-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, R3Q5tbbvlz2Z2UuUYtkK2zfhbPuRalgUZrdRRV/vLpwzWFD1BRN+PIruSQzweK+Z 9TsT/2dzZH6/kfVKmTIpbw== 0001010192-03-000041.txt : 20030520 0001010192-03-000041.hdr.sgml : 20030520 20030519192713 ACCESSION NUMBER: 0001010192-03-000041 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20030520 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MEDIA GENERAL INC CENTRAL INDEX KEY: 0000216539 STANDARD INDUSTRIAL CLASSIFICATION: NEWSPAPERS: PUBLISHING OR PUBLISHING & PRINTING [2711] IRS NUMBER: 540850433 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 333 E FRANKLIN ST CITY: RICHMOND STATE: VA ZIP: 23219 BUSINESS PHONE: 8046496000 MAIL ADDRESS: STREET 1: 333 E FRANKLIN ST CITY: RICHMOND STATE: VA ZIP: 23219 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: NTN COMMUNICATIONS INC CENTRAL INDEX KEY: 0000748592 STANDARD INDUSTRIAL CLASSIFICATION: TELEVISION BROADCASTING STATIONS [4833] IRS NUMBER: 311103425 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-42217 FILM NUMBER: 03711288 BUSINESS ADDRESS: STREET 1: 5966 LA PLACE CT STREET 2: STE 100 CITY: CARLSBAD STATE: CA ZIP: 92008 BUSINESS PHONE: 6194387400 MAIL ADDRESS: STREET 1: 5966 LA PLACE COURT STREET 2: STE 100 CITY: CARLSBAD STATE: CA ZIP: 92008 FORMER COMPANY: FORMER CONFORMED NAME: ALROY INDUSTRIES INC DATE OF NAME CHANGE: 19850411 SC 13D 1 schd13d.txt SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------- SCHEDULE 13D Under the Securities Exchange Act of 1934 NTN Communications, Inc. (Name of Issuer) Common Stock, par value $.005 per share (Title of Class of Securities) 629410309 (CUSIP Number) George L. Mahoney, Esq. Media General, Inc. 333 East Franklin Street, Richmond, Virginia 23219 (804) 649-6000 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) May 7, 2003 ------------------------------------------------------------- (Date of Event Which Requires Filing of This Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this statement because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box . The information required in the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Exchange Act but shall be subject to all other provisions of the Act. SCHEDULE 13D - -------------------------------------------------------------- ---------------- CUSIP No. 692410309 Page 2 of 8 - -------------------------------------------------------------- ---------------- - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S.IDENTIFICATION NO. OF Media General, Inc. ABOVE PERSON IRS Emp.ID No. 54-0850433 - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) ----- (b) X ----- (See Item 3) - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS WC/OO (See Item 3) - ------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d)or 2(e)_____ Not Applicable - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Commonwealth of Virginia - ------------------------------------------------------------------------------- NUMBER OF SHARES BENEFICIALLY 7 SOLE VOTING RIGHTS 2,666,667 OWNED BY EACH REPORTING PERSON WITH - ------------------------------------------------------------------------------ 8 SHARED VOTING POWER -0- - ------------------------------------------------------------------------------ 9 SOLE DISPOSITIVE POWER 2,666,667 - ------------------------------------------------------------------------------ 10 SHARED DISPOSITIVE POWER -0- - ------------------------------------------------------------------------------ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,666,667 - ------------------------------------------------------------------------------ 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES - ------------------------------------------------------------------------------ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.8% (1) - ------------------------------------------------------------------------------ 14 TYPE OF REPORTING PERSON CO - ------------------------------------------------------------------------------ (1) Based on the 45,741,000 shares of common stock outstanding as of May 12, 2003 according to the company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2003. - 2 - The summary descriptions contained in this Schedule 13D of certain agreements and documents are qualified in their entirety by reference to the complete texts of such agreements and documents filed as Exhibits hereto and incorporated herein by reference. Item 1. Security and Issuer. This Schedule 13D filed by the undersigned relates to the common stock, par value $.005 per share (the "Common Stock"), of NTN Communications, Inc., a Delaware corporation (the "Company"). The Company's principal executive offices are located at 5966 La Place Court, Carlsbad, California 92008. Item 2. Identity and Background. This statement is being filed by Media General, Inc., a Virginia corporation ("Media General"). Media General's principal businesses are newspaper publishing, television broadcasting and interactive media. The principal office and business address of Media General is 333 East Franklin Street, Richmond, Virginia 23219. The following information concerning the executive officers, directors and controlling persons of Media General is set forth on Exhibit 99.1 attached hereto, which is incorporated herein by reference: (i) name; (ii) residence or business address; and (iii) present principal occupation or employment and the name, principal business and address of any corporation or other organization in which such employment is conducted. During the last five years, to the best knowledge of the person filing this Schedule 13D, none of Media General or any of the individuals listed on Exhibit 99.1 have been convicted in any criminal proceedings (excluding traffic violations and similar misdemeanors). During the last five years, to the best knowledge of the person filing this Schedule 13D, none of Media General or any of the individuals listed on Exhibit 99.1 have been a party to any civil proceeding of a judicial administrative body of competent jurisdiction as the result of which it, he or she was or is subject to any judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. To the best knowledge of the person filing this Schedule 13D, all of the individuals listed on Exhibit 99.1 are citizens of the United States of America. Item 3. Source and Amount of Funds or Other Consideration. Item 4 on the cover page hereto is incorporated herein by reference. On May 7, 2003, Media General acquired 2 million shares of restricted Common Stock for $3 million in cash pursuant to the terms of the Purchase Agreement described in Item 6(a) below (the "Investment Transaction"). Pursuant to the terms of the Licensing Agreement described in Item 6(d) below, on May 7, 2003, Media General received 666,667 shares of restricted Common Stock as payment for a license fee for granting a five (5) year license to Buzztime Entertainment, Inc., a Delaware corporation and wholly-owned subsidiary of the Company ("Buzztime"), of certain technology owned by Media General (the "License Transaction"). Item 4. Purpose of Transaction. Media General's purpose in acquiring the Common Stock was to make a strategic investment in the Company, an interactive game content developer and distributor. - 3 - Except as set forth in this Schedule 13D, none of Media General or, to the best knowledge of the person filing this Schedule 13D, any of the individuals listed on Exhibit 99.1, have a present plan or proposal that relates to or would result in any of the actions or changes specified in clauses (a) through (j) of Item 4 of the General Instructions to Schedule 13D. However, each of Media General and the individuals listed on Exhibit 99.1 reserves the right to propose or participate in future transactions which may result in one or more of such actions or changes. Items 6(a) through (d) below are incorporated by reference herein. Item 5. Interest in Securities of the Issuer. (a) See Items 11 and 13 of the cover page hereto, which are incorporated herein by reference, for the aggregate number of shares and percentage of the Common Stock beneficially owned by Media General. See Exhibit 99.1, which is incorporated herein by reference, for the aggregate number of shares of Common Stock beneficially owned by Neal F. Fondren, which represent less than 1% of the outstanding Common Stock. (b) See Items 7 and 9 of the cover page hereto, which are incorporated herein by reference, for the number of shares as to which Media General has the sole power to vote or direct the vote, and to dispose or to direct the disposition. See Exhibit 99.1, which is incorporated herein by reference, for the number of shares as to which Neal F. Fondren has the sole power to vote or direct the vote, and to dispose or to direct the disposition. (c) See Item 3, which is incorporated herein by reference, for a description of the Investment Transaction and the License Transaction, which were the only transactions in Common Stock that were effected during the past 60 days by Media General. (d) There is no other person that has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Common Stock beneficially owned by Media General or Neal F. Fondren. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. (a) Purchase Agreement. On May 5, 2003, Media General, the Company and Buzztime entered into a definitive Securities Purchase Agreement, attached hereto as Exhibit 2.1 (the "Purchase Agreement"), providing for the purchase by Media General of restricted Common Stock as described in Item 3 above (which description in Item 3 is incorporated herein by reference). The Purchase Agreement required the parties to enter into the NTN Investor Rights Agreement and the Buzztime Investor Rights Agreement described below as a condition to closing the transactions contemplated thereunder. (b) NTN Investor Rights Agreement. Pursuant to the NTN Investor Rights Agreement dated May 7, 2003 between the Company and Media General, attached hereto as Exhibit 4.1 (the "NTN Investor Rights Agreement"), Media General has preemptive rights to purchase up to its pro rata share of certain issuances of Common Stock and securities convertible into Common Stock. These preemptive rights terminate in the event that Media General's holdings of Common Stock decline below specified thresholds. Effective as of the closing of the Investment Transaction, the Company appointed Neal F. Fondren to the Board of Directors of the Company as Media General's designee to serve in the class of directors whose current term expires in 2005. In addition to the initial appointment, the Company agreed to use its best efforts to cause and maintain the election to its Board of Directors of an individual designated by Media General and approved by the - 4 - Company, so long as Media General maintains certain minimum holdings of Common Stock. In certain circumstances, including in the event Media General's designee is not elected to the Board of Directors, a Media General designee is entitled to attend meetings of the Board of Directors as a non-voting observer. The Company is also obligated to register Media General's shares of Common Stock, including shares acquired in the future in connection with the Investment Transaction and the License Transaction, for resale in compliance with applicable securities laws. These registration rights terminate on the fourth anniversary of the May 7, 2003 closing date, or earlier in certain circumstances. (c) Buzztime Investor Rights Agreement. In connection with the Investment Transaction, Media General received warrants to purchase on or before May 7, 2007 up to 500,000 shares of Buzztime's common stock at an exercise price of $3.46 per share (subject to adjustment) pursuant to the Common Stock Purchase Warrant executed by Buzztime on May 7, 2003, attached hereto as Exhibit 4.2 (the "Warrant"). Under the Buzztime Investor Rights Agreement dated May 7, 2003 by and among Media General, the Company and Buzztime, attached hereto as Exhibit 4.3 (the "Buzztime Investor Rights Agreement"), Media General has the right to exchange each share of its Buzztime common stock acquired pursuant to the Warrant or the Licensing Agreement (as described more fully in Item 6(d) below) for two shares of Common Stock (subject to adjustment in specified circumstances) upon the occurrence of certain events, including the second and fourth anniversary dates of the Buzztime Investor Rights Agreement, a sale of the Company, and the bankruptcy of Buzztime. Media General may exercise this exchange option no more than twice. In the event of a sale of the Company, the Company has the right to require Media General to exchange each share of its Buzztime common stock acquired under the Warrant and Licensing Agreement for two shares of Common Stock. Under certain circumstances (including the bankruptcy of Buzztime), Media General also has the right to exchange its Warrant for warrants to purchase a number of shares of Common Stock equal to twice the number of shares of Buzztime common stock issuable upon exercise of the Warrant for the same aggregate exercise price (subject to adjustment). The exchange rights provided in the Buzztime Investor Rights Agreement terminate on the fourth anniversary of the May 7, 2003 closing date, or earlier upon the occurrence of certain specified events. The Buzztime Investor Rights Agreement also contains provisions regarding preemptive, tag along, drag along and registration rights, but these provisions apply only to Buzztime securities. (d) Licensing Agreement. Pursuant to a Licensing Agreement dated May 7, 2003 by and among Media General, Buzztime and the Company (the "Licensing Agreement"), Media General licensed certain technology to Buzztime for a five-year term and license fee, which was paid by issuing 666,667 shares of restricted Common Stock to Media General. If Buzztime meets specified performance targets during the initial term, Buzztime may renew the license for an additional five-year term by paying Media General a one-time $100,000 renewal payment, which Media General could elect to accept in shares of either Common Stock or Buzztime common stock with an aggregate value of $100,000 (based on the 20-day average trading price) if the stock is then publicly traded. Except as may be otherwise described herein, to the best knowledge of the person filing this Schedule 13D, none of the individuals listed on Exhibit 99.1 are parties to any contract, arrangement, understanding or relationship with Media General, any other individual listed on Exhibit 99.1 or any other person with respect to any securities of the Company. - 5 - The foregoing descriptions of the Purchase Agreement, NTN Investor Rights Agreement, Buzztime Investor Rights Agreement, and Warrant are qualified in their entirety by reference to a copy of such instruments attached as Exhibits hereto, which documents are incorporated herein by reference. Item 7. Material to be Filed as Exhibits. Exhibit No. Title of Exhibit 2.1 Securities Purchase Agreement dated May 5, 2003 by and among Media General, the Company and Buzztime. 4.1 NTN Investor Rights Agreement dated May 7, 2003 between the Company and Media General. 4.2 Common Stock Purchase Warrant dated May 7, 2003 by Buzztime. 4.3 Buzztime Investor Rights Agreement dated May 7, 2003 by and among Media General, Buzztime and the Company. 99.1 Executive Officers, Directors & Controlling Persons of Media General - 6 - SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. MEDIA GENERAL, INC. By: /s/ George L. Mahoney ----------------------------- Date: May 19, 2003 Name: George L. Mahoney Title: General Counsel & Secretary Exhibit 99.1 Executive Officers, Directors & Controlling Persons of Media General
- ------------------------------------------------------------------------------------------------------------ Name Residence or Business Present NTN Common Stock Address Employment/Employer Holdings - ------------------------------------------------------------------------------------------------------------ Directors of Media General - ------------------------------------------------------------------------------------------------------------ O. Reid Ashe, Jr. 333 East Franklin Street President and Chief Richmond, Virginia 23219 Operating Officer of Media General none - ------------------------------------------------------------------------------------------------------------ J.Stewart Bryan III(a) 333 East Franklin Street Chairman and Chief Executive none Richmond, Virginia 23219 Officer of Media General - ------------------------------------------------------------------------------------------------------------ Charles A. Davis 1166 Avenue of the Americas Vice Chairman of Marsh & McLennan none New York, New York 10036 Companies, Inc.; President and Chief Executive Officer of Marsh & McLennan Capital, Inc. - -------------------------------------------------------------- --------------------------------------------- Robert V. Hatcher, Jr. 8401 Patterson Avenue, Director of Media General; former none Suite 106, Richmond, Chairman and Chief Executive Virginia 232229 Officer of Johnson & Higgins - ------------------------------------------------------------------------------------------------------------ John G. Medlin, Jr. 100 North Main Street Director of Media General; Chairman none Winston-Salem, North Emeritus and former Chairman and Carolina 27101 Chief Executive Officer of Wachovia Corporation - ------------------------------------------------------------------------------------------------------------ Marshall N. Morton 333 East Franklin Street Vice Chairman of the Board and none Richmond, Virginia 23219 Chief Financial Officer of Media General - ------------------------------------------------------------------------------------------------------------ Thompson L. Rankin c/o Media General 333 East Director of Media General; retired none Franklin Street Richmond, President and Chief Executive Virginia 23219 Officer of Lykes Bros., Inc. - ------------------------------------------------------------------------------------------------------------ Wyndham Robertson c/o Media General 333 East Director of Media General; retired none Franklin Street Richmond, Vice President for Communications Virginia 23219 at the University of North Carolina - ------------------------------------------------------------------------------------------------------------ Henry L. Valentine, II One James Center 901 East Chairman of Davenport & Company none Cary Street Richmond, LLC, a Richmond, Virginia, Virginia 23219 investment banking firm - ------------------------------------------------------------------------------------------------------------ Walter E. Williams George Mason University Faculty member at George Mason none 4400 University Drive University, Fairfax, Virginia; Fairfax, Virginia author, columnist, radio and 22030-4444 television commentator - ------------------------------------------------------------------------------------------------------------
(a) Identified in Media General's Proxy Statement for the 2003 Annual Meeting of Stockholders ("Proxy Statement") as beneficially owning 461,468 shares, or 83%, of Media General's outstanding Class B Common Stock (the "Class B Common Stock"). Mr. Bryan has sole voting and dispositive power as to such shares unless otherwise noted below. Media General's Articles of Incorporation provide for the holders of Media General's Class A common Stock (the "Class A Common Stock") voting separately and as a class to elect 30% of the Board of Directors of Media General (or the nearest whole number if such percentage is not a whole number) and for the holders of the Class B Common Stock to elect the balance. The By-laws of Media General provide that in the election of each class of directors, those receiving the greatest number of votes of each class of stockholders entitled to vote for such directors shall be elected. The shares of Class B Common Stock identified for Mr. Bryan above include 373,000 shares held by the D. Tennant Bryan Media Trust ("Media Trust"), of which Mr. Bryan serves as sole trustee. Mr. Bryan and the Media constitute a group for certain purposes. Other Officers of Media General(b) - ------------------------------------------------------------------------------------------------------------
Stephen Y. Dickinson 333 East Franklin Street Controller none Richmond, Virginia 23219 - ------------------------------------------------------------------------------------------------------------ Neal F. Fondren 333 East Franklin Street Vice President, President of 1320 shares (c) Richmond, Virginia 23219 Interactive Media Division - ------------------------------------------------------------------------------------------------------------ George L. Mahoney 333 East Franklin Street General Counsel, Secretary none Richmond, Virginia 23219 - ------------------------------------------------------------------------------------------------------------ Lou Anne J. Nabhan 333 East Franklin Street Vice President, Corporate none Richmond, Virginia 23219 Communications - ------------------------------------------------------------------------------------------------------------ John A. Schauss 333 East Franklin Street Treasurer none Richmond, Virginia 23219 - ------------------------------------------------------------------------------------------------------------ H. Graham Woodlief, Jr. 333 East Franklin Street Vice President, President of none Richmond, Virginia 23219 Publishing Division - ------------------------------------------------------------------------------------------------------------ James A. Zimmerman 333 East Franklin Street Vice President, President of none Richmond, Virginia 23219 Broadcast Division - ------------------------------------------------------------------------------------------------------------ Other Control Persons(d) - ------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------ Jane Bryan Brockenbrough(e) c/o Bryan Brothers 1802 President, Thistles 411 Libbie none Bayberry Court Suite 301 411 Libbie Avenue Richmond, Virginia 23226 Richmond, Virginia 23226 - ------------------------------------------------------------------------------------------------------------ Mario J. Gabelli(f) One Corporate Center Chairman, Chief Executive Officer none Rye, New York 10580 and Chief Investment Officer, Gabelli Asset Management, Inc. - --------------------------- ----------------------------- ------------------------------------- ----------------------
