FIRST AMENDMENT TO FACTORING AND SECURITY AGREEMENT
FIRST AMENDMENT TO FACTORING
AND SECURITY AGREEMENT
This
FIRST AMENDMENT TO FACTORING AND SECURITY AGREEMENT (this "Amendment") is made
and entered into this 1st day of
April, 2010, between Zoo Publishing, Inc., a New Jersey corporation ("Seller"), and Working
Capital Solutions, Inc., a Delaware corporation ("Purchaser").
R E C I T A L
S:
WHEREAS,
Seller and Purchaser are party to that certain Factoring and Security Agreement
dated as of September 9, 2009 (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
Amendment shall have the meanings provided therefor in the Factoring
Agreement.
2. AMENDMENT TO SECTION 1 OF
FACTORING AGREEMENT. Section 1 of the Factoring Agreement is
hereby amended as follows:
2.1. By
deleting the definition of “Maximum Amount” in its entirety and substituting in
its stead the following new definition therefor:
“Maximum Amount” – $5,250,000;
provided that Seller
acknowledges that up to $3,500,000 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 $1,750,000 if any participant
fails to fund its portion of such Maximum Amount.”
2.2. By
adding the following new definition in appropriate alphabetical
order:
“First Amendment Effective
Date” – April 1, 2010.”
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3. 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 First Amendment Effective
Date (the “Initial
Term”), and shall be automatically extended for successive one (1) year
periods (each, a “Renewal Term”) 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.”
4. CONDITIONS
PRECEDENT. This Amendment shall not be effective until each of
the following conditions precedent has been fulfilled to the satisfaction of
Purchaser:
4.1. This
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.
4.2. No
Event of Default shall have occurred and be continuing.
4.3. 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
Amendment and the documents and agreements executed in connection
herewith.
4.4. Seller
shall have provided such additional instruments and documents to Purchaser as
Purchaser and its counsel may have reasonably requested.
5. RATIFICATION OF FACTORING
AGREEMENT, ETC.
5.1. 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.
5.2. Seller,
on behalf of itself and its affiliates, represents and warrants to Purchaser
that, as of the First Amendment Effective Date, no Event of Default exists or,
solely with the passage of time or notice, would exist under the Factoring
Agreement Documents.
5.3. 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.
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6. 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 Amendment, all of them are hereby expressly WAIVED,
and each of Seller and its affiliates hereby RELEASES such Purchaser Parties
from any liability therefor.
7. MISCELLANEOUS.
7.1. 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.
7.2. This
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.
7.3. In
the event any one or more of the provisions contained in this 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.
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7.4. This
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 Amendment by facsimile or other electronic transmission shall be
effective as delivery of a manually executed counterpart of this Amendment, and
any party delivering such an executed counterpart of the signature page to this
Amendment by facsimile or other electronic transmission to any other party shall
thereafter also promptly deliver a manually executed counterpart of this
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 Amendment.
[SIGNATURE
PAGE FOLLOWS]
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IN
WITNESS WHEREOF, the Parties have duly executed this Amendment on the date above
first written.
| SELLER: | ZOO PUBLISHING, INC. | ||
|
By:
|
/s/ Xxxxx Xxxxxx | ||
| Name: | Xxxxx Xxxxxx | ||
| Title: | Chief Financial Officer | ||
| PURCHASER: | WORKING CAPITAL SOLUTIONS, INC. | ||
|
By:
|
/s/ Xxxxxx X. Xxxxx | ||
| Name: | Xxxxxx X. Xxxxx | ||
| Title: | President | ||
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 Amendment.
|
/s/ Xxxx X.
Xxxxxxx
|
|||
| Xxxx X. Xxxxxxx, an individual | |||
| /s/ Xxxxx X. Xxxxxxxxx | |||
| Xxxxx X. Xxxxxxxxx, an individual | |||
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 9, 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.
| /s/ Xxxxx X. Xxxxxx | |||
| Xxxxx X. Xxxxxx, an individual | |||
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 9, 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 Amendment.
| ZOO ENTERTAINMENT, INC. | |||
|
By:
|
/s/ Xxxxx Xxxxxx | ||
| Name: | Xxxxx Xxxxxx | ||
| Title: | Chief Financial Officer | ||
| ZOO GAMES, INC. | |||
|
By:
|
/s/ Xxxxx Xxxxxx | ||
| Name: | Xxxxx Xxxxxx | ||
| Title: | Chief Financial Officer | ||
