Document:

Exhibit
10.1

 

LEASE
TERMINATION, SURRENDER AND BUY-OUT AGREEMENT

 

THIS
LEASE TERMINATION, SURRENDER AND BUY-OUT AGREEMENT (“Agreement”) is made and entered into as of the 25th day of June,
2020, by and between NTN BUZZTIME, INC., a Delaware corporation (“Lessee”), and BURKE ASTON PARTNERS, LLC,
a California limited liability company (“Lessor”)).

 

R
E C I T A L S :

 

A.
Lessor and Lessee are parties to that certain Standard Multi-Tenant Office Lease – Gross dated July 26, 2018 (together with
addenda and exhibits thereto, the “Lease”) for the Premises consisting of approximately 16,162 rentable square feet
in the building and suite known as 1800 Aston Avenue, Suite 100, Carlsbad, California, as more particularly described in the Lease.
The capitalized terms used and not otherwise defined herein shall have the same definitions as set forth in the Lease.

 

B.
Lessee desires to terminate the Lease. Lessor has agreed to terminate the Lease in exchange for Lessee’s representations
contained herein and agreement to pay the amounts stated herein and the parties hereto have agreed to such payments and such termination
in exchange for the releases and promises contained herein.

 

NOW,
THEREFORE, the parties hereto agree as follows:

 

1.
Payment of Lease Buy-Out. Lessee shall pay to Lessor the total sum of Four Hundred Sixty One Thousand Dollars ($461,000.00),
which represents a Lease buy-out fee, including to reimburse Lessor for its actual costs associated with terminating the Lease
and reletting the Premises, including brokerage fees and legal fees (“Lease Buy Out”). The Lease Buy Out shall be
paid as follows: (i) Lessee hereby authorizes Lessor to apply the security deposit it holds on behalf of Lessee pursuant to the
Lease in the amount of Fifty Nine Thousand Six Hundred Thirty One and 47/100 Dollars ($59,631.47) to the Lease Buy Out, (ii) Lessee
hereby authorizes Lessor to draw down on the entire amount of the Letter of Credit in the amount of Two Hundred Thousand Dollars
($200,000.00), with the drawing to be made upon the signing of this Agreement, (iii) Lessee shall pay to Lessor upon the signing
of this Agreement, via wire transfer, cashier’s check or other readily available funds to the satisfaction of Lessor, the
amount of One Hundred Twenty One Thousand Three Hundred Sixty Eight and 53/100 Dollars ($121,368.53), (iv) Lessee shall pay to
Lessor the sum of Five Thousand Dollars ($5,000.00) should Lessor notify Lessee that Lessor had to dispose of furniture within
30 days of signing this Agreement, and (v) upon the closing of the sale by Lessee or its owners of either all or any material
part of the Lessee’s assets, or all or any material part of the equity interests in Lessee, the amount of Eighty Thousand
Dollars ($80,000.00). Lessee agrees to promptly notify Lessor upon the signing of a purchase agreement for any such sale and to
remit all unpaid amounts due Lessor under this Agreement within three (3) business days of the closing of such sale. The payments
to be made hereunder are being made in consideration for Lessor’s termination of the Lease and are intended to compensate
for any and all amounts incurred or charged to Lessor now or in the future in connection with the Lease (including, but not limited
to, any and all losses, damages and costs that will be incurred by the Lessor due to an early termination of the Lease). No additional
amounts shall be due or payable by the Lessee.

 

    	-1-

     

    

 

2.
Termination of Lease.

 

(a)
Except as otherwise specifically provided in this Agreement, Lessor and Lessee hereby agree to terminate the Lease and the Lease
shall be fully and finally surrendered and terminated as of June 30, 2020 (“Effective Date”). Following the Effective
Date, full and complete surrender by Lessee to Lessor of the Premises in accordance with this Agreement, and payment of the Lease
Buy Out, Lessee shall thereafter have no further obligations, rights or interests whatsoever in or to the Premises.