(b) Includes only executive officers reported in the Proxy Statement and the Annual Report of Media General, Inc. on Form 10-K for the fiscal year ended December 29, 2002 ("2002 10-K"). Executive officers also serving as directors are listed only under the "Directors of Media General" heading. (c) Includes 500 shares held in a custodial account for Mr. Fondren's son with Mr. Fondren as custodian. Mr. Fondren has the sole power to vote or direct the vote, and to dispose or to direct the disposition of, all of such shares, which were acquired in March 2002. (d) Includes beneficial owners of more than 10% of the outstanding shares of any class of Media General's securities, as reported in the Proxy Statement and 2002 10-K. Persons with such holdings who also serve as officers and directors are listed under the headings for officers and directors, and their "control" interests are described in the footnote. (e) Beneficially owns 55,580 shares, or 10%, of the Class B Common Stock. (f) Beneficially owns 7,196,447 shares, or 31.5% of the Class A Common Stock. According to a Schedule 13D, amended as of November 4, 2002, the shares listed include shares held by Mr. Gabelli or entities under his direct or indirect control, including 4,742,647 shares held by GAMCO Investors, Inc. ("GAMCO") and 2,453,800 shares held by Gabelli Funds, LLC ("Gabelli Funds"). In the aggregate, such shares are attributable to Mr. Gabelli and to Gabelli Group Capital Partners, Inc. and to Gabelli Asset Management, Inc., parent companies of GAMCO and Gabelli Funds. Mr. Gabelli and such entities, in the aggregate, have sole power for all shares except 187,450 shares for which there is no voting power. The Schedule 13D states that if the aggregate voting power of the Gabelli entities should exceed 25% of their voting interest in Media General, the 2,453,800 shares held by Gabelli Funds will be voted by a proxy voting committee for each of the approximately 20 funds advised by Gabelli Funds. Another Gabelli-controlled entity holds 380 shares of Class B Common Stock. EX-2.1 3 secpurcagre.txt SECURITIES PURCHASE AGREEMENT Exhibit 2.1 SECURITIES PURCHASE AGREEMENT This SECURITIES PURCHASE AGREEMENT (this "Agreement") is made as of the fifth day of May, 2003, by and among NTN Communications, Inc., a Delaware corporation (the "Company"), Buzztime Entertainment, Inc., a Delaware corporation ("Buzztime"), and Media General, Inc., a Virginia corporation (the "Investor," and collectively with the Company and Buzztime, the "Parties"). The Parties hereby agree as follows: 1. AUTHORIZATION OF SALE OF THE SECURITIES The Company and Buzztime have authorized the sale and issuance of certain units (the "Units"; each Unit consisting of one share of the Company's common stock, par value $.005 per share, and one-fourth of a warrant to purchase one share of Buzztime's common stock, par value $.001 per share). The shares of the Company's common stock sold hereunder shall be referred to herein as the "Shares," the Buzztime warrants sold hereunder shall be referred to herein as the "Warrants," and the shares of Buzztime common stock underlying the Warrants shall be referred to herein as the "Warrant Shares." A form of the Warrant is attached as Appendix I. At the Closing, the Company and the Investor will enter into the NTN Investor Rights Agreement and the Company, Buzztime and the Investor will enter into the Buzztime Investor Rights Agreement. The warrants exercisable for shares of the Company's common stock that are issuable upon the exchange of the Warrants pursuant to the Buzztime Investor Rights Agreement (subject to adjustment to reflect stock splits, combinations, stock dividends, mergers or reclassifications) shall be referred to herein as the "Exchange Warrants." The shares of the Company's common stock that are issuable upon the exchange of the Warrant Shares pursuant to the Buzztime Investor Rights Agreement at a fixed ratio of two shares of the Company's common stock for each Warrant Share (subject to adjustment to reflect stock splits, combinations, stock dividends, mergers or reclassifications), together with the shares of the Company's common stock that are issuable upon the exercise of the Exchange Warrants, shall be referred to herein as "Exchange Shares." In addition, the Company has authorized the issuance of 666,667 shares of the Company's common stock to the Investor as payment of the license fee for the initial term under Section 3.1 of the Licensing Agreement to be entered into by the Company, Buzztime and the Investor at the Closing (the "Licensing Agreement," and such shares to be issued to the Investor at the Closing pursuant thereto, the "License Fee Shares"). The Licensing Agreement further permits the issuance of additional shares of the Company's common stock or Buzztime's common stock as payment for subsequent periods after the initial term (the "Renewal License Fee Shares") at the election of the Investor. The Licensing Agreement, the Warrants, the NTN Investor Rights Agreement, and the Buzztime Investor Rights Agreement shall be collectively referred to herein as the "Related Agreements." The Units, Shares, Warrants, Warrant Shares, Exchange Shares, Exchange Warrants, License Fee Shares and Renewal License Fee Shares shall be collectively referred to herein as the "Securities." The Investor has previously received the Company's annual report on Form 10-K for the year ended December 31, 2002 (the "Form 10-K"), and all other filings made with the Securities and Exchange Commission (the "SEC") under Sections 13, 14(a) and 15(d) of the Exchange Act (as defined below) since the filing of the Form 10-K through the date of this Agreement (such filings, along with the Form 10-K, the "2003 SEC Filings"). The 2003 SEC Filings shall be deemed to include any filings pursuant to Items 9 or 12 of Form 8-K made during 2003 through the date of this Agreement. 2. AGREEMENT TO SELL AND PURCHASE THE UNITS Subject to the terms and conditions of this Agreement, at the Closing (as defined below), the Company and Buzztime agree to sell to the Investor, and the Investor agrees to purchase from the Company and Buzztime, 2,000,000 Units at a purchase price of $1.50 per Unit for an aggregate amount of $3,000,000. 3. CLOSING AND DELIVERY 3.1 Closing. The closing of the purchase and sale of the Units pursuant to this Agreement and the License Fee Shares (the "Closing") shall be held as soon as practicable after the satisfaction or waiver of all of the conditions to Closing set forth in Sections 6 and 7 hereof, at the offices of O'Melveny & Myers LLP, located at 400 South Hope Street, Los Angeles, California, or on such other date and at such other place as may be agreed by the Company and the Investor. Prior to the Closing, the Parties shall execute any Related Agreements and other documents required to be executed hereunder. 3.2 Delivery of the Certificates and Warrants at the Closing. At the Closing, the Company and Buzztime shall deliver to the Investor a stock certificate for 2,000,000 shares of the Company's common stock, a stock certificate for 666,667 shares of the Company's common stock and Warrants for 500,000 shares of Buzztime's common stock registered in the name of such Investor, or in such nominee name as designated by such Investor, representing the Units to be purchased by such Investor at the Closing against payment of the purchase price for such Units and representing the License Fee Shares. 3.3 Payment of Purchase Price. At the Closing, the Investor shall make payment of the aggregate purchase price of $3,000,000 for the Units by wire transfer to an account specified by the Company. 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND BUZZTIME The Company and Buzztime each hereby jointly and severally represents and warrants to the Investor as follows: 4.1 Organization; Standing; Permits. The Company and each of its subsidiaries is duly incorporated and validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation with full corporate power and corporate authority to own, lease and operate its properties and conduct its current business as described in the Form 10-K. The Company and each of its subsidiaries is duly qualified to do business as a foreign corporation and in good standing in each jurisdiction in which the ownership or leasing of its properties or the conduct of its business requires such qualification, except where the failure to be so qualified or be in good standing is not reasonably likely to have a material adverse effect on the condition (financial or otherwise), operations, business or business prospects of the Company and each of its subsidiaries (hereinafter, a "Material Adverse Effect"). No proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing, or seeking to revoke, limit or curtail, such power and authority or qualification. The Company and each of its subsidiaries is in possession of and operating in compliance with all authorizations, licenses, certificates, franchises, consents, orders and permits from federal, state and other governmental and regulatory authorities necessary for its business and operations as presently conducted and as proposed to be conducted, except where the failure to possess or be in compliance with any of the foregoing is not reasonably likely to have a Material Adverse Effect, all of which are valid and in full force and effect. 4.2 Subsidiaries. Schedule 4.2 sets forth the names and jurisdictions of organization of each of the Company's direct and indirect significant subsidiaries. Except as set forth on Schedule 4.2, the Company holds of record and owns beneficially 100% of the issued and outstanding shares of capital stock and other securities of each such subsidiary. 4.3 Corporate Power; Authorization; Compliance with Other Instruments. The Company and Buzztime each has full legal right, power and authority to enter into this Agreement and the Related Agreements and to perform the transactions contemplated hereby and thereby. This Agreement and the Related Agreements have been duly authorized, executed and delivered by the Company and Buzztime and, assuming due authorization, execution and delivery by the Investor, are valid and binding agreements on the part of the Company and Buzztime, enforceable in accordance with their terms, except as may be limited by applicable bankruptcy, - 2 - insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors' rights generally or by general equitable principles. The making, execution and performance of this Agreement and the Related Agreements by the Company and Buzztime and the consummation of the transactions herein and therein contemplated will not (with or without the passage of time and/or the giving of notice) conflict with or result in a breach or violation of any of the terms and provisions of, or constitute a default under, (i) any bond, debenture, note or other evidence of indebtedness, or under any lease, contract, indenture, mortgage, deed of trust, loan agreement, joint venture or other agreement or instrument to which the Company or Buzztime is a party or by which it or its assets or properties may be bound, (ii) the certificates of incorporation or bylaws of the Company and Buzztime or (iii) any law, order, rule, regulation, writ, injunction, judgment or decree of any court, administrative agency, regulatory body, government or governmental agency or body, domestic or foreign, having jurisdiction over the Company or Buzztime or their assets or properties, except, with respect to (i) and (iii), for any conflict, breach, violation or default which is not reasonably likely to have a Material Adverse Effect. 4.4 SEC Filings; Financial Statements. The Company has filed in a timely manner all documents that the Company was required to file with the SEC under Sections 13, 14(a) and 15(d) of the Securities Exchange Act of 1934 (as amended, and including any successor thereto and any rules and regulations promulgated thereunder, the "Exchange Act") since January 1, 2001. As of their respective filing dates (or, if amended, when amended), the documents filed by the Company with the SEC since January 1, 2001 (the "SEC Filings") complied with the requirements of the Exchange Act and the Securities Act of 1933 (as amended, and including any successor thereto and any rules and regulations promulgated thereunder, the "Securities Act"). The Company satisfies the registrant requirements for the use of Form S-3 for secondary offerings under the Securities Act. None of the SEC Filings contain any untrue statement of a material fact or omit to state material facts required to be stated therein or necessary to make the statements made therein not misleading. Since January 1, 2001, the Company has timely filed all documents that it was required to file under the Securities Act or the Exchange Act, and all such documents were complete and accurate in all material respects. The consolidated financial statements of the Company included in the SEC Filings (the "Financial Statements") comply in all respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto. The Financial Statements have been prepared in accordance with generally accepted accounting principles consistently applied ("GAAP") and fairly present the consolidated financial position of the Company and its subsidiaries at the dates thereof and the results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal, recurring adjustments and the absence of complete footnotes). Except as and to the extent reflected in the Financial Statements, the Company and its subsidiaries did not have, as of the respective dates of the Financial Statements, any liabilities or obligations (other than obligations of continued performance under contracts and other commitments and arrangements entered into in the ordinary course of business that are not in the nature of contingent liabilities) which GAAP would require the Company to reflect in the Financial Statements. Except as disclosed in the 2003 SEC Filings, there have not been any changes in the assets, liabilities (contingent or otherwise), financial condition or operations of the Company or any of its subsidiaries from that reflected in the Financial Statements for the period ended December 31, 2002, except changes in the ordinary course of business that are consistent with past practices that, individually or in the aggregate, are not material to the financial condition or results of operations of the Company. - 3 - 4.5 Properties. Except as set forth in the 2003 SEC Filings, (a) each of the Company and its subsidiaries owns or leases all properties and assets, and has all other rights and privileges, necessary to its business and operations as now conducted and proposed to be conducted, and each of the Company and its subsidiaries has good and marketable title to all such properties and assets owned by it, free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest except those that do not materially impair the Company's or any of its subsidiaries' ownership or use of such properties or assets; (b) the agreements, contracts and other instruments to which each of the Company and its subsidiaries is a party are valid and enforceable by the Company or the subsidiary that is a party thereto, except as the enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors' rights generally or by general equitable principles and, to the Company's knowledge, the other contracting party or parties thereto are not in material breach or material default under any of such agreements, contracts or instruments; and (c) each of the Company and its subsidiaries has valid and enforceable leases for all material properties and assets leased by it, except as the enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors' rights generally or by general equitable principles. 4.6 Capitalization. (a) All outstanding shares of capital stock of the Company and Buzztime have been duly authorized and validly issued and are fully paid and nonassessable, have been issued in compliance with all applicable federal and state securities laws, were not issued in violation of or subject to any preemptive rights or other rights to subscribe for or purchase securities. The tables included in Schedule 4.6(a) specify (i) the total number of authorized shares of each class of capital stock of the Company and each of its subsidiaries and (ii) the total number of issued and outstanding shares of each class of capital stock of the Company and each of its subsidiaries and the total number of shares held in treasury, in each case before and after giving effect to the transactions contemplated by this Agreement. Schedule 4.6(a) also specifies (1) the total number of shares of common stock of each of the Company and Buzztime that are issuable upon the exercise, conversion or exchange of all Convertible Securities of each of the Company and Buzztime that are outstanding after giving effect to the transactions contemplated by this Agreement, on a fully-diluted basis and after giving effect to any anti-dilution adjustments resulting from the transactions contemplated by this Agreement and (2) the total additional number of shares of common stock or Convertible Securities of each of the Company and Buzztime that are authorized or reserved for issuance pursuant to employee stock option plans or otherwise or that either the Company or Buzztime may become obligated to issue under an outstanding contract or commitment after giving effect to the transactions contemplated by this Agreement. "Convertible Securities" means all securities or obligations that are exercisable for, convertible into or exchangeable for shares of common stock of the Company and Buzztime, as applicable, including options, warrants and other rights to subscribe for or purchase other securities that are exercisable for, convertible into or exchangeable for shares of common stock of the Company or Buzztime, as applicable. The rights, privileges and preferences of the Company's Series A Preferred Stock are as stated in the restated certificate of incorporation of the Company in the form delivered to the Investor, and the rights, privileges and preferences of Buzztime's Series A Preferred Stock are as stated in the restated certificate of incorporation of Buzztime and the Investor Rights Agreement dated June 8, 2001 between Buzztime and Scientific-Atlanta Strategic Investments, LLC in the forms delivered to the Investor. Except as disclosed in the 2003 SEC Filings, there are no accrued and unpaid dividends with respect to any shares of capital stock or other securities of the Company or its subsidiaries. (b) The Shares and License Fee Shares to be issued and sold at the Closing hereunder and the Licensing Agreement have been duly authorized for issuance and sale to the Investor pursuant to this Agreement and the Licensing Agreement, and, when issued and delivered by the Company and Buzztime against payment therefor in accordance with the terms of this Agreement and the - 4 - Licensing Agreement, will be duly and validly issued and fully paid and nonassessable, issued in compliance with all applicable securities laws and regulations, and sold free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest. The Units and Warrants to be issued and sold at the Closing hereunder have been duly authorized for issuance and sale to the Investor pursuant to this Agreement, and, when issued and delivered by the Company and Buzztime against payment therefor in accordance with the terms of this Agreement, will be duly and validly issued, issued in compliance with all applicable securities laws and regulations, and sold free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest. The Renewal License Fee Shares issuable under the Licensing Agreement have been duly authorized and reserved for issuance to the Investor pursuant to the Licensing Agreement and, upon issuance pursuant to Section 3.2 of the Licensing Agreement, the Renewal License Fee Shares will be duly and validly issued and fully paid and nonassessable, issued in compliance with all applicable securities laws and regulations, and sold free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest. The Warrant Shares issuable upon exercise of the Warrants have been duly and validly authorized and reserved for issuance and, when issued and delivered by Buzztime against payment therefor in accordance with the terms of the this Agreement and the Warrant, will be duly and validly issued and fully paid and nonassessable, issued in compliance with all applicable securities laws and regulations, and sold free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest. The Exchange Shares issuable upon exercise of the Investor's exchange rights under the Buzztime Investor Rights Agreement and the Exchange Shares issuable upon the exercise of the Exchange Warrants have been duly and validly authorized and reserved for issuance and, upon issuance, will be duly and validly issued and fully paid and nonassessable, issued in compliance with all applicable securities laws and regulations, and sold free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest. The Exchange Warrants to be issued and sold upon the exercise of the Investor's exchange rights under the Buzztime Investor Rights Agreement have been duly authorized for issuance and sale to the Investor pursuant to the Buzztime Investor Rights Agreement, and, when issued and delivered by the Company against payment therefor in accordance with the terms of the Buzztime Investor Rights Agreement, will be duly and validly issued, issued in compliance with all applicable securities laws and regulations, and sold free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest. Except as set forth on Schedule 4.6(b), no preemptive right, co-sale right, registration right, right of first refusal or other similar right of stockholders exists with respect to any of the Securities or the issuance and sale thereof other than those that have been expressly waived prior to the date hereof and those that will automatically expire upon and will not apply to the consummation of the transactions contemplated on or before the Closing. No further approval or authorization of any stockholder or the Board of Directors of the Company or Buzztime is required for the issuance and sale of the Securities to the Investor in accordance with this Agreement and the Related Agreements. 4.7 Litigation. Except as disclosed in the 2003 SEC Filings, there is not pending or, to the Company's knowledge, threatened, any action, suit, claim, proceeding or investigation against the Company or any of its subsidiaries or any of their respective directors, officers, employees, properties, assets or rights before any court, administrative agency, regulatory body, government or governmental agency or body, domestic or foreign, having jurisdiction over the Company, or its subsidiaries (or any of their respective directors, officers, employees, properties, or otherwise) which (i) is reasonably likely, individually or in the aggregate, to have a Material Adverse Effect or is reasonably likely to materially and adversely affect the Company's or its subsidiaries' properties, assets or rights or (ii) is reasonably likely to prevent consummation of, or rescind or unwind, the transactions contemplated hereby. Neither the Company nor any of its subsidiaries is a party or subject to the provisions of any injunction, judgment, decree or order of any court, regulatory body, administrative agency, government or governmental agency or body domestic or foreign, that could reasonably be expected to have a Material - 5 - Adverse Effect. The Company and each of its subsidiaries has conducted and is conducting its business in compliance with all applicable federal, state, local and foreign statutes, laws, rules, regulations, ordinances, codes, decisions, decrees, directives and orders, except where the failure to do so would not reasonably be likely, singly or in the aggregate, to have a Material Adverse Effect. 4.8 Listed Shares. Upon issuance, the Shares, License Fee Shares, Renewal License Fee Shares and the Exchange Shares will be registered pursuant to Section 12(b) of the Exchange Act, and approved for listing and quotation on the American Stock Exchange ("AMEX"). Except as disclosed in the 2003 SEC Filings, the Company has taken no action designed to, or likely to have the effect of, terminating the registration of its common stock under the Exchange Act or delisting its common stock from the AMEX. The Company is, and after giving effect to the issuance of the Shares and the License Fee Shares to the Investor at the Closing hereunder, the Company will be in compliance with all standards for continued listing on the AMEX. Based on the Company's financial projections, which have been prepared by the Company in good faith and on a reasonable basis, its stockholders' equity will exceed the minimum required by the AMEX during and at the end of the twelve-month period following the Closing. 4.9 Intellectual Property. The Company and its subsidiaries each owns or possesses sufficient rights in all patents, patent rights, inventions, trademarks, service marks, trade names, copyrightable materials, domain names, trade secrets, know-how and all other intellectual property which are necessary to conduct its business as now conducted and as proposed to be conducted (collectively, the "Intellectual Property"). Except as disclosed in the 2003 SEC Filings or on Schedule 4.9 attached hereto, neither the Company nor any of its subsidiaries has received any written notice of, nor has it any knowledge of, any violation of or allegation that the Company or any of its subsidiaries has violated or, by conducting its business as now conducted or as proposed to be conducted, would violate, any patent, patent rights, inventions, trade secrets, know-how, trademarks, service marks, trade names, copyrights or any other proprietary right of any third party. To the Company's knowledge, there is no violation or infringement by any third party of any of the Company's or any subsidiary's rights in the Intellectual Property. 4.10 No Change. Since December 31, 2002 and except as otherwise disclosed in the 2003 SEC Filings, there has not been (i) any change or development that, either individually or in the aggregate, has had a material and adverse effect on, or could be reasonably expected to have a material and adverse effect on, the condition (financial or otherwise), earnings, operational results, operations, assets, liabilities (actual or contingent), business or business prospects of the Company or any of its subsidiaries, (ii) any transaction that is material to the Company or any of its subsidiaries, (iii) any obligation, direct or contingent, incurred by the Company or any of its subsidiaries, except obligations incurred in the ordinary course of business consistent with past practices, (iv) any change in the capital stock or outstanding indebtedness of the Company or any of its subsidiaries, except the incurrence of trade debt and obligations incurred in the ordinary course consistent with past practices, (v) any dividend or distribution of any kind declared, paid or made on the capital stock of the Company or any of its subsidiaries, (vi) any default in the payment of principal of or interest on any outstanding debt obligations, or (vii) any material loss or damage (whether or not insured) to the property of the Company or any of its subsidiaries which has been sustained or will have been sustained. 4.11 No Defaults. Neither the Company nor any of its subsidiaries is (a) in violation of its certificate of incorporation, bylaws or other organizational documents or (b) in violation of or default (with or without notice or lapse of time or both) in the performance or observance of any obligation, agreement, covenant or condition contained in any bond, debenture, note or other evidence of indebtedness, or in any lease, contract, indenture, - 6 - mortgage, deed of trust, loan agreement, joint venture or other agreement or instrument to which it is a party or by which it or its assets or properties may be bound, or (c) in violation of any law, order, rule, regulation, writ, injunction, judgment or decree of any court, government or governmental agency or body, domestic or foreign, having jurisdiction over the Company or any of its subsidiaries or their assets or properties, except in the case of (b) or (c) for any default or violation not reasonably likely to have a Material Adverse Effect. 