Exhibit 10.2
 
LIMITED RECOURSE ASSIGNMENT
 
FOR Eight Hundred and Fifty Thousand Dollars ($850,000.00) (the “Purchase
Price”), and other good and valuable consideration, as more particularly set
forth herein, Panta Distribution, LLC, a Delaware limited liability company (the
“Assignor”), hereby sells, assigns, and transfers WITHOUT RECOURSE to MMB
Holdings LLC, a Delaware limited liability company, with an address of 888 Linda
Flora Drive Los Angeles, California 90049, (the “Assignee”), in accordance with
the terms hereof, all right, title, and interest of the Assignor in and to each
of the documents (collectively, the “Assigned Documents”) related to the
Assignor’s factoring and financing arrangement with Zoo Publishing, Inc., a New
Jersey corporation (hereinafter, the “Borrower”), as such Assigned Documents are
more particularly described on Exhibit A annexed hereto and incorporated herein
by reference, and all rights, remedies, powers, and discretions of the Assignor
thereunder, as if the Assignor had specifically and separately assigned to the
Assignee each of the Assigned Documents, including, all of Assignor’s right to
all payments, principal, unpaid interest, fees and any other amounts now
hereafter due under the Assigned Documents, all collateral security therefor, if
any, and all other associated rights (collectively, together with the Assigned
Documents, the “Assigned Rights”). In addition to payment of the Purchase Price,
Assignee and Assignor acknowledge and agree that Assignor is retaining an
interest in certain amounts owing by Borrower under the Asigned Documents, as
more particularly set forth in the Second Amended and Restated Factoring and
Security Agreement of even date herewith, among the Borrower, Assignee and the
other Holders named there in, and Assignee in its capacity as agent for such
Holders (the “Agent”), and in that certain letter agreement of even date
herewith, among Assignee, Assignor, the Agent and the Borrower.

1.           Assignor’s Representations and Warranties.  The Assignor warrants
and represents solely the following:
 
 
a.
Outstanding Indebtedness: The following amounts are outstanding under the
Assigned Documents as of October 27, 2011:

 
(i)
Principal
  $ 1,035,818.93              
(ii)
Accrued Interest
  $ 74,694.83              
(iii)
Accrued Fees
  $ None              
(iv)
Attorneys fees and expenses
  $ $57,500                
Total:
  $ 1,160,813.76  

 
 

--------------------------------------------------------------------------------

 

 
b.
Authorization.  Assignor has all requisite power and authority to execute and
deliver and to perform all of its obligations under this Agreement and all
instruments and other documents executed and delivered by Assignor in connection
therewith.  The execution by the Assignor of this Limited Recourse Assignment
and all instruments and other documents executed and delivered by Assignor in
connection therewith and the performance by the Assignor of the Assignor’s
obligations hereunder and thereunder, respectively, have been duly authorized.

 
 
c.
Title to Assigned Rights.  Assignor is the sole owner of all of the Assigned
Rights, free and clear of all liens, encumbrances, claims, pledges, charges and
security interests.  The Assigned Rights are not subject to any prior assignment
or pledge by Assignor.  The Assignor has no knowledge of any proceedings
commenced or followed by the Assignor with respect to the Assignor’s loan
arrangement with the Borrower.  For purposes of this provision, knowledge shall
be deemed to mean matters known or that should have known by the Assignor.

 
 
d.
Assigned Documents.  The Assigned Documents constitute all of the material
documents between the Assignor and the Borrower related to the Assignor’s
factoring and financing arrangement with the Borrower. Assignor has made
available for Assignee’s review true and correct copies of all of the Assigned
Documents.  Except as set forth on Schedule 1d annexed hereto or in the Assigned
Documents delivered or made available to Assignee by Assignor, Assignor has not
given its written consent to change, amend, or modify, nor has it waived in
writing, any term or provision of the Assigned Documents, which could reasonably
be expected to adversely affect the interests of Assignee under the Assigned
Documents.

 
 
e.
Disputed Funds.  The Assignor is holding certain funds (the “Disputed Funds”)
received by the Assignor in payment of certain accounts receivable in which the
Assignor, Borrower and Southpeak Interactive, LLC and/or its subsidiary,
AlterEgo Games, LLC claim an interest.  The Assignor believes that the Disputed
Funds are payments on account of Borrower’s accounts receivable and consequently
constitute the Assignor’s collateral under the Factoring Agreement.  At the
request of Borrower, the Assignor has not applied the Disputed Funds to amounts
due to Assignor under the Factoring Agreement.  Simultaneous with the
consummation of the transaction contemplated hereby, the Assignor is delivering
to Assignee the Disputed Funds.  The forgoing statements relating to the
Disputed Funds do not constitute a representation or warranty by Assignor and
Assignor expressly makes no representations or warranties of any kind or nature
with respect to or regarding the Disputed Funds and the rights, if any, of the
Assignor, Borrower and/or Assignee therein or whether or not the Disputed Funds
constitute collateral under the Factoring Agreement.

