Re: Senior Secured Convertible Promissory Note

Re:         Senior Secured Convertible Promissory Note

Ladies and Gentlemen:

Reference is made to that certain Amendment No. 2 (“Amendment No. 2”) to Senior Secured Convertible Promissory Note, dated as of the date hereof, by and among Zoo Entertainment, Inc. (the “Company”) and each of the holders of the Senior Secured Convertible Notes (the “Notes) identified on the signature page thereto (the “Holders”).   Capitalized terms used herein but not otherwise defined shall have the meanings ascribed to them in Amendment No. 2.  Pursuant to Amendment No. 2, the parties have agreed to amend the Notes to provide that the outstanding principal amount plus accrued but unpaid interest underlying the Notes shall automatically convert into shares of Common Stock, at a conversion price of $0.20 per share on the Effective Date (as defined in Amendment No. 2).  In consideration of the execution and delivery of Amendment No. 2, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company desires to grant to the Holders certain registration rights and to make certain representations and warranties to the Holders as set forth herein.  Accordingly, the undersigned parties do hereby agree as follows:

1.              Registration Rights .

1.1            Definitions .  In addition to the terms defined elsewhere in this letter agreement, for all purposes of this letter agreement, the following terms shall have the meanings indicated in this Section 1.1:

 “Business Day” means any day except Saturday, Sunday and any day which shall be a federal legal holiday or a day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

“ Exchange Act " means the Securities Exchange Act of 1934, as amended.

“ Filing Date ” means within either 30 calendar days after receipt of Stockholder Approval, or 60 calendar days after the Closing, whichever is later.

“ Indemnifying Party ” has the meaning set forth in Section 1.5(c).

“ Required Effectiveness Date ” means within 90 calendar days after the Filing Date, or within 180 calendar days after the Filing Date in the event the Registration Statement is reviewed by the Commission.

"Rule 415" means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

“Securities Act" means the Securities Act of 1933, as amended.

“ Selling Stockholder Questionnaire ” means a questionnaire as may reasonably be adopted by the Company from time to time.

“Trading Day” means (i) a day on which the Common Stock is traded on a Trading Market, or (ii) if the Common Stock is not listed on a Trading Market, a day on which the Common Stock is traded in the over-the-counter market is quoted in the over-the-counter market as reported by the National Quotation Bureau Incorporated (or any similar organization or agency succeeding to its functions of reporting prices); provided, that in the event that the Common Stock is not listed or quoted as set forth in (i) or (ii) hereof, then Trading Day shall mean a Business Day.

“Trading Market” means whichever of the NYSE, the NYSE Amex, the NASDAQ Stock Market or the OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date in question.

“Transaction Documents” means this letter agreement and any other documents or agreements executed in connection with the transactions contemplated hereunder.

“ Transfer Agent ” means Empire Stock Transfer, Inc., or any successor transfer agent for the Company.

1.2          Registration Statement .

(a)           As promptly as possible, and in any event on or prior to the Filing Date, the Company shall prepare and file with the Commission a Registration Statement covering the resale of all Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415.  The Registration Statement shall be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate form in accordance with the Securities Act and the Exchange Act).

(b)           Each Holder agrees to furnish to the Company a completed Selling Stockholder Questionnaire not more than five (5) Trading Days following the date that the Selling Stockholder Questionnaire is provided by the Company to the Holder. At least five (5) Trading Days prior to the first anticipated filing date of a Registration Statement for any registration under this letter agreement, the Company will notify each Holder of the information the Company requires from that Holder other than the information contained in the Selling Stockholder Questionnaire, if any, which shall be completed and delivered to the Company promptly upon request and, in any event, within two (2) Trading Days prior to the applicable anticipated filing date.  Each Holder further agrees that it shall not be entitled to be named as a selling securityholder in the Registration Statement or use the Prospectus for offers and resales of Registrable Securities at any time, unless such Holder has returned to the Company a completed and signed Selling Stockholder Questionnaire and a response to any requests for further information as described in the previous sentence. If a Holder of Registrable Securities returns a Selling Stockholder Questionnaire or a request for further information, in either case, after its respective deadline, the Company shall use its commercially reasonable efforts at the expense of the Holder who failed to return the Selling Stockholder Questionnaire or to respond for further information to take such actions as are required to name such Holder as a selling security holder in the Registration Statement or any pre-effective or post-effective amendment thereto and to include (to the extent not theretofore included) in the Registration Statement the Registrable Securities identified in such late Selling Stockholder Questionnaire or request for further information. Each Holder acknowledges and agrees that the information in the Selling Stockholder Questionnaire or request for further information as described in this Section 1.2(b) will be used by the Company in the preparation of the Registration Statement and hereby consents to the inclusion of such information in the Registration Statement.

(c)           The Company shall use its commercially reasonable efforts to cause the Registration Statement to be declared effective by the Commission as promptly as possible after the filing thereof, but in any event prior to the Required Effectiveness Date, and shall use its commercially reasonable efforts to keep the Registration Statement continuously effective under the Securities Act until the earlier of the date that all shares of Common Stock covered by such Registration Statement have been sold or that all shares of Common Stock that would otherwise be covered by such Registration Statement can be resold by a Holder, with respect to such Holder’s shares, without restriction (including volume limitations) pursuant to Rule 144 of the Securities Act (the “Effectiveness Period ”); provided that, notwithstanding the foregoing, so long as a Holder’s securities represent 7.5% or more of the Company’s outstanding securities, that Holder’s shares of Common Stock will continue to be covered by such Registration Statement until such time as such Holder’s shares of Common Stock no longer represent at least 7.5% of the Company’s outstanding securities; provided further that, upon notification by the Commission that a Registration Statement will not be reviewed or is no longer subject to further review and comments, the Company shall request acceleration of such Registration Statement within five (5) Trading Days after receipt of such notice and request that it become effective on 4:00 p.m. New York City time on the Effective Date and file a prospectus supplement for any Registration Statement, whether or not required under Rule 424 (or otherwise), by 9:00 a.m. New York City time the day after the Effective Date.  For purposes of clarification, in the event an individual Holder is able to resell such Holder’s shares of Common Stock without restriction (including volume limitations) pursuant to Rule 144 of the Securities Act, the Company shall not have any obligation to keep the Registration Statement continuously effective to cover the resale of such Holder’s shares of Common Stock.

