AMENDMENT NO. 2
TO
SENIOR SECURED CONVERTIBLE
PROMISSORY NOTE
This Amendment
No. 2 (this “Amendment”), dated as of June 26, 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, Trinad Capital Master
Fund, Ltd. (“Trinad”) 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 Trinad 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, Trinad 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, Trinad 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, John S. Lemak
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, 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 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
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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 is hereby amended by
deleting the date “July 7, 2009” and inserting the
following in place thereof: “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”.
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Amendment to
Section 2 of the Notes . Effective immediately on the date
(the “ Effective Date ”) by which the following
two events have occurred, regardless of the order in which they
occur: (1) the effectiveness of the filing with the Secretary of
State of the State of Delaware of the Certificate of Amendment to
the Company’s Certificate of Incorporation, in accordance
with Section 103 of the Delaware General Corporation Law, in the
form attached hereto as Exhibit A (the “
Certificate of Amendment ”), and (2) the consummation
of an Investor Sale (as defined below in Section 3 of this
Amendment), Section 2 of each of the Notes shall be deleted in its
entirety and replaced with the following:
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(a)
General . On the Mandatory Conversion
Date, the outstanding principal balance and all accrued and unpaid
interest under this Note (collectively, the “ Note
Value ”) shall automatically be converted, in whole,
into shares of the Company’s Common Stock, par value $0.001
per share (“ Common Stock ”), at a rate
of one (1) share of Common Stock for each $0.20 (the “
Conversion Price
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