 

 
2

--------------------------------------------------------------------------------

 

 
f.
Credit Balance.  The Assignor represents and warrants that as of the date of
this Limited Recourse Assignment the amount of the credit balance due from the
Assignor to the Borrower is $0.00.

 
 
g.
Independent Representation. The Assignor has entered into this transaction after
consultation with independent counsel of the Assignor’s own selection and with
the sole exception of the representations and warranties specifically made in
Paragraph 5 herein is not relying upon any representation or warranty of the
Assignee in consummating this transaction.

 
 
h.
Taxes.  The Assignor acknowledges and agrees that the Assignee is not
responsible or liable in any way to the Assignor for the payment or adjustment
of outstanding taxes (or any other type of charges or liens whatsoever) arising
prior to the date of this Limited Recourse Agreement affecting any of the
collateral purportedly granted to the Assignor under the Assigned
Documents.  The Assignee shall be responsible and liable for the payment or
adjustment of outstanding taxes (or any other type of charges or liens
whatsoever) arising after to the date of this Limited Recourse Agreement
affecting any of the collateral purportedly granted to the Assignor under the
Assigned Documents.

 
 
i.
No Breaches.  Assignor has not breached the terms of, is not in default under,
nor is there any state of facts that, with the giving of notice or passage of
time, could ripen into a default under that certain Limited Recourse Assignment,
dated as of June 24, 2011 (the “Original Assignment”) by and between Assignor
and Working Capital Solutions, Inc., a Delaware corporation (“Original
Assignor”).   Original Assignor has not asserted nor, to Assignor’s knowledge
threatened to assert, against Assignor any claim for indemnification pursuant to
Section 10 of the Original Assignment.

 
2.           Exclusion of Assignor’s Warranties and Representations. Except as
specifically provided above, this Limited Recourse Assignment is made by the
Assignor without any representations or warranties whatsoever, whether
expressed, implied, or imposed by law.  Without limiting the generality of the
foregoing limited exclusion of representations and warranties, this Limited
Recourse Assignment is made:
 
 
a.
WITHOUT any representation, warranty or statement of any kind with respect to or
regarding the Disputed Funds.

 
 
3

--------------------------------------------------------------------------------

 

 
b.
WITHOUT any representations or warranties with respect to the genuineness of any
signature other than those made by or on behalf of the Assignor.

 
 
c.
WITHOUT any representations or warranties with respect to the collectability of
any amount owed under any of the Assigned Documents by the Borrower or any
guarantor of the Borrower’s obligations to the Assignor.

 
 
d.
WITHOUT any representations as to the financial condition of the Borrower or of
any guarantor of the obligations of the Borrower to the Assignor.

 
 
e.
WITHOUT any of the representations or warranties described in Article 3 of the
Uniform Commercial Code as enacted in the State of New York.

 
 
f.
WITHOUT any representations or warranties with respect to the legality,
validity, sufficiency, or enforceability of any of the Assigned Documents.

 
 
g.
WITHOUT any representations or warranties with respect to the validity,
enforceability, attachment, priority, or perfection of any security interest,
attachment, relief, or encumbrance, included in the Assigned Documents, or the
compliance with applicable law with respect to the Assignor’s loan arrangement
with the Borrower.

 
 
h.
WITHOUT any representations or warranties with respect to the existence, value,
access to, or condition of any collateral granted (or purported to be granted)
to the Assignor under the Assigned Documents, including, without limitation, as
to any environmental matters (including, without limitation as to the existence
of any hazardous materials).

 
3.           Assignee’s Acknowledgment.  The Assignee acknowledges the foregoing
limitation of representations and warranties in paragraph 2(h) and in paragraph
1(e) above and further acknowledges and agrees that except as specifically
provided in Paragraph 1, above, the Assignor has not made any additional
representations or warranties whatsoever.
 
4.           No Endorsement.  This Limited Recourse Assignment does not
constitute an endorsement by the Assignor of any of the Assigned Documents.

