SECURITIES PURCHASE AGREEMENT
Exhibit
10.1
This
Securities Purchase Agreement (this "Agreement") is dated as of May
11, 2009 between NTN Buzztime, Inc., a Delaware corporation (the "Company"), and each purchaser
identified on the signature pages hereto (each, including its successors and
assigns, a "Purchaser"
and collectively the "Purchasers").
RECITALS
The
Company and Instant Access Media, LLC ("IAM") have entered into an
Asset Purchase Agreement dated as of May 11, 2009 (the "Asset Purchase Agreement")
whereby, subject to the terms and conditions thereof, the Company will buy
certain assets and assume certain liabilities of IAM. Purchasers are creditors
and members of IAM. It is a condition of the obligations of the Company and of
IAM under the Asset Purchase Agreement that the Purchasers invest in the Common
Stock (as such term is defined below) as provided in this
Agreement.
Subject
to the terms and conditions set forth in this Agreement and pursuant to Section
4(2) of the Securities Act of 1933, as amended (the "Securities Act"), and Rule 506
promulgated thereunder, the Company desires to issue and sell to each Purchaser,
and each Purchaser, severally and not jointly, desires to purchase from the
Company, shares of Common Stock as more fully described in this
Agreement.
In
consideration of the mutual covenants contained in this Agreement, and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Company and each Purchaser agree as follows:
ARTICLE
I
DEFINITIONS
1.1 Definitions. In
addition to the terms defined elsewhere in this Agreement, the following terms
have the meanings set forth in this Section 1.1:
"15 Day Average" means the
average closing price of the Common Stock as reported on the Trading Market
during the 15 Trading Day period ending on the Trading Day immediately before
the Closing Date.
"Affiliate" means any Person
that, directly or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with a Person, as such term is used in
and construed under Rule 405 promulgated under the Securities
Act. With respect to a Purchaser, any investment fund or managed
account that is managed on a discretionary basis by the same investment manager
as such Purchaser will be deemed to be an Affiliate of such
Purchaser.
"Board of Directors" means the
board of directors of the Company.
"Business Day" means Monday
through Friday, excluding any day of the year on which banks are required or
authorized to close in the State of California.
"Closing" means the closing of
the purchase and sale of the Shares pursuant to Section 2.1.
"Closing Date" means the
Trading Day when the Transaction Documents have been executed and delivered by
the applicable parties thereto, and all conditions precedent to (i) the
Purchasers' obligations to pay the purchase price and (ii) the Company's
obligations to deliver the Shares have been satisfied or waived.
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"Closing Price" means the
closing price of the Common Stock as reported on the Trading Market on the
Trading Day immediately before the Closing Date.
"Commission" means the
Securities and Exchange Commission.
"Common Stock" means the common
stock of the Company, par value $0.005 per share.
"Contract" means any written or
oral contract, agreement, instrument, commitment, arrangement, understanding or
undertaking (including leases, franchises, bonds, guaranties, licenses,
mortgages, notes, guarantees, sublicenses, subcontracts and purchase
orders).
"Exchange Act" means the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
"Governmental Entity" means any
foreign, federal, state, municipal or local government, governmental, regulatory
or administrative authority, agency, instrumentality or commission or any United
States court, tribunal, or judicial or arbitral body of any nature; or any
United States body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory or taxing authority or
power of any nature.
"Knowledge of the Company"
means any particular fact, circumstance, event or other matter in question of
which any of the Company's executive officers and directors have
knowledge. An individual shall be deemed to have knowledge of a
particular fact, circumstance, event or other matter if (i) such fact,
circumstance, event or other matter is reflected in one or more documents,
written or electronic, that are or have been in such individual's possession or
that would likely be reviewed by an individual who has the duties and
responsibilities of such individual in the customary performance of such duties
and responsibilities or (ii) such knowledge would be obtained from reasonable
and customary inquiry of those Persons employed by Buyer charged with
administrative or operational responsibility for such matter.
"Law" means any United States
federal, state, municipal or local statute, law, ordinance, regulation, rule,
code, executive order, injunction, judgment, decree or other order of any
Governmental Entity.
"Liens" means a lien, charge,
security interest, encumbrance, right of first refusal, preemptive right or
other restriction.
"Material Adverse Effect" means
(i) a material adverse effect on the business of the Company and its
Subsidiaries, taken as a whole, or (ii) a material adverse effect on the
Company's ability to perform in any material respect on a timely basis its
obligations under any Transaction Document.
"NYSE Amex Approval" means
approval from NYSE Amex for the additional listing of the Shares.
