EXECUTION
VERSION


 


FIRST
AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT


 


This
First Amendment to Amended and Restated Loan and Security Agreement (this “Agreement”) is entered as of March
12, 2018, by and between NTN Buzztime, Inc., a Delaware corporation (“Borrower”), and East West Bank
(“Bank”).


 


Recitals


 


Whereas,
Bank and Borrower entered into the Amended
and Restated Loan and Security Agreement, dated as of November 29, 2017 (as the same may from time to time be amended, modified,
supplemented or restated, the “Loan Agreement”);


 


Whereas,
Borrower acknowledges that Borrower is currently
in default of minimum Fixed Charge Coverage Ratio covenant set forth in Section 6.7(a) of the Loan Agreement for the fiscal quarter
ended December 31, 2017 (the “Existing Event of Default”);


 


Whereas,
Borrower has requested that Bank (i) waive
the Existing Event of Default, (ii) replace the minimum Fixed Charge Coverage Ratio covenant with minimum Adjusted EBITDA Covenant
for the 2018 fiscal year, and (iii) the Adjusted EBITDA definition be amended to provide that the non-cash inventory write-off
expenses for the fiscal quarter ended December 31, 2017, are an add-back; and


 


Whereas,
Bank is willing to agree to Borrower’s
requests, on the terms and conditions set forth herein;


 


Agreement


 


Now,
Therefore,
in consideration of the foregoing recitals and other
good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound,
the parties hereto agree as follows:


 


1.
Definitions. Capitalized terms used but not defined in this Agreement shall have the meanings given to them in the Loan Agreement.


 


2.
Waiver of Event of Default.


 


(a)
Bank hereby waives the Existing Event of Default. The foregoing Event of Default waiver shall not operate as a waiver of any
other Event of Default, now existing or occurring in the future. The foregoing waiver also shall not operate as a waiver of any
right or remedy of Bank now existing or arising in the future with respect to any Event of Default not waived pursuant to this
Section.


 


(b)
Borrower represents and warrants to Bank that the Existing Event of Default is the only Event of Default which has occurred
and is continuing as of the date hereof.


 


3.
Amendments to Loan Agreement.


 


(a)
Section 6.7 of the Loan Agreement is deleted in its entirety and replaced with the following:


 


6.7
Financial Covenants. Borrower shall at all times maintain the following financial ratios and covenants:


 


(a)
Minimum Fixed Charge Coverage Ratio. Borrower shall not have a Fixed Charge Coverage Ratio as of the last day of a fiscal
quarter, commencing with the fiscal quarter ending March 31, 2019, less than 1.25 to 1.00; provided, however, that
if as of the last day of a fiscal quarter (i) the Fixed Charge Coverage Ratio is less than 1.25 to 1.00 and (ii) Borrower’s
unrestricted cash exceeds the Term Loan principal outstanding, then the breach of this Section 6.7(a) shall be automatically cured,
provided that such automatic cure may not be used more than (A) two (2) times in any fiscal year or (B) four (4) times during
the term hereof.


 






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(b)
Minimum Liquidity. Borrower shall maintain Liquidity at all times, and tested as of the last day of each calendar month,
of not less than Two Million Dollars ($2,000,000).


 


(c)
Maximum Senior Leverage Ratio. Borrower shall not have Senior Leverage Ratio as of the last day of a fiscal quarter greater
than the ratio set forth below:


 


	Fiscal Quarter Ending	 	Maximum Senior Leverage Ratio
	December 31, 2017 through March 31, 2018	 	2.75 to 1.00
	June 30, 2018 and each Fiscal Quarter ending thereafter	 	2.50 to 1.00




 


(d)
Adjusted EBITDA. Borrower shall achieve Adjusted EBITDA at such date below for each six-month period noted below of not
less than the applicable amount set forth below for such period:


 


	Six Month Period Ending	 	Minimum Adjusted EBITDA	 
	March 31, 2018	 	$	600,000	 
	June 30, 2018	 	$	1,200,000	 
	September 30, 2018	 	$	1,600,000	 
	December 31, 2018	 	$	1,500,000	 



 


(b)
The definition of “Adjusted EBITDA” in Exhibit A of the Loan Agreement is amended to read as follows:


 


“Adjusted
EBITDA” means, as calculated on a consolidated basis for Borrower and its Subsidiaries for any period as at any date
of determination, (a) EBITDA, plus (b) other noncash expenses and charges, plus (c) to the extent approved by Bank, other onetime
charges, plus (d) to the extent approved by Bank, any losses arising from the sale, exchange, transfer or other disposition of
assets not in the ordinary course of business plus (e) with respect to the fiscal quarter ended December 31, 2017, the non-cash
inventory write-off expenses.