 
4

--------------------------------------------------------------------------------

 

5.           Representations by Assignee.  The Assignee represents the
following:
 
 
a.
The Assignee has determined to purchase this Limited Recourse Assignment and the
Assigned Rights following the Assignee’s own independent review and inspection
of whatever matters the Assignee deemed necessary or appropriate, and not in
reliance upon any information provided by the Assignor, other than, the Assignee
has relied upon the Assignor’s representations and warranties in Paragraph 1
herein.  The principal investors and controlling parties of the Assignee are
principal investors in and/or directors of the Borrower, and are sophisticated
investors with particular knowledge about and familiarity with the business,
assets and affairs of the Borrower, the Borrower’s business dealings with
Southpeak Interactive, LLC and its subsidiary, AlterEgo Games, LLC, and the
financing arrangement under the Assigned Documents.

 
 
b.
The Assignee has made the Assignee’s own independent investigation and
evaluation as to the facts and circumstances relating to this Limited Recourse
Assignment.

 
 
c.
The Assignee has entered into this transaction after consultation with
independent counsel of the Assignee’s own selection and with the sole exception
of the representations and warranties specifically made in Paragraph 1 herein is
not relying upon any representation or warranty of the Assignor in consummating
this transaction.

 
 
d.
Assignee has all requisite power and authority to execute and deliver and to
perform all of its obligations under this Agreement and all instruments and
other documents executed and delivered by Assignee in connection therewith.  The
execution by the Assignee of this Limited Recourse Assignment and all
instruments and other documents executed and delivered by Assignee in connection
therewith and the performance by the Assignee of the Assignee’s obligations
hereunder and thereunder, respectively, have been duly authorized.

 
 
e.
The Assignee has purchased this Limited Recourse Assignment as agent for the
benefit of the Holders (as such term is defined in that certain Second Amended
and Restated Factoring and Security Agreement of even date herewith).

 
 
f.
The Assignee has completed all evaluation and investigation deemed necessary and
appropriate to enter into this transaction.

 
 
g.
The Assignee acknowledges and agrees that the Assignor is not responsible or
liable in any way to the Assignee for the payment or adjustment of outstanding
taxes (or any other type of charges or liens whatsoever) arising after the date
of this Limited Recourse Agreement affecting any of the collateral purportedly
granted to the Assignor under the Assigned Documents.  The Assignor shall be
responsible and liable for the payment or adjustment of outstanding taxes
arising prior to the date of this Limited Recourse Agreement affecting any of
the collateral purportedly granted to the Assignor under the Assigned Documents.

 
 
5

--------------------------------------------------------------------------------

 

6.           Delivery of Assigned Documents.  As soon as practicable, but in any
event within three (3) business days after Assignee’s execution and delivery of
this Limited Recourse Assignment to the Assignor, together with the payment of
the Purchase Price and all other amounts due from the Assignee hereunder in good
and collected funds, the Assignor shall deliver to the Assignee all of the
original Assigned Documents in the Assignor’s possession.  The Assignee
acknowledges and agrees that the Assignor may not have in its possession
originals of all loan documents, which in such case Assignor shall deliver
copies of such Assigned Documents.
 
7.           Turnover of Collections.  The Assignor shall hold in trust for the
Assignee, any “Collections” (as defined in the Assigned Documents) and any other
funds received relating to Borrower, other than funds due and owing to the
Assignor in accordance with the terms of this Limited Recourse Assignment,
whether received by ACH/wire transfer or by check.  All such Collections shall
be delivered to the Assignee in the form received (with the endorsement of
Assignor, if required) in accordance with the wire transfer instructions and
mailing address provided by the Assignee set forth on Exhibit B annexed
hereto.  Upon demand, the Assignee will reimburse the Assignor for all wire
transfer fees and overnight courier fees and expenses, if any, for delivering
the Collections to the Assignee.
 
8.           WAIVER OF TRIAL BY JURY.  THE ASSIGNEE AND ASSIGNOR MAKE THE
FOLLOWING WAIVER KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY, AND UNDERSTAND THAT
THE PARTIES, IN ENTERING INTO THE WITHIN AGREEMENT ARE RELYING THEREON.  THE
ASSIGNEE AND ASSIGNOR, IF AND TO THE EXTENT OTHERWISE ENTITLED THERETO, HEREBY
IRREVOCABLY WAIVE ANY PRESENT OR FUTURE RIGHT TO A JURY IN ANY TRIAL OF ANY CASE
OR CONTROVERSY IN WHICH THE ASSIGNOR OR THE ASSIGNEE ARE OR BECOME A PARTY
(WHETHER SUCH CASE OR CONTROVERSY IS INITIATED BY OR AGAINST THE ASSIGNOR OR THE
ASSIGNEE OR IN WHICH THE ASSIGNOR OR ASSIGNEE ARE JOINED AS A PARTY LITIGANT),
WHICH CASE OR CONTROVERSY ARISES OUT OF, OR IS IN RESPECT OF, THE AGREEMENT SET
FORTH HEREIN, OR ANY RELATIONSHIP BETWEEN THE ASSIGNEE, WHETHER ALONE OR WITH
OTHERS, AND THE ASSIGNOR, WHETHER ALONE OR WITH OTHERS, RELATIVE TO THE LOAN,
THE WITHIN ASSIGNMENT, OR OTHERWISE.
 