 

(b)
Lessee shall surrender the Premises to Lessor on or before the Effective Date in its currently existing “AS-IS” condition
with all current Lessee improvements and fixtures in place. Lessee acknowledges that its surrender of the Premises to Lessor in
the above required condition is consideration for Lessor’s agreement to enter into this Agreement and to terminate the Lease.
Lessee represents and covenants that the Premises will be surrendered and delivered to Lessor in the above required condition
free and clear of any and all claims, debts, liens or encumbrances.

 

(c)
Lessee will surrender the Premises as of the Effective Date.

 

(d)
Lessee hereby waives any right it has to any security deposit held by Lessor relating to the Premises.

 

(e)
Prior to the Effective Date, Lessee agrees that Lessor may actively advertise and show the Premises to prospective Lessees and
Lessee waives any and all claims relating to any inconvenience or disturbance of Lessee’s occupancy of the Premises or operation
of its business at the Premises relating to such advertising and showing of the Premises by Lessor.

 

3.
Release. Except as otherwise expressly provided herein, Lessor and Lessee, on behalf of themselves and their partners,
members, directors, officers, managers, agents, representatives, attorneys and lenders, as well as their heirs, successors and
assigns, and each of them, do hereby acknowledge full and complete satisfaction of, and do hereby fully and forever release and
discharge each other, as well as their respective partners, members, directors, officers, managers, agents, representatives, attorneys
and lenders, and their successors and assigns, and each of them, from any and all claims, liabilities, demands, charges, accounts,
obligations and causes of actions of any kind or nature whatsoever, whether known or unknown, suspected or unsuspected, arising
either before or after the Effective Date, which they now own or hold as against one another (or at any time in the future own
or hold as against one another) by reason of any and all claims which arise out of the Lease and the Premises. Notwithstanding
the foregoing, the aforesaid release shall not release Lessor and Lessee from their respective obligations under this Termination
Agreement. Lessor and Lessee further agree that the release contained in this Agreement is a general release, and is intended
by the parties to extend to all claims described in this paragraph, whether or not such claims are known or suspected by a party
to exist in their favor at the time of the execution hereof, and the parties hereby expressly waive all rights under Section 1542
of the California Civil Code. Section 1542 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.”

 

	 	Initials:	 	BRB	 	SG	 
	 	 	 	Lessor	 	Lessee	 

 

    	-2-

     

    

 

4.
Representation of Parties. Each person signing this Agreement on behalf of Lessee warrants and represents to Lessor that
he or she is authorized to sign this Agreement on behalf of Lessee and that this Agreement shall be binding upon and enforceable
against Lessee.

 

5.
Miscellaneous.

 

(a)
Voluntary Agreement. The parties have read this Agreement and the mutual releases contained in it, and on advice of counsel
they have freely and voluntarily entered into this Agreement.

 

(b)
Waiver. The failure by any party to this Agreement at any time or times to require performance of any provision hereof
will in no manner affect such party’s right at a later time to enforce the same. No waiver by any party of any condition,
or of the breach of any term, covenant, representation or warranty contained in this Agreement, whether by conduct or otherwise,
in any one or more instances will be construed as a waiver of any such condition or a breach or waiver of any other condition
or a breach of any other term, covenant, representation or warranty of this Agreement.

 

(c)
Attorneys’ Fees. If any party to this Agreement shall bring any action, suit, counterclaim, appeal, arbitration,
or mediation for any relief against any other party, declaratory or otherwise, to enforce the terms hereof or to declare rights
hereunder, the losing party shall pay to the prevailing party a reasonable sum for attorneys’ fees and costs.

 

(d)
Successors. This Agreement shall be binding upon and inure to the benefit of the parties and their heirs, devisees, representatives,
successors and assigns.

 

(e)
Governing Law. This Agreement will be construed in accordance with, and governed by, the laws of the State of California.
All disputes between the parties concerning this Agreement or any of its terms or conditions, which are not otherwise resolved,
will be exclusively resolved in a court of competent jurisdiction for Orange County, California.