"Person" means an individual,
sole proprietorship, partnership, joint venture, trust, unincorporated
association, corporation, limited liability company, entity or Governmental
Entity.
"Purchase Price" means the
amount equal to the greater of (i) $0.30 and (ii) the Closing Price; provided,
however, that if the Closing Price exceeds 115% of the 15 Day Average, the
Purchase Price means the amount equal to the greater of (a) $0.30 and (b) the 15
Day Average multiplied by 1.15.
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"Registration Rights Agreement"
means the registration rights agreement of even date herewith among the Company
and the other parties thereto.
"Rule 144" means Rule 144
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" shall have the
meaning ascribed to such term in the Recitals.
"SEC" means the United States
Securities and Exchange Commission.
"SEC Reports" shall have the
meaning ascribed to such term in Section 3.1(f).
"Shares" means the shares of
Common Stock issued to Purchasers under this Agreement.
"Short Sales" include, without
limitation, (i) all "short sales" as defined in Rule 200 promulgated under
Regulation SHO under the Exchange Act, whether or not against the box, and all
types of direct and indirect stock pledges, forward sale contracts, options,
puts, calls, short sales, swaps, "put equivalent positions" (as defined in Rule
16a-1(h) under the Exchange Act) and similar arrangements (including on a total
return basis), and (ii) sales and other transactions through non-U.S. broker
dealers or foreign regulated brokers.
"Subsidiary" means with respect
to any Person, any corporation a majority (by number of votes) of the
outstanding shares of any class or classes of which shall at the time be owned
by such Person or by a Subsidiary of such Person, if the holders of the shares
of such class or classes (i) are ordinarily, in the absence of contingencies,
entitled to vote for the election of a majority of the directors (or Persons
performing similar functions) of the issuer thereof, even though the right so to
vote has been suspended by the happening of such a contingency, or (ii) are at
the time entitled, as such holders, to vote for the election of a majority of
the directors (or Persons performing similar functions) of the issuer thereof,
whether or not the right so to vote exists by reason of the happening of a
contingency.
"Trading Day" means a day on
which the NYSE Amex is open for trading.
"Trading Market" means NYSE
Amex or such other markets or exchanges on which the Common Stock is primarily
listed or quoted for trading on the date in question.
"Transaction Documents" means
this Agreement and the other agreements contemplated hereby.
ARTICLE
II
PURCHASE AND
SALE
2.1 Closing. On
the Closing Date, upon the terms and subject to the conditions set forth herein,
substantially concurrent with the execution and delivery of this Agreement by
the parties hereto, the Company agrees to sell to each Purchaser, and each
Purchaser, severally and not jointly, agrees to purchase from the Company, such
number of Shares that equals the total Purchase Price set forth opposite such
Purchaser's name on the Schedule of Purchasers attached hereto divided by the
Purchase Price. Each Purchaser shall deliver to the Company, via wire
transfer or a certified check, immediately available funds equal to the total
Purchase Price of the Shares to be purchased by it, and the Company shall
deliver to each Purchaser stock certificates registered in the name of such
Purchaser, or in such nominee names as designated by such Purchaser,
representing the number of Shares to be purchased by such Purchaser at the
Closing, against payment of the purchase price for such Shares, and the Company
and each Purchaser shall deliver the other items set forth in Section 2.2
deliverable at the Closing. Upon satisfaction of the conditions set
forth in Section 2.2, the Closing shall occur at such location as the parties
shall mutually agree.
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2.2 Closing
Conditions.
(a) The
obligations of the Company hereunder in connection with the Closing are subject
to the following conditions being met, to the extent not waived by the Company
in writing:
(1) the
accuracy in all respects when made and on the Closing Date of the
representations and warranties of the Purchasers contained herein;
(2) all
obligations, covenants and agreements of each Purchaser required to be performed
at or prior to the Closing Date shall have been performed;
(3) payment,
by wire transfer of immediately available funds, in the full amount of the
purchase price for the number of Shares being purchased by each Purchaser at the
Closing as set forth in the Schedule of Purchasers (for the avoidance of doubt,
the condition set forth in this Section 2.2(a)(3) shall be satisfied only when
the Company receives payment in the aggregate amount of $750,000);
(4) the
Shares shall have been approved for listing on NYSE Amex, subject to official
notice of issuance;
(5) the
"Closing," as such term is defined in the Asset Purchase Agreement, shall occur
simultaneously with the Closing hereunder; and
(6) each
Purchaser shall have completed, executed and delivered to the Company the
accredited investor questionnaire attached hereto as Exhibit
A.