9.           Inentionally Omitted.
 
10.         Indemnification of Assignor.  The Assignee hereby agrees to
indemnify, defend, and hold the Assignor, and any of the Assignor’s employees,
officers, directors, attorneys, or agents (each, an “Assignor Indemnified
Person”) harmless of and from any claim brought or threatened against any
Assignor Indemnified Person by the Borrower, any creditor of the Borrower, any
equity holder in the Borrower, any guarantor or endorser of the Borrower’s
obligations, or any other person (as well as from attorneys’ reasonable fees and
expenses in connection therewith) on account of, relating to, or arising out of
(i) any act or omission of Assignee or any of its affiliates or assignees
following the execution of this Limited Recourse Assignment in connection with
the Assigned Documents or Assigned Rights or otherwise, including, without
limitation, any action taken by Assignee in connection with the collection,
enforcement or other activity related to any Assigned Document, and (ii)  any
claim by the Borrower, any creditor of the Borrower, or any third party to all
or any part of any item, credit, or payment, the amount of which has been
credited by the Assignor to the Borrower’s account (for purposes of calculating
the amount of the Purchase Price) or which is hereafter turned over by the
Assignor to the Borrower or for the Borrower’s account, and any reasonable cost,
expense, or service charge which the Assignor may incur on account of the
foregoing, (each of which may be defended, compromised, settled, or pursued by
the Assignor Indemnified Person with counsel of the Assignor’s selection, but at
the sole cost and expense of the Assignee).  The Assignee, by executing this
Limited Recourse Assignment where indicated below, acknowledges and agrees that
the Assignee’s liability and obligations under this Paragraph 10 shall continue
in full force and effect until specifically terminated in writing by a duly
authorized officer of the Assignor.
 
 
6

--------------------------------------------------------------------------------

 

11.          Conditions Precedent.  This Limited Recourse Assignment shall not
be effective until each of the following conditions precedent have been
fulfilled to the reasonable satisfaction of the Assignor:
 
 
a.
The Assignor shall have received counterparts of this Limited Recourse
Assignment duly executed and delivered by the Assignee and the Borrower;

 
 
b.
The Assignor shall have received by wire transfer the Purchase Price;

 
 
c.
The Assignee shall have received the wire transfer of the credit balance; if
any; and

 
 
d.
The matters on the Closing Checklist annexed hereto marked Exhibit C shall have
been satisfied, performed, or waived.

 
12.         Miscellaneous.
 
 
a.
This Limited Recourse Assignment constitutes the entire agreement between the
Assignor and the Assignee, shall be construed in accordance with the internal
law of the State of New York without regard to any conflicts of laws or
principles, and is intended to take effect as a sealed instrument.

 
 
b.
This Limited Recourse Assignment may be executed in counterparts each of which
shall constitute an original, and each of which when taken together shall
constitute a single agreement.  The delivery of an executed counterpart of a
signature page of this Limited Recourse Assignment by telecopier, e-mail, or
other electronic format shall be effective as delivery of a manually executed
counterpart of this Limited Recourse Assignment.

 
 
7

--------------------------------------------------------------------------------

 

 
c.
The Assignor and Assignee hereby agree to furnish upon request to each other
such further information, to execute and deliver to each other such other
documents, and to do such other acts and things, all as the other party may
reasonably request, for the purpose of carrying out the intent of this Agreement
and the documents entered into in connection with this Agreement.

 
Executed as an instrument under seal this 28th day of October, 2011.
 
[Signatures on following page.]

 
8

--------------------------------------------------------------------------------

 

 
PANTA DISTRIBUTION, LLC
       
By: 
/s/ Gary Katz
   
Name: Gary Katz
   
Title: Authorized Rep

Acknowledged, agreed, and accepted
on the terms and conditions set forth herein:

 

 
MMB Holdings LLC
         
By:
Mojobear Capital, its managing member
         
By:
/s/ David Smith
   
Name:
David E. Smith
   
Title:
 

Signature Page - Limited  Recourse Assignment

 
 

--------------------------------------------------------------------------------