4.12 Consents. No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental or regulatory authority or other third party on the part of the Company or any of its subsidiaries is required in connection with the consummation of the transactions contemplated by this Agreement or the Related Agreements (each a "Consent"), except for (a) Consents required to comply with the securities and Blue Sky laws in the states and other jurisdictions in which any of the Securities are offered and/or sold, which compliance will be effected in accordance with such laws, (b) Consents required by the AMEX and the SEC, and (c) Consents described on Schedule 4.12. The Company and all of its subsidiaries are conducting business in compliance with all applicable laws, rules and regulations of the jurisdictions in which they are conducting business, including but not limited to, all applicable federal, state and local environmental laws and regulations, except for any failure to comply which is not reasonably likely to have a Material Adverse Effect 4.13 Labor; Employees; ERISA. (a) The Company and its subsidiaries are in compliance in all material respects with all laws, orders, rules and regulations relating to the employment of labor. No strike by or other labor dispute involving the employees of the Company or its subsidiaries exists or, to the Company's knowledge, has been threatened. The Company is not aware of any existing or threatened labor dispute involving the employees of any of its principal suppliers, subcontractors, authorized dealers or international distributors that is reasonably likely to result in a Material Adverse Effect. No collective bargaining agreement or other agreement with any labor union covering any employees of the Company or any of its subsidiaries exists, no such agreement is being negotiated or prepared, and, to the knowledge of the Company, no labor union has sought to represent any of the employees, representatives, or agents of the Company or any of its subsidiaries (b) If any employee of the Company or any of its subsidiaries has entered into any non-competition, non-disclosure, confidentiality or other similar agreement with any party other than the Company or its subsidiaries of which the Company is aware, (i) to the Company's knowledge, such employee is neither in violation thereof nor is expected to be in violation thereof as a result of the business conducted or expected to be conducted by the Company or any of its subsidiaries or such person's performance of his or her obligations to the Company or any of its subsidiaries and (ii) the Company will use reasonable efforts to prevent its employees and the employees of its subsidiaries from violating any such agreement. (c) The Company and any ERISA Affiliate have complied in all material respects with all applicable laws, orders, rules and regulations relating to any Employee Plan or Compensation Arrangement. There are no material undisclosed liabilities relating to, associated with or arising under any Employee Plan or Compensation Arrangement. No governmental inspection, investigation, audit or examination of any Employee Plan or Compensation Arrangement is pending or threatened. There are no Employee Plans subject to Title IV of the Employee Retirement Income Security Act of 1974 (as amended, and including any successor thereto and any regulations promulgated thereunder, "ERISA"). As used herein, the term "Code" means the Internal Revenue Code of 1986, as amended, any successor thereto and any regulations promulgated thereunder; "Compensation Arrangement" means any plan or compensation arrangement other than an Employee Plan, whether written or unwritten, which - 7 - provides to employees, former employees, officers, directors and shareholders of the Company or any ERISA Affiliate any compensation or other benefits, whether deferred or not, including, but not limited to, any bonus or incentive plan, stock rights plan, deferred compensation arrangement, life insurance, stock purchase plan, severance pay plan and any other employee fringe benefit plan; "Employee Plan" means any retirement or welfare plan or arrangement or any other employee benefit plan as defined in Section 3(3) of ERISA to which the Company or any ERISA Affiliate contribute or to which the Company or any ERISA Affiliate sponsor, maintain or otherwise are bound; and "ERISA Affiliate" means any trade or business related to the Company under the terms of Sections 414(b), (c), (m) or (o) of the Code. 4.14 Taxes. The Company and its subsidiaries have timely filed all federal, state, local and foreign income tax returns and all franchise, sales and use and other material tax returns required by law and have paid all taxes shown thereon as due, and there is no tax deficiency that has been or, to the Company's knowledge, that might be asserted against the Company or its subsidiaries that is reasonably likely to have a Material Adverse Effect. All tax liabilities of the Company or any of its subsidiaries (whether or not shown to be due on or with respect to the applicable tax return or claimed to be due from it by any governmental authority) have either been paid or are adequately provided for on the books and balance sheet of the Company or the applicable subsidiary in accordance with GAAP. There are no tax sharing agreements or similar arrangements with respect to or involving the Company or any of its subsidiaries. 4.15 Insurance. Each of the Company and its subsidiaries maintains insurance with insurers of recognized financial responsibility of the types and in the amounts generally deemed prudent for its business and consistent with insurance coverage maintained by similar companies in similar businesses, including, but not limited to, insurance covering real and personal property owned or leased by the Company or its subsidiaries against theft, damage, destruction, acts of vandalism, products liability, errors and omissions, and all other risks customarily insured against, and directors and officers liability insurance, all of which insurance is in full force and effect. Neither the Company nor any of its subsidiaries is in default with respect to its obligations under any insurance policy maintained by it. The Company has delivered to the Investor a true and complete copy of the Company's directors and officers liability insurance policy as currently in effect. 4.16 Offering. Subject in part to the truth and accuracy of the representations and warranties of the Investor set forth in Section 5 of this Agreement, the offer, sale and issuance of the Securities as contemplated by this Agreement and the Related Agreements are exempt from the registration requirements of any applicable state and federal securities laws, and neither the Company, Buzztime nor any authorized agent acting on their behalf shall take any action hereafter that would cause the loss of such exemption. 4.17 Environmental Matters. (i) The Company and its subsidiaries are in compliance with all rules, laws, orders and regulations relating to the use, treatment, storage, cleanup and disposal of toxic or hazardous substances and protection of health and the environment ("Environmental Laws") which are applicable to them or their businesses, except where the failure to comply would not reasonably be likely to have a Material Adverse Effect, (ii) neither the Company nor any of its subsidiaries has received any written notice or other communication from any governmental authority or third party of an asserted or threatened claim under any Environmental Laws, which claim would be required to be disclosed in its filings with SEC under the Exchange Act, (iii) to the Company's knowledge, neither the Company nor any subsidiary will be required to make future material capital expenditures to comply with Environmental Laws and (iv) no property which is, or has been, owned, leased or occupied by the Company or any subsidiary has, to the Company's knowledge, been designated as a Superfund site pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, or otherwise designated as - 8 - a contaminated site under applicable state or local law. The Company and its subsidiaries do not currently own any real property in fee simple. 4.18 Reservation of Shares. Buzztime shall take all action necessary to at all times have authorized, and reserved for the purpose of issuance, the number of shares of Buzztime common stock necessary to provide for the issuance of the Warrant Shares. The Company shall take all action necessary to at all times have authorized, and reserved for the purpose of issuance, the number of shares of the Company's common stock necessary to provide for the issuance of the Exchange Shares and Renewal License Fee Shares. Buzztime shall take all action necessary to at all times have authorized, and reserved for the purpose of issuance, the number of shares of Buzztime common stock necessary to provide for the issuance of the Renewal License Fee Shares. 4.19 Corporate Documents. True and complete copies of the certificates of incorporation and bylaws of the Company and Buzztime as currently in effect have been delivered to the Investor. Except as disclosed in the 2003 SEC Filings, neither the Company nor any of its subsidiaries has taken any action to amend or plans to amend its certificate of incorporation or bylaws. 4.20 Disclosure. No representation or warranty of the Company or Buzztime contained in this Agreement or the Related Agreements, or the schedules attached hereto and thereto contains any untrue statement of a material fact or omits to state a material fact required to be stated herein or therein or necessary to make the statements contained herein or therein not misleading in light of the circumstances under which they were made. 5. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR 5.1 Investment Representations. The Investor represents and warrants to the Company and Buzztime that: (a) The Investor is knowledgeable, sophisticated and experienced in making, and is qualified to make, decisions with respect to investments in securities presenting an investment decision like that involved in the purchase of the Units and License Fee Shares, including investments in securities issued by the Company, and has requested, received, reviewed and considered all information the Investor deems relevant (including the Confidential Private Placement Memorandum dated May 31, 2002 and annexes thereto (the "Memorandum") and the 2003 SEC Filings) in making an informed decision to purchase the Units and License Fee Shares. The Investor further represents that it has had an opportunity to ask questions and receive answers from the Company and Buzztime regarding the terms and conditions of the offering of the Units and License Fee Shares and the business, properties, prospects and financial condition of the Company and its subsidiaries. (b) The Investor is purchasing the Units and the License Fee Shares for its own account for investment only and with no present intention of distributing the Units or the License Fee Shares or any arrangement or understanding with any other persons regarding the distribution of the Units or the License Fee Shares in violation of any applicable federal or state securities laws. (c) The Investor shall not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase or otherwise acquire or take a pledge of) any of the securities purchased hereunder except in compliance with the Securities Act, applicable Blue Sky laws, and the rules and regulations promulgated thereunder. The Investor also understands that there is no assurance that any exemption from registration under the Securities Act and applicable Blue Sky laws will ever be available and that, even if available, such exemption may not allow the Investor to transfer all or any portion of the securities under the circumstances, in the amounts or at the times the Investor might propose. - 9 - (d) The Investor has, in connection with its decision to purchase the Units and the License Fee Shares, relied with respect to the Company and its affairs solely upon the Memorandum, the 2003 SEC Filings and the representations and warranties of the Company and Buzztime contained herein. (e) The Investor is an "accredited investor" within the meaning of Rule 501 of Regulation D promulgated under the Securities Act. (f) The Investor has full right, power, authority and capacity to enter into this Agreement and the Related Agreements and to perform the transactions contemplated hereby and thereby. This Agreement and the Related Agreements have been duly authorized, executed and delivered by the Investor. Assuming due authorization, execution and delivery by each of the other Parties hereto and thereto, this Agreement and the Related Agreements are valid and binding obligations of the Investor, enforceable in accordance with their terms. 5.2 Ability to Bear Risk. The Investor is able to bear the economic risk of holding the Units and License Fee Shares for an indefinite period, including the loss of the Investor's entire investment. The Units and License Fee Shares were not offered or sold to the Investor by any form of general solicitation or advertising. The Investor also represents that it has not been organized for the purpose of acquiring the Units and License Fee Shares. 5.3 Independent Advice. The Investor understands that nothing in the Memorandum, this Agreement or any other materials presented to the Investor in connection with the purchase and sale of the Units and License Fee Shares constitutes legal, tax or investment advice and that no independent legal counsel retained by the Company has reviewed these documents and materials on the Investor's behalf. The Investor has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of the Units. 5.4 No Transferability. The Investor understands that (a) none of the Securities shall be transferable in the absence of registration under the Securities Act and applicable Blue Sky laws or an exemption therefrom or in the absence of compliance with any term of this Agreement; (b) the Company and Buzztime shall provide stop transfer instructions to its transfer agent with respect to each of the Securities in order to enforce the restrictions contained in this Section 5.4; and (c) each certificate or instrument representing any of the Securities shall be in the name of Investor and shall bear substantially the following legend (in addition to any legends required under applicable securities laws): "THIS SECURITY [AND ANY SHARES ISSUED UPON EXERCISE OF THIS SECURITY] HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THE APPLICABLE SECURITY HAS BEEN REGISTERED UNDER THE ACT AND SUCH LAWS OR (1) REGISTRATION UNDER SUCH LAWS IS NOT REQUIRED AND (2) AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS FURNISHED UPON REQUEST BY THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED." - 10 - The legend contained in this Section 5.4 may be removed from a certificate or instrument representing any of the Securities immediately upon receipt by the Company's transfer agent of a certificate substantially in the form of Appendix II and such other documentation as the transfer agent may routinely require, including, but not limited to, an opinion of counsel. Notwithstanding the foregoing, such Securities must be held in certificated form until such shares have been sold in accordance with the provisions of Appendix II. 5.5 Residence. The office or offices of the Investor in which its investment decision was made is located at the address or addresses of the Investor set forth on the signature page. 5.6 Effect on the Company's and Buzztime's Representations and Warranties. The representations and warranties of the Investor in this Section 5 do not limit or modify in any respect the Company's and Buzztime's representations and warranties in Section 4 herein or the right of the Investor to rely on the Company's and Buzztime's representations and warranties in Section 4. 6. CONDITIONS TO COMPANY'S AND BUZZTIME'S OBLIGATIONS AT THE CLOSING The Company's and Buzztime's obligations to complete the sale and issuance of the Units and to deliver Units to the Investor shall be subject to the following conditions (to the extent not waived by the Company and Buzztime): 6.1 Representations and Warranties; Performance. The representations and warranties made by the Investor in Section 5 hereof shall be true and correct when made, and shall be true and correct as of the Closing as if made on the Closing. The Investor shall have performed and complied in all material respects with all of its obligations under this Agreement which are to be performed or complied with on or prior to the Closing. 6.2 Delivery of Purchase Price. The purchase price for the Units being purchased shall have been delivered by the Investor. 7. CONDITIONS TO INVESTOR'S OBLIGATIONS AT THE CLOSING The Investor's obligation to accept delivery of the Units and to pay for the Units shall be subject to the following conditions (to the extent not waived by the Investor): 7.1 Representations and Warranties; Performance. The representations and warranties made by the Company and Buzztime in Section 4 shall be true and correct when made, and shall be true and correct as of the Closing as if made on the Closing. The representations and warranties made by the Company and Buzztime in Section 4.6(a) with respect to capitalization shall be true and correct as of the Closing as if made on the Closing, and the Company will provide an updated Schedule 4.6(a) dated as of the date of the Closing (provided that the updated Schedule 4.6(a) may reflect changes in the capitalization since the date of this Agreement through the Closing so long as the total number of shares of fully-diluted common stock of each of the Company and Buzztime, respectively, disclosed on such updated Schedule 4.6(a) is equal to the number of shares of fully-diluted common stock of each of the Company and Buzztime, respectively, as disclosed in the original Schedule 4.6(a)). The Company and Buzztime shall have performed and complied in all material respects with all of their obligations under this Agreement which are to be performed or complied with on or prior to the Closing. 7.2 Delivery of the Shares, Warrants and License Fee Shares. The stock certificates representing the Shares and License Fee Shares, and the instruments representing the Warrants, shall have been delivered by the Company and Buzztime in accordance with Section 3.2 herein. 7.3 Consents. The Company and Buzztime shall have obtained any and all consents, permits and waivers necessary or appropriate for the consummation of the transactions contemplated by this Agreement (except for such as may be properly obtained subsequent to the Closing). 7.4 Execution of Investor Rights Agreements and Licensing Agreement. The Company and the Investor shall have executed the NTN Investor Rights Agreement substantially in the form attached as Appendix III. Buzztime, the Company and the Investor shall have executed the Buzztime Investor Rights Agreement substantially in the form attached as Appendix IV and the Licensing Agreement substantially in the form attached as Appendix V. - 11 - 7.5 AMEX Listing. The Shares and License Fee Shares shall have been approved for listing and authorized for trading on AMEX, and trading in the Shares and License Fee Shares shall not have been suspended by the SEC or AMEX. 7.6 Board Seat. The Board of Directors of the Company shall have appointed Neal F. Fondren as the Investor's designee to the Board of Directors to serve as a director of the Company in the class whose current term expires in 2005. The Company and Mr. Fondren shall have entered into an indemnity agreement substantially similar to the indemnity agreements executed between the Company and the other directors of the Company. 7.7 Officer's Certificate. The Investor shall have received a certificate signed by a duly authorized officer of the Company attesting to the satisfaction of all of the conditions contained in this Section 7. Such certificate shall attest that from the date of this Agreement through the date of Closing, no event or development has occurred that has resulted or could reasonably be expected to result in a material adverse change (from the information previously furnished to the Investor) in the condition (financial or otherwise), operations, assets or liabilities of the Company or Buzztime taken as a whole. 7.8 Opinion of Counsel. The Company and Buzztime shall have delivered to the Investor an opinion of O'Melveny & Myers LLP, counsel to the Company and Buzztime, dated as of the Closing, in a form attached as Appendix VI. 8. MISCELLANEOUS 8.1 Waivers and Amendments. Neither this Agreement nor any provision hereof may be changed, waived, discharged, terminated, modified or amended except upon the written consent of the Company, Buzztime and the Investor. 8.2 Headings. The headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be part of this Agreement. 8.3 Broker's Fee. Except as otherwise disclosed in writing, the Company, Buzztime and the Investor hereby represent (as to such party only) that there are no brokers or finders entitled to compensation in connection with the sale of the Units, and shall indemnify each other for any such fees for which they are responsible. 8.4 Severability. The provisions of this Agreement are severable. The invalidity, in whole or in part, of any provision of this Agreement will not affect the validity or enforceability of any other of its provisions. If one or more provisions hereof will be declared invalid or unenforceable, the remaining provisions will remain in full force and effect and will be construed in the broadest possible manner to effectuate the purposes hereof. If it is determined by a court of competent jurisdiction in any state that any restriction in this Agreement is excessive in duration or scope or is unreasonable or unenforceable under the laws of that state, it is the intention of the parties that such restriction may be modified or amended by the court to render it enforceable to the maximum extent permitted by the law of that state. The parties further agree to replace such void or unenforceable provisions of this Agreement with valid and enforceable provisions that will achieve, to the extent possible, the economic, business and other purposes of the void or unenforceable provisions. 8.5 Notices. All notices, requests, consents and other communications hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed facsimile if sent during normal business hours of the recipient; if not, then on the next business day, (c) upon receipt when sent by first-class registered or certified mail, return receipt requested, postage prepaid, or (d) upon receipt after deposit with a nationally recognized overnight express courier, postage prepaid, specifying next day delivery with written verification of receipt. All - 12 - communications shall be sent to the party to be notified at the address as set forth below or at such other address as such party may designate by ten (10) days advance written notice to the Company. All communications shall be addressed as follows: (a) if to the Company and/or Buzztime, to: NTN COMMUNICATIONS, INC. 5966 La Place Court Carlsbad, California 92008 Telephone: (760) 438-7400 Facsimile: (760) 930-1187 Attention: Chief Executive Officer with a copy so mailed to: O'MELVENY & MYERS LLP 400 South Hope Street Los Angeles, California 90071 Telephone: (213) 430-6000 Facsimile: (213) 430-6407 Attention: C. James Levin (b) if to the Investor, at the address as set forth on the signature page of this Agreement, with a copy so mailed to the same address and to the attention of the general counsel of the Investor. 8.6 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law principles thereof. 8.7 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one instrument, and shall become effective when one or more counterparts have been signed by each Party hereto and delivered to the other Parties. 8.8 Survival of Representations, Warranties and Agreements. Notwithstanding any investigation made by any party to this Agreement, all covenants, agreements, representations and warranties made by the Company, Buzztime and the Investor herein and in the certificates for the securities delivered pursuant hereto shall survive the execution of this Agreement, the delivery to the Investor of the Units and the payment therefor. The Company and Buzztime shall indemnify, defend, reimburse and hold harmless the Investor from and against all costs, losses, liabilities, damages and expenses (including reasonable attorneys' fees) arising out of or related to the breach of or a failure by the Company and/or Buzztime to perform any of their representations, warranties, covenants or agreements under this Agreement. The Investor shall indemnify, defend, reimburse and hold harmless the Company and Buzztime from and against all costs, losses, liabilities, damages and expenses (including reasonable attorneys' fees) arising out of or related to the breach of or a failure by the Investor to perform any of its representations, warranties, covenants or agreements under this Agreement. 8.9 Successors and Assigns. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the Parties hereto. Neither the terms "successors" nor "assigns" as used herein shall include any entity or person who purchases any of the Securities from the Investor after the Closing and is not an affiliate of the Investor. Neither the Company nor Buzztime may assign this Agreement or delegate any of its obligations hereunder. - 13 - 8.10 Entire Agreement. This Agreement, the Related Agreements and other documents delivered pursuant hereto and thereto, including the exhibits, constitute the full and entire understanding and agreement between the Parties with regard to the subjects hereof and thereof. 8.11 Payment of Fees and Expenses. Each of the Company, Buzztime and the Investor shall bear its own expenses and legal fees incurred on its behalf with respect to this Agreement and the transactions contemplated hereby; provided, however, that the Company shall bear the Registration Expenses as described in the NTN Investor Rights Agreement and the Buzztime Investor Rights Agreement. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement (including, without limitation, any action arising out of or related to a breach of a representation or warranty herein), the prevailing party shall be entitled to reasonable attorney's fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled. 8.12 Confidentiality. The Investor acknowledges and agrees that any information or data it has acquired from the Company and its subsidiaries, not otherwise properly in the public domain, was received in confidence. Except to the extent authorized by the Company or Buzztime or required by any federal or state law, rule or regulation or any decision or order of any court or regulatory authority, the Investor agrees that it will refrain from disclosing any such information to any person other than to any agents, attorneys, accountants, employees, officers and directors of the Investor who need to know such information in connection with the Investor's purchase of the Units, and who agree to be bound by the confidentiality provisions of this Agreement. In the event that the Investor or its agents are required by federal or state or other law, rule or regulation or any decision or order of any court or regulatory authority to release such information, it shall give the Company and Buzztime sufficient prior notice so that the Company and Buzztime may seek a stay or other release or waiver from disclosing such information. The Investor agrees not to use to the detriment of the Company or its subsidiaries or for the benefit of any other person or persons, or misuse in any way, any confidential information of the Company or its subsidiaries. Nothing in this Section 8.12 will prohibit or restrict the Investor from complying with its disclosure obligations under applicable federal and state securities laws. 8.13 Knowledge. The phrases "knowledge," "to the Company's knowledge," "to our knowledge," "of which the Company is aware" and similar language as used herein shall mean the actual knowledge or awareness, or knowledge or awareness which a prudent business person would have acquired following a reasonable investigation, of Stanley B. Kinsey, James B. Frakes, Mark DeGorter and Tyrone V. Lam. 8.14 Rights Cumulative. Each and all of the various rights, powers and remedies of the Parties hereto will be considered to be cumulative with and in addition to any other rights, powers and remedies that such Parties may have at law or in equity in the event of the breach of any of the terms of this Agreement. 8.15 Limitation on Issuance of Common Stock. Notwithstanding any provision to the contrary contained herein or in the Related Agreements, in no event shall the Investor be entitled to receive any Renewal License Fee Shares or Exchange Shares under this Agreement and the Related Agreements to the extent that, after giving effect to such issuances, the aggregate number of Shares, License Fee Shares, Renewal License Fee Shares and Exchange Shares issued under this Agreement and the Related Agreements would exceed 19.9% of the total shares of the Common Stock outstanding as of the date hereof as disclosed on Schedule 4.6(a). [remainder of the page left blank; signature page follows] - 14 - IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written. NTN COMMUNICATIONS, INC., a Delaware corporation By: /s/ Stanley B. Kinsey --------------------------------- Name: Stanley B. Kinsey Title: Chairman and Chief Executive Officer BUZZTIME ENTERTAINMENT, INC., a Delaware corporation By: /s/ James B. Frakes --------------------------------- Name: James B. Frakes Title: Chief Financial Officer MEDIA GENERAL, INC., a Virginia corporation By: /s/ Marshall N. Morton ---------------------------------- Name: Marshall N. Morton Title: Vice Chairman Address: 333 East Franklin Street Richmond, VA 23219 Phone: (804) 649-6000 Facsimile: (804) 649-6212 Pursuant to Item 601(b)(2) of Regulation S-K, the exhibits and schedules listed below have been omitted. A copy of the omitted exhibits and schedules will be furnished to the Securities and Exchange Commission upon request. TABLE OF EXHIBITS AND SCHEDULES Appendix I. Form of Warrant Appendix II. NTN Communications, Inc. Investor's Certificate of Resale of the Shares Appendix III. Form of NTN Investor Rights Agreement Appendix IV. Form of Buzztime Investor Rights Agreement Appendix V. Form of Licensing Agreement Appendix VI. Form of Opinion of O'Melveny & Myers LLP Schedule 4.2 Subsidiaries Schedule 4.6(a) Capitalization and Indebtedness Schedule 4.6(b) Certain Rights Schedule 4.7 Litigation Schedule 4.9 Intellectual Property Schedule 4.12 Consents EX-4.1 4 rightsagremt.txt NTN INVESTOR RIGHTS AGREEMENT Exhibit 4.1 NTN INVESTOR RIGHTS AGREEMENT THIS NTN INVESTOR RIGHTS AGREEMENT (this "Agreement") is made and entered into as of May 7, 2003 by and among NTN Communications, Inc., a Delaware corporation (the "Company"), and Media General, Inc., a Virginia corporation (the "Investor"). RECITALS A. The Company, Buzztime Entertainment, Inc. ("Buzztime") and the Investor have entered into a Securities Purchase Agreement (the "Purchase Agreement") dated as of May 5, 2003, pursuant to which the Investor will purchase from the Company and Buzztime 2,000,000 units (the "Units"), each unit consisting of one share of Common Stock and one-fourth of a warrant to purchase one share of Buzztime's common stock (the "Warrants"). B. Concurrently with the execution of this Agreement, the Company, Buzztime and the Investor have entered into a Licensing Agreement (the "Licensing Agreement") dated as of May 7, 2003, pursuant to which the Investor will license certain intellectual property in exchange for 666,667 shares of Common Stock. C. A condition to the Investor's obligations under the Purchase Agreement and the Licensing Agreement is that the Company and the Investor enter into this Agreement in order to provide the Investor with (i) the right to nominate one person to the Company's board of directors, (ii) the opportunity to purchase and/or participate, upon the terms and conditions set forth in this Agreement, in subsequent sales of securities in the Company, and (iii) to provide certain registration rights for shares of the Common Stock held by the Investor. D. The Company and Buzztime desire to induce the Investor to purchase shares of Common Stock pursuant to the Purchase Agreement and the Licensing Agreement by agreeing to the terms and conditions set forth below. E. Concurrently with the execution of this Agreement, the Company, Buzztime and the Investor have entered into the Buzztime Investor Rights Agreement (the "Buzztime Investor Rights Agreement") dated as of May 7, 2003. NOW, THEREFORE, in consideration of the above recitals and the mutual covenants and conditions contained in this Agreement, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. Definitions. Unless otherwise defined in this Agreement, capitalized terms used herein shall have the following meanings: (a) "Common Stock" means the Company's common stock, $.005 par value per share. (b) "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations thereunder, or any successor statute. (c) "SEC" means the U.S. Securities and Exchange Commission and any successor agency thereto. (d) "Securities Act" means the Securities Act of 1933, as amended from time to time, and the rules and regulations thereunder, or any successor statute. 2. Preemptive Rights. 2.1 Preemptive Rights Granted. If the Company proposes to issue or sell any New Securities (as defined below), the Investor shall have a preemptive right to purchase up to a pro rata share of such New Securities proposed to be issued or sold in accordance with the terms of this Section 2. The Investor's pro rata share is the ratio of the number of shares of Common Stock held by such Investor immediately prior to the issuance or sale of New Securities to the total number of shares of Common Stock outstanding immediately prior to the issuance or sale of New Securities. 2.2 New Securities. "New Securities" shall mean any capital stock or similar security or any security convertible or exchangeable, with or without consideration, into or for any capital stock or similar security, or any security carrying any warrant or right to subscribe for or purchase any capital stock or similar security, or any such warrant or right, of the Company whether now authorized or not, provided that the New Securities do not include: (a) securities issuable upon conversion or exercise of currently outstanding warrants, options or other contractual obligations of the Company as disclosed on Schedule 4.6(a) of the Purchase Agreement; (b) securities issued or issuable to employees, officers, directors, contractors, advisors or consultants of the Company pursuant to stock options or other stock incentive agreements or plans approved by the Board of Directors and the stockholders of the Company; (c) securities in an aggregate amount of up to 5% of the fully-diluted Common Stock issued or issuable to employees, officers, directors, contractors, advisors or consultants of the Company pursuant to stock options or other stock incentive agreements or plans approved by the Board of Directors but not approved by the stockholders of the Company; (d) securities issued pursuant to acquisition transactions, joint ventures or strategic partnerships; (e) securities offered by the Company in an underwritten offering to the public pursuant to a registration statement filed under the Securities Act; (f) securities issued in connection with any stock split, stock dividend or recapitalization of the Company; and (g) securities in an aggregate amount of up to 5% of the fully-diluted Common Stock issued in connection with arrangements with financial institutions or lessors in connection with commercial credit arrangements, equipment financings or similar transactions. 2.3 Notice; Exercise of Preemptive Rights. In the event the Company proposes to issue or sell New Securities, it shall give the Investor written notice of its intention, describing the New Securities, their price and the terms upon which the Company proposes to issue or sell the same. Investor shall have five (5) business days after such notice is given to agree to purchase up to such Investor's pro rata share of such New Securities for the price and upon the terms specified in the notice by giving written notice to the Company and stating therein the quantity of New Securities to be purchased. 2.4 Sale of New Securities. In the event that the Investor fails to exercise fully all preemptive rights within said five-business day period, the Company shall have 120 days thereafter to sell the remaining New Securities that the Investor does not elect to purchase upon exercise of the preemptive rights pursuant to this Section 2, at a price and upon terms no more favorable to the purchasers thereof than specified in the Company's notice to Investor pursuant to subsection 2.3. In the event the Company has not sold all such remaining New Securities within such 120-day period, the Company shall not thereafter issue or sell any New Securities, without first again offering such securities to the Investor in the manner provided in subsection 2.3 above. - 2 - 2.5 Termination. The covenants set forth in this Section 2 shall terminate and be of no further force or effect in the event that the Investor and its affiliates neither (i) hold at least half the shares of Common Stock that the Investor acquired under the Purchase Agreement and Licensing Agreement on the closing date; nor (ii) beneficially own 5% or more of the outstanding Common Stock. For purposes of this Section 2, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act. 3. Representation on the Board of Directors 3.1 Board Representation. Effective as of the Closing under the Purchase Agreement, the Company's Board of Directors has appointed Neal F. Fondren to the Board of Directors as the Investor's designee to serve in the class of directors whose current term expires in 2005. Hereafter, so long as the Investor and its affiliates beneficially own at least (i) 5% of the outstanding Common Stock or (ii) seventy-five percent (75%) of the shares of Common Stock acquired by the Investor under the Purchase Agreement and the Licensing Agreement on the closing date (and further provided that, except as permitted under Section 5.15, the Investor and its affiliates have not sold any shares of Common Stock acquired under such agreements prior to one year after the execution of this Agreement), the Company shall use its best efforts to cause and maintain the election to its Board of Directors of one individual designated by the Investor and approved by the Company, whose approval shall not be unreasonably withheld, and in furtherance of the foregoing, the Company shall include the Investor's designee in the slate of nominees to the Board of Directors proposed and recommended by the Board of Directors for election at each annual meeting at which the class of directors whose current term expires in 2005 shall be subject to election, and such designee shall be included in any proxy statement prepared by the Company in respect of such annual meeting. 3.2 Observer Rights. In the event the Investor is entitled to designate one individual to the Company's Board of Directors and elects not to select an individual or such individual is not elected to such Board of Directors, or in the event the Investor is not entitled to designate one individual to the Company's Board of Directors but so long as the Investor and its affiliates beneficially own at least (i) 3% of the outstanding Common Stock or (ii) fifty percent (50%) of the shares of Common Stock acquired by the Investor under the Purchase Agreement and the Licensing Agreement on the closing date, then the Company shall invite a representative of the Investor to attend all meetings of its Board of Directors in a nonvoting observer capacity and, in this respect, shall give such representative copies of all notices, minutes, consents, and other materials that it provides to its directors; provided, however, that such representative shall agree to hold in confidence and trust and to act in a fiduciary manner with respect to all information so provided; and, provided further, that the Company reserves the right to withhold any information and to exclude such representative from any meeting or portion thereof (1) if access to such information or attendance at such meeting could (A) adversely affect the attorney-client privilege between the Company and its counsel or (B) would result in disclosure of trade secrets to such representative and such representative has not entered into a confidentiality and non-disclosure agreement with the Company, or (2) if such Investor or its representative is a direct competitor of the Company. 3.3 Termination. The covenants set forth in this Section 3 shall terminate and be of no further force or effect once the Investor and its affiliates no longer are entitled to designate an individual for director under Section 3.1 and no longer are entitled to designate a nonvoting observer under Section 3.2. For purposes of Sections 3.1(i) and 3.2(i), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act, but such calculation shall exclude any shares of Common Stock issued after the date of this Agreement which did not constitute New Securities under Section 2.2 (other than shares described in Section 2.2(a) and disclosed on Schedule 4.6(a) of the Purchase Agreement) from the number of shares of Common Stock outstanding and shall include in the number of shares of Common Stock held by the Investor any shares of Common Stock issuable to the Investor upon exercise of its exchange rights under the Buzztime Investor Rights Agreement. - 3 - 4. Registration Rights. 4.1 Registrable Securities. "Registrable Securities" means all shares of Common Stock now or hereafter owned or held by the Investor acquired under the Purchase Agreement, the Licensing Agreement and the Buzztime Investor Rights Agreement. 4.2 Mandatory Registration. The Company shall prepare, and, on or prior to ten (10) days after the date of this Agreement, file with the SEC a registration statement on Form S-3, covering the resale of the 2,666,667 shares of Common Stock included in the Registrable Securities acquired by the Investor under the Purchase Agreement and the Licensing Agreement on the closing date. The Company shall use its best efforts to have the registration statement declared effective by the SEC as soon as possible thereafter and shall cause such registration statement to be kept effective until the earlier of (i) such time as all such Registrable Securities have been disposed of in accordance with the intended methods of distribution set forth in such registration statement and (ii) the two-year period commencing on the date such registration statement becomes effective, provided that the end of such two-year period shall be extended by the aggregate number of days included in all periods of postponement, suspension and/or lockup of sales pursuant to this Section 4 (including Sections 4.4, 4.8 and 4.18). The Company represents and warrants to the Investor that it meets the registrant eligibility and transaction requirements for the use of Form S-3 for registration of the sale of such Registrable Securities by the Investor. 4.3 Registrations on Form S-3. The Company shall file all reports required to be filed by the Company with the SEC in a timely manner and otherwise use commercially reasonable efforts so as to maintain its eligibility for the use of Form S-3 or any comparable or successor form or forms. The Investor shall have the right at any time and from time to time to request a registration on Form S-3 or any comparable or successor form or forms (a "Short Form Registration") if the estimated offering price of shares subject to such registration shall be at least $1,000,000; provided, that the Company shall not be required to effect a Short Form Registration more frequently than twice (counting for these purposes only registrations which have been declared or ordered effective) during any 12 consecutive month period. Such requests shall be in writing and shall state the number of shares of Registrable Securities proposed to be disposed of and the intended method of distribution of such shares by the holders. 4.4 Right to Defer Registration. The Company may postpone for up to ninety (90) days the filing or the effectiveness of a registration statement for a Short Form Registration pursuant to Section 4.3 if its Board of Directors determines, reasonably and in good faith, that such registration might have a material and adverse effect on any proposal or plan by the Company to engage in any acquisition, merger, consolidation, tender offer or any other material transaction; provided, that the Company may not postpone the filing or effectiveness of a registration statement pursuant to this Section 4.4 more than twice during any period of 12 consecutive months. Any suspension under this Section 4.4, along with any suspension of a prospectus under Section 4.8 and any market standoff period under Section 4.18, shall not exceed an aggregate of 180 days in any twelve month period. 4.5 Right to Piggyback Registrations. If the Company proposes to register any of its securities under the Securities Act either for its own account or the account of a security holder or holders in an underwritten offering (other than a registration solely in connection with an employee benefit or stock ownership plan) and the registration form to be used may be used for the registration of Registrable Securities (a "Piggyback Registration"), the Company will give prompt written notice to the Investor of its intention to effect such a registration (each, a "Piggyback Notice"). Subject to Section 4.6, the Company will include in such registration all shares of Registrable Securities that the Investor requests the Company to include in such registration by written notice given to the Company within five business days after the date of receiving the Piggyback Notice. - 4 - 4.6 Priority on Piggyback Registrations. If the managing underwriters in a Piggyback Registration advise the Company in writing that in their opinion the number of securities requested to be included in such registration exceeds the number that can be sold in an orderly manner in such offering within a price range acceptable to the Company, the Company will include in such registration (i) first, in the case of a registration initiated by the Company, the securities proposed to be sold by the Company, or in the case of a registration initiated by a security holder, the securities proposed to be sold by such holder, (ii) second, the securities held by those holders who have existing piggyback registration rights as disclosed on Schedule 4.6(b) of the Purchase Agreement and have requested to be included in such registration, (iii) third, to the Registrable Securities of the holders requested to be included in such registration, pro rata among all holders entitled to participate in such offering on the basis of the number of shares of Registrable Securities requested to be included in such registration, and (iv) fourth, other securities requested to be included in such registration. The Company agrees that the Investor shall have priority over any holder of securities of the Company who is accorded registration rights in the future; provided that any holder who purchases $5 million or more of securities from the Company and its subsidiaries may have shared priority with the holders of the Registrable Securities on a pari passu basis. 4.7 Registration Procedures. Whenever the Investor has requested that any Registrable Securities be registered pursuant to this Agreement, the Company will use commercially reasonable efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of distribution thereof (which may include an underwritten offering conducted by an underwriter or underwriters selected by the Investor) and will as expeditiously as possible: (a) prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its best efforts to cause such registration statement to become effective as soon as possible thereafter and to remain effective as otherwise provided in this Section 4, provided that before filing a registration statement or prospectus or any amendments or supplements thereto, the Company will furnish to the counsel selected by the Investor copies of all such documents proposed to be filed, which documents will be subject to the review of such counsel and the sections of the registration statement covering information with respect to the Investor, the Investor's beneficial ownership of securities of the Company and the Investor's intended method of disposition of the Registrable Securities shall conform to the information provided by the Investor; (b) prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for a period of at least two years (as extended by the aggregate number of days included in all periods of postponement, suspension and/or lockup of sales under Sections 4.4, 4.8 and 4.18) or until the Investor has completed the distribution described in the registration statement relating thereto, whichever first occurs, and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of distribution by the sellers thereof set forth in such registration statement; (c) furnish to the Investor such number of copies of such registration statement, each amendment and supplement thereto, the prospectus included in such registration statement (including each preliminary prospectus) and such other documents as the Investor may reasonably request in order to facilitate the disposition of the Registrable Securities owned by the Investor; (d) use its best efforts to register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdictions as the Investor reasonably requests and do any and all other acts and things that may be reasonably necessary or advisable to enable the Investor to consummate - 5 - the disposition in such jurisdictions of the Registrable Securities owned by the Investor, provided that the Company will not be required (i) to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subparagraph, (ii) to subject itself to taxation in any such jurisdiction, or (iii) to consent to general service of process in any such jurisdiction; (e) notify Investor, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement contains an untrue statement of a material fact or omits any fact necessary to make the statements therein not misleading, and, at the request of the Investor, the Company will prepare a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading; (f) cause all such Registrable Securities to be listed on each securities exchange on which similar securities issued by the Company are then listed and to be qualified for trading on each system on which similar securities issued by the Company are from time to time qualified, and the Company agrees to use commercially reasonable efforts to maintain listing of the Common Stock on the American Stock Exchange or the other primary national exchange or quotation system that constitutes the principal market for the Common Stock at the time; (g) provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of such registration statement and thereafter maintain such a transfer agent and registrar; (h) enter into such customary agreements (including underwriting agreements in customary form) and take all such other actions as the Investor or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities being sold, including obtaining customary letters and consents from the Company's independent certified public accountants and the participation of management in at least one "road show" if requested by the underwriters at a time and location reasonably acceptable to management; (i) make available for inspection by any underwriter participating in any disposition pursuant to such registration statement and any attorney, accountant or other agent retained by any such underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company's officers, directors, employees and independent accountants to supply all information reasonably requested by any such underwriter, attorney, accountant or agent in connection with such registration statement; (j) permit the Investor, if it might be deemed, in the sole and exclusive judgment of the Investor, to be an underwriter or a controlling person of the Company, to participate in the preparation of such registration or comparable statement and to require the insertion therein of material, furnished to the Company in writing, that in the reasonable judgment of the Investor or its counsel should be included; (k) in the event of the issuance of any stop order suspending the effectiveness of a registration statement, or of any order suspending or preventing the use of any related prospectus or suspending the qualification of any Registrable Securities included in such registration statement for sale in any jurisdiction, the Company will notify the Investor and use its reasonable best efforts promptly to obtain the withdrawal of such order; and (l) take all other reasonable actions necessary to expedite and facilitate the registration and the sale of the Registrable Securities in accordance with the intended method of distribution thereof. - 6 - If any such registration statement refers to the Investor by name or otherwise as the holder of any securities of the Company and if, in the sole and exclusive judgment of the Investor, the Investor is or might be deemed to be a controlling person of the Company, the Investor shall have the right to require (a) the inclusion in such registration statement of language, in form and substance reasonably satisfactory to Investor, to the effect that the holding of such securities by Investor is not to be construed as a recommendation by Investor of the investment quality of the Company's securities covered thereby and that such holding does not imply that the Investor will assist in meeting any future financial requirements of the Company, or (b) in the event that such reference to Investor by name or otherwise is not required by the Securities Act or any similar federal statute then in force, the deletion of the reference to the Investor; provided, that with respect to this clause (b) the Investor shall furnish to the Company an opinion of counsel to such effect, which opinion of counsel shall be reasonably satisfactory to the Company. 