 

(f)
Counterparts; Facsimile & Electronic Execution. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same document. To facilitate execution
of this Agreement, the parties may execute and exchange facsimile or electronic counterparts, and facsimile or electronic counterparts
shall serve as originals.

 

(g)
Complete Agreement. This Agreement constitutes the entire agreement of the Lessor and Lessee with respect to its subject
matter and supersedes all prior and contemporaneous agreements and understandings relating to the subject matter of this Agreement,
and any and all prior correspondence, conversations, or memoranda are merged into this Agreement and hereby replaced.

 

[Signatures
on following page]

 

    	-3-

     

    

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of day and year first above written.

 

	LESSOR	 
	 	 
	BURKE
    ASTON PARTNERS, LLC, a California limited liability company	 
	 	 	 
	By:	/s/ Brian R. Burke	 
	 	Brian
R. Burke, general partner of CMK Family	 
	 	Partners,
a Limited Partnership, its Manager	 

 

	LESSEE	 
	 	 
	NTN BUZZTIME, INC., a Delaware
    corporation	 
	 	 
	By:	/s/
    Sandra M. Gurrola	 
	Name:	Sandra Gurrola	 
	Title:	SVP
    of Finance	 

 

    	-4-Document

EXHIBIT 10.1

FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT

THIS FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT (this “Amendment”) is entered into as of June 30, 2020 by and among CATASYS, INC., a Delaware corporation (the “Company”), the Purchaser signatory hereto and GOLDMAN SACHS SPECIALTY LENDING GROUP, L.P., as collateral agent for the Purchasers (in such capacity, the “Collateral Agent”).

RECITALS

A.  The  Company, certain subsidiaries of the Company, the Purchaser and the Collateral Agent are parties to a certain Note Purchase Agreement, dated as of September 24, 2019 (as amended, restated, supplemented or otherwise modified from time to time, the “Note Purchase Agreement”; capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Note Purchase Agreement), pursuant to which the Purchaser has agreed to purchase the Notes issued by Company; 
B. The Company has requested an amendment to the Note Purchase Agreement, and subject to the terms and conditions hereof, the Purchaser (being the sole Purchaser under the Note Purchase Agreement) executing this Amendment is willing to do so; 
NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter contained, and intending to be legally bound, the parties hereto agree as follows:

A.  AMENDMENTS

1.Section 1.1 of the Note Purchase Agreement is hereby amended by replacing the defined term “Leverage Changeover Date” in its entirety with the following:
“‘Leverage Changeover Date’ means the date first occurring after five (5) full Fiscal Quarters following the Closing Date and corresponding to the earlier of (i) June 30, 2021 or (ii) the date on which Company and its Subsidiaries have delivered Compliance Certificates under Section 5.1(d) evidencing a Leverage Ratio (calculated based on Consolidated Adjusted EBITDA) less than or equal to 6.00:1.00.”
2.Section 3.2 of the Note Purchase Agreement is hereby amended by replacing clause (a)(vii) thereof in its entirety with the following:

“(vii) As of such Credit Date, (x) from the Closing Date until the Leverage Changeover Date, Consolidated Total Debt determined as of such date after giving effect to the Notes to be issued shall not exceed the product of Consolidated Adjusted Revenue multiplied by 0.675 and (y) on and after the Leverage Changeover Date, the Leverage Ratio determined as of such date after giving effect to the Notes to be issued shall not exceed the maximum Leverage Ratio permitted as of the last day of the immediately preceding Fiscal Quarter pursuant to Section 6.8, in each case, as certified by the Chief Financial Officer in the Chief Financial Officer’s Funding Certificate and evidenced by reasonably detailed calculations;”
3.Section 6.8 of the Note Purchase Agreement is hereby amended by replacing clause (b) thereof in its entirety with the following:
“(b)  Fixed Charge Coverage Ratio.  Following the Leverage Changeover Date, Company shall not permit the Fixed Charge Coverage Ratio as of the last day of any Fiscal Quarter, beginning with the Fiscal Quarter ending June 30, 2021, to be less than the correlative ratio indicated below:
						
