Exhibit 10.4

 

Esports Entertainment Group, Inc.

170 Pater House, Psaila Street

Birkirkara, Malta, BKR 9077

 

July ___, 2019

 

VIA ELECTRONIC MAIL

 

Re: Waiver Letter – Securities Purchase Agreement and related documents

 

You are being sent this letter (this “Letter Agreement”) as an investor
(“Investor”) in the November 2018 bridge offering (the “Offering”) by Esports
Entertainment Group, Inc. (the “Company”) pursuant to a securities purchase
agreement (the “Securities Purchase Agreement”), whereby the Company sold 5%
Senior Convertible Notes (the “Notes”) and warrants to purchase common stock of
the Company (the “Warrants” and together with the Securities Purchase Agreement
and the Notes, the “Offering Documents”).

 

Potential investors have engaged the Company in preliminary discussions
regarding investment in the Company and terms of a potential new bridge offering
of notes and warrants are currently being discussed. Pursuant to the Offering
Documents, however, the Company had agreed to covenants (i) granting the
Investors a right of participation in a Subsequent Financing (as defined in the
Securities Purchase Agreement); (ii) prohibiting the Company from entering into,
creating, incurring, assuming or guaranteeing any indebtedness for borrowed
money of any kind, without the prior written consent of the Investors holding at
least 75% in principal amount of the then outstanding notes issued as part of
the Offering; (iii) granting the Investors certain “piggy-back” registration
rights in connection with the Company’s filing of a Registration Statement with
the U.S. Securities and Exchange Commission (the “SEC”); (iv) that it would
purchase, within 60 days of the closing of the Offering, directors and officers
insurance (“D&O Insurance”) on behalf of the Company’s (including its
subsidiaries’) officers and directors for a period of 18 months after the close
of the Offering; and (v) relating to current public information.

 

In furtherance of the foregoing, we are requesting that all Investors in the
Offering agree to: (i) allow the Company to raise additional capital in an
amount up to $1,000,000, in a new offering of notes and warrants having terms
not more favorable to investors than those of the Offering (the “New Offering”)
and waive compliance with certain items and potential defaults as described
herein. Notwithstanding anything contained herein, you will be afforded the
opportunity to invest in the New Offering.

 

In order to permit the New Offering to proceed expeditiously and to facilitate a
successful public offering and uplisting of the Company’s common stock as
contemplated in the Registration Statement defined below, the Company is
requesting that all Investors deliver their agreement and consent with respect
to (i) waiving their right of participation and notice requirements as set forth
in Section 4.11 of the Securities Purchase Agreement; (ii) waiving the
prohibition on the Company entering into and incurring indebtedness for borrowed
money and to issue equity securities pursuant to the terms of the New Offering
as set forth in Section 6 of the Notes; (iii) waiving any potential default with
respect to the Company’s non-compliance with the “piggy-back” registration
rights contained in Section 4.21 of the Securities Purchase Agreement, Section
8(k) of the Notes, and Section 5(o) of the Warrants as it pertains to
Registration Statement No. 333-231167 filed by the Company with the SEC on May
2, 2019 as may be amended (the “Registration Statement”); (iv) waiving any
potential default with respect to the Company’s failure to timely obtain and
maintain D&O Insurance described in Section 4.23 of the Securities Purchase
Agreement; (v) waiving any potential default with respect to the Company’s
breach of Section 4.2 of the Securities Purchase Agreement as it relates to the
late filing of its Quarterly Report on Form 10-Q
[http://www.sec.gov/Archives/edgar/data/1451448/000121390019012704/f10q0319_esportsentertain.htm]
for the period ended March 31, 2019 and (vi) waiving any and all additional
potential defaults known or unknown with respect to the Company’s compliance
with any covenant or agreement contained in any of the Offering Documents
through the date hereof (the foregoing items collectively, the “Waiver Items”).

 

 

 

 

In consideration for your entering into this Letter Agreement, the Company will
(i) increase the principal amount of each Note issued in the Offering by 30%, in
the form of Amended and Restated Note, attached hereto as Exhibit A; and (ii)
file its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
2019
[http://www.sec.gov/Archives/edgar/data/1451448/000121390019012704/f10q0319_esportsentertain.htm]
on or prior to July 15, 2019.

 

By your execution below, this Letter Agreement shall serve as written
confirmation that you agree to permit the Company to consummate and issue
securities pursuant to the New Offering and that you have waived the Waiver
Items defined above.

 

Further, by your execution below, each Investor acknowledges and agrees to the
following: (i) for its role as lead investor and facilitator of the Offering and
negotiating the terms of this Letter Agreement, the Company shall (A) issue to
Cavalry Fund I LP warrants to purchase 50,000 shares of the Company’s common
stock exercisable on or after October 1, 2019 for a term of three (3) years from
such date at an exercise price of $0.75 per share in the form substantially the
same as the Warrants issued to you in the Offering and agree to waive compliance
with Section 4.13 of the Securities Purchase Agreement with respect to the
foregoing (B) pay $5,000 to Cavalry Fund I LP for legal expenses related to the
review of this Letter Agreement and amended Note; and (ii) commencing the date
hereof, you will not offer, pledge, sell, contract to sell, grant, lend, or
otherwise transfer or dispose of, directly or indirectly, the Notes and Warrants
and any shares of the Company’s common stock underlying the Notes and Warrants
until the earlier of (a) the Company’s listing on a national securities exchange
or (b) October 1, 2019.

 

This Letter Agreement and any and all exhibits hereto contain the entire
understanding between and among the parties and supersedes any prior
understandings and agreements among them respecting the subject matter of this
Letter Agreement. This Letter Agreement shall be governed and have exclusive
jurisdiction as provided under Section 5.10 in the Note. This Letter Agreement
may be executed in any number of counterparts, each of which shall be an
original but all of which together shall constitute one and the same instrument.
In case any provision of this Letter Agreement shall be held to be invalid,
illegal or unenforceable, such provision shall be severable from the rest of
this Letter Agreement, and the validity legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby. By
your execution below, you are confirming that you have had the opportunity to
review this Letter Agreement with your counsel

 

The parties hereby consent and agree that if this Letter Agreement shall at any
time be deemed by the parties for any reason insufficient, in whole or in part,
to carry out the true intent and spirit hereof or thereof, the parties will
execute or cause to be executed such other and further assurances and documents
as in the reasonable opinion of the parties may be reasonably required in order
more effectively to accomplish the purposes of this Letter Agreement.

 

2

 

 

Please indicate confirmation of the terms provided herein by executing and
returning this letter in the space provided below.

 

  Very truly yours,         ESPORTS ENTERTAINMENT GROUP, INC.         By:    
Name: Grant Johnson   Title: Chief Executive Officer

 

ACCEPTED AND AGREED:

 

INVESTOR:

 

For Individuals  

For Entities

           

Name of Investor

 

Name of Investor

           

Signature of Investor

 

Signature of Authorized Person

               

Print Name of Authorized Person

               

Print Title of Authorized Person

 

3

 

 

Exhibit A