 


(c)
Exhibit D of the Loan Agreement is amended to read as set forth in Attachment “1” hereto.


 


4.
Limitations.


 


(a)
This Agreement is effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed
to (i) be a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, or (ii) otherwise
prejudice any right or remedy which Bank may now have or may have in the future under or in connection with any Loan Document.


 






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(b)
This Agreement shall be construed in connection with and as part of the Loan Documents, and all terms, conditions, representations,
warranties, covenants and agreements set forth in the Loan Documents are hereby ratified and confirmed and shall remain in full
force and effect.


 


5.
Representations and Warranties. Borrower represents and warrants to Bank as follows:


 


(a)
the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects
as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they
are true and correct in all material respects as of such date);


 


(b)
Borrower has the power and authority to execute and deliver this Agreement and to perform its obligations under the Loan Agreement
and this Agreement;


 


(c)
The organizational documents of Borrower delivered to Bank on the Effective Date remain true, accurate and complete and have
not been amended, supplemented or restated and are and continue to be in full force and effect;


 


(d)
The execution and delivery by Borrower of this Agreement and the performance by Borrower of its obligations under the Loan
Agreement and this Agreement have been duly authorized by all necessary action on the part of Borrower;


 


(e)
The execution and delivery by Borrower of this Agreement and the performance by Borrower of its obligations under the Loan
Agreement and this Agreement do not and will not contravene (i) any material law or regulation binding on or affecting Borrower,
(ii) any contractual restriction with a Person binding on Borrower, (iii) any order, judgment or decree of any court or other
governmental or public body or authority, or subdivision thereof, binding on Borrower, or (iv) the organizational documents of
Borrower;


 


(f)
The execution and delivery by Borrower of this Agreement and the performance by Borrower of its obligations under the Loan
Agreement do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration
with, or exemption by any governmental or public body or authority, or subdivision thereof, binding on either Borrower, except
as already has been obtained or made;


 


(g)
This Agreement has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against
Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization,
liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’
rights;


 


(h)
Except as expressly stated in this Agreement, neither Bank nor any agent, employee or representative of Bank has made any
statement or representation to Borrower regarding any fact relied upon by Borrower in entering into this Agreement;


 


(i)
Borrower has made such investigation of the facts pertaining to this Agreement and all of the matters appertaining thereto,
as it deems necessary;


 


(j)
The terms of this Agreement are contractual and not a mere recital; and


 


(k)
This Agreement has been carefully read by Borrower, the contents hereof are known and understood by Borrower, and this Agreement
is signed freely, and without duress, by Borrower.


 


6.
Release by Borrower.


 


(a)
FOR GOOD AND VALUABLE CONSIDERATION, Borrower hereby forever relieves, releases, and discharges Bank and its present or former
employees, officers, directors, agents, representatives, attorneys, and each of them, from any and all claims, debts, liabilities,
demands, obligations, promises, acts, agreements, costs and expenses, actions and causes of action, of every type, kind, nature,
description or character whatsoever, whether known or unknown, suspected or unsuspected, absolute or contingent, arising out of
or in any manner whatsoever connected with or related to facts, circumstances, issues, controversies or claims existing or arising
from the beginning of time through and including the date of execution of this Agreement (collectively the “Released
Claims”). Without limiting the foregoing, the Released Claims shall include all liabilities or claims arising out of
or in any manner whatsoever connected with or related to the Loan Documents, the Recitals hereto, any instruments, agreements
or documents executed in connection with any of the foregoing or the origination, negotiation, administration, servicing and/or
enforcement of any of the foregoing.


 






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(b)
In furtherance of the release in this Section, Borrower expressly acknowledges and waives all rights under Section 1542 of
the California Civil Code, which provides as follows:


 


A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME
OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. (EMPHASIS
ADDED.)