	Fiscal Quarter End Date	Fixed Charge Coverage Ratio
	On or before December 31, 2021	1.50:1.00
	March 31, 2022 through December 31, 2022	1.75:1.00
	March 31, 2023 until the Maturity Date	2.00:1.00

4.Section 6.8 of the Note Purchase Agreement is hereby amended by replacing clause (c) thereof in its entirety with the following:
“(c)  Leverage Ratio.
(i)Prior to the Leverage Changeover Date, Company shall not permit the Leverage Ratio as of the last day of any Fiscal Quarter, beginning with the Fiscal Quarter ending September 30, 2019, to be greater than the correlative ratio indicated below:
						
	Fiscal Quarter End Date	Leverage Ratio
	September 30, 2019	1.20:1.00
	December 31, 2019	1.20:1.00
	March 31, 2020	1.20:1.00
	June 30, 2020	0.75:1.00
	September 30, 2020	0.75:1.00
	December 31, 2020	0.75:1.00
	March 31, 2021	0.50:1.00

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(ii)On or after the Leverage Changeover Date, Company shall not permit the Leverage Ratio as of the last day of any Fiscal Quarter, to be greater than the correlative ratio indicated below:
						
	Fiscal Quarter End Date	Leverage Ratio
	On or before June 30, 2021	6.00:1.00
	September 30, 2021	5.50:1.00
	December 31, 2021	5.00:1.00
	March 31, 2022	4.50:1.00
	June 30, 2022	4.00:1.00
	September 30, 2022	3.50:1.00
	December 31, 2022 until the Maturity Date	3.00:1.00

  5. Section 6.8 of the Note Purchase Agreement is hereby amended by replacing clause (d) thereof in its entirety with the following:

“(d) Consolidated Adjusted EBITDA.  Company shall not permit Consolidated Adjusted EBITDA as at the end of any Fiscal Quarter, beginning with the Fiscal Quarter ending September 30, 2019, for the four Fiscal Quarter period then ended to be less than the correlative amount indicated below:
						
	Fiscal Quarter	Consolidated Adjusted EBITDA
	September 30, 2019	-$17,250,000
	December 31, 2019	-$24,000,000
	March 31, 2020	-$28,500,000
	June 30, 2020	-$23,750,000
	September 30, 2020	-$16,500,000
	December 31, 2020	-$7,750,000
	March 31, 2021	$0
	June 30, 2021	$10,000,000
	September 30, 2021	$15,000,000
	December 31, 2021 until the Maturity Date	$20,000,000

For the purposes of determining compliance with the covenant set forth in this Section 6.8(d) following consummation of a Permitted Acquisition each of the minimum Consolidated Adjusted EBITDA amounts set forth in this Section 6.8(d), following the consummation date, shall be increased by 100% of Consolidated Adjusted EBITDA of the entity or assets being acquired for the 
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four Fiscal Quarter period most recently ended prior to the consummation of such Permitted Acquisition.”

6. Section 6.8 of the Note Purchase Agreement is hereby amended by replacing clause (h) thereof in its entirety with the following:
“(h) Minimum Consolidated Liquidity. Company shall not permit Consolidated Liquidity at any time (i) on or prior to September 30, 2020 to be less than $7,500,000, (ii) after September 30, 2020 but prior to the Leverage Changeover Date to be less than the greater of (x) $10,000,000 and (y) an amount equal to the product of 2.00 multiplied by the absolute value of any negative Consolidated Adjusted EBITDA for the three month period then ending, and (iii) on or after the Leverage Changeover Date to be less than the greater of (x) $5,000,000 and (y) an amount equal to the product of 3.00 multiplied by the absolute value of any negative Consolidated Adjusted EBITDA for the three month period then ending.”
7. Section 6.8 of the Note Purchase Agreement is hereby by replacing clause (i) thereof in its entirety with the following: 
“(i) Minimum Revenue.  Company shall not permit Consolidated Recurring Revenue as of the end of any Fiscal Quarter, beginning with the Fiscal Quarter ending September 30, 2019, for the two Fiscal Quarter period then ended, on an annualized basis, to be less than the correlative amount indicated below:
						