(b) The
respective obligations of the Purchasers hereunder in connection with the
Closing are subject to the following conditions being met to the extent not
waived by such Purchaser:
(1) the
accuracy in all material respects (except to the extent that such
representations and warranties are qualified by materiality, material adverse
effect, or words of like effect, in which case such representations and
warranties shall be true in all respects) when made and on the Closing Date of
the representations and warranties of the Company contained herein;
(2) all
obligations, covenants and agreements of the Company required to be performed at
or prior to the Closing Date shall have been performed;
(3) there
shall have been no Material Adverse Effect with respect to the
Company;
(4) each
Purchaser shall have received:
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(A) a
certificate signed by the Company's Chief Executive Officer or Chief Financial
Officer to the effect that the representations and warranties of the Company in
Section 3 hereof are true and correct in all material respects (except to the
extent that such representations and warranties are qualified by materiality,
material adverse effect, or words of like effect, in which case such
representations and warranties shall be true in all respects) as of, and as if
made on, the date of this Agreement and as of the Closing Date and that the
Company has satisfied in all material respects all of the conditions set forth
in this Section 2.2(b); and
(B) a
certificate signed by the Secretary of the Company to which is attached a true,
complete and correct copy of each of the amended and restated certificate of
incorporation of the Company, as amended to date, the amended and restated
bylaws of the Company and a copy of the resolutions adopted by the Board of
Directors, to the effect that (i) no document with respect to any amendment to
the certificate of incorporation of the Company has been filed in the office of
the Secretary of State of the State of Delaware since, and no action has been
taken or, to the best knowledge of the Secretary of the Company, is contemplated
by the Board of Directors or the stockholders of the Company, for the purpose of
effecting any such amendment or the dissolution, merger or consolidation of the
Company, (ii) no proposal for any amendment, repeal or other modification to the
amended and restated bylaws of the Company has been taken or is currently
pending before the Board of Directors or stockholders of the Company and (iii)
the resolutions of the Board of Directors of the Company authorizing the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated by this Agreement have not been altered, amended
or superseded and remain in full force and effect as of the date
hereof;
(5) the
Company shall be validly existing as a corporation and in good standing under
the laws of Delaware as of the Closing Date;
(6) the
Shares shall have been approved for listing on NYSE Amex, subject to official
notice of issuance; and
(7) the
"Closing," as such term is defined in the Asset Purchase Agreement, shall occur
simultaneously with the Closing hereunder.
ARTICLE
III
REPRESENTATIONS AND
WARRANTIES
3.1 Representations and
Warranties of the Company. The Company hereby represents and
warrant to each Purchaser as follows:
(a) Organization and
Qualification. The Company is an entity duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to perform its obligations
under this Agreement. The Company is duly qualified to conduct business and is
in good standing as a foreign corporation or other entity in each jurisdiction
in which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, would not have or reasonably be expected to result
in a Material Adverse Effect.
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(b) Authorization. The
execution, delivery and performance by the Company of this Agreement and each
other Transaction Document to which it is a party and each of the transactions
contemplated hereby or thereby have been duly and validly authorized by the
Company, and no other corporate act or proceeding on the part of the Company,
its Board of Directors or its stockholders is necessary to authorize the
execution, delivery or performance by the Company of this Agreement or any
Transaction Document to which it is a party or the consummation of any of the
transactions contemplated hereby or thereby. This Agreement has been
duly executed and delivered by the Company and this Agreement constitutes, and
the Transaction Documents upon execution and delivery by the Company, will each
constitute, a valid and binding obligation of the Company, enforceable against
the Company in accordance with their respective terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect, relating to or
limiting creditors' rights generally and (ii) general principles of equity
(whether considered in an action in equity or at law).