 


(c)
By entering into the release in this Section, Borrower recognizes that no facts or representations are ever absolutely certain
and it may hereafter discover facts in addition to or different from those which it presently knows or believes to be true, but
that it is the intention of Borrower hereby to fully, finally and forever settle and release all matters, disputes and differences,
known or unknown, suspected or unsuspected; accordingly, if Borrower should subsequently discover that any fact that it relied
upon in entering into this release was untrue, or that any understanding of the facts was incorrect, Borrower shall not be entitled
to set aside this release by reason thereof, regardless of any claim of mistake of fact or law or any other circumstances whatsoever.
Borrower acknowledges that it is not relying upon and has not relied upon any representation or statement made by Bank with respect
to the facts underlying this release or with regard to any of such party’s rights or asserted rights.


 


(d)
The release in this Section may be pleaded as a full and complete defense and/or as a cross-complaint or counterclaim against
any action, suit, or other proceeding that may be instituted, prosecuted or attempted in breach of this release. Borrower acknowledges
that the release contained in this Section constitutes a material inducement to Bank to enter into this Agreement, and that Bank
would not have done so but for Bank’s expectation that such release is valid and enforceable in all events.


 


(e)
The provisions, waivers and releases set forth in this Section are binding upon Borrower and Borrower’s stockholders,
officers, employees, agents, assigns and successors in interest. The provisions, waivers and releases of this Section shall inure
to the benefit of Bank and its stockholders, officers, employees, agents, assigns and successors in interest.


 


(f)
Borrower represents and warrants that Borrower is the sole and lawful owner of all right, title and interest in and to all
of the Released Claims and Borrower has not heretofore voluntarily, by operation of law or otherwise, assigned or transferred
or purported to assign or transfer to any Person any such Released Claim or any portion thereof. Borrower shall indemnify and
hold harmless Bank from and against any claim, demand, damage, debt, liability (including payment of attorneys’ fees and
costs actually incurred whether or not litigation is commenced) based on or arising out of any assignment or transfer prior to
the date of this Agreement.


 


(g)
The provisions of this Section shall survive payment in full of the Obligations, full performance of all the terms of this
Agreement and the Loan Agreement, and/or Bank’s actions to exercise any remedy available under the Loan Agreement or otherwise.


 


7.
Conditions Precedent. As conditions precedent to the effectiveness of this Agreement (the date such conditions precedent are
satisfied the “Effective Date”):


 


(a)
Bank shall have received, in form and substance satisfactory to Bank, the following:


 


(i)
this Agreement, duly executed by Borrower (Borrower’s executed signature page may be delivered via facsimile, electronic
mail (including pdf) or other transmission method); and


 






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(ii)
such other documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate; and


 


(b)
Borrower shall have paid all reasonable Bank Expenses incurred through the date of this Agreement, which may be debited from
any of Borrower’s accounts.


 


8.
Prior Agreement; No Novation. The Loan Documents are hereby ratified and reaffirmed and shall remain in full force and effect.
This Agreement is not a novation and the terms and conditions of this Agreement shall be in addition to and supplemental to all
terms and conditions set forth in the Loan Documents. This Agreement shall constitute a Loan Document under the Loan Agreement;
the failure to comply with the covenants contained herein shall constitute an Event of Default and all obligations included in
this Agreement shall constitute Obligations and shall be secured by the Collateral. In the event of any conflict or inconsistency
between this Agreement and the terms of any other Loan Document, the terms of this Agreement shall be controlling, but such Loan
Documents shall not otherwise be affected or the rights therein impaired.


 


9.
Course of Dealing; Waivers. No course of dealing on the part of Bank or its officers, nor any failure or delay in the exercise
of any right by Bank, shall operate as a waiver thereof, and any single or partial exercise of any such right shall not preclude
any later exercise of any such right. Bank’s failure at any time to require strict performance by Borrower of any provision
shall not affect any right of Bank thereafter to demand strict compliance and performance. Any suspension or waiver of a right
must be in writing signed by an officer of Bank.


 


10.
Integration. This Agreement and the other Loan Documents represent the entire agreement about the subject matter hereof and
supersede prior negotiations or agreements. All prior agreements, understandings, representations, warranties, and negotiations
between the parties about the subject matter of this Agreement and the Loan Documents merge into this Agreement and the Loan Documents.


