Earn Out Option

EXHIBIT C


NTN COMMUNICATIONS, INC.


EARN OUT OPTION


THIS EARN OUT OPTION (this "Option") is made and entered into as of April 23, 1999 by and between NTN COMMUNICATIONS, INC., a Delaware corporation (the "Company"), and Sikander, Inc., a Nevada corporation (the "Optionee").


W I T N E S S E T H


In consideration of the mutual promises and covenants made herein and the mutual benefits to be derived herefrom, the parties hereto agree as follows:


1. Grant of Option. The Company hereby grants to the Optionee the right and option to purchase, in accordance with the terms and conditions of this Agreement, an aggregate of 600,000 shares of Common Stock exercisable at $.6250 per share (the "Price"), exercisable prior to the close of business on April 30, 2006 (the "Expiration Date").


2. Vesting and Exercisability of Option. The Option will become vested and exercisable in accordance with the terms and conditions set forth in Attachment 1 hereto. In the event of termination of employment of Edward Bevilacqua (other than termination by the Company without cause) with the Company, the vested portion of this Option may only be exercised by Optionee at any time prior to 60 days after such termination of employment, and the unvested portion will immediately terminate and this Option will be of no further force or effect. If Mr. Bevilacqua's employment is terminated for any reason, the Company shall have no further obligation to use its good faith or best efforts to maximize the number of shares of Common Stock subject to the Option.


3. Corporate Transaction. In the event of a Corporate Transaction (as defined below), the Company shall notify the Optionee at least 30 days prior thereto. To the extent not previously exercised, the Option shall terminate immediately prior to the consummation of such Corporate Transaction unless the Company determines otherwise in the exercise of its sole discretion, provided, however, the Company must permit exercise of the Option prior to its termination, even if the Option would not otherwise have been exercisable. A "Corporate Transaction" means a liquidation or dissolution of the Company, a merger or consolidation of the company with or into another corporation or entity, a sale of all or substantially all of the assets of the Company.


4. Method of Exercise of Option and Payment of Purchase Price. Each exercise of the Option shall be by means of a written notice of exercise delivered to the Company and specifying the number of whole shares with respect to which the Option is being exercised, together with any written statements required pursuant to Section 9 below and payment of the Price in full in cash or by check payable to the order of the Company. The delivery of shares pursuant to an exercise of this Option will be conditional upon payment by the Optionee of amounts sufficient to enable the Company to pay all applicable federal, state and local withholding taxes.


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5. Non-Assignability of Option. The Option and the rights and privileges conferred hereby are not transferable or assignable and may not be offered, sold, pledged, hypothecated or otherwise disposed of in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment, garnishment, levy or similar process.


6. Adjustments and Other Rights. The rights of the Optionee hereunder will be subject to adjustments and modifications in certain circumstances and upon occurrence of certain events including a reorganization, merger, combination, recapitalization, reclassification, stock split, reverse stock split, stock dividend or stock consolidation.


7. Optionee Not A Stockholder. Neither the Optionee nor any other person entitled to exercise the Option shall have any of the rights or privileges of a shareholder of the Company. No adjustment will be made for dividends or other rights for which the record date is prior to the date on which such stock certificate or certificates are issued even if such record date is subsequent to the date upon which notice of exercise was delivered and the tender of payment was accepted.


8. Application of Securities Laws. No shares of Common Stock may be purchased pursuant to the Option unless and until any then applicable requirements of the Securities and Exchange Commission, the California Department of Corporations and any other regu ...