	Fiscal Quarter End Date	Consolidated Adjusted Revenue
	September 30, 2019	$26,750,000
	December 31, 2019	$31,750,000
	March 31, 2020	$40,500,000
	June 30, 2020	$55,500,000
	September 30, 2020	$75,000,000
	December 31, 2020 until the Maturity Date	$90,000,000

B. CONDITIONS TO EFFECTIVENESS 

Notwithstanding any other provision of this Amendment and without affecting in any manner the rights of the Purchaser hereunder, it is understood and agreed that this Amendment shall not become effective, and the Note Parties shall have no rights under this Amendment, until the Purchaser shall have received (i) reimbursement or payment of its costs and expenses incurred in connection with this Amendment or the Note Purchase Agreement (including reasonable fees, charges and disbursements of 
4

counsel to the Purchaser) and (ii) each of the following documents, in form and substance satisfactory to the Purchaser: 

(a)executed counterparts to this Amendment from the Company and the Purchaser; and

(b)current insurance certificates demonstrating the director and officer insurance maintained pursuant to Section 5.5 of the Note Purchase Agreement.

C.  REPRESENTATIONS

To induce the Purchaser and the Collateral Agent to enter into this Amendment, each Note Party hereby represents and warrants to the Purchaser and the Collateral Agent that: 

1. Each of the Note Parties and its Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, (b) has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and as proposed to be conducted, to enter into the Note Documents to which it is a party and to carry out the transactions contemplated thereby, and (c) is qualified to do business and in good standing in every jurisdiction where its assets are located and wherever necessary to carry out its business and operations, except in jurisdictions where the failure to be so qualified or in good standing has not had, and could not be reasonably expected to have, a Material Adverse Effect; and 

2. The execution, delivery and performance of this Amendment has been duly authorized by all necessary action on the part of each Note Party that is a party hereto.

D.  OTHER AGREEMENTS

1. Continuing Effectiveness of Note Documents.  As amended hereby, all terms of the Note Purchase Agreement and the other Note Documents shall be and remain in full force and effect and shall constitute the legal, valid, binding and enforceable obligations of the Note Parties party thereto.  To the extent any terms and conditions in any of the other Note Documents shall contradict or be in conflict with any terms or conditions of the Note Purchase Agreement, after giving effect to this Amendment, such terms and conditions are hereby deemed modified and amended accordingly to reflect the terms and conditions of the Note Purchase Agreement as modified and amended hereby. Upon the effectiveness of this Amendment such terms and conditions are hereby deemed modified and amended accordingly to reflect the terms and conditions of the Note Purchase Agreement as modified and amended hereby.

2. [Reserved].  
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3. Acknowledgment of Perfection of Security Interest. Each Note Party hereby acknowledges that, as of the date hereof, the security interests and liens granted to Collateral Agent and the Purchasers under the Note Purchase Agreement and the other Note Documents are in full force and effect, are properly perfected and are enforceable in accordance with the terms of the Note Purchase Agreement and the other Note Documents.

4. Effect of Agreement.  Except as set forth expressly herein, all terms of the Note Purchase Agreement, as amended hereby, and the other Note Documents shall be and remain in full force and effect and shall constitute the legal, valid, binding and enforceable obligations of the Note Parties to the Purchasers and Collateral Agent.  The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Purchasers under the Note Purchase Agreement, nor constitute a waiver of any provision of the Note Purchase Agreement.  This Amendment shall constitute a Note Document for all purposes of the Note Purchase Agreement.