4.8 Suspension of Prospectus. For not more than 45 consecutive days or for a total of not more than 90 days in any twelve month period, the Company may delay the disclosure of material non-public information concerning the Company by suspending the use of any prospectus included in any registration contemplated by this Section 4 containing such information, the disclosure of which at the time would be, in the good faith opinion of the Company, detrimental to the Company; provided, that the Company shall promptly (a) notify the Investor in writing of the existence of (but in no event, without the prior written consent of the Investor, shall the Company disclose to such Investor any of the facts or circumstances regarding) material non-public information giving rise to such delay, and (b) advise the Investor in writing to cease all sales under the registration statement until the end of such allowed delay. Any suspension under this Section 4.8, along with any deferral of a registration statement under Section 4.4 and any market standoff period under Section 4.18, shall not exceed an aggregate of 180 days in any twelve month period. 4.9 Registration Expenses. The term "Registration Expenses" means any and all expenses incident to the Company's performance of or compliance with Section 4, including without limitation all registration and filing fees, fees and expenses of compliance with securities or blue sky laws, printing expenses, messenger and delivery expenses, and fees and expenses of counsel for the Company and all independent certified public accountants, underwriting fees and expenses (excluding discounts and commissions, which shall be paid by Investor out of the proceeds of the offering) and the fees and expenses of any other persons retained by the Company. 4.10 Payment. The Company shall pay the Registration Expenses in connection with the mandatory registration under Section 4.2, all Short Form Registrations under Section 4.3 and all Piggyback Registrations under Section 4.5. All other expenses shall be paid by the Investor, pro rata on the basis of the number of its shares included in the registration. 4.11 Indemnification by the Company. The Company agrees to indemnify, to the extent permitted by law, each holder of Registrable Securities, his, her or its general and limited partners, members, shareholders, officers and directors and each person who controls such person (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses caused by or based on any untrue statement of material fact contained in any registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading or caused by or based on any violation by the Company of any federal or state securities law, rule or regulation, except insofar as the same are caused by or contained in any information furnished in writing to the Company by such holder of Registrable Securities expressly for use therein. In connection with an underwritten offering, the Company will indemnify such underwriters, their officers and directors and each person who controls such underwriters (within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification of the holders of Registrable Securities. - 7 - 4.12 Indemnification by Holders of Registrable Securities. In connection with any registration statement in which a holder of Registrable Securities is participating, such person will furnish to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such registration statement or prospectus and, to the extent permitted by law, will indemnify the Company, its directors and officers and each person who controls the Company (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses resulting from any untrue statement of material fact contained in the registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in any written information or affidavit so furnished in writing by Investor in connection with such registration statement; provided, that the obligation to indemnify will be limited to the net amount of proceeds received by such holder from the sale of Registrable Securities pursuant to such registration statement. 4.13 Notice; Defense of Claims. Any person entitled to indemnification hereunder will (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) unless in such indemnified party's reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party will not be subject to any liability for any settlement made by the indemnified party without his, her or its consent. An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. 4.14 Contribution. If the indemnification provided for herein is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to herein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party, on the one hand, and of the indemnified party, on the other, in connection with the statements or omissions that resulted in such loss, liability, claim, damage or expense, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The obligation to contribute will be limited to the amount by which the net amount of proceeds received by a holder of Registrable Securities from the sale of its Registrable Securities, as the case may be, exceeds the amount of losses, liabilities, damages and expenses that the Investor has otherwise been required to pay by reason of such statements or omissions. - 8 - 4.15 Survival. The indemnification and contribution provided for under this Agreement will remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling person of such indemnified party and will survive the transfer of securities and the termination of this Section 4 under Section 4.20. 4.16 Underwriting Agreement. To the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with an underwritten public offering are in conflict with the indemnification provisions of this Agreement, the provisions of the underwriting agreement shall control. 4.17 Participation in Underwritten Registrations. No person may participate in any registration hereunder that is underwritten unless such person (i) agrees to sell such person's securities on the basis provided in any underwriting arrangements approved by the person or persons entitled hereunder to approve such arrangements, and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements. 4.18 Market Stand-Off Agreement. Each holder of Registrable Securities hereby agrees, for a period of 134 days following the effective date of any registration statement covering securities to be sold on behalf of the Company in an underwritten public offering (or for such shorter period as may be allowed by the managing underwriter or underwriters of such offering), not to sell or otherwise transfer or dispose of (other than to donees who agree to be similarly bound) any Common Stock held by it at any time during such period except Common Stock included in such registration or purchased on the open market. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to the Registrable Securities (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period. This Section 4.18 shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement and shall only be applicable to the Investor if (i) all officers and directors of the Company enter into similar agreements and (ii) the Investor beneficially owns more than five percent (5%) of the outstanding Common Stock. Any market stand-off period under this Section 4.18, along with any deferral of a registration statement under Section 4.4 and any suspension under Section 4.8, shall not exceed an aggregate of 180 days in any twelve month period. 4.19 Transfer of Registration Rights. The rights of the Investor to cause the Company to register securities and keep information available and related rights, granted to the Investor by the Company under this Section 4 may be assigned to a transferee or assignee who is a partner, member, stockholder or affiliate of the Investor; provided that the transferee or assignee of such rights has agreed in writing to comply with the obligations under this Agreement. 4.20 Termination of Registration Rights. Section 4 of this Agreement shall terminate with respect to any holder of Registrable Securities on the earlier of (a) four years after the date of this Agreement or (b) eighteen months after the earlier of (i) the date such holder can sell all of his/her/its Registrable Securities in any three month period pursuant to Rule 144 or (ii) the date such holder holds Registrable Securities in an amount less than one percent of the outstanding shares of Common Stock; provided that the Company's obligations under Section 4.21 shall survive any such termination. 4.21 Reports Under the Exchange Act. With a view to making available to the Investor the benefits of Rule 144 promulgated under the Securities Act and any other rule or regulation of the SEC that may at any time permit the Investor to sell securities of the Company to the public without registration or pursuant to a Short Form Registration, the Company agrees to: (a) file with the SEC in a timely manner all reports and other documents required of the Company under the Exchange Act; and - 9 - (b) furnish to the Investor, so long as the Investor or any of its affiliates owns any Registrable Securities, forthwith upon request (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144, the Securities Act and the Exchange Act, or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested in availing the Investor or its affiliates of any rule or regulation of the SEC that permits the selling of any such securities without registration or pursuant to such form. 5. Miscellaneous. 5.1 Successors and Assigns. Except as otherwise provided in this Agreement, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties. The rights of the Investor hereunder may only be assigned to a transferee or assignee that is an "affiliate" of such Investor as such term is defined under Rule 405 of the Securities Act; provided, however, that (i) the transferor shall, within ten (10) days after such transfer, furnish to the Company written notice of the name and address of such transferee or assignee and the securities that are being assigned and (ii) such transferee shall agree to be subject to all restrictions set forth in this Agreement and all applicable transfer restrictions under the Securities Act. In the event of a permitted assignment, all references herein to the "Investor" will be deemed to include references to the permitted assignee(s) and include the shares of Common Stock owned by such permitted assignee(s) as appropriate. The Company may not assign this Agreement or delegate any of its obligations hereunder 5.2 Amendments and Waivers. Any term of this Agreement may be amended or waived only with the written consent of the Company, Buzztime and the Investor. Any amendment or waiver effected in accordance with this Section 5.2 shall be binding upon the Company, Buzztime, and the Investor, and each of their respective successors and assigns. 5.3 Notices. Notices are deemed delivered when actually delivered to the address for notices. Notices must be given to parties at the address set forth on the signature page below, although any party may furnish, from time to time, other addresses for notices to it. All notices (including other communications required or permitted) under this Agreement must be in writing and must be delivered (i) in person; (ii) by registered or certified mail, postage prepaid, return receipt requested; or (iii) by a generally recognized courier or messenger service that provides written acknowledgement of receipt by the addressee. 5.4 Severability. The provisions of this Agreement are severable. The invalidity, in whole or in part, of any provision of this Agreement will not affect the validity or enforceability of any other of its provisions. If one or more provisions hereof will be declared invalid or unenforceable, the remaining provisions will remain in full force and effect and will be construed in the broadest possible manner to effectuate the purposes hereof. If it is determined by a court of competent jurisdiction in any state that any restriction in this Agreement is excessive in duration or scope or is unreasonable or unenforceable under the laws of that state, it is the intention of the parties that such restriction may be modified or amended by the court to render it enforceable to the maximum extent permitted by the law of that state. The parties further agree to replace such void or unenforceable provisions of this Agreement with valid and enforceable provisions that will achieve, to the extent possible, the economic, business and other purposes of the void or unenforceable provisions. 5.5 Governing Law. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to its principles of conflicts of law. - 10 - 5.6 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. A facsimile signature page shall be deemed an original. 5.7 Further Assurances. Each party agrees to cooperate fully with the other parties, to take such actions, to execute such further instruments, documents and agreements, and to give such further written assurances, as may be reasonably requested by any other party to evidence and reflect the transactions described herein and contemplated hereby, and to carry into effect the intents and purposes of this Agreement. 5.8 No Presumption. The parties acknowledge that each party has been represented by counsel in connection with this Agreement and the transactions contemplated by this Agreement. Accordingly, any rule of law or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the party that drafted it has no application and is expressly waived. If any claim is made by a party relating to any conflict, omission or ambiguity in the provisions of this Agreement, no presumption or burden of proof or persuasion will be implied because this Agreement was prepared by or at the request of any party or its counsel. 5.9 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 5.10 Entire Agreement. This Agreement (together with the other documents referred to herein) is the complete and exclusive statement of agreement and understanding of the parties with respect to matters in this Agreement and is a complete and exclusive statement of the terms and conditions thereof. This Agreement replaces and supersedes all prior written or oral agreements, statements, correspondence, negotiations and understandings by and among the parties with respect to the matters covered by it. No representation, statement, condition or warranty not contained in this Agreement or such other documents is binding on the parties. 5.11 Rights Cumulative. Each and all of the various rights, powers and remedies of the parties hereto will be considered to be cumulative with and in addition to any other rights, powers and remedies that such parties may have at law or in equity in the event of the breach of any of the terms of this Agreement. The exercise or partial exercise of any right, power or remedy will neither constitute the exclusive election thereof nor the waiver of any other right, power or remedy available to such party. 5.12 No Third Party Beneficiaries. Nothing herein expressed or implied is intended to confer upon any person, other than the parties hereto and their respective successors and permitted assignees, if any, any rights, obligations, or liabilities under or by reason of this Agreement. 5.13 Specific Performance. Each of the parties acknowledges and agrees that the other parties would be damaged irreparably in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are breached. Accordingly, each of the parties agrees that the other parties will be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any action instituted in any court of the United States or any state thereof having jurisdiction over the parties and the matter, in addition to any other remedy to which they may be entitled, at law or in equity. 5.14 Reorganization. The provisions of this Agreement shall apply to any shares or other securities resulting from any stock split or reverse stock split, stock dividend, reclassification, subdivision, consolidation or reorganization of any shares or other equity securities of the Company and to any shares or other securities of the Company or of any successor company that may be received by the Investor by virtue of its ownership of any shares of Common Stock. - 11 - 5.15 Comerica Bank. Notwithstanding any provision in this Agreement to the contrary (including Sections 3.1 and 4.18), the Investor may transfer a portion of the shares of Common Stock acquired under the Licensing Agreement on the closing date to Comerica Bank-California or its nominee at any time after the date hereof in order to comply with the Investor's obligations under that certain Asset Purchase Agreement between the Investor and Comerica Bank-California dated as of June 2, 2002, provided that Comerica Bank-California will be subject to the one-year holding period requirement under the Licensing Agreement with respect to such shares. In the event Comerica Bank-California transfers all or any portion of any shares transferred to it by the Investor back to the Investor, all such shares transferred back to the Investor will be treated as if they had been continuously held by the Investor from and after the date of original issuance for all purposes of this Agreement. The Company will cooperate with the Investor to facilitate the transfer of any such shares and the issuance of appropriate stock certificates, provided that Comerica Bank-California provides customary investment representations and agreements. [remainder of page intentionally left blank; signature page follows] - 12 - IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. NTN COMMUNICATIONS, INC. By: /s/ Stanley B. Kinsey ------------------------------ Name: Stanley B. Kinsey Title: Chairman and Chief Executive Officer Address: The Campus - 5966 La Place Court Carlsbad, California 92008 Phone: (760) 438-7400 Fax: (760) 930-1178 MEDIA GENERAL, INC. By: /s/ Marshall N. Morton ------------------------------- Name: Marshall N. Morton Title: Vice Chairman Address: 333 East Franklin Street Richmond, VA 23219 Phone: (804) 649-6000 Fax: (804) 649-6212 S-1 EX-4.2 5 purchwarrnt.txt COMMON STOCK PURCHASE WARRANT Exhibit 4.2 COMMON STOCK PURCHASE WARRANT THIS SECURITY AND ANY SHARES ISSUED UPON EXERCISE OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THE APPLICABLE SECURITY HAS BEEN REGISTERED UNDER THE ACT AND SUCH LAWS OR (1) REGISTRATION UNDER SUCH LAWS IS NOT REQUIRED AND (2) AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS FURNISHED UPON REQUEST BY THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. BUZZTIME ENTERTAINMENT, INC. WARRANT TO PURCHASE COMMON STOCK This certifies that, for value received, MEDIA GENERAL, INC., a Virginia corporation (the "Holder"), is entitled to subscribe for and purchase up to 500,000 shares (subject to adjustment from time to time pursuant to the provisions of Section 7 hereof) of fully paid and nonassessable common stock of Buzztime Entertainment, Inc., a Delaware corporation (the "Company"), at the price specified in Section 2 hereof, as such price may be adjusted from time to time pursuant to Section 7 hereof (the "Warrant Price"), subject to the provisions and upon the terms and conditions hereinafter set forth. As used herein, the term "Common Stock" shall mean the Company's common stock, par value $.001 per share, and any stock or other security into or for which such Common Stock may hereafter be converted or exchanged. This Warrant is issued pursuant to that certain Securities Purchase Agreement by and among NTN Communications, Inc., the Company and the Holder dated May 5, 2003 (the "Purchase Agreement"). 1. Term of Warrant The purchase right represented by this Warrant is exercisable, in whole or in part, at any time and from time to time during a period beginning on the date hereof and ending May 7, 2007. 2. Warrant Price The Warrant Price is $3.46 per share, subject to adjustment from time to time pursuant to the provisions of Section 7 hereof. 3. Cash Exercise Subject to Section 1 hereof, the purchase right represented by this Warrant may be exercised by the Holder, in whole or in part, by the surrender of this Warrant (with the notice of exercise form attached hereto as Exhibit 1 duly executed) at the principal office of the Company and by the payment to the Company, by cashier's check or wire transfer, of an amount equal to the then applicable Warrant Price per share multiplied by the number of shares then being purchased. 4. Net Exercise The Holder may exchange this Warrant, in whole or in part, for Common Stock by delivering to the Company such Warrant accompanied by the notice of exercise form attached hereto as Exhibit 1 duly executed. The number of shares of Common Stock to be received by the Holder upon exchange pursuant to this Section 4 shall be equal to (a) the number of shares of Common Stock allocable to the portion of the Warrant being exchanged (the "Exchange Number"), as specified by the Holder in the notice of exercise less (b) the number of shares of Common Stock equal to the quotient obtained by dividing (i) the product obtained by multiplying (A) the Warrant Price times (B) the Exchange Number by (ii) the Market Price as of the exercise date. The Company acknowledges that the provisions of this section are intended, in part, to ensure that a full or partial exchange of a Warrant pursuant to this section will qualify as a conversion, within the meaning of paragraph (d)(3)(ii) of Rule 144 under the federal Securities Act of 1933, as amended. At the request of the Holder, the Company will accept reasonable modifications to the exchange procedures provided for in this section in order to accomplish such intent. "Market Price" means, as of any date of determination, the price per share of Common Stock as determined as follows: (a) if such security is Publicly Traded as of the date of determination, the price shall be determined by computing the average, over a period consisting of the most recent twenty (20) trading days (or such shorter period as such security shall have been listed or quoted) occurring prior to the date of determination, of the applicable price set forth below (but excluding any trades or quotations that are not bona fide, arm's length transactions): (i) the average of the closing prices for such security on such trading day on all domestic national securities exchanges on which such security may be listed if such exchanges are the primary securities markets for such security, or (ii) if there have been no sales on any such exchange on such trading day, the average of the highest bid and lowest asked prices on all such exchanges at the end of such trading day if such exchanges are the primary securities markets for such security, or (iii) if on any trading day such security is not so listed on such an exchange, the closing sale price on such trading day quoted on the Nasdaq National Market or the Nasdaq Small-Cap Market, as applicable, or if there have been no sales on the Nasdaq National Market or the Nasdaq Small-Cap Market, as the case may be, on such trading day, the average of the highest bid and lowest asked prices quoted on the Nasdaq National Market or the Nasdaq Small-Cap Market, as the case may be, or (iv) if on any trading days such security is not so listed and not quoted in the Nasdaq National Market or Nasdaq Small-Cap Market, the average of the highest bid and lowest asked prices on such trading day in the domestic over-the-counter market as reported by the National Quotation Bureau, Incorporated, or any similar successor organization; provided, however, that (1) for the purposes of any determination of the "Market Price" of any share on any day on or after the "ex" date or any similar date for any dividend or distribution paid or to be paid with respect to such security, any price of such security on a day prior to such "ex" date or similar date shall be reduced by the fair market value of the per share amount of such dividend or such distribution as determined in good faith by the Board of Directors of the Company exercising reasonable business judgment and (2) for the purposes of any determination of the "Market Price" of any security on any day on or after (i) the effective day of any subdivision (by stock split or otherwise) or combination (by reverse stock split or otherwise) of outstanding securities or (ii) the "ex" date or any similar date for any dividend or distribution with respect to such securities in shares, any price of such security on a day prior to such effective date or "ex" date or similar date shall be appropriately adjusted to reflect such subdivision, combination, dividend or distribution; and (b) if such security is not Publicly Traded as of the date of determination, the Market Value Per Share as determined in good faith by the Board of Directors of the Company exercising their reasonable business judgment. "Market Value Per Share" means the price per share of Common Stock obtained by dividing (A) the Market Value by (B) the number of shares of Common Stock outstanding (on an as-converted, fully diluted basis to the extent any securities are convertible into, exercisable for or exchangeable for Common Stock on the date of determination) at the time of determination. - 2 - "Market Value" means the highest price that would be paid for the entire common equity interest in the Company on a going-concern basis in a single arm's-length transaction between a willing buyer and a willing seller (neither acting under compulsion), using valuation techniques then prevailing in the securities industry and assuming full disclosure of all relevant information and a reasonable period of time for effectuating such sale. "Publicly Traded" means, with respect to any security, that such security is (a) listed on a domestic securities exchange, (b) quoted on the Nasdaq National Market or the Nasdaq Small-Cap Market, or (c) traded in the domestic over-the-counter market, which trades are reported by the National Quotation Bureau, Incorporated or a similar successor organization. 