8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 1, 2010

ZOO ENTERTAINMENT, INC.

(Exact name of registrant as specified in its charter)

Delaware	333-124829	71-1033391
(State or Other Jurisdiction	(Commission File Number)	(I.R.S. Employer
of Incorporation)		Identification No.)

3805 Edwards Road, Suite 400

Cincinnati, OH  45209

 (Address of principal executive

offices including zip code)

(513) 824-8297

 (Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17  CFR 240.13e-4(c))

ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

On April 1, 2010, Zoo Publishing, Inc. (“Zoo Publishing”), a wholly-owned subsidiary of Zoo Games, Inc. (“Zoo Games”), a wholly-owned subsidiary of Zoo Entertainment, Inc. (the “Company”), entered into a First Amendment to Factoring and Security Agreement (the “WCS Amendment”) with Working Capital Solutions, Inc. (“WCS”).  The WCS Amendment amended that certain Factoring and Security Agreement (the “Factoring Agreement”), pursuant to which WCS agreed to utilize existing Zoo Publishing accounts receivable in order to provide working capital to fund all aspects of Zoo Publishing’s business operations, as set forth in that Current Report on Form 8-K filed with the Securities and Exchange Commission (the “Commission”) on October 2, 2009, which is incorporated herein by reference.  Pursuant to the WCS Amendment, the parties amended the Factoring Agreement to, among other things: (i) increase the maximum amount of funds available pursuant to the facility to $5,250,000;  and (ii) extend its term to a period initially ending on April 1, 2012, subject to automatic renewal for successive one year periods unless Zoo Publishing terminates the Factoring Agreement with written notice 90 days prior to the next anniversary of the date of the Factoring Agreement, or  unless  Zoo Publishing terminates the Factoring Agreement on a date other than an anniversary date with 30 days prior written notice. The foregoing description of the WCS Amendment does not purport to be complete and is qualified in its entirety by reference to the WCS Amendment, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference.

On April 6, 2010, Zoo Publishing, Zoo Games, the Company and Wells Fargo Bank, National Association (“Wells Fargo”) entered into a First Amendment to Master Purchase Order Assignment Agreement (the “Wells Fargo Amendment”), which amended that certain Amended and Restated Master Purchase Order Assignment Agreement, dated as of April 6, 2009 (the “Assignment Agreement”).   Pursuant to the Assignment Agreement, the Company agreed to assign purchase orders received from customers to Wells Fargo, and requested that Wells Fargo purchase the required materials to fulfill such purchase orders, as set forth in that Current Report on Form 8-K filed with the Commission on April 9, 2009, which is incorporated herein by reference.   Pursuant to the Wells Fargo Amendment, the parties amended the Assignment Agreement to, among other things: (i) increase the amount of funding available pursuant to the facility to $10,000,000; and (ii) extend its term until April 5, 2011, subject to automatic renewal for successive twelve month terms unless either party terminates the Assignment Agreement with written notice 30 days prior to the end of the initial term or any renewal term. In consideration for the extension, the Company paid to Wells Fargo an aggregate fee of $31,947.47.    The foregoing description of the Wells Fargo Amendment does not purport to be complete and is qualified in its entirety by reference to the Wells Fargo Amendment, a copy of which is attached hereto as Exhibit 10.2 and incorporated herein by reference.

ITEM 8.01. OTHER EVENTS.

On April 1, 2010, the Company terminated that certain Amended and Restated Employment Agreement with Ryan Brant, dated as of September 1, 2008 (the “Employment Agreement”).  Ryan Brant is one of the founders of Zoo Games and until April 1, 2010, was the Director of Content Acquisition of Zoo Games. He was responsible for identifying new content available for publishing and distribution, as well as other business opportunities for Zoo Games, although his suggestions were informative only and did not determine strategy.

