ZOO ENTERTAINMENT, INC. Cincinnati, OH 45209
0000
Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx,
XX 00000
October
1, 2010
Xx. Xxxx
Xxxxxxx
0000
Xxxxxxxx Xxxxx
Xxxxxxxxxx,
XX 00000
Dear Xx.
Xxxxxxx:
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 Xxxxx Fargo Guaranty, (ii) the Solutions 2 Go
Guaranty and (iii) the Working Capital Guaranty.
“Loans” means, collectively,
(i) the Xxxxx 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.
“Xxxxx 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 Xxxxx Fargo Bank, National Association, dated as of April 6, 2009, as
amended from time to time.
“Xxxxx Fargo Guaranty” means
that certain Guaranty, made by you to Xxxxx 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 Xxxxx 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 $10,000 (the
“Xxxxx Fargo Monthly Fee”) (commencing on October 1, 2010 and continuing on the
same date of each month thereafter), for so long as the Xxxxx Fargo Loan and the
Xxxxx Fargo Guaranty remain in full force and effect; provided, however, that if
for any three consecutive months no amount of the Xxxxx Fargo Loan is due and
owing (but the Xxxxx Fargo Loan has not been terminated) for any one day during
such period, the Xxxxx 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 Xxxxx Fargo Guaranty is not released by the end of the
month following termination of employment, the Xxxxx Fargo Monthly Fee shall be
doubled to $20,000 for each month thereafter until the Xxxxx 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 Xxxxx 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/ Xxxxx Xxxxxx
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Name:
Xxxxx Xxxxxx
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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/
Xxxx Xxxxxxx
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Xxxx
Xxxxxxx
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