5. Governing Law.   This Amendment shall be governed by, and construed in accordance with, the internal laws of the State of New York and all applicable federal laws of the United States of America.

6. No Novation.  This Amendment is not intended by the parties to be, and shall not be construed to be, a novation of the Note Purchase Agreement and the other Note Documents or an accord and satisfaction in regard thereto.

7. Costs and Expenses.  The Note Parties agrees to pay on demand all costs and expenses of Purchaser and Collateral Agent in connection with the preparation, execution and delivery of this Amendment, including, without limitation, the reasonable fees and out-of-pocket expenses of outside counsel for Purchaser and Collateral Agent with respect thereto.

8. Counterparts.  This Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, each of which shall be deemed an original and all of which, taken together, shall be deemed to constitute one and the same instrument.  Delivery of an executed counterpart of this Amendment by facsimile transmission, electronic transmission (including delivery of an executed counterpart in .pdf format) shall be as effective as delivery of a manually executed counterpart hereof.

9. Binding Nature.  This Amendment shall be binding upon and inure to the benefit of the parties hereto, their respective successors, successors-in-titles, and assigns.  No third party beneficiaries are intended in connection with this Amendment.

10. Entire Understanding.  This Amendment sets forth the entire understanding of the parties with respect to the matters set forth herein, and shall 
6

supersede any prior negotiations or agreements, whether written or oral, with respect thereto.

11. Release.  (a) Each Note Party hereby releases, acquits, and forever discharges Collateral Agent and each of the Purchasers, and each and every past and present subsidiary, affiliate, stockholder, officer, director, agent, servant, employee, representative, and attorney of Collateral Agent and the Purchasers (each a “Releasee”), from any and all claims, causes of action, suits, debts, liens, obligations, liabilities, demands, losses, costs and expenses (including attorneys' fees) of any kind, character, or nature whatsoever, known or unknown, fixed or contingent, which such Note Party may have or claim to have now or which may hereafter arise out of or connected with any act of commission or omission of Releasee existing or occurring on or prior to the date of this Amendment or any instrument executed on or prior to the date of this Amendment including, without limitation, any claims, liabilities or obligations arising with respect to the Note Purchase Agreement or the other of the Note Documents.  The provisions of this paragraph shall be binding upon each Note Party and shall inure to the benefit of Releasees, and their respective heirs, executors, administrators, successors and assigns, and the other released parties set forth herein.  No Note Party is aware of any claim or offset against, or defense or counterclaim to, any Note Party’s obligations or liabilities under the Note Purchase Agreement or any other Note Document.  The provisions of this Section shall survive payment in full of the Obligations, full performance of the terms of this Amendment and the Note Documents, and/or Collateral Agent’s or each Purchaser’s actions to exercise any remedy available under the Note Documents or otherwise.  Each Note Party warrants and represents that such Note Party is the sole and lawful owner of all right, title and interest in and to all of the claims released hereby and each Note Party has not heretofore voluntarily, by operation of law or otherwise, assigned or transferred or purported to assign or transfer to any person any such claim or any portion thereof.

[remainder of page intentionally left blank]

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IN WITNESS WHEREOF, this Amendment has been duly executed as of the date first written above.

CATASYS, INC., as the Company and as a Note Party 

By: _/s/ Brandon LaVerne___________________
Name: Brandon LaVerne
Title:   Chief Financial Officer

[Signature Page to First Amendment to Note Purchase Agreement]

GOLDMAN SACHS SPECIALTY LENDING GROUP, L.P. as Purchaser 

By: /s/ Greg Watts      
Name: Greg Watts 
Title: Senior Vice President

GOLDMAN SACHS SPECIALTY LENDING GROUP, L.P. as Collateral Agent

By: /s/ Greg Watts      
Name: Greg Watts
Title: Senior Vice President

[Signature Page to First Amendment to Note Purchase Agreement]

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