Exhibit 10.1

 

SECURED CONVERTIBLE NOTE

MODIFICATION AND CONVERSION AGREEMENT NO. 2

 

This Secured Convertible Note Modification and Conversion Agreement No. 2 (this
“Agreement”) is dated effective as of May 22, 2020, among Allied Esports
Entertainment, Inc., a Delaware corporation formerly known as Black Ridge
Acquisition Corp. (“Borrower”), certain undersigned direct and indirect
subsidiaries of Borrower (the “Borrower Parties”) and Knighted Pastures LLC (the
“Purchaser” and collectively with Borrower and the Borrower Parties, the
“Parties”).

 

A. Certain purchasers purchased Secured Convertible Promissory Notes (the “First
Bridge Notes”) in a $10,000,000 private placement offering (the “First Bridge”)
of Ourgame International Holdings Limited, a Cayman Islands corporation
(“Ourgame”), pursuant to the terms and conditions of that certain Convertible
Note Purchase Agreement, dated as of October 11, 2018 (the “First Purchase
Agreement”), between Ourgame and such purchasers.

 

B. Certain purchasers purchased Secured Convertible Promissory Notes (the
“Second Bridge Notes,” together with the First Bridge Notes, collectively, the
“Notes”) in a $4,000,000 private placement offering (the “Second Bridge,”
together with the First Bridge, collectively, the “Bridge Transactions”) of
Noble Link Global Limited, a British Virgin Islands entity (“Noble”), pursuant
to the terms and conditions of that certain Convertible Note Purchase Agreement,
dated as of May 17, 2019 (the “Second Purchase Agreement”), between Noble and
such purchasers. The First Purchase Agreement and Second Purchase Agreement,
together with the Notes, security agreements, share pledge security agreements,
guarantees and other documents executed in connection therewith or contemplated
thereby are each referred to herein as a “Bridge Document,” and collectively as
the “Bridge Documents.”

 

C. In order to facilitate the closing of the SPAC Transaction (as defined in the
First Purchase Agreement and Second Purchase Agreement), the purchasers of the
Notes entered into an Amendment and Acknowledgement Agreement dated as of August
5, 2019 (the “Amendment and Acknowledgement Agreement”) pursuant to which all
obligations of Ourgame and Noble under the Notes were assigned to and became the
sole obligations of Borrower, and the purchasers agreed to, among other things,
temporarily extend the maturity date of their respective Notes (the “Maturity
Date”) until August 23, 2020 (the 380th day following the closing of the SPAC
Transaction).

 

D. Each Note holder has an option, during the period commencing as of the
effective time of the SPAC Transaction and ending on the Maturity Date (the
“Conversion Period”), to convert all, but not less than all, the remaining
unpaid principal amount of such holder’s Note (but not any accrued interest),
into a number of common shares of Borrower (“Borrower Common Stock”) equal to
(i) the principal amount of such holder’s Note, divided by (ii) $8.50 (the
“Conversion Price”).

 

 

 

 

E. The Parties previously entered into that certain Secured Convertible Note
Modification and Conversion Agreement dated effective as of April 29, 2020 (the
“Prior Amendment”), pursuant to which the Purchaser converted $2,000,000 of the
principal amount of its Note into 1,250,000 shares of Borrower Common Stock at a
reduced Conversion Price of $1.60 per share.

 

F. Borrower desires that the Purchaser convert all $3,000,000 of remaining
principal under its Note into Borrower Common Stock on the date hereof (such
portion, as set forth on the Conversion Notice attached to this Agreement, is
referred to as the “Conversion Amount”), and to induce the Purchaser to do so,
Borrower has offered to reduce the Conversion Price as it relates to the
Conversion Amount.

 

G. The Purchaser has agreed to convert the Conversion Amount at such reduced
Conversion Price upon the terms and conditions set forth in this Agreement.

 

For good and valuable consideration, the Parties hereby acknowledge, declare and
agree as follows:

 

1.Conversion Price Reduction. Borrower hereby reduces the Conversion Price as it
relates to the Conversion Amount from $8.50 to $1.40 per share.

