSORY NOTE
AMENDMENT
NO. 3
TO
This Amendment No. 3 (this
“Amendment”), dated as of August 31, 2009, is entered into by and among Zoo
Entertainment, Inc. (the “Company”) and the undersigned holders of the Notes (as
defined below) representing the Requisite Holders (as defined
below).
RECITALS
WHEREAS,
the Company entered into that certain Note Purchase Agreement, dated as of July
7, 2008, as subsequently amended on July 15, 2008, July 31, 2008 and August 12,
2008, pursuant to which the Company consummated a financing (the “First
Financing”) to raise $9,000,000 through the sale of senior secured convertible
notes (the “Notes”) to certain investors, and the issuance to such investors of
warrants to purchase an aggregate of 8,181,818 shares of the Company’s common
stock, par value $0.001 per share (“Common Stock”); and
WHEREAS,
on July 7, 2008, Xxxxxx Capital Master Fund, Ltd. (“Xxxxxx”) invested $2,500,000
in the First Financing and received a Note in the principal amount of
$2,500,000; and
WHEREAS,
on July 7, 2008, Back Bay LLC (“Back Bay”) invested $2,000,000 in the First
Financing and received a Note in the principal amount of $2,000,000;
and
WHEREAS, on July 7, 2008, the Company
issued to Xxxxxx Capital Management, LLC, a Note in the principal amount of
$750,000; and
WHEREAS,
on July 10, 2008, Cipher 06 LLC invested $150,000 in the First Financing and
received a Note in the principal amount of $150,000; and
WHEREAS,
on July 24, 2008, each of Soundpost Capital, LP and Soundpost Capital Offshore
Ltd. invested $500,000 in the First Financing and each received a Note in the
principal amount of $500,000; and
WHEREAS,
on August 1, 2008, Xxxxxx invested $1,500,000 in the First Financing and
received a Note in the principal amount of $1,500,000; and
WHEREAS,
on August 12, 2008, Amendment No. 1 to the Senior Secured Convertible Promissory
Notes was executed; and
WHEREAS,
on August 13, 2008, S.A.C. Venture Investments, LLC invested $1,850,000 in the
First Financing and received a Note in the principal amount of $1,850,000;
and
WHEREAS,
on September 26, 2008, the Company entered into that certain Note Purchase
Agreement, pursuant to which the Company consummated a second financing (the
“Second Financing”) to raise $1,400,000 through the sale of Notes to certain
investors, and the issuance to such investors of warrants to purchase an
aggregate of 1,272,727 shares of Common Stock; and
WHEREAS,
on September 26, 2008, Xxxxxx invested $500,000 in the Second Financing and
received a Note in the principal amount of $500,000; and
WHEREAS,
on September 26, 2008, Back Bay invested $500,000 in the Second Financing and
received a Note in the principal amount of $500,000; and
WHEREAS,
on September 26, 2008, Xxxx X. Xxxxx invested $100,000 in the Second Financing
and received a Note in the principal amount of $100,000; and
WHEREAS,
on September 26, 2008, Sandor Capital Master Fund LP invested $300,000 in the
Second Financing and received a Note in the principal amount of $300,000;
and
WHEREAS,
on June 26, 2009, the Requisite Holders executed and delivered Amendment No. 2
to Senior Secured Convertible Promissory Note (“Amendment No. 2”) pursuant to
which the Notes were amended to provide, among other things, that the
outstanding principal plus accrued and unpaid interest under the
Notes shall automatically convert into shares of Common Stock upon the
occurrence of both the effectiveness of the filing of an amendment to the
Company’s Certificate of Incorporation to increase the number of authorized
shares of Common Stock to permit the conversion of the Notes, and the
consummation of an Investor Sale (as defined therein); and
WHEREAS,
pursuant to Section 8 of the Notes, the Notes may be amended with the consent of
the Company and the holders of Notes representing at least seventy-five percent
(75%) of the aggregate principal amount then outstanding under all Notes (the
“Requisite Holders”); and
WHEREAS,
the undersigned holders represent the Requisite Holders and desire to further
amend certain provisions of all of the Notes.