Simultaneously with the termination of the Employment Agreement, Zoo Publishing entered into a consulting agreement with Mr. Brant (the “Consulting Agreement”). Pursuant to the Consulting Agreement, Mr. Brant will provide consulting services with respect to identifying new content available for publishing by Zoo Publishing or other opportunities consistent with the business of Zoo Publishing, and provide other services incidentally related thereto as requested by Zoo Publishing.  The Consulting Agreement is for an initial term ending on August 31, 2011, subject to automatic renewal for two additional one-year terms upon 60 days prior written notice by Zoo Publishing.  Mr. Brant is entitled to receive $25,000 per month during the term of the Consulting Agreement.  In the event Mr. Brant’s services are terminated due to death, he is entitled to receive any earned but unpaid fees through the end of the month of such termination.  If Mr. Brant’s services are terminated due to disability, Mr. Brant is entitled to receive any earned but unpaid fees through the end of the month of such termination, plus payments equal to twelve months of fees under the Consulting Agreement.  In the event Mr. Brant’s services are terminated by him for Good Reason, or by Zoo Publishing without Cause, each as defined in the Consulting Agreement, he is entitled to receive payments equal to twelve months of fees under the Consulting Agreement, plus, full acceleration of the vesting of all outstanding options to purchase shares of the Company’s common stock held by Mr. Brant, with the right to exercise such options until the earlier of the options’ termination date or the two year anniversary of Mr. Brant’s termination date. If Mr. Brant’s services are terminated by him without Good Reason or by Zoo Publishing without Cause, he is entitled to receive the fees earned through the date of termination. In addition, the Consulting Agreement provides that during the term of the Consulting Agreement and for a period of one year thereafter, Mr. Brant is prohibited from engaging in activities competitive with the Company’s business and from soliciting the employment of Zoo Publishing’s employees.

Mr. Brant spent nearly his entire professional career in the interactive entertainment software industry. He was one of the founders of Take-Two Interactive Software, Inc. (“Take-Two”), which under his leadership became one of the leading publicly traded companies in the industry. In June 2005, Mr. Brant and the Commission entered into a consent decree concerning revenue recognition issues at Take-Two. In connection with separate investigations conducted by the New York County District Attorney’s Office and the Commission concerning the backdating of stock options at Take-Two (the “Investigation”), Mr. Brant (1) pled guilty to falsifying business records in the first degree on February 14, 2007; and (2) entered into an additional Consent Judgment with the Commission on or about February 16, 2007. In connection with the Consent Judgment, Mr. Brant, among other things, agreed to a permanent bar from holding any control management positions in publicly traded companies.

Pursuant to the Consulting Agreement, Mr. Brant is subject to the same strict guidelines as were set forth in his Employment Agreement, which were approved by the boards of directors of Zoo Games and the Company, and are designed to ensure compliance with Mr. Brant’s agreement with the Commission. With respect to the Company or any of its subsidiaries (the “Group”), these guidelines, among other things, restrict Mr. Brant from (i) becoming a director or executive officer of any member of the Group; (ii) attending or participating in any board of directors meeting of any member of the Group; (iii) participating in any financial reporting functions or accounting decisions, (iv) working directly with the financial staff or regularly working in the principal headquarters, (v) having power to bind any member of the Group, (vi) having control over any policy making decisions. Adherence to these guidelines is monitored by the board of directors of Zoo Publishing and requires quarterly updates by the board of directors of Zoo Publishing to the Company’s board of directors regarding Mr. Brant’s activities as well as his and the Company’s compliance with such guidelines.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits

Number	Description
10.1	First Amendment to Factoring and Security Agreement, by and between Zoo Publishing, Inc. and Working Capital Solutions, Inc., dated as of April 1, 2010.
10.2	First Amendment to Master Purchase Order Assignment Agreement, by and among Zoo Entertainment, Inc., Zoo Games, Inc., Zoo Publishing, Inc. and Wells Fargo Bank, National Association, dated as of April 6, 2010.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: April 7, 2010

ZOO ENTERTAINMENT, INC.
By:	/s/ Mark Seremet
Name:	Mark Seremet
Title:	Chief Executive Officer and President

EX-10.1

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/ David Fremed
	Name:	David Fremed
	Title:	Chief Financial Officer

PURCHASER:	WORKING CAPITAL SOLUTIONS, INC.
	By:	/s/ Thomas G. Siska
	Name:	Thomas G. Siska
	Title:	President

Signature Page to First Amendment to Factoring and Security Agreement

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/ Mark E. Seremet

Mark E. Seremet, an individual

/s/ David W. Rosenbaum

David W. Rosenbaum, 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/ David J. Fremed

David J. Fremed, 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/ David Fremed
Name:	David Fremed
Title:	Chief Financial Officer

ZOO GAMES, INC.
By:	/s/ David Fremed
Name:	David Fremed
Title:	Chief Financial Officer

Signature Page to First Amendment to Factoring and Security Agreement

EX-10.2

FIRST AMENDMENT

TO

MASTER PURCHASE ORDER

ASSIGNMENT AGREEMENT

This First Amendment to that certain Amended and Restated Master Purchase Order Assignment Agreement  (the “Amendment”) is made as of the 6th day of April 2010, between WELLS FARGO BANK, NATIONAL ASSOCIATION, acting through its Wells Fargo Business Credit, operating division (the “Contractor”), ZOO ENTERTAINMENT, INC., a Delaware corporation, ZOO PUBLISHING, INC., a New Jersey corporation, and ZOO GAMES, INC., a Delaware corporation (collectively, the “Distributor”).