5. Issuance of Shares and New Warrant The Company agrees that the shares so purchased shall be deemed to be issued to the Holder as the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares as aforesaid. In the event of any exercise of the rights represented by this Warrant, certificates for the shares of stock so purchased shall be delivered to the Holder within 15 days thereafter and, unless this Warrant has been fully exercised or expired, a new Warrant of like tenor representing the portion of the shares, if any, with respect to which this Warrant shall not then have been exercised, shall also be issued to the Holder within such 15 day period. 6. Stock Fully Paid; Reservation of Shares All shares of Common Stock which may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issue thereof. During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized, and reserved solely for the purpose of the issuance upon exercise of the purchase rights evidenced by this Warrant, a sufficient number of shares of its Common Stock to provide for the exercise of the rights represented by this Warrant. 7. Adjustment of Purchase Price and Number of Shares The securities purchasable upon the exercise of this Warrant, the Warrant Price and the number of shares purchasable upon exercise of this Warrant shall be subject to adjustment from time to time upon the occurrence of any of the following events described in (a), (b) and (c): (a) Reclassification, Consolidation, or Merger. In case of any reclassification or change of outstanding securities of the class issuable upon exercise of this Warrant (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), or in case of any consolidation or merger of the Company with or into another corporation, other than a merger with another corporation in which the Company is a continuing corporation and which does not result in any reclassification or change of outstanding securities issuable upon exercise of this Warrant, the Company, or such successor, as the case may be, shall execute a new Warrant, providing that the Holder of this Warrant shall have the right to exercise such new Warrant and procure upon such exercise, in lieu of each share of Common Stock theretofore issuable upon exercise of this Warrant, the kind and amount of shares of stock, other securities, money and property receivable upon such reclassification, change, consolidation, or merger by a Holder of one share of Common Stock. Such new Warrant shall provide for adjustments, which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 7. The provisions of this Section 7(a) shall similarly apply to successive reclassifications, changes, consolidations, and mergers. (b) Subdivision or Combination of Shares. If the Company at any time while this Warrant remains outstanding and unexpired shall subdivide or combine its common stock, or distribute dividends on its common stock payable in Common Stock, the Warrant Price shall be proportionately decreased in the case of a subdivision or dividend or increased in the case of a combination. - 3 - (c) Issuance of Additional Shares of Common Stock. If the Company shall issue, after the date upon which this Warrant was first issued (the "Purchase Date"), any Additional Stock (as defined below) without consideration or for a consideration per share less than the Warrant Price in effect immediately prior to the issuance of such Additional Stock, the Warrant Price in effect immediately prior to each such issuance shall forthwith (except as otherwise provided) be adjusted to a price determined by multiplying such Warrant Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such issuance (including shares of Common Stock deemed to be issued pursuant to Section 7(g)(1) or (2)) plus the number of shares of Common Stock that the aggregate consideration received by the Company for such issuance would purchase at such Warrant Price; and the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to such issuance (including shares of Common Stock deemed to be issued pursuant to Section 7(g)(1) or (2)) plus the number of shares of such Additional Stock. (d) Minimum for Adjustment. No adjustment of the Warrant Price shall be made in an amount less than one cent per share, provided that any adjustments that are not required to be made by reason of this sentence shall be carried forward and shall be either taken into account in any subsequent adjustment made prior to three (3) years from the date of the event giving rise to the adjustment being carried forward, or shall be made at the earlier of the end of three (3) years from the date of the event giving rise to the adjustment being carried forward and May 7, 2007. Except to the limited extent provided for in Sections 7(g)(3) and (4), no adjustment of such Warrant Price pursuant to Section 7(c) shall have the effect of increasing the Warrant Price above the Warrant Price in effect immediately prior to such adjustment. (e) Cash Consideration. In the case of the issuance of Common Stock for cash, the consideration shall be deemed to be the amount of cash paid therefor, before deducting any reasonable discounts, commissions or other expenses allowed, paid or incurred by the Company for any underwriting or otherwise in connection with the issuance and sale thereof. (f) Other Consideration. In the case of the issuance of the Common Stock for a consideration in whole or in part other than cash, the consideration other than cash shall be deemed to be the fair value thereof as determined by the Company's Board of Directors irrespective of any accounting treatment. (g) Options, Convertible Securities, and Exchangeable Securities. In the case of the issuance (whether before, on or after the applicable Purchase Date) of options to purchase or rights to subscribe for Common Stock, securities by their terms convertible into or exchangeable for Common Stock or options to purchase or rights to subscribe for such convertible or exchangeable securities, the following provisions shall apply for all purposes of Sections 7(c) through (h): (1) The aggregate maximum number of shares of Common Stock deliverable upon exercise (to the extent then exercisable) of such options to purchase or rights to subscribe for Common Stock shall be deemed to have been issued at the time such options or rights were issued and for a consideration equal to the consideration (determined in the manner provided in Sections 7(e) and (f)), if any, received by the Company upon the issuance of such options or rights plus the minimum exercise price provided in such options or rights for the Common Stock covered thereby. (2) The aggregate maximum number of shares of Common Stock deliverable upon conversion of, or in exchange (to the extent then convertible or exchangeable) for, any such convertible or exchangeable securities or upon the exercise of options to purchase or rights to subscribe for such convertible or exchangeable securities and subsequent conversion or exchange thereof shall be deemed to have been issued at the time such securities were issued or such options or - 4 - rights were issued and for a consideration equal to the consideration, if any, received by the Company for any such securities and related options or rights (excluding any cash received on account of accrued interest or accrued dividends), plus the minimum additional consideration, if any, to be received by the Company upon the conversion or exchange of such securities or the exercise of any related options or rights (the consideration in each case to be determined in the manner provided in Sections 7(e) and (f)). (3) In the event of any change in the number of shares of Common Stock deliverable or in the consideration payable to the Company upon exercise of such options or rights or upon conversion of or in exchange for such convertible or exchangeable securities, including, but not limited to, a change resulting from the antidilution provisions thereof (unless such options or rights or convertible or exchangeable securities were merely deemed to be included in the numerator and denominator for purposes of determining the number of shares of Common Stock outstanding for purposes of Section 7(c)), the Warrant Price, to the extent in any way affected by or computed using such options, rights or securities, shall be recomputed to reflect such change, but no further adjustment shall be made for the actual issuance of Common Stock or any payment of such consideration upon the exercise of any such options or rights or the conversion or exchange of such securities. (4) Upon the expiration of any such options or rights, the termination of any such rights to convert or exchange or the expiration of any options or rights related to such convertible or exchangeable securities, the Warrant Price, to the extent in any way affected by or computed using such options, rights or securities or options or rights related to such securities (unless such options or rights were merely deemed to be included in the numerator and denominator for purposes of determining the number of shares of Common Stock outstanding for purposes of Section 7(c)), shall be recomputed to reflect the issuance of only the number of shares of Common Stock (and convertible or exchangeable securities that remain in effect) actually issued upon the exercise of such options or rights, upon the conversion or exchange of such securities or upon the exercise of the options or rights related to such securities. (5) The number of shares of Common Stock deemed issued and the consideration deemed paid therefor pursuant to Sections 7(g)(1) and (2) shall be appropriately adjusted to reflect any change, termination or expiration of the type described in either Section 7(g)(3) or (4). (h) Definition of Additional Stock. "Additional Stock" shall mean any shares of Common Stock issued (or deemed to have been issued pursuant to Section 7(g)) by the Company after the Purchase Date other than: (1) Common Stock issued pursuant to a transaction described in Section 7(b) hereof; (2) securities issuable upon conversion or exercise of currently outstanding warrants, options or other contractual obligations of the Company as disclosed on Schedule 4.6(a) of the Purchase Agreement; (3) securities in an aggregate amount of up to 15% of the fully-diluted Common Stock issued or issuable to employees, officers, directors, contractors, advisors or consultants of the Company pursuant to stock options or other stock incentive agreements or plans approved by the Board of Directors; (4) securities issued pursuant to acquisition transactions, joint ventures or strategic partnerships; - 5 - (5) securities offered by the Company in an underwritten offering to the public pursuant to a registration statement filed under the Securities Act; and (6) securities in an aggregate amount of up to 5% of the fully-diluted Common Stock issued in connection with arrangements with financial institutions or lessors in connection with commercial credit arrangements, equipment financings or similar transactions. (i) Adjustment of Number of Shares. Upon each adjustment in the Warrant Price pursuant to Section 7(a), (b) or (c), the number of shares of Common Stock purchasable hereunder shall be adjusted, to the nearest whole share, to the product obtained by multiplying the number of shares purchasable immediately prior to such adjustment in the Warrant Price by a fraction, the numerator of which shall be the Warrant Price immediately prior to such adjustment and the denominator of which shall be the Warrant Price immediately thereafter. 8. Notice of Adjustments Whenever any event described in Section 7(a), (b) or (c) occurs, the Company shall prepare a certificate signed by its chief financial officer setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, the Warrant Price after giving effect to such adjustment and the number of shares then purchasable upon exercise of this Warrant, and shall cause copies of such certificate to be mailed (by first class mail, postage prepaid) to the Holder of this Warrant at the address specified in Section 14(c) hereof, or at such other address as may be provided to the Company in writing by the Holder of this Warrant. 9. No Impairment The Company shall not, by amendment of its certificate of incorporation or through any consolidation, merger, reorganization, transfer of assets, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be reasonably necessary or appropriate in order to protect the rights of the Holder of this Warrant against impairment. Without limiting the generality of the foregoing, the Company (a) shall not permit the par value of any shares of stock receivable upon the exercise of this Warrant to exceed the amount payable therefor upon such exercise, (b) shall take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of stock, free from all taxes, liens, security interests, encumbrances, preemptive rights and charges on the exercise of this Warrant from time to time outstanding, and (c) shall not take any action which results in any adjustment of the Warrant Price if the total number of shares of Common Stock issuable after the action upon the exercise of this Warrant would exceed the total number of shares of Common Stock then authorized by the Company's certificate of incorporation and available for the purpose of issue upon such exercise. 10. Notices of Corporate Action In the event of: (a) any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right; - 6 - (b) any capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company, any consolidation or merger involving the Company and any other person, any transaction or series of transactions in which more than 50% of the voting securities of the Company are transferred to another person, or any transfer, sale or other disposition of all or substantially all the assets of the Company to any other person; or (c) any voluntary or involuntary dissolution, liquidation or winding-up of the Company; then the Company shall mail to the Holder a notice specifying (i) the date or expected date on which any such record is to be taken for the purpose of such dividend, distribution or right, and the amount and character of such dividend, distribution or right, and (ii) the date or expected date on which any such reorganization, reclassification, recapitalization, consolidation, merger, transfer, sale, disposition, dissolution, liquidation or winding-up is to take place and the time, if any such time is to be fixed, as of which the holders of record of Common Stock shall be entitled to exchange their shares of Common Stock for the securities or other property deliverable upon such reorganization, reclassification, recapitalization, consolidation, merger, transfer, dissolution, liquidation or winding-up. Such notice shall be mailed at least 20 calendar days prior to the date therein specified but in no event earlier than the public announcement of such proposed transaction or event if the Company is Publicly Traded. 11. Fractional Shares No fractional shares of Common Stock will be issued in conjunction with any exercise hereunder, but in lieu of such fractional shares the Company shall make a cash payment therefor on the basis of the Warrant Price then in effect. 12. Compliance with Securities Act The Holder of this Warrant, by acceptance hereof, agrees that this Warrant and the shares of Common Stock to be issued on exercise hereof are being acquired for investment and that it will not offer, sell or otherwise dispose of this Warrant or any shares of Common Stock to be issued upon exercise hereof except under circumstances which will not result in a violation of the Securities Act of 1933, as amended (the "Act"). This Warrant and all shares of Common Stock issued upon exercise of this Warrant (unless registered under the Act) shall be stamped and imprinted with a legend substantially in the following form: "THIS SECURITY AND ANY SHARES ISSUED UPON EXERCISE OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THE APPLICABLE SECURITY HAS BEEN REGISTERED UNDER THE ACT AND SUCH LAWS OR (1) REGISTRATION UNDER SUCH LAWS IS NOT REQUIRED AND (2) AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS FURNISHED UPON REQUEST BY THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED." 13. Transfer and Exchange of Warrant This Warrant is not transferable (except to an affiliate of the Holder) or exchangeable (except pursuant to the Buzztime Investor Rights Agreement dated as of May 7, 2003) without the consent of the Company. 14. Miscellaneous (a) No Rights as Shareholder. The Holder shall not be entitled to vote or receive dividends or be deemed the holder of Common Stock or any other securities of the Company that may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the Holder, as such, any of the rights of a shareholder of the - 7 - Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value or change of stock to no par value, consolidation, merger, conveyance or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until the Warrant shall have been exercised and the shares purchasable upon the exercise hereof shall have become deliverable, as provided herein. (b) Replacement. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and, in the case of mutilation, on surrender and cancellation of this Warrant, the Company, at its expense, will execute and deliver, in lieu of this Warrant, a new Warrant of like tenor and amount. (c) Notice. Any notice given to either party under this Warrant shall be in writing, and any notice hereunder shall be deemed to have been given upon the earlier of delivery thereof by hand delivery, by courier, or by standard form of telecommunication or three (3) business days after the mailing thereof in the U.S. mail if sent registered mail with postage prepaid, addressed to the Company at its principal executive offices and to the Holder at its address set forth in the Company's books and records or at such other address as the Holder may have provided to the Company in writing. (d) Governing Law. This Warrant shall be governed and construed under the laws of the State of Delaware, without regard to its conflict of laws principles. [remainder of page intentionally left blank; signature page follows]This Warrant is executed as of this 7th day of May, 2003. - 8 - This Warrant is executed as of this 7th day of May, 2003. BUZZTIME ENTERTAINMENT, INC. By: /s/ James B. Frakes ---------------------------------- Name: James B. Frakes Title: Chief Financial OfficerEXHIBIT 1 EXHIBIT 1 NOTICE OF EXERCISE TO: BUZZTIME ENTERTAINMENT, INC. 1. The undersigned hereby elects to [purchase] [exchange] shares of Common Stock of Buzztime Entertainment, Inc. pursuant to the terms of the attached Warrant, and [tenders herewith payment of the purchase price of such shares in full] [elects to exchange a portion of such Warrant representing the right to acquire such shares]. 2. Please issue a certificate or certificates representing said shares of Common Stock in the name of the Holder at the address specified below: ----------------------------------- (Name) ----------------------------------- (Address) ----------------------------------- (Address) 3. The undersigned represents that any of the aforesaid shares of Common Stock are being acquired for the account of the undersigned for investment and not with a view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares, except as otherwise permitted under the Securities Act of 1933, as amended. 4. The undersigned represents that each of the investment representations given in Section 5 of the Purchase Agreement are true, correct and complete as of the date hereof. --------------------------------------- (Signature of Holder) --------------------------------------- (Print Name of Holder) EX-4.3 6 bzrightsagrmt.txt BUZZTIME INVESTOR RIGHTS AGREEMENT Exhibit 4.3 BUZZTIME INVESTOR RIGHTS AGREEMENT This BUZZTIME INVESTOR RIGHTS AGREEMENT (this "Agreement") is made and entered into as of May 7, 2003 by and among Buzztime Entertainment, Inc., a Delaware corporation (the "Company"), NTN Communications, Inc., a Delaware corporation ("NTN"), and Media General, Inc., a Virginia corporation (the "Investor"). RECITALS A. NTN, the Company and the Investor have entered into a Securities Purchase Agreement (the "Purchase Agreement") dated as of May 5, 2003 pursuant to which, among other things, the Investor will purchase from the Company warrants exercisable for shares of the Company's common stock (the "Warrants"). B. A condition to the Investor's obligations under the Purchase Agreement is that the Company, NTN and the Investor enter into this Agreement in order to provide the parties with the rights set forth herein. C. The Company and NTN desire to induce the Investor to purchase the Warrants pursuant to the Purchase Agreement by agreeing to the terms and conditions set forth below. D. In connection with the Purchase Agreement, the Company, NTN and the Investor will enter into a Licensing Agreement dated as of May 7, 2003 (the "Licensing Agreement") concurrently with the execution of this Agreement. NOW, THEREFORE, in consideration of the above recitals and the mutual covenants and conditions contained in this Agreement, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. Definitions (a) "Capital Securities" means the Common Stock and any securities or obligations that are exercisable for, convertible into or exchangeable for shares of Common Stock including options, warrants or other rights to subscribe for or purchase other securities that are convertible into or exchangeable for Common Stock, including the Warrants. Capital Securities does not include the NTN common stock obtained pursuant to Section 5 hereof. (b) "Common Stock" means the Company's common stock, $.001 par value per share. (c) "Investor Securities" means the Capital Securities now owned or subsequently acquired by the Investor under the Warrants or the Licensing Agreement. (d) "NTN's Securities" means the Capital Securities now owned or subsequently acquired by NTN. (e) "Person" means and includes natural persons, corporations, limited partnerships, general partnerships, limited liability companies, limited liability partnerships, joint stock companies, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities. (f) "Qualified Public Offering" means the closing of an underwritten offering by registration statement on a Form S-1 (or any other form equivalent thereto) pursuant to which Common Stock is sold to the public by the Company in a public offering registered under the Securities Act, that has an aggregate public offering price of not less than $10 million, prior to underwriting commissions and expenses, at a pre-money Company valuation in excess of $35 million and the shares are listed on a national securities exchange or the Nasdaq national market. (g) "Sale of the Company" means, with respect to the Company or NTN, as applicable, (i) the sale, conveyance or other disposition of all or substantially all of the entity's assets or business to any Person (other than an "affiliate" of the Company or NTN) in a transaction that results in the liquidation of such entity and the distribution of all of the net proceeds (such net proceeds excluding amounts for transaction expenses, reserves for indemnification and other customary costs and expenses) to the equity holders of such entity, or (ii) the entity's merger into or consolidation with any other corporation (other than an "affiliate" of the Company or NTN) which results in the distribution of all of the net consideration for such merger or consolidation to the equity holders of such entity. For purposes of this definition, an "affiliate" of the Company or NTN shall mean any Person that directly or indirectly controls, is controlled by, or under common control with the Company or NTN. 2. Preemptive Rights 2.1 Preemptive Rights Granted. If the Company proposes to issue or sell any New Securities (as defined below), the Investor, provided that the Investor holds at least half of the Investor Securities acquired under the Purchase Agreement, shall have a preemptive right to purchase up to a pro rata share of such New Securities proposed to be issued or sold in accordance with the terms of this Section 2. The Investor's pro rata share is the ratio of the number of shares of Common Stock represented by the Investor Securities held immediately prior to the issuance or sale of New Securities to the total number of shares of Common Stock outstanding on a fully-diluted basis immediately prior to the issuance or sale of New Securities. 