(c) No
Conflict. The execution, delivery and performance by the
Company of this Agreement and the Transaction Documents to which it is a party
and the consummation of each of the transactions contemplated hereby or thereby
will not (i) violate or conflict with the certificate of incorporation, bylaws
or other organizational documents of the Company, (ii) violate, conflict with,
result in any material breach of, constitute a default under, result in the
termination of, result in the acceleration of any obligations under, result in a
material change in terms of, create in any party the right to accelerate,
terminate, modify or cancel, or require any consent or notice under, or create
an event that, with the giving of notice or the lapse of time, or both, would be
a default under or material breach of, any (A) Contract to which the Company is
a party or by which it is bound or affected or to which any of its assets is
bound or affected; or (B) judgment, order, writ, injunction, decree or demand of
any Governmental Entity which materially affects the ability of the Company to
perform its obligations under this Agreement; (iii) result in the creation or
imposition of any Lien upon any assets or any of the equity of the Company, or
which affects the ability to conduct its business as conducted prior to the date
of this Agreement or perform its obligations under this Agreement; (iv) require
any declaration, filing or registration with, or authorization, consent or
approval of, exemption or other action by or notice to, any Governmental Entity
or other Person under the provisions of any Law or any Contract to which the
Company is subject, or by which the Company is bound or affected or by which the
Company or any of its assets are bound or affected other than (y) the notice
and/or application to NYSE Amex for the issuance and sale of the Shares and the
listing of the Shares for trading thereon in the time and manner required
thereby and (z) the filing of Form D with the SEC and such filings as are
required to be made under applicable state securities laws.
(d) Legal
Proceedings. There is no action, claim, suit or proceeding
pending or, to the Knowledge of the Company, threatened, by or against the
Company that challenges, or may have the effect of preventing, delaying, making
illegal or otherwise interfering with the execution and delivery by the Company
of this Agreement or any of the Transaction Documents to which it is a party or
the performance of the Company hereunder or thereunder or which would, if such
action, claim, suit or proceeding were adversely determined, have or reasonably
be expected to result in a Company Material Adverse Effect.
(e) Issuance of
Securities. The Shares are duly authorized and, when issued
for the consideration as set forth in this Agreement, will be duly and validly
issued, fully paid and nonassessable, free and clear of all Liens imposed by the
Company other than Liens and restrictions on transfer provided for in this
Agreement.
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(f) SEC
Reports. The Company has filed all reports, schedules, forms,
statements and other documents required to be filed by the Company under the
Securities Act and the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, since January 1, 2009 (the foregoing materials, including the
exhibits thereto and documents incorporated by reference therein, being
collectively referred to herein as the "SEC Reports") on a timely
basis or has received a valid extension of such time of filing and has filed any
such SEC Reports prior to the expiration of any such extension. As of their
respective dates, the SEC Reports (i) were complete and accurate in all material
respects and (ii) complied in all material respects with the requirements of the
Securities Act and the Exchange Act, as applicable.
(g) Preemptive and Other
Rights. No Person has any right of first refusal, preemptive
right, right of participation, or any similar right to participate in the
transactions contemplated by the Transaction Documents. The issuance
and sale of the Shares will not obligate the Company to issue shares of Common
Stock or other securities to any Person and, except with respect to adjustments
to the conversion price of the Company's Series A Convertible Preferred Stock as
set forth in the Company's certificate of incorporation, will not result in a
right of any holder of the Company's securities to adjust the exercise,
conversion, exchange or reset price under any of such securities.
(h) Financial
Statements. The audited consolidated financial statements and
unaudited interim consolidated financial statements of the Company (including,
in each case, the notes, if any, thereto) included in the Form 10-K filed by the
Company with the SEC on March 24, 2009, fairly present, in all material
respects, the assets, liabilities and consolidated financial position of the
Company as of the dates indicated and the results of operations for the periods
then ended.
(i) Brokers. There
are no claims or rights to brokerage commissions, finders fees or similar
compensation in connection with the transactions contemplated by this Agreement
based on any Contract made or alleged to have been made by or on behalf of the
Company or any of its Affiliates, officers, employees or directors.
(j) Private
Placement. Assuming the accuracy of each Purchaser's
representations and warranties set forth in Section 3.2, no registration under
the Securities Act is required for the offer and sale of the Shares by the
Company to the Purchasers as contemplated hereby. Subject to NYSE Amex Approval,
the issuance and sale of the Shares hereunder does not contravene the rules and
regulations of NYSE Amex.
(k) Disclosure. Except
with respect to the material terms and conditions of the transactions
contemplated by the Transaction Documents and the Asset Purchase Agreement, the
Company confirms that neither it nor any other Person acting on its behalf has
provided the Purchasers or any of their agents or counsel with any information
that it believes constitutes or might constitute material, nonpublic
information. The Company understands and confirms that the Purchasers
will rely on the foregoing representation in effecting transactions in
securities of the Company.
3.2 Representations and
Warranties of the Purchasers. Each Purchaser, for itself and
for no other Purchaser hereby, represents and warrants as of the date hereof and
as of the Closing Date to the Company as follows:
(a) Organization;
Authority. Such Purchaser, if not a natural person, is an
entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization with full right, corporate or partnership
power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder, and the execution and delivery of the
Transaction Documents and performance by such Purchaser of the transactions
contemplated by the Transaction Documents have been duly authorized by all
necessary corporate or similar action on the part of such
Purchaser. Each Transaction
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Document
to which it is a party has been duly executed by such Purchaser, and when
delivered by such Purchaser in accordance with the terms hereof, will constitute
the valid and legally binding obligation of such Purchaser, enforceable against
it in accordance with its terms, except (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors' rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable
law.