W I T N E S S E T H:

WHEREAS, the Contractor and the Distributor are parties to that certain Amended and Restated Master Purchase Order Assignment Agreement dated as of April 6, 2009 (the “Assignment Agreement”);

WHEREAS, the Contractor and the Distributor desire to amend the Assignment Agreement as set forth herein;

NOW, THEREFORE, in consideration of the premises and other consideration, the receipt and sufficiency of which is hereby acknowledged by each of the Contractor and the Distributor, the parties hereto hereby agree as follows:

1.           Certain Definitions.  Capitalized terms not otherwise herein defined shall have the meanings ascribed to them in the Assignment Agreement.

2.           Extension Fee.  In consideration for the Contractor entering into this Agreement, the Distributor shall pay the Contractor an extension fee in the amount of Thirty-One Thousand Nine Hundred Forty-Seven and 47/100 Dollars ($31,947.47) on or before April 6, 2010.

3.           Amendment to Section 1(j) of the Assignment Agreement.  The definition of "Minimum Volume" contained in Section 1(j) of the Assignment Agreement is hereby deleted in its entirety, and in lieu thereof there is inserted a new definition of "Minimum Volume" as follows:

“MINIMUM VOLUME” means Product Volume which equals or exceeds $20,308,776.50 for the initial twelve month term of this Agreement.  In the event the term of this Agreement is renewed for one or more twelve month renewal terms, for each such renewal, Minimum Volume means Product Volume which equals or exceeds $20,000,000.

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4.           Amendment to Section 3(b)(iv) of the Assignment Agreement.  Section 3(b)(iv) of the Assignment Agreement is hereby deleted in its entirety, and in lieu thereof there is inserted a new Section 3(b)(iv) as follows:

(iv)           Upon the purchase of Product required for the P.O., or upon any other advance of funds in connection with the P.O., the Contractor's aggregate outstanding funding pursuant to this Agreement shall not exceed the sum of $10,000,000;

5.           Amendment to Section 6(a) of the Assignment Agreement.  Section 6(a) of the Assignment Agreement is hereby deleted in its entirety, and in lieu thereof there is inserted a new Section 6(a) as follows:

(a)           Subject to the provisions of this ¶6, Distributor shall pay Contractor a Commitment Fee in consideration of Contractor's commitment to reserve and have available sufficient funds to purchase Products or to otherwise advance funds in connection with a P.O. for Product Volume in amounts equal to or exceeding the Minimum Volume as contemplated by this Agreement.  The Commitment Fee shall be in the sum of $406,947.47 and shall be paid by Distributor on the earlier of April 5, 2011, or the date of termination of this Agreement.  In the event the term of this Agreement is renewed for one or more twelve month renewal terms, for each such renewal, Distributor shall pay Contractor a Commitment Fee in the sum of $400,000, which fee shall be paid by Distributor on the earlier of twelve months following the date of the renewal of this Agreement or the date of termination of this Agreement.  The Commitment Fee for the initial term of this Agreement is deemed by the parties to have been earned by the Contractor upon the signing of this Agreement, as of which date the Contractor has reserved the requisite funds.  The Commitment Fee for each renewal term of this Agreement is deemed by the parties to have been earned by the Contractor upon each renewal date of this Agreement, as of which date the Contractor has reserved the requisite funds.

