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COAST BUSINESS CREDIT(R)
NINTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
BORROWER: NTN COMMUNICATIONS, INC.
ADDRESS: 5966 LA PLACE COURT, SUITE 100
CARLSBAD, CALIFORNIA 92008
BORROWER: BUZZTIME ENTERTAINMENT, INC.
ADDRESS: 5966 LA PLACE COURT, SUITE 100
CARLSBAD, CALIFORNIA 92008
BORROWER: NTN WIRELESS COMMUNICATIONS, INC.
ADDRESS: 5966 LA PLACE COURT, SUITE 100
CARLSBAD, CALIFORNIA 92008
DATE: FEBRUARY 4, 2003
THIS NINTH AMENDMENT TO THE LOAN AND SECURITY AGREEMENT ("Ninth 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 12121
Wilshire Boulevard, Suite 1400, Los Angeles, California 90025, on the one hand
and NTN Communications, Inc. ("NTN"), Buzztime Entertainment, Inc. ("Buzztime")
and NTN Wireless Communications, Inc. ("Wireless") on the other hand, whose
chief executive offices are located at the above address ("Borrower's Address").
NTN, Buzztime and Wireless shall hereinafter be jointly and severally referred
to as Borrower. This Ninth Amendment shall for all purposes be deemed to be a
part of the Loan and Security Agreement, as amended ("Agreement") and the
Schedule to the Agreement, as amended ("Schedule"), and the same is an integral
part of the Agreement and Schedule.
CONSENT AND APPROVAL
1. Coast hereby consents and approves Borrower's request to downstream to
Wireless, up to a total amount at any one time outstanding, One Million
Dollars ($1,000,000.00) provided no Default or Event of Default has
occurred and is continuing.
AMENDMENTS
1. Section 2.1 of the Schedule is hereby amended to delete sub-section 2.1 (a)
(ii) and end that sub-section after the word "average" at the end of
sub-section 2.1 (a) (i).
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2. The last paragraph of Section 2.1 of the Schedule, as added by the Fourth
Amendment to Loan and Security Agreement, is hereby amended to delete the
phrase ", and to Two Million Dollars ($2,000,000.00) on March 31, 2002"
from the end of that paragraph.
3. Section 8.1 (9) of the Schedule is hereby amended to read as follows:
" Notwithstanding the preceding, Borrower may downstream up to a total
amount at any one time outstanding of One Million Dollars ($1,000,000.00)
to its Affiliate, NTN Wireless Communications, Inc. provided no Default or
Event of Default has occurred and is continuing."
4. Section 8.1 (18) of the Schedule is hereby amended to read as follows:
"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 2.0 : 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 2.5 : 1.0.
5. Section 8.1 (19) of the Schedule is hereby amended to read as follows:
"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 2003, quarters 1 and 2 shall be equal to or
greater than 1.3 : 1.0 to be tested based on the 6-30-03 financial
statements;
DSC for fiscal year end 2003, quarters 2 and 3 shall be equal to or
greater than 1.4 : 1.0 to be tested based on the 9-30-03 financial
statements;
DSC for fiscal year end 2003, quarters 3 and 4 shall be equal to or
greater than 1.6 : 1.0 to be tested based on the 12-31-03 financial
statements;
DSC for fiscal year end 2003, quarter 4 and fiscal year end 2004,
quarter 1 shall be equal to or greater than 1.4 : 1.0 to be tested based on
the 3-31-04 financial statements; and
DSC for fiscal year end 2004, quarters 1 and 2 shall be equal to or
greater than 1.3 : 1.0 to be tested based on the 6-30-04 financial
statements.
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.
For the purpose of calculating this Debt Service Coverage Ratio, the
recently raised One Million Dollars ($1,000,000.00) in additional equity
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shall be allocated (as proceeds from the issuance of stock, net of costs)
Three Hundred Thousand Dollars ($300,000.00) in the first fiscal quarter of
2003, Three Hundred Thousand Dollars ($300,000.00) in the second fiscal
quarter of 2003, and Four Hundred Thousand Dollars ($400,000.00) in the
third fiscal quarter of 2003."
6. Section 9.1 of the Schedule is hereby amended to substitute "June 30, 2004"
in place of "June 30, 2003".
CONDITIONS PRECEDENT TO EFFECTIVENESS OF NINTH AMENDMENT
1. Borrowers shall execute and deliver this Ninth Amendment to Coast.
2. Borrowers shall pay Coast a credit line renewal fee, fully earned and
payable on July 1, 2003, of Thirty Thousand Dollars ($30,000.00).
EXCEPT AS EXPRESSLY PROVIDED FOR HEREIN, ALL OF THE TERMS AND CONDITIONS OF
THE LOAN AND SECURITY AGREEMENT 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 NOR ANY RELATED DOCUMENT OR AGREEMENT,
NOR AN AGREEMENT TO WAIVE OR CONSENT TO ANY TERM OR CONDITION OF THE LOAN
AND SECURITY AGREEMENT NOR ANY RELATED DOCUMENT OR AGREEMENT IN THE FUTURE.
Borrower: Coast:
NTN COMMUNICATIONS, INC. COAST BUSINESS CREDIT, a division of
Southern Pacific Bank
By:_____________________________ By:_______________________________
Name: Stanley B. Kinsey, CEO Name: Darrell Daniel, Vice President
And by:_________________________
James B. Frakes, CFO
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Borrower: Borrower:
BUZZTIME ENTERTAINMENT, INC. NTN WIRELESS COMMUNICATIONS, INC.
By:_____________________________ By:__________________________
Name: V. Tyrone Lam, President Name: Mark de Gorter, President
And by:____________________________ And by:_______________________
Name: James B. Frakes, CFO Name: Kathy Miles, Secretary
Continued Signature page to Ninth Amendment
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