(b) Own
Account. Such Purchaser (i) understands that the Shares are
"restricted securities" and have not been registered under the Securities Act or
any applicable state securities law (ii) is acquiring the Shares as principal
for its own account and not with a view to or for distributing or reselling such
Shares (within the meaning of Section 2(11) of the Securities Act) or any part
thereof in violation of the Securities Act or any applicable state securities
law, (iii) has no present intention of distributing any of such Shares in
violation of the Securities Act or any applicable state securities law and (iv)
has no direct or indirect arrangement or understandings with any other Persons
to distribute or regarding the distribution of such Shares (this representation
and warranty not limiting such Purchaser's right to sell the Shares in
compliance with applicable federal and state securities laws).
(c) Purchaser
Status. At the time such Purchaser was offered the Shares, it
was, and at the date hereof it is, an "accredited investor" as defined in Rule
501(a) under the Securities Act. Such Purchaser is not required to be
registered as a broker-dealer under Section 15 of the Exchange Act.
(d) Residency. Such
Purchaser's principal executive offices (or residence, in the case of a
Purchaser that is an individual) are in the jurisdiction set forth immediately
below Purchaser's name on the applicable signature page attached
hereto.
(e) Experience of Such
Purchaser. Such Purchaser, either alone or together with its
representatives (who are unaffiliated with and who are not compensated by the
Company or any Affiliate of the Company and who are not selling agents of the
Company), has such knowledge, sophistication and experience in business and
financial matters so as to be capable of evaluating the merits and risks of the
prospective investment in the Shares, and has so evaluated the merits and risks
of such investment. Such Purchaser is able to bear the economic risk
of an investment in the Shares and, at the present time, is able to afford a
complete loss of such investment.
(f) [Intentionally
Omitted].
(g) Investment
Risks. Such Purchaser acknowledges and is aware that: (i)
there are substantial restrictions on the transferability of the Shares, (ii)
the Shares will not be, and such Purchaser does not have the right to require
that the Shares be, registered under the Securities Act (other than pursuant the
registration rights set forth in the Registration Rights Agreement); (iii) the
certificates representing the Shares shall bear a legend similar to the legend
set out in Section 4.1 and (iv) such legend shall not be removed from any such
certificates unless either (A) such Shares are sold under an effective
registration statement under the Securities Act, or (B) such Purchaser delivers
to the Company a written opinion of counsel, in form and substance satisfactory
to the Company, that no such registration is required and that the transfer will
not otherwise violate the Securities Act, the Exchange Act or applicable state
securities laws.
(h) Opportunity to Ask
Questions. During the course of the transaction contemplated
by this Agreement, and before acquiring the Shares, such Purchaser has had the
opportunity (i) to be provided with financial and other written information
about the Company included in all documents the Company has publicly filed with
the Commission, and (ii) to ask questions and receive answers concerning the
business of the Company and its finances. Such Purchaser has, to the extent it
has availed itself of this opportunity, received satisfactory information and
answers.
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(i) General Solicitation.
Such Purchaser is not purchasing the Shares as a result of any advertisement,
article, notice or other communication regarding the Shares published in any
newspaper, magazine or similar media or broadcast over television or radio or
presented at any seminar or meeting or, to its knowledge, in any other form of
general solicitation or general advertisement.
(j) Investor
Questionnaire. The accredited investor questionnaire attached
hereto as Exhibit
A completed by such Purchaser is true and accurate in all
respects.
(k) No Governmental
Review. Such Purchaser understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Shares or the
fairness or suitability of the investment in the Shares nor have such
authorities passed upon or endorsed the merits of the offering of the
Shares.
(l) Regulation
M. Such Purchaser is aware that the anti-manipulation rules of
Regulation M under the Exchange Act may apply to sales of Common Stock and other
activities with respect to the Common Stock by the Purchasers.
(m) Brokers and
Finders. No Person will have, as a result of the transactions
contemplated by this Agreement, any valid right, interest or claim against or
upon the Company or such Purchaser for any commission, fee or other compensation
pursuant to any agreement, arrangement or understanding entered into by or on
behalf of such Purchaser.