 


11.
Construction. Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against Bank on
the basis that this Agreement was drafted by Bank. On the contrary, this Agreement has been negotiated and reviewed by both parties
and shall be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes
and intentions of the parties hereto.


 


12.
Governing Law. This Agreement and the rights and obligations of the parties hereto shall be governed by and construed in accordance
with the laws of the State of California, without regards to conflicts of law principles.


 


13.
Severability. Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose
of determining the legal enforceability of any specific provision.


 


14.
Counterparts. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute
but one and the same agreement. Delivery of an executed signature page of this Agreement and all other documents executed in connection
with the Loan by facsimile or other electronic mail transmission shall be effective as delivery of a manually executed counterpart
hereof.


 


[Signature
page follows]


 




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In
Witness Whereof,
the parties hereto have caused this Agreement
to be duly executed and delivered as of the date first written above.


 


	BANK	 	BORROWER
	 	 	 
	East
    West Bank	 	NTN
    Buzztime, Inc.
	 	 	 	 	 
	By:	/s/
    Alexis Coyle	 	By:	/s/
    Allen Wolff
	Name:	Alexis
    Coyle	 	Name:	Allen
    Wolff
	Title:	Managing
    Director	 	Title:	CFO
    & EVP


 


[First
Amendment to Amended and Restated Loan and Security Agreement]


 




    	 	 	 



     


    

 


ATTACHMENT
“1”


 


EXHIBIT
D


 


	 	COMPLIANCE
    CERTIFICATE
	Please
    send all Required Reporting to:	East
    West Bank
		555
    Montgomery Street, 9th Floor
		San
    Francisco, CA 94111
		Alexis.coyle@eastwestbank.com


 


	FROM:	NTN
    Buzztime, Inc.	 


 


The
undersigned authorized officer of NTN Buzztime, Inc., a Delaware corporation (“Borrower”), for and on behalf
of Borrower, hereby certifies that in accordance with the terms and conditions of the Amended and Restated Loan and Security Agreement,
dated as of November 29, 2017, by and between Bank and Borrower (the “Agreement”), (i) Borrower is in complete
compliance for the period ending __________ with all required covenants except as noted below and (ii) except as noted below all
representations and warranties of Borrower stated in the Agreement are true and correct in all material respects as of the date
hereof except that those representations and warranties referring to another date shall be true and correct in all material respects
on that other date. Attached hereto are the required documents supporting the above certification. The summary descriptions in
the Reporting Covenants below are qualified by, and subject to, the terms of the Agreement.


Please
indicate compliance status by circling Yes/No under “Complies” column.


 


	Reporting
    Covenants	 	Required	 	 	 	Complies
	Annual
    audited consolidated and consolidating financial statements and Compliance Certificate	 	FYE
    within 180 days	 	Yes	 	No  
    N/A
	Monthly
    balance sheet , income statements and statements of cash (Borrower prepared)	 	Monthly
    within 30 days after each month	 	Yes	 	No  
    N/A
	Annual
    financial projections	 	Annually
    by February 15 of each fiscal year	 	Yes	 	No  
    N/A
	Compliance
    Certificate	 	Monthly
    within 30 days after each month	 	Yes 	 	No  
    N/A


 


	Financial Covenants	 	Required	 	 	Actual	 	 	 	 	Complies
	Minimum Adjusted EBITDA	 	$	_________	 	 	$	_________	 	 	Yes	 	No   N/A
	Minimum Fixed Charge Coverage Ratio	 	 	1.25 to. 1.00	 	 	 	____to 1.00	 	 	Yes	 	No   N/A
	Minimum Liquidity	 	$	2,000,000	 	 	$	_________	 	 	Yes	 	No   N/A
	Maximum Senior Leverage	 	 	____to 1.00	 	 	 	____to 1.00	 	 	Yes	 	No   N/A






 


	Comments Regarding Exceptions: See Attached.	 	BANK
    USE ONLY
	 	 		
	 	 	Verified:	
	SIGNATURE	 	 	AUTHORIZED
    SIGNER
	 	 	 	 
	 	 	Date:	 
	TITLE	 	 	 
	 	 	 	 
	 	 	 	 
	DATE	 	Compliance
    Status	Yes	No