2.2 New Securities. "New Securities" shall mean any capital stock or similar security or any security convertible or exchangeable, with or without consideration, into or for any capital stock or similar security, or any security carrying any warrant or right to subscribe for or purchase any capital stock or similar security, or any such warrant or right, of the Company whether now authorized or not, provided that the New Securities do not include: (a) securities issuable upon conversion or exercise of currently outstanding warrants or options of the Company as disclosed on Schedule 4.6(a) of the Purchase Agreement (including the Warrants); (b) securities in an aggregate amount of up to 15% of the fully-diluted Common Stock issued or issuable to employees, officers, directors, contractors, advisors or consultants of the Company pursuant to stock options or other stock incentive agreements or plans approved by the Board of Directors; (c) securities issued pursuant to acquisition transactions, joint ventures or strategic partnerships; (d) securities offered by the Company in an underwritten offering to the public pursuant to a registration statement filed under the Securities Act of 1933, as amended (the "Securities Act"); (e) securities issued in connection with any stock split, stock dividend or recapitalization of the Company; and (f) securities in an aggregate amount of up to 5% of the fully-diluted Common Stock issued in connection with arrangements with financial institutions or lessors in connection with commercial credit arrangements, equipment financings or similar transactions. 2.3 Notice; Exercise of Preemptive Rights. In the event the Company proposes to issue or sell New Securities, it shall give the Investor written notice of its intention, describing the New Securities, their price and the terms upon which the Company proposes to issue or sell the same. The Investor shall have 20 calendar days after such notice is given to agree to purchase up to such Investor's pro rata share of such New Securities for the price and upon the terms specified in the notice by giving written notice to the Company and stating therein the quantity of New Securities to be purchased. - 2 - 2.4 Sale of New Securities. In the event that the Investor fails to exercise fully all preemptive rights within said 20-day period, the Company shall have 120 days thereafter to sell the remaining New Securities that the Investor does not elect to purchase upon exercise of the preemptive rights pursuant to this Section 2, at a price and upon terms no more favorable to the purchasers thereof than specified in the Company's notice to the Investor pursuant to subsection 2.3. In the event the Company has not sold all such remaining New Securities within such 120-day period, the Company shall not thereafter issue or sell any New Securities, without first again offering such securities to the Investor in the manner provided in subsection 2.3 above. 3. Co-Sale Rights. 3.1 Notice of Transfer. If NTN proposes to effect any transaction that would result in the transfer of all or a portion NTN's Securities (a "Purchase Offer") to any Person upon specific terms and conditions (including a specified purchase price payable in cash or other property), then, as a condition to such transfer, NTN shall promptly notify the Investor in writing of the terms and conditions of such Purchase Offer (a "Disposition Notice"). 3.2 Grant of Right. The Investor shall have the right, exercisable upon written notice to NTN within ten (10) calendar days after receipt of the Disposition Notice of the Purchase Offer, to participate in the sale of NTN's Securities on the same specified terms and conditions of such Purchase Offer, including the price per share. To the extent the Investor exercises such right of participation in accordance with the terms and conditions set forth below, the number of shares of the Common Stock (or securities convertible into such number of shares of Common Stock) that NTN may sell pursuant to such Purchase Offer shall be correspondingly reduced. The right of participation of the Investor shall be subject to the following terms and conditions: (a) The Investor may sell all or any part of that number of Investor Securities equal to the product obtained by multiplying the aggregate number of shares of Common Stock (or securities convertible into such number of shares of Common Stock) covered by the Purchase Offer by a fraction, (x) the numerator of which shall be the number of Investor Securities and (y) the denominator of which shall be the sum of the number of Investor Securities and NTN's Securities, each on an as-converted, fully-diluted basis. (b) The Investor may effect its participation in the sale by delivering to NTN, for transfer to the purchase offeror, one or more certificates, properly endorsed for transfer, that represents the Investor Securities that the Investor elects to sell. (c) To the extent that any prospective purchaser or purchasers prohibit such exercise of this co-sale right or otherwise refuses to purchase Investor Securities from the Investor exercising its co-sale right hereunder, NTN shall not sell to such prospective purchaser or purchasers any of NTN's Securities unless and until, simultaneously with such sale, NTN shall purchase such Investor Securities from the Investor for the same consideration and on the same terms and conditions as the proposed transfer described in the Disposition Notice. (d) In the event that the Investor elects not to sell all of the Investor Securities that it is entitled to sell pursuant to subsection (a) above, NTN shall have 120 days thereafter to sell the NTN's Securities that it proposed to sell in the Disposition Notice, at a price and upon terms no more favorable to the purchasers thereof than those specified in the Disposition Notice. If NTN has not sold all such NTN's Securities within such 120-day period, NTN shall not thereafter sell any NTN's Securities unless it delivers a new Disposition Notice to the Investor in accordance with Section 3.1. - 3 - 3.3 Mechanics of Transfer. The stock certificates that the Investor delivers to NTN shall be transferred by NTN to the purchase offeror in consummation of the sale of NTN's Securities pursuant to the terms and conditions specified in the Disposition Notice, and NTN shall promptly thereafter remit to the Investor that portion of the sale proceeds (and in no event later than three business days after the receipt of such proceeds) to which the Investor is entitled by reason of its participation in such sale. In the event that less than all the shares represented by such a stock certificate are sold, NTN shall instruct the Company to issue a new certificate to the Investor representing the shares not sold. 3.4 No Effect on Subsequent Rights. The exercise or non-exercise of the rights of the Investor hereunder to participate in one or more sales of NTN's Securities made by NTN shall not adversely affect the Investor's rights to participate in subsequent sales of shares of NTN's Securities. 3.5 Permitted Transfers. This Section 3 shall not apply to (i) any pledge made pursuant to a bona fide loan transaction that creates a security interest, (ii) any transfer to an "affiliate" of NTN as such term is defined under Rule 405 of the Securities Act or (iii) an authorized repurchase by the Company applicable to the Investor Securities and NTN's Securities. 4. Drag-Along Rights 4.1 General. Subject to Sections 4.4 and 5.1(e), in connection with a sale to any unaffiliated Person by NTN of a majority or more of the shares of Common Stock on a fully-diluted basis, NTN shall have the right, at its election and in its sole discretion, to cause the Investor (and any of its assignees) to sell their Investor Securities in such sale to such Person for the same price per share and upon the same terms and conditions as the sale by NTN to such Person. 4.2 Transfer Notice. If NTN elects to exercise its drag-along rights, NTN shall deliver a transfer notice to the Investor not later than five (5) business days prior the date of the proposed transfer. The transfer notice shall set forth the terms and conditions of the sale and shall set forth the number of Investor Securities subject to transfer pursuant to the drag-along rights, which number shall represent the same proportionate percentage of the total number of Investor Securities as the number of shares of Common Stock being sold by NTN represents of the total number of NTN's Securities, and such notice shall also contain, if available, a copy of any definitive documentation pursuant to which the Common Stock is to be sold. The Investor shall transfer all Investor Securities subject to transfer for the same price per share and on the same terms and conditions applicable to the sale by NTN. 4.3 Procedures. Upon receipt of a transfer notice, the Investor shall promptly take all reasonable steps described in the transfer notice to effectuate the transfer of its proportionate share of Investor Securities, including the furnishing of information customarily provided in connection with such a transfer and the execution of customary transfer documents, with customary representations and warranties regarding title to securities and the absence of any liens or other encumbrances thereon (provided that the Investor shall only be required to make representations and warranties regarding its securities and its liability therefor shall be several (and not joint) and in no event will the Investor have any liability in excess of the net consideration received by the Investor in the sale). 4.4 Warrants. In the event a sale referred to in Section 4.1 occurs and the Investor holds all or any portion of the Warrants, the Investor may, upon receipt of a transfer notice under Section 4.2 (i) exercise all or any portion of its Warrants (by cash payment or net exercise), at which time the Investor's resulting Common Stock shall be subject to the terms and conditions set forth in such transfer notice unless the Investor exercises its NTN Optional Exchange under Section 5.1(e); (ii) surrender and forfeit all or any portion of its Warrants in lieu of exercising the Warrants; or (iii) accept the consideration offered for all or any portion of the Warrants by the purchaser in such a sale, if any. - 4 - 5. Exchange of Buzztime Securities for NTN Securities 5.1 NTN Optional Exchange. Upon the occurrence of any of (a) the second anniversary of the date of this Agreement, (b) the fourth anniversary of the date of this Agreement, (c) a Sale of the Company with respect to NTN, (d) bankruptcy, liquidation, dissolution or other insolvency proceeding of the Company, whether voluntary or involuntary or (e) if NTN elects to exercise its drag-along rights under Section 4 and the consideration to be received is not cash and/or securities tradeable without restriction on a national securities exchange or the Nasdaq national market or smallcap market (each, a "Trigger Event"), the Investor shall have the option ("NTN Optional Exchange"), upon notice to the Company and NTN, to exchange each share of Common Stock issued under the Warrants or the Licensing Agreement held by the Investor (the "Buzztime Exchange Shares") into two fully paid and nonassessable shares of NTN common stock (the "NTN Exchange Shares") (as adjusted to reflect any forward or reverse stock splits, stock combinations, stock dividends, mergers or reclassifications affecting the Common Stock or the NTN common stock). The Investor shall have the right to exercise the NTN Optional Exchange only twice. NTN shall provide a written notice to the Investor five (5) business days prior to the occurrence of a Trigger Event under Section 5.1(c) and fifteen (15) business days prior to the occurrence of a Trigger Event under Section 5.1(d) that is voluntary by the Company or NTN. NTN shall provide a written notice to the Investor promptly upon the occurrence of an involuntary Trigger Event under Section 5.1(d). With respect to a Trigger Event under Section 5.1(c), the written notice therefor shall include a description of the terms and conditions of the Sale of the Company and the anticipated sale date and, if available, a copy of any definitive documentation to be used to effect such sale. 5.2 Mechanics of NTN Optional Exchange. The Investor may exercise its NTN Optional Exchange (a) with respect to a Trigger Event under Section 5.1(a) or (b), at any time during the period beginning on the date of the Trigger Event and ending 45 days thereafter; (b) with respect to a Trigger Event under Section 5.1(c) or (d), at any time during the period beginning on the date the Investor receives the written notice of such Trigger Event required under Section 5.1 and ending on the earlier of (i) the business day before the Trigger Event occurs or (ii) fifteen (15) business days after the Investor's receipt of Company's or NTN's notice of the Trigger Event, provided that in the event of an involuntary Trigger Event under Section 5.1(d), the Investor shall have at least five (5) business days after receipt of notice to exercise its NTN Optional Exchange; and (c) with respect to a Trigger Event under Section 5.1(e), at any time during the period beginning on the date the Investor receives the transfer notice required under Section 4.2 and ending on the day before the date of the sale described in such transfer notice. If the Investor exercises its NTN Optional Exchange, it shall deliver (i) the certificates evidencing the Buzztime Exchange Shares being exchanged, (ii) written notice of exchange and proper assignment of such certificates to NTN and (iii) a certificate signed by an authorized officer of the Investor pursuant to Section 5.3, to the office of any transfer agent for the Common Stock or to any other office or agency maintained by the Company for that purpose. The NTN Optional Exchange shall be deemed to have been effected immediately prior to the close of business on the date on which the foregoing requirements shall have been satisfied, and the Person or Persons entitled to receive the NTN Exchange Shares deliverable upon exchange of the Buzztime Exchange Shares shall be treated for all purposes as the record holder or holders of such NTN Exchange Shares at such time on such date. NTN shall, as soon as practicable after the surrender for exchange of certificates evidencing the Buzztime Exchange Shares and compliance with the other conditions herein contained, deliver at the offices of such transfer agent to the Person for whom such Buzztime Exchange Shares are so surrendered, or to the nominee or nominees of such Person, certificates evidencing the number of full shares of NTN Exchange Shares to which such Person shall be entitled, together with a cash payment in respect of any fraction of a share of NTN Exchange Shares. 5.3 Investor Representations and Warranties. On the date the Investor sends notice of exercise of its NTN Optional Exchange, an authorized officer of the Investor shall sign a certificate in which the Investor represents, warrants and covenants that at the time of the NTN Optional Exchange the following is true and correct: - 5 - (a) The NTN Exchange Shares 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 NTN Exchange Shares except for the Investor's registration rights with respect thereto. The Investor has not seen or received any advertisement or general solicitation with respect to the NTN Exchange Shares. (b) The Investor believes it has received all the information it considers necessary or appropriate for deciding whether to purchase the NTN Exchange Shares. 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 NTN Exchange Shares and the business, properties, prospects and financial condition of NTN. (c) 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 NTN Exchange Shares. The Investor also represents it has not been organized for the purpose of acquiring the NTN Exchange Shares. The Investor acknowledges that it must bear the economic risk of this investment indefinitely unless the NTN Exchange Shares are registered pursuant to the Securities Act 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 NTN Exchange Shares under the circumstances, in the amounts or at the times the Investor might propose. (d) 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. (e) The Investor understands that the NTN Exchange Shares 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 NTN Exchange Shares 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 Rule 144 under the Securities Act, as then in effect, understands the resale limitations imposed thereby and by the Securities Act, and understands that the NTN Exchange Shares may not currently be resold in reliance upon Rule 144. 5.4 NTN Call Right. In the event a Sale of the Company occurs with respect to NTN, NTN shall have the right to require the Investor to exchange all of its Buzztime Exchange Shares for NTN Exchange Shares upon five (5) business days notice using the mechanics comparable to those set forth in Section 5.2 as if the Investor had exercised its rights under the NTN Optional Exchange. In the event a Sale of the Company occurs with respect to NTN and the Investor holds all or any portion of the Warrants, NTN shall have the right to require the Investor to effect one or more of the following alternatives (as determined by the Investor in its sole discretion): (i) to exercise all or any portion of its Warrants (by cash payment or net exercise), at which time NTN shall have the right to require the Investor to exchange all of its resulting Buzztime Exchange Shares as provided above; (ii) to surrender and forfeit all or any portion of its Warrants in lieu of exercising the Warrants and exchanging the resulting Buzztime Exchange Shares; or (iii) to accept the consideration offered for all or any portion of the Warrants by the purchaser in such a Sale of the Company, if any. - 6 - 5.5 Warrant Exchange. In the event of a bankruptcy, liquidation, dissolution or other insolvency proceeding of the Company, whether voluntary or involuntary, the Investor shall have the option, upon notice to the Company and NTN, to exchange the Warrants held by the Investor into warrants of like tenor for twice the number of fully paid and nonassessable shares of NTN common stock for the same aggregate exercise price (as adjusted to reflect any forward or reverse stock splits, stock combinations, stock dividends, mergers or reclassifications affecting the Common Stock or the NTN common stock). The new warrant will contain equivalent terms, including an exercise price of $1.73, as adjusted. The exercise of the warrant exchange rights under this Section 5.5 shall be deemed to be the exercise of the NTN Optional Exchange (provided that the rights under this Section 5.5 may, to the extent exercisable, be exercised concurrently with the NTN Optional Exchange under Section 5.1). 5.6 Legend. NTN hereby agrees to issue such shares of its common stock or warrants as required under this Section 5; provided that each certificate or warrant issued shall be endorsed with the following legend: "THIS SECURITY [AND ANY SHARES ISSUED UPON EXERCISE OF THIS SECURITY] HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THE APPLICABLE SECURITY HAS BEEN REGISTERED UNDER THE ACT AND SUCH LAWS OR (1) REGISTRATION UNDER SUCH LAWS IS NOT REQUIRED AND (2) AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS FURNISHED UPON REQUEST BY THE COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED." 5.7 Termination. In addition to the conditions set forth in Section 8.1, this Section 5 shall terminate and be of no further force or effect on the later of (i) the fourth anniversary of this Agreement or (ii) the expiration of NTN's drag-along rights provided for in Section 4; provided that this provision shall not impair the Investor's right to exercise the NTN Optional Exchange upon the occurrence of the Trigger Event under Section 5.1(b) in accordance with the other provisions of this Section 5, and shall not affect any exercise of the NTN Optional Exchange initiated prior to such fourth anniversary or such expiration of NTN's drag-along rights. 6. Legend (a) Each certificate representing Common Stock now or hereafter owned by NTN and the Investor shall be endorsed with the following legend: "THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF THE BUZZTIME INVESTOR RIGHTS AGREEMENT AMONG THE HOLDER OF THE SECURITIES, THE COMPANY AND CERTAIN STOCKHOLDERS OF THE COMPANY. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY." (b) Under no circumstances shall any transfer of Capital Securities subject hereto be valid until the proposed transferee thereof shall have executed and become a party to this Agreement and thereby shall have become subject to all of the provisions hereof; and regardless of any other provisions of this Agreement, no such transfer of any kind shall in any event result in the non-applicability of the provisions hereof at any time to any of the Capital Securities subject hereto. (c) NTN and the Investor agree that the Company may instruct its transfer agent to impose transfer restrictions on the Common Stock represented by certificates bearing the legend referred to in Section 6(a) above to enforce the provisions of this Agreement and the Company agrees to promptly do so. The legend shall be removed upon termination of Sections 3, 4 and 5 of this Agreement. - 7 - 7. Registration Rights 7.1 Registrable Securities. "Registrable Securities" means all shares of Common Stock now or hereafter owned or held by the Investor acquired under the Warrants or the Licensing Agreement. Registrable Securities do not include the Warrants (except in relation to the underlying shares of Common Stock). 7.2 Registrations on Form S-3. Following a Qualified Public Offering, the Company shall use its commercially reasonable efforts to qualify for registration on Form S-3 or any comparable or successor form or forms, and after receiving any such qualification, the Company shall file all reports required to be filed by the Company with the SEC in a timely manner and otherwise use commercially reasonable efforts so as to maintain its eligibility for the use of Form S-3 or any comparable or successor form or forms. After the Company has qualified for the use of Form S-3, the Investor shall have the right at any time and from time to time to request a registration on Form S-3 or any comparable or successor form or forms (a "Short Form Registration") if the estimated offering price of shares subject to such registration shall be at least $1,000,000; provided, that the Company shall not be required to effect a Short Form Registration more frequently than twice (counting for these purposes only registrations which have been declared or ordered effective) during any 12 consecutive month period. Such requests shall be in writing and shall state the number of shares of Registrable Securities proposed to be disposed of and the intended method of distribution of such shares by the holders. 7.3 Right to Defer Registration. The Company may postpone for up to ninety (90) days the filing or the effectiveness of a registration statement for a Short Form Registration pursuant to Section 7.2 if its Board of Directors determines, reasonably and in good faith, that such registration might have a material and adverse effect on any proposal or plan by the Company to engage in any acquisition, merger, consolidation, tender offer or any other material transaction; provided, that the Company may not postpone the filing or effectiveness of a registration statement pursuant to this Section 7.3 more than twice during any period of 12 consecutive months. Any suspension under this Section 7.3, along with any suspension of a prospectus under Section 7.7 and any market standoff period under Section 7.17, shall not exceed an aggregate of 180 days in any twelve month period. 7.4 Right to Piggyback Registrations. If the Company proposes to register any of its securities under the Securities Act either for its own account or the account of a security holder or holders in an underwritten offering (other than a registration solely in connection with an employee benefit or stock ownership plan) and the registration form to be used may be used for the registration of Registrable Securities (a "Piggyback Registration"), the Company will give prompt written notice to the Investor of its intention to effect such a registration (each, a "Piggyback Notice"). Subject to Section 7.5, the Company will include in such registration all shares of Registrable Securities that the Investor requests the Company to include in such registration by written notice given to the Company within five business days after the date of receiving the Piggyback Notice. 