(n) Certain Trading
Activities. Other than with respect to the transactions
contemplated herein and the purchase by Xxxx Xxxx Xxxxxxxxxx of 16,016 shares of
Common Stock on February 9, 2009 for $2,489.22 and 79,700 shares of Common Stock
on February 12, 2009 for $14,034.15, since the time that such Purchaser was
first contacted by the Company regarding the transactions contemplated hereby
until the date hereof, neither such Purchaser nor any Affiliate of such
Purchaser which (i) had knowledge of the transactions contemplated hereby, (ii)
has or shares discretion relating to such Purchaser's investments or trading or
information concerning such Purchaser's investments, including in respect of the
Shares, and (iii) is subject to such Purchaser's review or input concerning such
Affiliate's investments or trading (collectively, "Trading Affiliates") has
directly or indirectly, nor has any Person acting on behalf of or pursuant to
any understanding with such Purchaser or Trading Affiliate, effected or agreed
to effect any transactions in the securities of the Company (including, without
limitation, any Short Sales involving the Company's securities).
(o) Reliance by the
Company. Such Purchaser understands that the foregoing
representations and warranties are to be relied upon by the Company as a basis
for exemption of the sale of the Shares under the Securities Act and under the
securities laws of all applicable states and for other purposes.
ARTICLE
IV
OTHER AGREEMENTS OF THE
PARTIES
4.1 Transfer
Restrictions.
(a) The
Shares may only be disposed of in compliance with state and federal securities
laws. In connection with any transfer of Shares other than pursuant
to an effective registration statement or in compliance with Rule 144 or to the
Company or to an Affiliate of a Purchaser, the Company may require the
transferor thereof to provide to the Company, at the transferor's sole expense,
an opinion of counsel selected by the transferor and reasonably acceptable to
the Company, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require
registration of such transferred Shares under the Securities Act and such
transfer is in compliance with applicable state securities laws. As a
condition of transfer, any such transferee shall agree in writing to be bound by
the terms of this Agreement and shall have the rights of a Purchaser under this
Agreement.
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(b) The
Purchasers agree to the imprinting, so long as is required by this Section 4.1,
of a legend on any certificate representing any of the Shares in the following
form:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED WITH THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") UNDER
XXXXXXX 0 XX XXX XXXXXX XXXXXX SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), IN RELIANCE UPON ONE OR MORE EXEMPTIONS FROM REGISTRATION OR
QUALIFICATION AFFORDED BY THE SECURITIES ACT AND/OR RULES PROMULGATED BY THE
COMMISSION PURSUANT THERETO. THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
ALSO NOT BEEN REGISTERED OR QUALIFIED (AS THE CASE MAY BE) UNDER THE SECURITIES
LAWS OF ANY XXXXX XX XXXXXXXXX XX XXX XXXXXX XXXXXX (THE "BLUE SKY LAWS"), IN
RELIANCE UPON ONE OR MORE EXEMPTIONS FROM REGISTRATION OR QUALIFICATION (AS THE
CASE MAY BE) AFFORDED UNDER SUCH SECURITIES LAWS. THESE SECURITIES HAVE BEEN
ACQUIRED FOR THE HOLDER'S OWN ACCOUNT FOR INVESTMENT PURPOSES ONLY AND NOT WITH
A VIEW FOR RESALE OR DISTRIBUTION.
4.2 Integration. The
Company shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Shares to the
Purchasers in a manner that would require the registration under the Securities
Act of the sale of the Shares to the Purchasers or that would be integrated with
the offer or sale of the Shares for purposes of the rules and regulations of the
Trading Market.
4.3 Securities Laws Disclosure;
Publicity. The Company shall have sole control over any press
release, public announcement, statement or acknowledgment (collectively, "Public Statements") with
respect to this Agreement and the consummation of the transactions contemplated
herein; provided, however, that prior to the release of any Public Statements,
Purchasers shall be afforded the right to review the Public Statements.
Notwithstanding the foregoing, the Company shall not publicly disclose the name
of any Purchaser, or include the name of any Purchaser in any filing with the
Commission or any regulatory agency or Trading Market, without the prior written
consent of such Purchaser, except (i) as reasonably believed to be required by
federal securities law in connection with the filing of final Transaction
Documents (including signature pages thereto) with the Commission and (ii) to
the extent such disclosure is reasonably believed to be required by law or
Trading Market regulations.