NOW, THEREFORE, in consideration of the
foregoing and for other good and valuable consideration, the receipt of which is
hereby acknowledged by the parties hereto, the undersigned parties do hereby
agree as follows:
AGREEMENT
1.
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Amendment to Section 1
of the Notes Issued in the First Financing. Section 1 of
each of the Notes issued in the First Financing, as amended, is hereby
further amended by deleting the language “August 31, 2009, or, if the
Company receives comments from the Securities and Exchange Commission with
respect to that certain Information Statement Pursuant to Section 14(c)
that the Company is contemplating filing in connection with an amendment
to the Company’s certificate of incorporation authorizing a sufficient
number of shares of Common Stock to permit the conversion of the Notes,
September 15, 2009” set forth therein and replacing it with the date
“September 30, 2009”.
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2.
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Amendment to Section 1
of the Notes Issued in the Second Financing. Section 1
of each of the Notes issued in the Second Financing, as amended, is hereby
further amended by deleting the date “September 26, 2009” set forth
therein and replacing it with the date “September 30,
2009”.
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3.
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Amendment to Section 2
of Amendment No. 2. Section 2 of Amendment No. 2 is
hereby amended by deleting the first sentence and replacing it with the
following: “Effective immediately on the date (the “Effective Date”) on which the
consummation of an Investor Sale (as defined below in Section 3 of this
Amendment) occurs, Section 2 of each of the Notes shall be deleted in its
entirety and replaced with the
following:”
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4.
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Amendment to Section 3
of Amendment No. 2. Section 3 of Amendment No. 2 is
hereby amended by deleting the language in Section 3 in its entirety and
replacing it with the following: “For purposes of this
Amendment, the “Investor
Sale” shall mean the sale of shares of the Company’s Common Stock,
par value $.001 per share (the “Common Stock”), at
closings for which (A) such sale results in aggregate gross proceeds to
the Company of at least Four Million Dollars ($4,000,000) and (B) the
Common Stock is sold at $.20 per
share.”
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5.
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Amendment to Section 5
of Amendment No. 2. Section 5 of Amendment No. 2 is
hereby amended by deleting the language in Section 5 in its entirety and
replacing it with the following: “If the amendment to the Notes
set forth in Section 2 of this Amendment does not become effective as
provided in Section 2 above, on or prior to September 30, 2009, the
provisions of Section 2 above shall become null and void and shall be of
no further effect.”
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6.
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Except
as otherwise set forth herein, the Notes shall remain in full force and
effect without change or modification. This Amendment, the
Notes, as amended, and other agreements related to the Notes constitute
the entire understanding of the parties with respect to the subject matter
hereof and thereof and supersede all prior and current understandings and
agreements, whether written or oral, with respect to such subject
matter. The invalidity or unenforceability of any provision
hereof shall not affect the validity or enforceability of any other term
or provision hereof. The headings in this Amendment are for
convenience of reference only and shall not alter, limit or otherwise
affect the meaning hereof. This Amendment may be executed in
any number of counterparts, which together shall constitute one
instrument, and shall bind and inure to the benefit of the parties and
their respective successors and
assigns.
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[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed on their behalf as of the date first written above.
COMPANY:
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By:
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Name:
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Title:
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PURCHASERS:
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XXXXXX
CAPITAL MASTER FUND, LTD.
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By:
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Name:
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Title:
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BACK
BAY LLC
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By:
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Name:
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Title:
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CIPHER
06 LLC
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By:
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Name:
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Title:
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SOUNDPOST
CAPITAL, LP
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By:
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Name:
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Title:
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SOUNDPOST
CAPITAL OFFSHORE LTD.
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By:
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Name:
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Title:
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[Additional
Signature Page Follows]
XXXXXX
MANAGEMENT, LLC
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By:
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Name:
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Title:
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S.A.C.
VENTURE INVESTMENTS, LLC
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By:
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Name:
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Title:
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SANDOR
CAPITAL MASTER FUND LP
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By:
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Name:
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Title:
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Xxxx
X.
Xxxxx
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