7.5 Priority on Piggyback Registrations. If the managing underwriters in a Piggyback Registration advise the Company in writing that in their opinion the number of securities requested to be included in such registration exceeds the number that can be sold in an orderly manner in such offering within a price range acceptable to the Company, the Company will include in such registration (i) first, in the case of a registration initiated by the Company, the securities proposed to be sold by the Company, or in the case of a registration initiated by a security holder, the securities proposed to be sold by such holder, (ii) second, the securities held by those holders who have existing piggyback registration rights as disclosed on Schedule 4.6(b) of the Purchase Agreement and have requested to be included in such registration, (iii) third, to the Registrable Securities of the holders requested to be included in such registration, pro rata among all holders entitled to participate in such - 8 - offering on the basis of the number of shares of Registrable Securities requested to be included in such registration, and (iv) fourth, other securities requested to be included in such registration. The Company agrees that the Investor shall have priority over any holder of securities of the Company who is accorded registration rights in the future; provided that any holder who purchases $3 million or more of securities from the Company and its subsidiaries may have shared priority with the holders of the Registrable Securities on a pari passu basis. 7.6 Registration Procedures. Whenever the Investor has requested that any Registrable Securities be registered pursuant to this Agreement, the Company will use commercially reasonable efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of distribution thereof (which may include an underwritten offering conducted by an underwriter or underwriters selected by the Investor) and will as expeditiously as possible: (a) prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its best efforts to cause such registration statement to become effective as soon as possible thereafter and to remain effective as otherwise provided in this Section 4, provided that before filing a registration statement or prospectus or any amendments or supplements thereto, the Company will furnish to the counsel selected by the Investor copies of all such documents proposed to be filed, which documents will be subject to the review of such counsel and the sections of the registration statement covering information with respect to the Investor, the Investor's beneficial ownership of securities of the Company and the Investor's intended method of disposition of the Registrable Securities shall conform to the information provided by the Investor; (b) prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for a period of at least two years (as extended by the aggregate number of days included in all periods of postponement, suspension and/or lockup of sales under Sections 7.3, 7.7 and 7.17) or until the Investor has completed the distribution described in the registration statement relating thereto, whichever first occurs, and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of distribution by the sellers thereof set forth in such registration statement; (c) furnish to the Investor such number of copies of such registration statement, each amendment and supplement thereto, the prospectus included in such registration statement (including each preliminary prospectus) and such other documents as the Investor may reasonably request in order to facilitate the disposition of the Registrable Securities owned by the Investor; (d) use its best efforts to register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdictions as the Investor reasonably requests and do any and all other acts and things that may be reasonably necessary or advisable to enable the Investor to consummate the disposition in such jurisdictions of the Registrable Securities owned by the Investor, provided that the Company will not be required (i) to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subparagraph, (ii) to subject itself to taxation in any such jurisdiction, or (iii) to consent to general service of process in any such jurisdiction; (e) notify Investor, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement contains an untrue statement of a material fact or omits any fact necessary to make the statements therein not misleading, and, at the request of the Investor, - 9 - the Company will prepare a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading; (f) cause all such Registrable Securities to be listed on each securities exchange on which similar securities issued by the Company are then listed and to be qualified for trading on each system on which similar securities issued by the Company are from time to time qualified, and the Company agrees to use commercially reasonable efforts to maintain listing of the Common Stock on the American Stock Exchange or the other primary national exchange or quotation system that constitutes the principal market for the Common Stock at the time; (g) provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of such registration statement and thereafter maintain such a transfer agent and registrar; (h) enter into such customary agreements (including underwriting agreements in customary form) and take all such other actions as the Investor or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities being sold, including obtaining customary letters and consents from the Company's independent certified public accountants and the participation of management in at least one "road show" if requested by the underwriters at a time and location reasonably acceptable to management; (i) make available for inspection by any underwriter participating in any disposition pursuant to such registration statement and any attorney, accountant or other agent retained by any such underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company's officers, directors, employees and independent accountants to supply all information reasonably requested by any such underwriter, attorney, accountant or agent in connection with such registration statement; (j) permit the Investor, if it might be deemed, in the sole and exclusive judgment of the Investor, to be an underwriter or a controlling Person of the Company, to participate in the preparation of such registration or comparable statement and to require the insertion therein of material, furnished to the Company in writing, that in the reasonable judgment of the Investor or its counsel should be included; (k) in the event of the issuance of any stop order suspending the effectiveness of a registration statement, or of any order suspending or preventing the use of any related prospectus or suspending the qualification of any Registrable Securities included in such registration statement for sale in any jurisdiction, the Company will notify the Investor and use its reasonable best efforts promptly to obtain the withdrawal of such order; and (l) take all other reasonable actions necessary to expedite and facilitate the registration and the sale of the Registrable Securities in accordance with the intended method of distribution thereof. If any such registration statement refers to the Investor by name or otherwise as the holder of any securities of the Company and if, in the sole and exclusive judgment of the Investor, the Investor is or might be deemed to be a controlling person of the Company, the Investor shall have the right to require (a) the inclusion in such registration statement of language, in form and substance reasonably satisfactory to the Investor, to the effect that the holding of such securities by Investor is not to be construed as a recommendation by Investor of the investment quality of the Company's securities covered thereby and that such holding does not imply that the Investor will assist in meeting - 10 - any future financial requirements of the Company, or (b) in the event that such reference to Investor by name or otherwise is not required by the Securities Act or any similar federal statute then in force, the deletion of the reference to the Investor; provided, that with respect to this clause (b) the Investor shall furnish to the Company an opinion of counsel to such effect, which opinion of counsel shall be reasonably satisfactory to the Company. 7.7 Suspension of Prospectus. For not more than 45 consecutive days or for a total of not more than 90 days in any twelve month period, the Company may delay the disclosure of material non-public information concerning the Company, by suspending the use of any prospectus included in any registration contemplated by this Section 7 containing such information, the disclosure of which at the time would be, in the good faith opinion of the Company, detrimental to the Company; provided, that the Company shall promptly (a) notify the Investor in writing of the existence of (but in no event, without the prior written consent of the Investor, shall the Company disclose to such Investor any of the facts or circumstances regarding) material non-public information giving rise to such delay, and (b) advise the Investor in writing to cease all sales under the registration statement until the end of such allowed delay. Any suspension under this Section 7.7, along with any deferral of a registration statement under Section 7.3 and any market standoff period under Section 7.17, shall not exceed an aggregate of 180 days in any twelve month period. 7.8 Registration Expenses. The term "Registration Expenses" means any and all expenses incident to the Company's performance of or compliance with Section 7, including without limitation all registration and filing fees, fees and expenses of compliance with securities or blue sky laws, printing expenses, messenger and delivery expenses, and fees and expenses of counsel for the Company and all independent certified public accountants, underwriting fees and expenses (excluding discounts and commissions, which shall be paid by Investor out of the proceeds of the offering) and the fees and expenses of any other persons retained by the Company. 7.9 Payment. The Company shall pay the Registration Expenses in connection with all Short Form Registrations under Section 7.2 and all Piggyback Registrations under Section 7.4. All other expenses shall be paid by the Investor, pro rata on the basis of the number of its shares included in the registration. 7.10 Indemnification by the Company. The Company agrees to indemnify, to the extent permitted by law, each holder of Registrable Securities, his, her or its general and limited partners, members, shareholders, officers and directors and each Person who controls such Person (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses caused by or based on any untrue statement of material fact contained in any registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading or caused by or based on any violation by the Company of any federal or state securities law, rule or regulation, except insofar as the same are caused by or contained in any information furnished in writing to the Company by such holder of Registrable Securities expressly for use therein. In connection with an underwritten offering, the Company will indemnify such underwriters, their officers and directors and each Person who controls such underwriters (within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification of the holders of Registrable Securities. 7.11 Indemnification by Holders of Registrable Securities. In connection with any registration statement in which a holder of Registrable Securities is participating, such Person will furnish to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such registration statement or prospectus and, to the extent permitted by law, will indemnify the Company, its directors and officers and - 11 - each Person who controls the Company (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses resulting from any untrue statement of material fact contained in the registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in any written information or affidavit so furnished in writing by Investor in connection with such registration statement; provided, that the obligation to indemnify will be limited to the net amount of proceeds received by such holder from the sale of Registrable Securities pursuant to such registration statement. 7.12 Notice; Defense of Claims. Any Person entitled to indemnification hereunder will (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) unless in such indemnified party's reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party will not be subject to any liability for any settlement made by the indemnified party without his, her or its consent. An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. 7.13 Contribution. If the indemnification provided for herein is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to herein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party, on the one hand, and of the indemnified party, on the other, in connection with the statements or omissions that resulted in such loss, liability, claim, damage or expense, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The obligation to contribute will be limited to the amount by which the net amount of proceeds received by a holder of Registrable Securities from the sale of its Registrable Securities, as the case may be, exceeds the amount of losses, liabilities, damages and expenses that the Investor has otherwise been required to pay by reason of such statements or omissions. 7.14 Survival. The indemnification and contribution provided for under this Agreement will remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling person of such indemnified party and will survive the transfer of securities and the termination of this Section 7 under Section 7.19. 7.15 Underwriting Agreement. To the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with an underwritten public offering are in conflict with the indemnification provisions of this Agreement, the provisions of the underwriting agreement shall control. - 12 - 7.16 Participation in Underwritten Registrations. No Person may participate in any registration hereunder that is underwritten unless such Person (i) agrees to sell such Person's securities on the basis provided in any underwriting arrangements approved by the Person or Persons entitled hereunder to approve such arrangements, and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements. 7.17 Market Stand-Off Agreement. Each holder of Registrable Securities hereby agrees, for a period of 120 days following the effective date of a registration statement in an initial underwritten public offering on behalf of the Company and 90 days following the effective date of a registration statement in any subsequent underwritten public offering on behalf of the Company (or for such shorter period as may be allowed by the managing underwriter or underwriters of such offering), not to sell or otherwise transfer or dispose of (other than to donees who agree to be similarly bound) any Common Stock held by it at any time during such period except Common Stock included in such registration or purchased on the open market. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to the Registrable Securities (and the shares or securities of every other Person subject to the foregoing restriction) until the end of such period. This Section 7.17 shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement and shall only be applicable to the Investor if (i) all officers and directors of the Company enter into similar agreements and (ii) the Investor beneficially owns more than five percent (5%) of the outstanding Common Stock. Any market standoff period under this Section 7.17, along with any deferral of a registration statement under Section 7.3 and any suspension under Section 7.7, shall not exceed an aggregate of 180 days in any twelve month period. 7.18 Transfer of Registration Rights. The rights of the Investor to cause the Company to register securities and keep information available and related rights, granted to the Investor by the Company under this Section 7 may be assigned to a transferee or assignee who is a partner, member, stockholder or affiliate of the Investor; provided, that the transferee or assignee of such rights has agreed in writing to comply with the obligations under this Agreement. 7.19 Termination of Registration Rights. Section 7 of this Agreement shall terminate with respect to any holder of Registrable Securities on the earlier of (a) six years after the date of this Agreement, (b) four years after a Qualified Public Offering, or (c) eighteen months after the earlier of (i) the date such holder can sell all of his/her/its Registrable Securities in any three month period pursuant to Rule 144 or (ii) the date such holder holds Registrable Securities in an amount less than one percent of the outstanding shares of Common Stock; provided that the Company's obligations under Section 7.20 shall survive any such termination. 7.20 Reports Under the Exchange Act. With a view to making available to the Investor the benefits of Rule 144 promulgated under the Securities Act and any other rule or regulation of the SEC that may at any time permit the Investor to sell securities of the Company to the public without registration or pursuant to a Short-Form Registration, the Company agrees to: (a) file with the SEC in a timely manner all reports and other documents required of the Company under the Exchange Act; and (b) furnish to the Investor, so long as the Investor or any of its affiliates owns any Registrable Securities, forthwith upon request (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144 (at any time after ninety (90) days after the effective date of the first registration statement filed by the Company), the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of - 13 - the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested in availing the Investor or its affiliates of any rule or regulation of the SEC that permits the selling of any such securities without registration or pursuant to such form. 8. Miscellaneous. 8.1 Termination. Sections 2, 3, 4, 5 and 6 shall terminate and be of no further force or effect upon the earlier to occur of a Qualified Public Offering or a Sale of the Company with respect to the Company; provided that such termination shall not affect any exercise of the rights granted in such Sections that was initiated prior to such termination, and all provisions of such Sections shall remain in effect with respect to any such rights so exercised in accordance with their terms. 8.2 Successors and Assigns. Except as otherwise provided in this Agreement, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties. The rights of the Investor hereunder may only be assigned to a transferee or assignee that is an "affiliate" of such Investor as such term is defined under Rule 405 of the Securities Act; provided, however, that (i) the transferor shall, within ten (10) days after such transfer, furnish to the Company written notice of the name and address of such transferee or assignee and the securities that are being assigned and (ii) such transferee shall agree to be subject to all restrictions set forth in this Agreement and all applicable transfer restrictions under the Securities Act. In the event of a permitted assignment, all references herein to the "Investor" will be deemed to include references to the permitted assignee(s) and include the shares of Common Stock owned by such permitted assignee(s) as appropriate. Neither the Company nor NTN may assign this Agreement or delegate any of its obligations hereunder. 8.3 Amendments and Waivers. Any term of this Agreement may be amended or waived only with the written consent of the Company, NTN and the Investor. Any amendment or waiver effected in accordance with this Section 8.3 shall be binding upon the Company, the Investor and NTN, and each of their respective successors and assigns. The exercise or non-exercise of any of the rights of the Investor with respect to a sale of NTN's Securities shall not adversely affect their rights with respect to subsequent sales of NTN's Securities subject to this Agreement. 8.4 Notices. All notices (including other communications required or permitted) under this Agreement must be in writing and must be delivered (i) in person; (ii) by registered or certified mail, postage prepaid, return receipt requested; or (iii) by a generally recognized courier or messenger service that provides written acknowledgement of receipt by the addressee. Notices must be given to parties at the address set forth on the signature page below, although any party may furnish, from time to time, other addresses for notices to it. Notices are deemed delivered when actually delivered to the address for notices. 8.5 Severability. The provisions of this Agreement are severable. The invalidity, in whole or in part, of any provision of this Agreement will not affect the validity or enforceability of any other of its provisions. If one or more provisions hereof will be declared invalid or unenforceable, the remaining provisions will remain in full force and effect and will be construed in the broadest possible manner to effectuate the purposes hereof. If it is determined by a court of competent jurisdiction in any state that any restriction in this Agreement is excessive in duration or scope or is unreasonable or unenforceable under the laws of that state, it is the intention of the parties that such restriction may be modified or amended by the court to render it enforceable to the maximum extent permitted by the law of that state. The parties further agree to replace such void or unenforceable provisions of this Agreement with valid and enforceable provisions that will achieve, to the extent possible, the economic, business and other purposes of the void or unenforceable provisions. - 14 - 8.6 Governing Law. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to its principles of conflicts of law. 8.7 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. A facsimile signature page shall be deemed an original. 8.8 Further Assurances. Each party agrees to cooperate fully with the other parties, to take such actions, to execute such further instruments, documents and agreements, and to give such further written assurances, as may be reasonably requested by any other party to evidence and reflect the transactions described herein and contemplated hereby, and to carry into effect the intents and purposes of this Agreement. 8.9 No Presumption. The parties acknowledge that each party has been represented by counsel in connection with this Agreement and the transactions contemplated by this Agreement. Accordingly, any rule of law or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the party that drafted it has no application and is expressly waived. If any claim is made by a party relating to any conflict, omission or ambiguity in the provisions of this Agreement, no presumption or burden of proof or persuasion will be implied because this Agreement was prepared by or at the request of any party or its counsel. 8.10 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 8.11 Entire Agreement. This Agreement (together with the other documents referred to herein) is the complete and exclusive statement of agreement and understanding of the parties with respect to matters in this Agreement and is a complete and exclusive statement of the terms and conditions thereof. This Agreement replaces and supersedes all prior written or oral agreements, statements, correspondence, negotiations and understandings by and among the parties with respect to the matters covered by it. No representation, statement, condition or warranty not contained in this Agreement or such other documents is binding on the parties. 8.12 Rights Cumulative. Each and all of the various rights, powers and remedies of the parties hereto will be considered to be cumulative with and in addition to any other rights, powers and remedies that such parties may have at law or in equity in the event of the breach of any of the terms of this Agreement. The exercise or partial exercise of any right, power or remedy will neither constitute the exclusive election thereof nor the waiver of any other right, power or remedy available to such party. 8.13 No Third Party Beneficiaries. Nothing herein expressed or implied is intended to confer upon any Person, other than the parties hereto and their respective successors and permitted assignees, if any, any rights, obligations, or liabilities under or by reason of this Agreement. 8.14 Reorganization. The provisions of this Agreement shall apply to any shares or other securities resulting from any stock split or reverse stock split, stock dividend, reclassification, subdivision, consolidation or reorganization of any shares or other equity securities of the Company and to any shares or other securities of the Company or of any successor company that may be received by the Investor by virtue of its ownership of any shares of Common Stock. 8.15 Specific Performance. Each of the parties acknowledges and agrees that the other parties would be damaged irreparably in the event any of the provisions of this Agreement are not performed in accordance with their specific - 15 - terms or otherwise are breached. Accordingly, each of the parties agrees that the other parties will be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any action instituted in any court of the United States or any state thereof having jurisdiction over the parties and the matter, in addition to any other remedy to which they may be entitled, at law or in equity. - 16 - IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. BUZZTIME ENTERTAINMENT, INC. By: /s/ James B. Frakes ----------------------------------- Name: James B. Frakes Title: Chief Financial Officer Address: The Campus - 5966 La Place Court Carlsbad, California 92008 Phone: (760) 438-7400 Fax: (760) 930-1178 NTN COMMUNICATIONS, INC. By: /s/ Stanley B. Kinsey ------------------------------------ Name: Stanley B. Kinsey Title: Chairman and Chief Executive Officer Address: The Campus - 5966 La Place Court Carlsbad, California 92008 Phone: (760) 438-7400 Fax: (760) 930-1178 MEDIA GENERAL, INC. By: /s/ Marshall N. Morton ------------------------------------ Name: Marshall N. Morton Title: Vice Chairman Address: 333 East Franklin Street Richmond, VA 23219 Phone: (804) 649-6000 Fax: (804) 649-6212 S-1 -----END PRIVACY-ENHANCED MESSAGE-----