4.4 Non-Public
Information. Except with respect to the material terms and
conditions of the transactions contemplated by this Agreement and the Asset
Purchase Agreement, the Company covenants and agrees that neither it nor any
other Person acting on its behalf, will provide any Purchaser or its agents or
counsel with any information that the Company believes constitutes material
non-public information, unless prior thereto such Purchaser shall have executed
a written agreement regarding the confidentiality and use of such information.
The Company understands and confirms that each Purchaser shall be relying on the
foregoing covenant in effecting transactions in securities of the
Company.
4.5 Form D; Blue Sky
Filings. The Company agrees to timely file a Form D with
respect to the Shares as required under Regulation D. The Company shall take
such action as the Company shall reasonably determine is necessary in order to
obtain an exemption for, or to qualify the Shares for, sale to the Purchasers at
the Closing under applicable securities or "Blue Sky" laws of the states of the
United States, and shall provide evidence of such actions upon reasonable
request of any Purchaser.
-10-
ARTICLE
V
MISCELLANEOUS
5.1 Termination. This
Agreement shall terminate automatically if the Asset Purchase Agreement is
terminated prior to the "Closing" as such term is defined in the Asset Purchase
Agreement, in which case this Agreement shall be of no further force and effect,
provided that this Article VI shall survive the termination of this Agreement
and shall remain in full force and effect.
5.2 Fees and
Expenses. Each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. The Company shall pay all
transfer agent fees, stamp taxes and other taxes and duties levied in connection
with the delivery of any Shares to the Purchasers.
5.3 Entire
Agreement. The Agreement, the Asset Purchase Agreement and the
Registration Rights Agreement, together with the exhibits and schedules hereto
and thereto, contain the entire understanding of the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings,
oral or written, with respect to such matters, which the parties acknowledge
have been merged into such documents, exhibits and schedules.
5.4 Notices. All
notices or other communications which are required or permitted hereunder shall
be in writing and shall be sufficiently given if (a) delivered personally or (b)
sent by registered or certified mail, postage prepaid, or (c) sent by overnight
courier with a nationally recognized courier, or (d) sent via facsimile
confirmed in writing in any of the foregoing manners, as set forth on the
signature pages attached hereto if delivered to Purchasers, or as follows if
delivered to the Company:
NTN
Buzztime, Inc.
0000 Xx
Xxxxx Xxxxx, Xxxxx 000
Xxxxxxxx,
XX 00000
Attention: Xxxxxx
Xxxxxx
Fax: 000.000.0000
With a
copy
to: Xxxxxxxx
Xxxxxx Xxxxxxx & Hampton, LLP
00000 Xx
Xxxxxx Xxxx, Xxxxx 000
Xxx
Xxxxx, XX 00000-0000
Attention: Xxxx
Xxxxxxxxx
Fax: 000.000.0000
If sent
by mail, notice shall be considered delivered five Business Days after the date
of mailing, and if sent by any other means set forth above, notice shall be
considered delivered upon receipt thereof. Any party may by notice to
the other parties change the address or facsimile number to which notice or
other communications to it are to be delivered or mailed.
5.5 Amendments;
Waivers. No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument signed, in the
case of an amendment, by the Company and the Purchasers of at least 50.1% in
interest of the aggregate Shares then held by Purchasers or, in the case of a
waiver, by the party against whom enforcement of any such waived provision is
sought. No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of any party to exercise any right hereunder in any manner impair the
exercise of any such right.
-11-
5.6 Headings. The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.
5.7 Successors and
Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted assigns (including,
without limitation, by merger, share exchange or other similar corporate
reorganization or similar transaction).
5.8 No Third-Party
Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except as otherwise set forth in Article V.
5.9 Governing
Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
California, without regard to the principles of conflicts of law
thereof.
5.10 Survival. The
representations and warranties of the Company and each Purchaser shall survive
the Closing and the delivery of the Shares for the applicable statute of
limitations.
5.11 Counterparts. This
Agreement may be executed in any number of counterparts, and each such
counterpart hereof shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement. Facsimile
and PDF signatures shall be treated as if they were originals.
5.12 Severability. If
any term or provision of this Agreement or the application thereof to any
circumstance shall, in any jurisdiction, be invalid or unenforceable, such term
or provision shall be ineffective as to such jurisdiction to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
such term or provision in any other jurisdiction, the remaining terms and
provisions of this Agreement or the application of such terms and provisions to
circumstances other than those as to which it is held invalid or
enforceable.
5.13 Remedies. In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, each of the Purchasers and the Company will
be entitled to specific performance under this Agreement. The parties
agree that monetary damages may not be adequate compensation for any loss
incurred by reason of any breach of obligations contained in the Transaction
Documents and hereby agrees to waive and not to assert in any action for
specific performance of any such obligation the defense that a remedy at law
would be adequate.