(d)           The Company shall notify the Holders in writing promptly (and in any event within five Trading Days) after receiving notification from the Commission that the Registration Statement has been declared effective.

(e)           Notwithstanding anything in this letter agreement to the contrary, after sixty (60) consecutive Trading Days of continuous effectiveness of the initial Registration Statement filed and declared effective pursuant to this letter agreement, the Company may, by written notice to the Holders, suspend sales under a Registration Statement after the Effective Date thereof and/or require that the Holders immediately cease the sale of shares of Common Stock pursuant thereto and/or defer the filing of any subsequent Registration Statement if the Company is engaged in a material merger, acquisition or sale and the Board of Directors determines in good faith, by appropriate resolutions, that, as a result of such activity, (A) it would be materially detrimental to the Company (other than as relating solely to the price of the Common Stock) to maintain   a Registration Statement at such time or (B) it is in the best interests of the Company to suspend sales under such registration at such time.  Upon receipt of such notice, each Holder shall immediately discontinue any sales of Registrable Securities pursuant to such registration until such Holder is advised in writing by the Company that the current Prospectus or amended Prospectus, as applicable, may be used.  In no event, however, shall this right be exercised to suspend sales beyond the period during which (in the good faith determination of the Company’s Board of Directors) the failure to require such suspension would be materially detrimental to the Company.  The Company’s rights under this Section 1.2(e) may be exercised for a period of no more than 20 Trading Days at a time and not more than once in any twelve-month period.  Immediately after the end of any suspension period under this Section 1.2(e), the Company shall take all necessary actions (including filing any required supplemental prospectus) to restore the effectiveness of the applicable Registration Statement and the ability of the Holders to publicly resell their Registrable Securities pursuant to such effective Registration Statement.

(f)           If for any reason the Commission does not permit all of the Registrable Securities to be included in the Registration Statement filed pursuant to this Section 1.2, or for any other reason any Registrable Securities are not permitted by the Commission to be included in a Registration Statement filed under this Agreement, then the Company shall prepare and file as soon as possible after the date on which the Commission shall indicate as being the first date or time that such filing may be made, an additional Registration Statement covering the resale of all Registrable Securities not already covered by an existing and effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415.  The Company shall cause each such Registration Statement to be declared effective under the Securities Act as soon as possible but, in any event, no later than its Effective Date, and shall use its best efforts to keep such Registration Statement effective under the Securities Act during the entire Effectiveness Period.

(g)           Notwithstanding anything to the contrary contained in this Agreement, in the event the Commission determines any Registration Statement filed pursuant to this Agreement (i) constitutes a primary offering of securities by the Company or (ii) requires any Holder to be named as an underwriter and such Holder does not consent to being so named as an underwriter in such Registration Statement, the Company may reduce, on a pro rata basis, the total number of Registrable Securities to be registered on behalf of each such Holder, and the failure to include such Registrable Securities in any Registration Statement shall not cause the Company to be required to pay any penalty, financial or otherwise.  The pro rata adjustment will reduce all Registrable Securities other than those issued pursuant to that certain Mutual Settlement, Release and Waiver Agreement, as amended, dated as of June 18, 2009, by and among the Company, Zoo Games, Inc., Zoo Publishing, Inc. and the individual plaintiffs set forth therein.  In the event of any such reduction in Registrable Securities, the affected Holders shall have the right to require, upon delivery of a written request to the Company signed by the Holders of at least a majority of the Registrable Securities then outstanding, the Company to file a registration statement within 90 days of such request subject to any restrictions imposed by Rule 415, until such time as: (i) all Registrable Securities have been registered pursuant to an effective Registration Statement, (ii) the Registrable Securities may be resold without restriction (including volume limitations) pursuant to Rule 144 of the Securities Act or (iii) the Holder agrees to be named as an underwriter in any such Registration Statement.

1.3           Registration Procedures .  In connection with the Company’s registration obligations hereunder, the Company shall:

 (a)            (i) Subject to Section 1.2(e), prepare and file with the Commission such amendments, including post-effective amendments, to each Registration Statement and the Prospectus used in connection therewith as may be necessary to keep the Registration Statement continuously effective, as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible (except to the extent that the Company reasonably requires additional time to respond to accounting comments), to any comments received from the Commission with respect to the Registration Statement or any amendment thereto; and (iv) comply in all material respects with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by the Registration Statement during the applicable period in accordance with the intended methods of disposition by the Holders thereof set forth in the Registration Statement as so amended or in such Prospectus as so supplemented.

(b)           Notify the Holders as promptly as reasonably possible, and (if requested by the Holders confirm such notice in writing no later than two Trading Days thereafter, of any of the following events:  (i) the Commission notifies the Company whether there will be a “review” of any Registration Statement; (ii) the Commission comments in writing on any Registration Statement; (iii) any Registration Statement or any post-effective amendment is declared effective; (iv) the Commission or any other Federal or state governmental authority requests any amendment or supplement to any Registration Statement or Prospectus or requests additional information related thereto; (v) the Commission issues any stop order suspending the effectiveness of any Registration Statement