COAST BUSINESS CREDIT(R)
FOURTH AMENDMENT TO LOA N AND SECURITY AGREEMENT
BORROWER: NTN COMMUNICATIONS, INC.
ADDRESS: 0000 XX XXXXX XXXXX, XXXXX 000
XXXXXXXX, XXXXXXXXXX 00000
BORROWER: BUZZTIME ENTERTAINMENT, INC.
ADDRESS: 0000 XX XXXXX XXXXX, XXXXX 000
XXXXXXXX, XXXXXXXXXX 00000
DATE: FEBRUARY 25, 2002
THIS FOURTH AMENDMENT TO THE LOAN AND SECURITY AGREEMENT ("Amendment") is
entered into as of the above date between COAST BUSINESS CREDIT, a division of
Southern Pacific Bank ("Coast"), a California corporation, with offices at 00000
Xxxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, and NTN
Communications, Inc. and Buzztime Entertainment, Inc. (jointly and severally,
"Borrower") whose chief executive office is located at the above address
("Borrower's Address"). This Amendment shall for all purposes be deemed to be a
part of the Loan and Security Agreement ("Agreement") and the Schedule to the
Agreement ("Schedule") and the same are integral parts of the Agreement and
Schedule.
AMENDMENT
1. Section 9.1 of the Agreement is hereby amended to read as follows:
" 9.1 MATURITY DATE. This Agreement shall continue in effect until the Maturity
Date."
2. Section 2.1 of the Schedule is hereby amended to add the following paragraph
at the end of the existing Section:
"The Maximum Dollar Amount shall be reduced to Two Million Five Hundred Thousand
Dollars ($2,500,000.00) on June 30, 2002, to Two Mil lion Two Hundred Fifty
Thousand Dollars ($2,250,000.00) on January 31, 2003, and to Two Million Dollars
($2,000,000.00) on March 31, 2003."
3. Section 9.2 of the Schedule is hereby amended to read as follows:
"SECTION 9.2 - EARLY TERMINATION FEE: An amount equal to three percent (3%) of
the Maximum Dollar Amount if termination occurs before the Maturity Date."
4. Section 8.1, paragraph 5 of the Schedule to the Agreement entitled Other
Provisions is hereby amended to read as follows:
"5. Intentionally omitted."
5. Section 8.1 of the Schedule to the Agreement entitled Other Provisions shall
be amended to add the following paragraphs 18 and 19 at the end of the
existing Section:
"18. As of the date hereof, and at all times during the Term hereof thereafter,
Borrower shall maintain a Senior Debt to EBITDA Ratio ("SDR") of not greater
than 3.0 : 1.0 measured on a quarterly basis. For the purpose of this SDR
covenant, EBITDA shall be defined as earnings before interest, taxes,
depreciation and amortization less capitalized software expenses plus any
non-cash stock based compensation and debt conversion costs. EBITDA will be
taken from the prior two (2) quarters and annualized. Notwithstanding the
preceding, the most recently measured quarter's annualized EBITDA shall not
result in a SDR greater than 3.5 : 1.0.
19. As of the date hereof, and at all times during the Term hereof thereafter,
Borrower shall maintain the following Debt Service Coverage Ratios, measured on
a quarterly basis, defined for the purpose of this Debt Service Coverage Ratio
covenant as EBITDA (as defined in Section 8.1, paragraph 18 above) less
unfinanced CAPEX (defined on the statement of cash flow as "capital
expenditures" less "deposits on broadcast equipment" less "proceeds from the
issuance of stock, net of costs") divided by the sum of annualized cash interest
plus cash taxes plus current maturities of long term debt. EBITDA will be taken
from the prior two (2) quarters and annualized.
DSC for fiscal year end 2002, quarters 1 and 2 shall be equal to or
greater than 1.2 : 1.0; DSC for fiscal year end 2002, quarters 2 and 3
shall be equal to or greater than 1.4 : 1.0; DSC for fiscal year end
2002, quarters 3 and 4 shall be equal to or greater than 1.6 : 1.0;
DSC for fiscal year end 2002, quarter 4 and fiscal year end 2003,
quarter 1 shall be equal to or greater than 1.4 : 1.0; and
DSC for fiscal year end 2003, quarters 1 and 2 shall be equal to or
greater than 1.2 : 1.0.
Notwithstanding the preceding, the most recently measured quarter's annualized
EBITDA shall not result in a DSC ratio of less than 1.0 : 1.0."
6. Section 9.1 of the Schedule to the Agreement entitled Maturity Date is hereby
amended to read as follows:
"June 30, 2003".
CONDITIONS PRECEDENT TO EFFECTIVENESS OF FOURTH AMENDMENT
1. Borrower shall execute and deliver this Fourth Amendment to Coast.
2. Borrower shall pay Coast a Renewal Fee of Forty Thousand Dollars ($40,000.00)
fully earned and payable on July 1, 2002.
EXCEPT AS EXPRESSLY PROVIDED FOR HEREIN, ALL OF THE TERMS AND CONDITIONS OF THE
LOAN AND SECURITYAGREEMENT, SCHEDULE AND ALL OTHER DOCUMENTS AND AGREEMENTS
BETWEEN COAST AND BORROWER SHALL CONTINUE IN FULL FORCE AND EFFECT AND THE SAME
ARE HEREBY RATIFIED AND AFFIRMED. THE WAIVERS AND CONSENTS CONTAINED HEREIN DO
NOT CONSTITUTE A WAIVER OR CONSENT OF ANY OTHER PROVISION OR TERM OF THE LOAN
AND SECURITYAGREEMENT, SCHEDULE NOR ANY RELATED DOCUMENT OR AGREEMENT, NOR AN
AGREEMENT TO WAIVE OR CONSENT TO ANY TERM OR CONDITION OF THE LOAN AND
SECURITYAGREEMENT, SCHEDULE NOR ANY RELATED DOCUMENT OR AGREEMENT IN THE FUTURE.
Borrower: Coast:
NTN COMMUNICATIONS, INC. COAST BUSINESS CREDIT, a division of
Southern Pacific Bank
By:/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx, CEO By:/s/ Xxxx Xxxxxxx
Xxxx Xxxxxxx, Vice President
And by:/s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx, CFO
Borrower:
BUZZTIME entertainment, INC.
By:/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx, Chairman.
And by:/s/ Xxxxx X. Xxxxxx
Xxxxx Xxxxxx, CFO
Signature page to Fourth Amendment to Loan and Security Agreement