5.14 Independent Nature of
Purchasers' Obligations and Rights; Separate Counsel. The
obligations of each Purchaser under this Agreement are several and not joint
with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance or non-performance of the obligations
of any other Purchaser under this Agreement or any other related agreement.
Nothing contained herein, and no action taken by any Purchaser pursuant thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by this Agreement. Each
Purchaser shall be entitled to independently protect and enforce its rights,
including without limitation the rights arising out of this Agreement or out of
any related agreement, and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such
purpose. Each Purchaser acknowledges and agrees that such Purchaser
has been represented by its own separate legal counsel in their review and
negotiation of the Agreement.
-12-
5.15 Construction. This
Agreement has been negotiated by the parties and is to be interpreted according
to its fair meaning as if the parties had prepared it together and not strictly
for or against any party. All references in this Agreement to
articles, sections, schedules and exhibits are to articles, sections, schedules
and exhibits of or to this Agreement unless expressly otherwise
indicated. At each place in this Agreement where the context so
requires, the masculine, feminine or neuter gender includes
others. "Including" or "include" means "including without limitation"
and "include without limitation," respectively. "Or" is used in the inclusive
sense of "and/or." Currency amounts referenced herein, unless
otherwise specified, are in U.S. dollars.
[Signature
Pages Follow]
-13-
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized signatories as of the date first
indicated above.
| NTN Buzztime, Inc., | |
| a Delaware corporation | |
| By: /s/ Xxxxxx Xxxxxx | |
| Name: Xxxxxx Xxxxxx | |
| Title: Chief Financial Officer |
[Signature
Pages For Purchasers Follow]
-14-
IN
WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed
by their respective authorized signatories as of the date first indicated
above.
Name of
Purchaser: Ushas,
LLC
Signature
of Authorized Signatory of Purchaser: /s/ Xxxxxx X.
Xxxxxxxxxx
Name of
Authorized Signatory: Xxxxxx X.
Xxxxxxxxxx
Title of
Authorized Signatory: Member
Email
Address of Purchaser:
___________________________________________________________________
Facsimile
Number of Purchaser:
________________________________________________________________
Address
for Notice of Purchaser:
Address
for Delivery of Shares for Purchaser (if not same as address for
notice):
Number of
Shares to be purchased:
_____________________________________________________________
Total
Purchase Price:
________________________________________________________________________
EIN
Number: [TO BE PROVIDED UNDER SEPARATE COVER]
-15-
IN
WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed
by their respective authorized signatories as of the date first indicated
above.
Name of
Purchaser: X'Xxxxx Community Property
Trust
Signature
of Authorized Signatory of Purchaser: /s/ Xxxxx
X'Xxxxx
Name of
Authorized Signatory: Xxxxx
X'Xxxxx
Title of
Authorized Signatory: Trustee
Email
Address of Purchaser:
___________________________________________________________________
Facsimile
Number of Purchaser:
________________________________________________________________
Address
for Notice of Purchaser:
Address
for Delivery of Shares for Purchaser (if not same as address for
notice):
Number of
Shares to be purchased:
_____________________________________________________________
Total
Purchase Price:
________________________________________________________________________
EIN
Number: [TO BE PROVIDED UNDER SEPARATE COVER]
-16-
IN
WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed
by their respective authorized signatories as of the date first indicated
above.
Name of
Purchaser: Xxxxxx
Xxxxxxx
Signature
of Authorized Signatory of Purchaser: /s/ Xxxxxx
Xxxxxxx
Name of
Authorized Signatory:
________________________________________________________________
Title of
Authorized Signatory:
_________________________________________________________________
Email
Address of Purchaser:
__________________________________________________________________
Facsimile
Number of Purchaser:
________________________________________________________________
Address
for Notice of Purchaser:
Address
for Delivery of Shares for Purchaser (if not same as address for
notice):
Number of
Shares to be purchased:
_____________________________________________________________
Total
Purchase Price:
________________________________________________________________________
EIN
Number: [TO BE PROVIDED UNDER SEPARATE COVER]
-17-
Schedule
of Purchasers
to
|
Purchaser
|
Total
Purchase Price
|
|||
|
Ushas,
LLC
|
$ | 515,339.00 | ||
|
Xxxxxx
Xxxxxxx
|
$ | 184,661.00 | ||
|
X'Xxxxx
Community Property Trust
|
$ | 50,000.00 | ||
| $ | 750,000.00 | |||
-18-