 

2.Conversion. Contemporaneously with the execution and delivery of this
Agreement, the Purchaser is delivering the Conversion Notice to Borrower
pursuant to which the Purchaser is converting the Conversion Amount into
Borrower Common Stock. The Conversion Amount will fully cancel the outstanding
principal on the Purchaser’s Note.

 

3.Interest. Interest on the Conversion Amount (including interest on the
“Conversion Amount” as set forth in the Prior Amendment) shall continue to
accrue, as if such principal amount with respect to the Conversion Amount
(including the principal amount with respect to the “Conversion Amount” set
forth in the Prior Amendment) of the Purchaser’s Note was not converted under
this Agreement or the Prior Amendment, and all accrued and unpaid interest under
the Note (including interest accrued on the “Conversion Amount” as set forth in
both this Agreement and the Prior Amendment through the maturity date) and
“Minimum Interest” (as such term is defined in the Amendment and Acknowledgement
Agreement) shall become due and payable on August 23, 2020. On or before August
23, 2020, Borrower shall pay such accrued interest under Purchaser’s Note in the
amount of $1,421,096 to Purchaser by wire transfer of immediately available
funds. Notwithstanding the conversion of the full outstanding principal amount
on the Purchaser’s Note, with respect to such interest due and payable, the
Bridge Documents related to Purchaser’s Note shall continue to be in effect, and
Purchaser shall continue to have all rights, and Borrower and the Borrower
Parties shall continue to have all obligations, under the Bridge Documents (as
amended by this Agreement and the Prior Amendment).

 

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4.Registration Rights. Borrower previously registered for resale shares of
Borrower Common Stock issuable upon conversion of the Purchaser’s Note at the
Conversion price of $8.50 per share. Reasonably promptly following the date
hereof, but in any event no later than June 1, 2020, Borrower shall file an
amendment to the registration statement filed May 1, 2020 (the “New Registration
Statement”) registering, among other things, the resale of any additional shares
of Borrower Common Stock issuable upon conversion of the Conversion Amount (and
the conversion of the “Conversion Amount” set forth in the Prior Amendment) that
exceeds the amount of shares of Borrower Common Stock registered for resale
under the existing registration statement, and shall use Borrower’s best efforts
to cause the New Registration Statement to be declared effective as promptly as
practicable thereafter. For the avoidance of doubt, all of the shares of
Borrower Common Stock issued or issuable upon conversion of the Purchaser’s Note
shall not be subject to any lock-up or other prohibitions on transfer other than
such transfer restrictions imposed by applicable law (and not by any contract).

 

5.Compliance with Securities Laws and Principal Market Rules; Beneficial
Ownership Limitation. Notwithstanding anything in this Agreement to the
contrary, Borrower shall not issue, and the Purchaser shall not acquire, shares
of Borrower Common Stock upon conversion of the Note if such shares proposed to
be issued, when aggregated with all other shares of Borrower Common Stock then
owned beneficially (as calculated pursuant to Section 13(d) of the Securities
Exchange Act of 1934, as amended, and Rule 13d-3 promulgated thereunder) by the
Purchaser and its affiliates would result in the beneficial ownership by the
Purchaser and its affiliates of more than 19.99% of the then issued and
outstanding shares of Borrower Common Stock unless (i) such ownership or voting
power would not be the largest ownership position in Borrower, or (ii) Borrower
stockholder approval is obtained for such ownership in excess of 19.99% in
accordance with the rules of The Nasdaq Stock Market.

 

6.Amendments. The Bridge Documents related to the Purchaser’s Note, as amended
by the Prior Amendment, are deemed amended by the terms of this Agreement
effective as of the date hereof. Except as otherwise expressly modified by this
Agreement, all terms, provisions, covenants and agreements contained in such
Bridge Documents, as amended by the Prior Amendment, shall remain unmodified and
in full force and effect.

