SCIENTIFIC-ATLANTIC STRATEGIC INVESTMENTS, L.L.C.
5030 Sugarloaf Parkway
Lawrenceville, Georgia 30044
January 16, 2003
NTN Communications, Inc.
BUZZTIME Entertainment, Inc.
The Campus - 5966 La Place Court
Carlsbad, California 92008
RE: NOTICE OF EXCHANGE OF BUZZTIME PREFERRED STOCK FOR NTN COMMON STOCK
Ladies and Gentlemen:
Pursuant to the Right of First Refusal and Exchange Agreement dated as of
June 8, 2001 (the "Exchange Agreement") by and among Buzztime Entertainment,
Inc. ("Buzztime"), NTN Communications, Inc. ("NTN"), and Scientific-Atlanta
Strategic Investments, L.L.C. (the "Investor"), an indirect wholly-owned
subsidiary of Scientific-Atlanta, Inc., the undersigned hereby elects to
exercise its option to exchange all 636,943 shares of Buzztime Series A
preferred stock held by the Investor into 1,000,000 shares of NTN common stock.
For purposes of the exchange, NTN and the Investor agree that the Series A
Liquidation Preference (as defined in the Exchange Agreement) shall be $1.57 per
share of Buzztime Series A preferred stock and that, notwithstanding the
provisions of Section 4.1 of the Exchange Agreement, the price of the NTN common
stock for purposes of the exchange shall be $1.00 per share. NTN and the
Investor further agree that, notwithstanding the 60-day exchange period set
forth in Section 4.2 of the Exchange Agreement, the Investor may execute the
exchange on the date hereof.
Enclosed with this letter is (1) the original stock certificate for
636,943 shares of Buzztime's Series A Preferred Stock, along with an assignment
of such stock, and (2) a certificate signed by an executive officer of the
Investor setting forth certain representations and warranties. The Investor
authorizes NTN and Buzztime to release such certificate to their respective
transfer agents and any other person to facilitate the execution of the exchange
and this Letter Agreement.
The Investor requests pursuant to Section 5.2 of the Exchange Agreement
that the shares of NTN common stock to be received in the exchange be registered
for resale on Form S-3 with the Securities and Exchange Commission ("SEC"). The
Investor and NTN agree that such registration statement shall be filed with the
SEC no later than 100 days after the date hereof, notwithstanding any contrary
terms in Article 5 of the Exchange Agreement.
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This letter agreement may be executed in two or more counterparts, each of
which will be deemed an original, but all of which will constitute the same
instrument. The terms of this letter agreement shall become effective upon
execution both you and us.
Sincerely,
SCIENTIFIC-ATLANTA STRATEGIC
INVESTMENTS, L.L.C.
By: /S/ WALLACE G. HAISLIP
-----------------------------------------
Name: Wallace G. Haislip
Title: President
Agreed to and Accepted
this 16TH day of January 2003
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NTN COMMUNICATIONS, INC.
By:_/S/ JAMES B. FRAKES
Name: James B. Frakes
Title: Chief Financial Officer
BUZZTIME ENTERTAINMENT, INC.
By:__/S/ V. TYRONE LAM
Name: V. Tyrone Lam
Title: President
SCIENTIFIC-ATLANTIC STRATEGIC INVESTMENTS, L.L.C.
OFFICER'S CERTIFICATE
I, Wallace G. Haislip, do hereby certify that I am the President of
Scientific-Atlanta Strategic Investments, L.L.C. (the "Investor"), and that the
following statements are true and correct as of the date of execution of this
certificate, as set forth below:
1. This certificate is being rendered in connection with the exchange by
the Investor of 636,943 shares of Series A preferred stock of Buzztime
Entertainment, Inc. ("Buzztime") held by the Investor into 1,000,000 shares of
common stock of NTN Communications, Inc. ("NTN").
2. I am familiar with the exchange transaction contemplated or described
by the Right of First Refusal and Exchange Agreement dated as of June 8, 2001 by
and among Buzztime, NTN and the Investor and have made such investigations and
inquiries as may be necessary to enable me to execute and deliver this
Certificate.
3. The common stock of NTN (the "Securities") to be received by the
Investor will be acquired for investment for the Investor's own account, not as
a nominee or agent, and not with a view to the resale or distribution of any
part thereof, and that the Investor has no present intention of selling,
granting any participation in or otherwise distributing the same in violation of
any applicable federal or any applicable state securities laws. The Investor
does not have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participations to such party or to any third
party with respect to the Securities. The Investor has not seen or received any
advertisement or general solicitation with respect to the Securities.
4. The Investor believes it has received all the information it considers
necessary or appropriate for deciding whether to purchase the Securities. The
Investor further represents that it has had an opportunity to ask questions and
receive answers from NTN regarding the terms and conditions of the offering of
the Securities and the business, properties, prospects and financial condition
of NTN.
5. The Investor acknowledges that it is able to fend for itself, can bear
the economic risk of its investment and has such knowledge and experience in
financial or business matters that it is capable of evaluating the merits and
risks of the investment in the Securities. The Investor also represents it has
not been organized for the purpose of acquiring the Securities. The Investor
acknowledges that it must bear the economic risk of this investment indefinitely
unless the Securities are registered pursuant to the Securities Act of 1933 or
an exemption from registration is available. The Investor also understands that
there is no assurance that any exemption from registration under the Securities
Act will ever be available and that, even if available, such exemption may not
allow Investor to transfer all or any portion of the Securities under the
circumstances, in the amounts or at the times the Investor might propose.
6. The Investor is an "accredited investor" within the meaning of
Securities and Exchange Commission (the "SEC") Rule 501 of Regulation D, as then
in effect.
7. The Investor understands that the Securities are characterized as
"restricted securities" under the federal securities laws inasmuch as they are
being acquired from NTN in a transaction not involving a public offering and
that under such laws and applicable regulations such the Securities may be
resold without registration under the Securities Act only in certain limited
circumstances. In this connection, the Investor represents that it is familiar
with SEC Rule 144, as then in effect, understands the resale limitations imposed
thereby and by the Securities Act, and understands that the Securities may not
currently be resold in reliance upon SEC Rule 144.
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IN WITNESS WHEREOF, I have hereunto signed my name this 17th day of
January, 2003.
__/S/ WALLACE G. HAISLIP
Wallace G. Haislip
President