6.           Amendment to Sections 7(b)(i)-(iii) of the Assignment Agreement.  Sections 7(b)(i)-(iii) of the Assignment Agreement are hereby deleted in their entirety, and in lieu thereof there are inserted new Sections 7(b)(i)-(iii) as follows:

(i)           A transaction initiation and set-up fee in a sum equal to 2.0% of the aggregate of (a) the face amounts of all letters of credit issued by Contractor (or other financial accommodations) plus (b) all funds advanced by Contractor by other than issuing its letters of credit; provided, however, that if for the initial twelve month term of this Agreement ending on April 5, 2011 Product Volume exceeds $20,308,776.50, then the transaction initiation and set-up fee for the remaining portion of such initial term shall be in a sum equal to 1.5% of the aggregate of (a) the face amounts of all letters of credit issued by Contractor (or other financial accommodations) plus (b) all funds advanced by Contractor by other than issuing its letters of credit; and provided, further, that if for any twelve month renewal term of this Agreement Product Volume exceeds $20,000,000, then the transaction initiation and set-up fee for the remaining portion of such renewal term shall be in a sum equal to 1.5% of the aggregate of (a) the face amounts of all letters of credit issued by Contractor (or other financial accommodations) plus (b) all funds advanced by Contractor by other than issuing its letters of credit; plus

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(ii)           A daily maintenance fee in a sum equal to 0.067% of the aggregate of (a) the face amounts of all letters of credit issued by Contractor (or other financial accommodations) and (b) all funds advanced by Contractor by other than issuing its letters of credit which remain outstanding for more than thirty (30) days; plus

(iii)           A Product advance fee in a sum equal to the Applicable Daily Rate (as hereinafter defined) multiplied by the aggregate amount outstanding on all letters of credit (or other financial accommodations) and all funds advanced by Contractor by other than issuing its letters of credit on account of purchases of Products or other advances made in connection with a P.O. multiplied by the number of days from the earliest of (A) the date on which any such letter of credit or purchase order or financial accommodation is negotiated into cash by any person, or (B) the date funds are advanced by other than issuing a letter of credit or purchase order, to and including the Clearance Date.  The “Applicable Daily Rate” shall mean the prime rate as in effect from time to time at Wells Fargo Bank, National Association, plus 2%, divided by 360.

7.           Amendment to Section 18(a) of the Assignment Agreement.  Section 18(a) of the Assignment Agreement is hereby deleted in its entirety, and in lieu thereof there is inserted a new Section 18(a) as follows:

(a)           Term of Agreement.  This Agreement is for an initial term of twelve months beginning on April 6, 2010, and ending on April 5, 2011, and shall continue thereafter for successive twelve month renewal terms unless either party terminates the Agreement by written notice to the other not later than thirty days prior to the end of the initial term or any renewal term.  Provided, however, that Contractor may also terminate this Agreement immediately upon Distributor's default or at any time following the initial term upon fifteen days' prior written notice to Distributor.

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8.           Amendment.  This Amendment constitutes an amendment to the Assignment Agreement, and except to the extent inconsistent herewith, the parties do hereby reconfirm the Assignment Agreement in its entirety.

9.           Effectiveness of Amendment.  This Amendment will not be effective until each of the persons set forth on Addendum III of the Assignment Agreement shall have executed an acknowledgment to the Guaranty previously executed by such persons, in form and substance satisfactory to Contractor.

10.           Counterparts.  This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement.  Delivery of an executed counterpart of this Amendment by facsimile shall be equally as effective as delivery of a manually executed counterpart of this Amendment.  Any party delivering an executed counterpart of this Amendment by facsimile shall also deliver a manually executed counterpart of this Amendment, but the failure to deliver a manually executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment.

* * * * * * * * * *

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first written above.

WELLS FARGO BANK, NATIONAL ASSOCIATION

By:	/s/ Michael Lawrence
Title:	Vice President

ZOO ENTERTAINMENT, INC.

By:	/s/ David Fremed
Name:	David Fremed
Title:	Chief Financial Officer

ZOO PUBLISHING, INC.

By:	/s/ David Fremed
Name:	David Fremed
Title:	Chief Financial Officer

ZOO GAMES, INC.

By:	/s/ David Fremed
Name:	David Fremed
Title:	Chief Financial Officer

ACKNOWLEDGMENT OF GUARANTORS

Each of the undersigned hereby acknowledges receiving and reviewing that certain First Amendment to that certain Master Purchase Order Assignment Agreement  (the “Amendment”). Each of the undersigned, by its execution hereof, hereby agrees that the Guaranty previously executed by him or her shall remain in full force and effect and that all references in said Guaranty to the Master Purchase Order Assignment Agreement shall be deemed to refer to the Master Purchase Order Assignment Agreement as amended by the Amendment.

Dated:   April 6, 2010

/s/ Mark Edward Seremet

Mark Edward Seremet

/s/ David William Rosenbaum

David William Rosenbaum