 

7.Governing Law; Venue. This Agreement shall be governed by the laws of the
State of California without regard to its conflicts-of-law principles. The
Parties expressly acknowledge and agree that any judicial action to enforce any
right of any Party under this Agreement may be brought and maintained in the
State of California, and the Parties consent to the jurisdiction of the courts
of the State of California, County of Orange, and the federal courts located in
the Central District of the State of California. Accordingly, the Parties hereby
submit to the process, jurisdiction and venue of any such court. Each Party
hereby waives, and agrees not to assert, any claim that it is not personally
subject to the jurisdiction of the foregoing courts in the State of California
or that any action or other proceeding brought in compliance with this Section
is brought in an inconvenient forum.

 

8.Counterparts. This Agreement may be executed in counterparts, all of which
taken together shall constitute one agreement binding on the Parties. Facsimile
and electronically transmitted signatures (such as, for example, DocuSign) shall
be valid and binding to the same extent as original signatures. In making proof
of this Agreement, it will be necessary to produce only one copy signed by the
Party to be charged.

 

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IN WITNESS WHEREOF, the Parties have executed and delivered this Secured
Convertible Note Modification and Conversion Agreement No. 2 as of the date
first set forth above.

 

  Purchaser Name: Knighted Pastures LLC         Signature:  /s/ Roi Choi   Name:
Roi Choi   Title: Manager

 

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IN WITNESS WHEREOF, the Parties have executed and delivered this Secured
Convertible Note Modification and Conversion Agreement No. 2 as of the date
first set forth above.

 

ALLIED ESPORTS ENTERTAINMENT, INC.   WPT ENTERPRISES, INC.           By: /s/
Frank Ng   By: /s/ Frank Ng Name: Frank Ng   Name: Frank Ng Its: CEO of AESE  
Its: CEO of AESE           PEERLESS MEDIA LIMITED   ALLIED ESPORTS MEDIA, INC.  
    By: /s/ Frank Ng   By: /s/ Frank Ng Name: Frank Ng   Name: Frank Ng Its: CEO
of AESE   Its: CEO of AESE           ESPORTS ARENA LAS VEGAS, LLC   ALLIED
ESPORTS INTERNATIONAL, INC.       By: /s/ Frank Ng   By: /s/ Frank Ng Name:
Frank Ng   Name: Frank Ng Its: CEO of AESE   Its: CEO of AESE           ELC
GAMING GMBH   PEERLESS MEDIA HOLDING CO.           By: /s/ Frank Ng   By: /s/
Frank Ng Name: Frank Ng   Name: Frank Ng Its: CEO of AESE   Its: CEO of AESE    
      CLUB SERVICES, INC.                 By: /s/ Frank Ng       Name: Frank Ng
      Its: CEO of AESE      

 

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CONVERSION NOTICE

To Whom It May Concern:

 

Reference is made to that certain Secured Convertible Promissory Note dated
October 11, 2018 (as amended, modified, supplemented or restated from time to
time, and including any replacements thereof, the “Note”) issued by Allied
Esports Entertainment, Inc., a Delaware corporation formerly known as Black
Ridge Acquisition Corp., as successor maker of Ourgame International Holdings
Limited (“Maker”) in favor of Knighted Pastures LLC (including its assigns,
“Holder”) in the original principal amount of $5,000,000. Capitalized terms used
in this Notice shall have the respective meanings set forth in the Note.

 

Holder hereby exercises the option to convert all or a portion of the principal
amount of the Note into the shares of common stock of Maker as identified below
(the “Conversion Shares”), in accordance with the terms of the Note, and directs
that such Conversion Shares be issued in the name of, and if certificated,
delivered, to Holder unless a different name has been indicated below. If this
conversion involves fractional Conversion Shares, please issue the related check
to the same person entitled to receive the Conversion Shares.

 

Dated:           May 22, 2020                          

 

Amount of Note to be converted: $       3,000,000                          

If Conversion Shares are to be issued to anyone other than Holder, please
provide the

Tax Identification Number of the transferee: ________________________________  

 

  Knighted Pastures LLC         Signature:  /s/ Roi Choi   Name: Roi Choi  
Title: Manager

 

Name and address of Holder for future notices: