Exhibit
10.1


 


NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH MAY BE THE LEGAL COUNSEL OPINION (AS DEFINED
IN THE PURCHASE AGREEMENT)), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD
PURSUANT TO RULE 144, RULE 144A OR REGULATION S UNDER SAID ACT OR OTHER APPLICABLE EXEMPTION. NOTWITHSTANDING THE FOREGOING, THE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.


 


	Principal
    Amount: $333,333.33	 	Issue
    Date: August 7, 2020
	Actual
    Amount of Purchase Price: $300,000.00	 	 


 


SELF-AMORTIZATION
PROMISSORY NOTE


 


FOR
VALUE RECEIVED, SIMPLICITY ESPORTS AND GAMING COMPANY, a Delaware corporation (hereinafter called the “Borrower”
or the “Company”) (Trading Symbol: WINR), hereby promises to pay to the order of FIRSTFIRE GLOBAL OPPORTUNITIES
FUND, LLC, a Delaware limited liability company, or registered assigns (the “Holder”), in the form of lawful money
of the United States of America, the principal sum of $333,333.33, which amount is the $300,000.00 actual amount of the purchase
price (the “Consideration”) hereof plus an original issue discount in the amount of $33,333.33 (the “OID”)
(subject to adjustment herein) (the “Principal Amount”) and to pay interest on the unpaid Principal Amount hereof
at the rate of twelve percent (12%) (the “Interest Rate”) per annum from the date hereof (the “Issue Date”)
until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise, as further provided
herein. The maturity date shall be twelve (12) months from the Issue Date (the “Maturity Date”), and is the date upon
which the principal sum, the OID, as well as any accrued and unpaid interest and other fees, shall be due and payable.


 


This
Note may not be prepaid or repaid in whole or in part except as otherwise explicitly set forth herein.


 


Interest
shall commence accruing on the date that the Note is fully funded and shall be computed on the basis of a 365-day year and the
actual number of days elapsed. Any Principal Amount or interest on this Note which is not paid when due shall bear interest at
the rate of the lesser of (i) fifteen percent (15%) per annum and (ii) the maximum amount permitted by law from the due date thereof
until the same is paid (“Default Interest”).


 


All
payments due hereunder (to the extent not converted into shares of common stock, $0.0001 par value per share, of the Borrower
(the “Common Stock”) in accordance with the terms hereof) shall be made in lawful money of the United States of America.
All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance
with the provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is
not a business day, the same shall instead be due on the next succeeding day which is a business day and, in the case of any interest
payment date which is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken
into account for purposes of determining the amount of interest due on such date.


 


Each
capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Purchase
Agreement, dated as of the Issue Date, pursuant to which this Note was originally issued (the “Purchase Agreement”).
As used in this Note, the term “business day” shall mean any day other than a Saturday, Sunday or a day on which commercial
banks in the city of New York, New York are authorized or required by law or executive order to remain closed. As used herein,
the term “Trading Day” means any day that shares of Common Stock are listed for trading or quotation on the Principal
Market (as defined in the Purchase Agreement), any tier of the OTC Markets, NASDAQ Stock Market, the New York Stock Exchange or
the NYSE American.


 




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This
Note is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive
rights or other similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.


 


The
following terms shall also apply to this Note:


 


ARTICLE
I. CONVERSION RIGHTS UPON DEFAULT


 

1.1 Conversion
Right Upon Default. The Holder shall have the right, at any time following the Uncured Default Date (as defined in this Note),
to convert all or any portion of the then outstanding and unpaid Principal Amount and interest (including any Default Interest)
into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital
stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified, at the Conversion
Price (as defined below) determined as provided herein (a “Conversion”); provided, however, that notwithstanding
anything to the contrary contained herein, the a Holder shall not have the right to convert any portion of this Note, pursuant
to Section 1 or otherwise, to the extent that after giving effect to such issuance after conversion as set forth on the applicable
Notice of Conversion, the Holder (together with the Holder’s affiliates (the “Affiliates”), and any other Persons
(as defined below) acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution
Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the
foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and Attribution Parties shall include
the number of shares of Common Stock issuable upon conversion of this Note with respect to which such determination is being made,
but shall exclude the number of shares of Common Stock which would be issuable upon (i) conversion of the remaining, nonconverted
portion of this Note beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion
of the unexercised or nonconverted portion of any other securities of the Company subject to a limitation on conversion or exercise
analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties.
Except as set forth in the preceding sentence, for purposes of this Section 1.1, beneficial ownership shall be calculated in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder
that the Holder is solely responsible for any schedules required to be filed in accordance therewith. In addition, a determination
as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder. For purposes of this Section 1.1, in determining the number of outstanding shares of Common
Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent
periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or
(C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.
Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder
the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined
after giving effect to the conversion or exercise of securities of the Company, including this Note, by the Holder or its Affiliates
or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial
Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding at the time of the respective
calculation hereunder. “Person” and “Persons” means an individual, a limited liability company, a partnership,
a joint venture, a corporation, a trust, an unincorporated organization, any other entity and any governmental entity or any department
or agency thereof. The limitations contained in this paragraph shall apply to a successor holder of this Note. The number of Conversion
Shares to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below)
by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto
as Exhibit A (the “Notice of Conversion”), delivered to the Borrower or Borrower’s transfer agent by the
Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by
other means resulting in, or reasonably expected to result in, notice) to the Borrower or Borrower’s transfer agent before
11:59 p.m., New York, New York time on such conversion date (the “Conversion Date”). The term “Conversion Amount”
means, with respect to any conversion of this Note, the sum of (1) the Principal Amount of this Note to be converted in such conversion
plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such Principal Amount at the Interest Rate
to the Conversion Date, plus (3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the
immediately preceding clauses (1) and/or (2).


 









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 1.2 Conversion Price.




 


(a) Calculation
of Conversion Price. The per share conversion price with respect to the shares of Common Stock hereunder into which
Principal Amount and interest (including any Default Interest) under this Note shall be convertible into at any time
following the Uncured Default Date shall equal the closing bid price of the Common Stock on the Trading Day immediately
preceding the date of the respective conversion (the “Conversion Price”). If at any time the Conversion Price as
determined hereunder for any conversion would be less than the par value of the Common Stock, then at the sole discretion of
the Holder, the Conversion Price hereunder may equal such par value for such conversion and the Conversion Amount for such
conversion may be increased to include Additional Principal, where “Additional Principal” means such additional
amount to be added to the Conversion Amount to the extent necessary to cause the number of conversion shares issuable upon
such conversion to equal the same number of conversion shares as would have been issued had the Conversion Price not been
adjusted by the Holder to the par value price. The Conversion Price is subject to equitable adjustments for stock splits,
stock dividends or rights offerings by the Borrower relating to the Borrower’s securities or the securities of any
subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar
events. Holder shall be entitled to deduct $1,500.00 from the conversion amount in each Notice of Conversion to cover
Holder’s fees associated with each Notice of Conversion, provided, however, that the aforementioned deduction shall
only apply for the initial ten (10) conversions under this Note.


 


1.3 Authorized
and Reserved Shares. The Borrower covenants that at all times until the Note is satisfied in full, the Borrower will
reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide
for the issuance of a number of Conversion Shares equal to the sum of (i) the number of Conversion Shares issuable upon the
full conversion of this Note (assuming no payment of Principal Amount or interest) as of any issue date (taking into
consideration any adjustments to the Conversion Price pursuant to Section 2 hereof or otherwise) multiplied by (ii)
one and a half (1.5) (the “Reserved Amount”). The Borrower represents that upon issuance, the Conversion Shares
will be duly and validly issued, fully paid and non-assessable. The Borrower (i) acknowledges that it has irrevocably
instructed its transfer agent to issue certificates for the Conversion Shares or instructions to have the Conversion Shares
issued as contemplated by Section 1.4(f) hereof, and (ii) agrees that its issuance of this Note shall constitute full
authority to its officers and agents who are charged with the duty of executing stock certificates or cause the Company to
electronically issue shares of Common Stock to execute and issue the necessary certificates for the Conversion Shares or
cause the Conversion Shares to be issued as contemplated by Section 1.4(f) hereof in accordance with the terms and conditions
of this Note.
 



If,
at any time the Borrower does not maintain the Reserved Amount it will be considered an Event of Default under this Note.


 


 1.4 Method of Conversion.




 


(a) Mechanics
of Conversion. This Note may be converted by the Holder in whole or in part, on any Trading Day, at any time following
the Uncured Default Date, by submitting to the Borrower or Borrower’s transfer agent a Notice of Conversion (by
facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 11:59 p.m., New York,
New York time). Any Notice of Conversion submitted after 11:59 p.m., New York, New York time, shall be deemed to have been
delivered and received on the next Trading Day.


 


(b) Surrender
of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in
accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower unless
the entire unpaid Principal Amount is so converted. The Holder and the Borrower shall maintain records showing the Principal
Amount so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder
and the Borrower, so as not to require physical surrender of this Note upon each such conversion. In the event of any dispute
or discrepancy, such records of the Borrower shall, prima facie, be controlling and determinative in the absence of
manifest error. Notwithstanding the foregoing, if any portion of this Note is converted as aforesaid, the Holder may not
transfer this Note unless the Holder first physically surrenders this Note to the Borrower, whereupon the Borrower will
forthwith issue and deliver upon the order of the Holder a new Note of like tenor, registered as the Holder (upon payment by
the Holder of any applicable transfer taxes) may request, representing in the aggregate the remaining unpaid Principal Amount
of this Note. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the
provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted Principal Amount of
this Note represented by this Note may be less than the amount stated on the face hereof.


 




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(c) Payment
of Taxes. The Borrower shall not be required to pay any tax which may be payable in respect of any transfer involved in
the issue and delivery of shares of Common Stock or other securities or property on conversion of this Note in a name other
than that of the Holder (or in street name), and the Borrower shall not be required to issue or deliver any such shares or
other securities or property unless and until the person or persons (other than the Holder or the custodian in whose street
name such shares are to be held for the Holder’s account) requesting the issuance thereof shall have paid to the
Borrower the amount of any such tax or shall have established to the satisfaction of the Borrower that such tax has been
paid.


 


(d) Delivery
of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission or e-mail (or
other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in
this Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder
certificates for the Conversion Shares (or cause the electronic delivery of the Conversion Shares as contemplated by Section
1.4(f) hereof) within three (3) Trading Days after such receipt (the “Deadline”) (and, solely in the case of
conversion of the entire unpaid Principal Amount and interest (including any Default Interest) under this Note, surrender of
this Note). If the Company shall fail for any reason or for no reason to issue to the Holder on or prior to the Deadline a
certificate for the number of Conversion Shares or to which the Holder is entitled hereunder and register such Conversion
Shares on the Company’s share register or to credit the Holder’s balance account with DTC (as defined below) for
such number of Conversion Shares to which the Holder is entitled upon the Holder’s conversion of this Note (a
“Conversion Failure”), then, in addition to all other remedies available to the Holder, (i) the Company shall pay
in cash to the Holder on each day after the Deadline and during such Conversion Failure an amount equal to 2.0% of the
product of (A) the sum of the number of Conversion Shares not issued to the Holder on or prior to the Deadline and to which
the Holder is entitled and (B) the closing sale price of the Common Stock on the Trading Day immediately preceding the last
possible date which the Company could have issued such Conversion Shares to the Holder without violating this Section 1.4(d);
and (ii) the Holder, upon written notice to the Company, may void its Notice of Conversion with respect to, and retain or
have returned, as the case may be, any portion of this Note that has not been converted pursuant to such Notice of
Conversion; provided that the voiding of an Notice of Conversion shall not affect the Company’s obligations to make any
payments which have accrued prior to the date of such notice. In addition to the foregoing, if on or prior to the Deadline
the Company shall fail to issue and deliver a certificate to the Holder and register such Conversion Shares on the
Company’s share register or credit the Holder’s balance account with DTC for the number of Conversion Shares to
which the Holder is entitled upon the Holder’s exercise hereunder or pursuant to the Company’s obligation
pursuant to clause (ii) below, and if on or after such Trading Day the Holder purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock issuable upon
such exercise that the Holder anticipated receiving from the Company, then the Company shall, within two (2) Trading Days
after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal
to the Holder’s total purchase price (including brokerage commissions and other reasonable and customary out-of-pocket
expenses, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point the
Company’s obligation to deliver such certificate (and to issue such Conversion Shares) or credit such Holder’s
balance account with DTC for such Conversion Shares shall terminate, or (ii) promptly honor its obligation to deliver to the
Holder a certificate or certificates representing such Conversion Shares or credit such Holder’s balance account with
DTC and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such
number of shares of Common Stock, times (B) the closing sales price of the Common Stock on the date of exercise. Nothing
shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including,
without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to
timely deliver certificates representing the Conversion Shares (or to electronically deliver such Conversion Shares) upon the
conversion of this Note as required pursuant to the terms hereof.


 


(e) Obligation
of Borrower to Deliver Common Stock. At the time that the Holder submits the Notice of Conversion to the Borrower or
Borrower’s transfer agent, the Holder shall be deemed to be the holder of record of the Conversion Shares issuable upon
such conversion, the outstanding Principal Amount and the amount of accrued and unpaid interest (including any Default
Interest) under this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations
under this Article I, all rights with respect to the portion of this Note being so converted shall forthwith terminate except
the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion. If
the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to issue and deliver
the certificates for the Conversion Shares (or cause the electronic delivery of the Conversion Shares as contemplated by
Section 1.4(f) hereof) shall be absolute and unconditional, irrespective of the absence of any action by the Holder to
enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against any
person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to
the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by
the Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such
obligation of the Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of
Conversion shall be the Conversion Date so long as the Notice of Conversion is sent to the Borrower or Borrower’s
transfer agent before 11:59 p.m., New York, New York time, on such date.


 




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(f) Delivery
of Conversion Shares by Electronic Transfer. In lieu of delivering physical certificates representing the Conversion
Shares issuable upon conversion hereof, provided the Borrower is participating in the Depository Trust Company
(“DTC”) Fast Automated Securities Transfer or Deposit/Withdrawal at Custodian programs, upon request of the
Holder and its compliance with the provisions contained in Section 1.1 and in this Section 1.4, the Borrower shall use its
best efforts to cause its transfer agent to electronically transmit the Conversion Shares issuable upon conversion hereof to
the Holder by crediting the account of Holder’s Prime Broker with DTC through its Deposit Withdrawal Agent Commission
system.


 


1.5 Concerning
the Shares. The Conversion Shares issuable upon conversion of this Note may not be sold or transferred unless (i) such
shares are sold pursuant to an effective registration statement under the 1933 Act or (ii) the Borrower or its transfer agent
shall have been furnished with an opinion of counsel (which opinion shall be the Legal Counsel Opinion (as defined in the
Purchase Agreement)) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an
exemption from such registration or (iii) such shares are sold or transferred pursuant to Rule 144, Rule 144A, Regulation S,
or other applicable exemption, or (iv) such shares are transferred to an “affiliate” (as defined in Rule 144) of
the Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is an
Accredited Investor (as defined in the Purchase Agreement). Except as otherwise provided in the Purchase Agreement (and
subject to the removal provisions set forth below), until such time as the Conversion Shares have been registered under the
1933 Act or otherwise may be sold pursuant to Rule 144, Rule 144A, Regulation S, or other applicable exemption without any
restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate for
the Conversion Shares that has not been so included in an effective registration statement or that has not been sold pursuant
to an effective registration statement or an exemption that permits removal of the legend, shall bear a legend substantially
in the following form, as appropriate:


 


“NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH MAY BE THE LEGAL COUNSEL OPINION (AS DEFINED
IN THE PURCHASE AGREEMENT)), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD
PURSUANT TO RULE 144, RULE 144A, REGULATION S UNDER SAID ACT, OR OTHER APPLICABLE EXEMPTION. NOTWITHSTANDING THE FOREGOING, THE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.”


 


The
legend set forth above shall be removed and the Company shall issue to the Holder a certificate for the applicable Conversion
Shares without such legend upon which it is stamped or (as requested by the Holder) issue the applicable Conversion Shares by
electronic delivery by crediting the account of such holder’s broker with DTC, if, unless otherwise required by applicable
state securities laws: (a) such Conversion Shares are registered for sale under an effective registration statement filed under
the 1933 Act or otherwise may be sold pursuant to Rule 144, Rule 144A, Regulation S, or other applicable exemption without any
restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) the Company or the
Holder provides the Legal Counsel Opinion (as contemplated by and in accordance with Section 4(m) of the Purchase Agreement) to
the effect that a public sale or transfer of such Conversion Shares may be made without registration under the 1933 Act, which
opinion shall be accepted by the Company so that the sale or transfer is effected. The Company shall be responsible for the fees
of its transfer agent and all DTC fees associated with any such issuance. The Holder agrees to sell all Conversion Shares, including
those represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery
requirements, if any. In the event that the Company does not accept the opinion of counsel provided by the Holder with respect
to the transfer of Conversion Shares pursuant to an exemption from registration, such as Rule 144, Rule 144A, Regulation S, or
other applicable exemption, at the Deadline, notwithstanding that the conditions of Rule 144, Rule 144A, Regulation S, or other
applicable exemption, as applicable, have been met, it will be considered an Event of Default under this Note.


 




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 1.6 Effect of Certain Events.




 


(a) Effect
of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially
all of the assets of the Borrower, or the consolidation, merger or other business combination of the Borrower with or into
any other Person (as defined below) or Persons when the Borrower is not the survivor shall either: (i) be deemed to be an
Event of Default pursuant to which the Borrower shall be required to pay to the Holder upon the consummation of and as a
condition to such transaction an amount equal to the Default Amount (defined in Section 3.20) or (ii) be treated pursuant to
Section 1.6(b) hereof. “Person” shall mean any individual, corporation, limited liability company, partnership,
association, trust or other entity or organization.


 


(b) Adjustment
Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion of
all of this Note, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other
similar event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different
number of shares of another class or classes of stock or securities of the Borrower or another entity, or in case of any sale
or conveyance of all or substantially all of the assets of the Borrower other than in connection with a plan of complete
liquidation of the Borrower, then the Holder of this Note shall thereafter have the right to receive upon conversion of this
Note, upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately
theretofore issuable upon conversion, such stock, securities or assets which the Holder would have been entitled to receive
in such transaction had this Note been converted in full immediately prior to such transaction (without regard to any
limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with respect to the
rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation,
provisions for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the Note) shall
thereafter be applicable, as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon
the conversion hereof. The Borrower shall not effectuate any transaction described in this Section 1.6(b) unless (a) it first
gives, to the extent practicable, at least thirty (30) days prior written notice (but in any event at least fifteen (15) days
prior written notice) of the record date of the special meeting of shareholders to approve, or if there is no such record
date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other similar
event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting successor
or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Section 1.6(b). The above
provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.


 


(c) Adjustment
Due to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to acquire its
assets) to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any
dividend or distribution to the Borrower’s shareholders in cash or shares (or rights to acquire shares) of capital
stock of a subsidiary (i.e., a spin-off)) (a “Distribution”), then the Holder of this Note shall be entitled,
upon any conversion of this Note after the date of record for determining shareholders entitled to such Distribution, to
receive the amount of such assets which would have been payable to the Holder with respect to the shares of Common Stock
issuable upon such conversion had such Holder been the holder of such shares of Common Stock on the record date for the
determination of shareholders entitled to such Distribution.


 


(d) Purchase
Rights. If, at any time when all or any portion of this Note is issued and outstanding, the Borrower issues any
convertible securities or rights to purchase stock, warrants, securities or other property (the “Purchase
Rights”) pro rata to the record holders of any class of Common Stock, then the Holder of this Note will be entitled to
acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such Holder could have
acquired if such Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note
(without regard to any limitations on conversion contained herein) immediately before the date on which a record is taken for
the grant, issuance or sale of such Purchase Rights or, if no such record is taken, the date as of which the record holders
of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.


 




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(e) Dilutive
Issuance. If the Borrower, at any time while this Note or any amounts due hereunder are outstanding, issues, sells or
grants (or has issued, sold or granted as of the Issue Date, as the case may be) any option to purchase, or sells or grants
any right to reprice, or otherwise disposes of, or issues (or has sold or issued, as the case may be, or announces any sale,
grant or any option to purchase or other disposition), any Common Stock or other securities convertible into, exercisable
for, or otherwise entitle any person or entity the right to acquire, shares of Common Stock (including, without limitation,
upon conversion of this Note, and any convertible notes or warrants outstanding as of or following the Issue Date), in each
or any case at an effective price per share that is lower than the then Conversion Price (such lower price, the “Base
Conversion Price” and such issuances, collectively, a “Dilutive Issuance”) (it being agreed that if the
holder of the Common Stock or other securities so issued shall at any time, whether by operation of purchase price
adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or
rights per share which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an
effective price per share that is lower than the Conversion Price, such issuance shall be deemed to have occurred for less
than the Conversion Price on such date of the Dilutive Issuance), then the Conversion Price shall be reduced, at the option
of the Holder, to a price equal to the Base Conversion Price. Such adjustment shall be made whenever such Common Stock or
other securities are issued. By way of example, and for the avoidance of doubt, if the Company issues a convertible
promissory note (including but not limited to a Variable Rate Transaction), and the holder of such convertible promissory
note has the right to convert it into Common Stock at an effective price per share that is lower than the then Conversion
Price (including but not limited to a conversion price with a discount that varies with the trading prices of or quotations
for the Common Stock), then the Holder has the right to reduce the Conversion Price to such Base Conversion Price (including
but not limited to a conversion price with a discount that varies with the trading prices of or quotations for the Common
Stock) in perpetuity regardless of whether the holder of such convertible promissory note ever effectuated a conversion at
the Base Conversion Price. Notwithstanding the foregoing, no adjustment will be made under this Section 1.6(e) in respect of
an Exempt Issuance. In the event of an issuance of securities involving multiple tranches or closings, any adjustment
pursuant to this Section 1.6(e) shall be calculated as if all such securities were issued at the initial closing.


 


An
“Exempt Issuance” shall mean the issuance of (a) shares of Common Stock or other securities to officers or directors
of the Company pursuant to any stock or option or similar equity incentive plan duly adopted for such purpose, by a majority of
the non-employee members of the Company’s Board of Directors or a majority of the members of a committee of non-employee
directors established for such purpose in a manner which is consistent with the Company’s prior business practices; (b)
securities issued pursuant to a merger, consolidation, acquisition or similar business combination approved by a majority of the
disinterested directors of the Company, provided that any such issuance shall only be to a Person (or to the equity holders of
a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic
with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds,
but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or
to an entity whose primary business is investing in securities; (c) securities issued pursuant to any equipment loan or leasing
arrangement, real property leasing arrangement or debt financing from a bank or similar financial institution approved by a majority
of the disinterested directors of the Company; or (d) securities issued with respect to which the Holder waives its rights in
writing under this Section 1.6(e).


 


(f) Notice
of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events
described in this Section 1.6, the Borrower, at its expense, shall promptly compute such adjustment or readjustment and
prepare and furnish to the Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Borrower shall, upon the written request at any time of the Holder,
furnish to such Holder a like certificate setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at the
time in effect and (iii) the number of shares of Common Stock and the amount, if any, of other securities or property which
at the time would be received upon conversion of the Note.


 


1.7 [Intentionally
Omitted].


 




    	7



     


    

 


1.8 Status
as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the Conversion Shares covered thereby (other
than the Conversion Shares, if any, which cannot be issued because their issuance would exceed such Holder’s allocated
portion of the Reserved Amount or Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii) the
Holder’s rights as a Holder of such converted portion of this Note shall cease and terminate, excepting only the right
to receive certificates for such shares of Common Stock and to any remedies provided herein or otherwise available at law or
in equity to such Holder because of a failure by the Borrower to comply with the terms of this Note. Notwithstanding the
foregoing, if a Holder has not received certificates for all shares of Common Stock prior to the tenth (10th) business day
after the expiration of the Deadline with respect to a conversion of any portion of this Note for any reason, then (unless
the Holder otherwise elects to retain its status as a holder of Common Stock by so notifying the Borrower) the Holder shall
regain the rights of a Holder of this Note with respect to such unconverted portions of this Note and the Borrower shall, as
soon as practicable, return such unconverted Note to the Holder or, if the Note has not been surrendered, adjust its records
to reflect that such portion of this Note has not been converted. In all cases, the Holder shall retain all of its rights and
remedies for the Borrower’s failure to convert this Note.


 


1.9 Prepayment. At
any time prior to the date that an Event of Default occurs under this Note (the “Prepayment Period”), the
Borrower shall have the right, exercisable on not less than one (1) Trading Day prior written notice to the Holder of the
Note, to prepay the outstanding Principal Amount and interest then due under this Note, in whole or in part, in accordance
with this Section 1.9. Any notice of prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to
the Holder of the Note at its registered addresses and shall state: (1) that the Borrower is exercising its right to prepay
the Note, and (2) the date of prepayment which shall be not more than one (1) Trading Days from the date of the Optional
Prepayment Notice. On the date fixed for prepayment (the “Optional Prepayment Date”), the Borrower shall make
payment of the amounts designated below to or upon the order of the Holder as specified by the Holder in writing to the
Borrower at least one (1) business day prior to the Optional Prepayment Date. If the Borrower exercises its right to prepay
the Note in accordance with this Section 1.9, the Borrower shall make payment to the Holder of an amount in cash equal to the
sum of: (w) 100% multiplied by the Principal Amount then outstanding plus (x) accrued and unpaid interest on the
Principal Amount to the Optional Prepayment Date.


 


If
the Borrower delivers an Optional Prepayment Notice and fails to pay the applicable prepayment amount due to the Holder of the
Note as provided in this Section 1.9, then the Borrower shall forever forfeit its right to prepay any part of the Note pursuant
to this Section 1.9.


 


1.10 Repayment
from Proceeds. While any portion of this Note is outstanding, if the Company receives cash proceeds of more than
$2,000,000.00 (the “Minimum Threshold”) in the aggregate from public offerings or private placements to investors
(except with respect to proceeds from officers and directors of the Company) (for the avoidance of doubt, each time that the
Company receives cash proceeds from any of the aforementioned sources, then such amount shall be aggregated together), the
Company shall, within two (2) business days of Company’s receipt of such proceeds, inform the Holder of such receipt,
following which the Holder shall have the right in its sole discretion to require the Company to immediately apply up to 50%
of all proceeds received by the Company after the Minimum Threshold is reached to repay the outstanding amounts owed under
this Note.


 


ARTICLE
II. RANKING AND CERTAIN COVENANTS


 


2.1 Ranking
and Security. The obligations of the Borrower under this Note shall rank senior with respect to any and all unsecured
Indebtedness incurred following the Issue Date.


 


2.2 [Intentionally
Omitted].


 


2.3 Distributions
on Capital Stock. So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the
Holder’s written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether in
cash, property or other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the
form of additional shares of Common Stock or (b) directly or indirectly or through any subsidiary make any other payment or
distribution in respect of its capital stock except for distributions pursuant to any shareholders’ rights plan which
is approved by a majority of the Borrower’s disinterested directors.


 




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2.4 [Intentionally
Omitted].


 


2.5 Sale
of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the
Holder’s written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the
ordinary course of business. Any consent to the disposition of any assets may be conditioned on a specified use of the
proceeds of disposition. For the avoidance of doubt, this Section 2.5 shall not apply to the Company’s transfer or
disposition of up to 25% of Simplicity One Brasil Ltda to Jed Kaplan.


 


2.6 [Intentionally
Omitted].


 


2.7 3(a)(10)
Transaction. So long as this Note is outstanding, the Borrower shall not enter into any transaction or arrangement
structured in accordance with, based upon, or related or pursuant to, in whole or in part, Section 3(a)(10) of the
Securities. In the event that the Borrower does enter into, or makes any issuance of Common Stock related to a 3(a)(10)
Transaction while this note is outstanding, a liquidated damages charge of 25% of the outstanding principal balance of this
Note, but not less than $25,000, will be assessed and will become immediately due and payable to the Holder at its election
in the form of a cash payment or added to the balance of this Note (under Holder’s and Borrower’s expectation
that this amount will tack back to the Issue Date).


 


2.8 Preservation
of Business and Existence, etc. So long as the Borrower shall have any obligation under this Note, the Borrower shall
not, without the Holder’s written consent, (a) change the nature of its business; (b) sell, divest, change the
structure of any material assets other than in the ordinary course of business; or (c) enter into any Merchant Cash Advance
transactions. In addition, so long as the Borrower shall have any obligation under this Note, the Borrower shall maintain and
preserve, and cause each of its Subsidiaries to maintain and preserve, its existence, rights and privileges, and become or
remain, and cause each of its Subsidiaries (other than dormant Subsidiaries that have no or minimum assets) to become or
remain, duly qualified and in good standing in each jurisdiction in which the character of the properties owned or leased by
it or in which the transaction of its business makes such qualification necessary. For the avoidance of doubt, this Section
2.8 shall not apply to the Company’s transfer or disposition of up to 25% of Simplicity One Brasil Ltda to Jed
Kaplan.


 


2.9 Noncircumvention.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate or Articles of
Incorporation or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement,
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 Note, and will at all times in good faith carry out all the provisions of this Note and take all
action as may be required to protect the rights of the Holder.


 


2.10 Lost,
Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of any indemnification
undertaking by the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of
this Note, the Company shall execute and deliver to the Holder a new Note.


 


ARTICLE
III. EVENTS OF DEFAULT


 


It
shall be considered an event of default if any of the following events listed in this Article III (each, an “Event of Default”)
shall occur:


 


3.1 Failure
to Pay Principal or Interest. The Borrower fails to pay the Principal Amount hereof or interest thereon when due on this
Note, whether at maturity, upon acceleration or otherwise, or fails to fully comply with Section 1.10 of this
Note.


 




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3.2 Conversion
and the Shares. The Borrower (i) fails to issue Conversion Shares to the Holder (or announces or threatens in writing
that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in
accordance with the terms of this Note, (ii) fails to transfer or cause its transfer agent to transfer (issue)
(electronically or in certificated form) any certificate for the Conversion Shares issuable to the Holder upon conversion of
or otherwise pursuant to this Note as and when required by this Note, (iii) reserve the Reserved Amount at all times, or
(iii) the Borrower directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in
transferring (or issuing) (electronically or in certificated form) any certificate for the Conversion Shares issuable to the
Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, or fails to remove (or
directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive
legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any Conversion Shares issued
to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written
announcement, statement or threat that it does not intend to honor the obligations described in this paragraph) and any such
failure shall continue uncured (or any written announcement, statement or threat not to honor its obligations shall not be
rescinded in writing) for two (2) Trading Days after the Holder shall have delivered a Notice of Conversion. It is an
obligation of the Borrower to remain current in its obligations to its transfer agent. It shall be an Event of Default of
this Note, if a conversion of this Note is delayed, hindered or frustrated due to a balance owed by the Borrower to its
transfer agent. If at the option of the Holder, the Holder advances any funds to the Borrower’s transfer agent in order
to process a conversion, such advanced funds shall be paid by the Borrower to the Holder within forty eight (48) hours of a
demand from the Holder.


 


3.3 Breach
of Agreements and Covenants. The Borrower breaches any material agreement, covenant or other material term or condition
contained in the Purchase Agreement, this Note, the Irrevocable Transfer Agent Instructions or in any agreement, statement or
certificate given in writing pursuant hereto or in connection herewith or therewith.


 


3.4 Breach
of Representations and Warranties. Any representation or warranty of the Borrower made in the Purchase Agreement and/or
this Note, the Irrevocable Transfer Agent Instructions or in any agreement, statement or certificate given in writing
pursuant hereto or in connection herewith or therewith shall be false or misleading in any material respect when made and the
breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with
respect to this Note or the Purchase Agreement.


 


3.5 Receiver
or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, or
apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or
business, or such a receiver or trustee shall otherwise be appointed.


 


3.6 Judgments. Any
money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary of the Borrower or
any of its property or other assets for more than $500,000, and shall remain unvacated, unbonded or unstayed for a period of
twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.


 


3.7 Bankruptcy. Bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any
bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the
Borrower.


 


3.8 Failure
to Comply with the 1934 Act. At any time after the Issue Date, the Borrower shall fail to comply with the reporting
requirements of the 1934 Act and/or the Borrower shall cease to be subject to the reporting requirements of the 1934 Act. It
shall be an Event of Default under this Section 3.9 if the Borrower shall file any Notification of Late Filing on Form 12b-25
with the SEC.


 


3.9 Liquidation. Any
dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.


 


3.10 Cessation
of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its
debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a
“going concern” shall not be an admission that the Borrower cannot pay its debts as they become due.


 


3.11 Maintenance
of Assets. The failure by Borrower to maintain any material intellectual property rights, personal, real property or
other assets which are necessary to conduct its business (whether now or in the future). For the avoidance of doubt, this
Section 3.11 shall not apply to the Company’s transfer or disposition of up to 25% of Simplicity One Brasil Ltda to Jed
Kaplan.


 




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3.12 Financial
Statement Restatement. The restatement of any financial statements filed by the Borrower with the SEC for any date or
period from two years prior to the Issue Date of this Note and until this Note is no longer outstanding, if the result of
such restatement would, by comparison to the unrestated financial statement, have constituted a material adverse effect on
the rights of the Holder with respect to this Note or the Purchase Agreement.


 


3.13 Replacement
of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide,
prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as
initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve
shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the
Borrower.


 


3.14 Cross-Default.
The declaration of an event of default by any lender or other extender of credit to the Company under any notes, loans,
agreements or other instruments of the Company evidencing any indebtedness of the Company (including those filed as exhibits
to or described in the Company’s filings with the SEC), after the passage of all applicable notice and cure or grace
periods.


 


3.15 Variable
Rate Transactions. The Borrower consummates a Variable Rate Transaction (as defined in the Purchase Agreement) at any
time on or after the Issue Date (excluding this Note).


 


3.16 Inside
Information. Any attempt by the Borrower or its officers, directors, and/or affiliates to transmit, convey, disclose, or
any actual transmittal, conveyance, or disclosure by the Borrower or its officers, directors, and/or affiliates of, material
non-public information concerning the Borrower, to the Holder or its successors and assigns, which is not immediately cured
by Borrower’s filing of a Form 8-K pursuant to Regulation FD on that same date


 


3.17 Unavailability
of Rule 144. If, at any time on or after the date which is six (6) months after the Issue Date, the Holder is unable to
(i) obtain a standard “144 legal opinion letter” from an attorney reasonably acceptable to the Holder, the
Holder’s brokerage firm (and respective clearing firm), and the Borrower’s transfer agent in order to facilitate
the Holder’s conversion of any portion of the Note into free trading shares of the Borrower’s Common Stock
pursuant to Rule 144, and/or (ii) thereupon deposit such shares into the Holder’s brokerage account.


 


3.18 Delisting
or Suspension of Trading of Common Stock. If, at any time on or after the Issue Date, the Borrower’s Common Stock
(i) is suspended from trading, (ii) halted from trading, and/or (iii) fails to be quoted or listed (as applicable) on any
level of the OTC Markets, any tier of the NASDAQ Stock Market, the New York Stock Exchange, or the NYSE American.


 


3.19 Failure
to Pay an Amortization Payment. The Borrower fails to pay an Amortization Payment (as defined in this Note) when due as
provided in Section 4.17 of this Note.


 


3.20 Rights
and Remedies Upon an Event of Default. Upon the Holder’s provision of notice to the Borrower of the occurrence of
any Event of Default specified in this Article III, which has not been cured within five (5) calendar days (provided,
however, that this five (5) calendar day cure period shall not apply to any event of default under Sections 3.1, 3.2, and
3.19 of this Note), this Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full
satisfaction of its obligations hereunder, an amount equal to the Principal Amount then outstanding plus accrued interest
(including any Default Interest) through the date of full repayment multiplied by 125% (the “Default Amount”).
Holder may, in its sole discretion, determine to accept payment part in Common Stock and part in cash. For purposes of
payments in Common Stock, the conversion formula set forth in Section 1.2 shall apply. Notwithstanding anything to the
contrary contained herein, the Borrower shall have the right to pay the Default Amount in cash at any time, provided, however
that the Holder may convert the Default Amount as provided in this Note at any time after the date that is five (5) calendar
days after the Note becomes immediately due and payable as provided in this Article III (the “Uncured Default
Date”) until the Borrower has repaid the Note in cash.


 




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ARTICLE
IV. MISCELLANEOUS


 


4.1 Failure
or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies of the Holder
existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.


 


4.2 Notices. All
notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified,
return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, e-mail or facsimile, addressed as set forth below or to such other address as such
party shall have specified most recently by written notice. Any notice or other communication required or permitted to be
given hereunder shall be deemed effective (a) upon hand delivery or delivery by e-mail or facsimile, with accurate
confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a
business day during normal business hours where such notice is to be received), or the first business day following such
delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b)
on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such
address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall
be:


 


If
to the Borrower, to:


 


SIMPLICITY
ESPORTS AND GAMING COMPANY





7000
W. Palmetto Park Rd., Suite 505


Boca
Raton, FL 33433


Attention:
Jed Kaplan


e-mail:
jkaplan@simplicityesports.com


 


If
to the Holder:


 


FIRSTFIRE
GLOBAL OPPORTUNITIES FUND, LLC


1040
First Avenue, Suite 190


New
York, NY 10022


 e-mail:




 


4.3 Amendments. This
Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term
“Note” and all reference thereto, as used throughout this instrument, shall mean this instrument as originally
executed, or if later amended or supplemented, then as so amended or supplemented.


 


4.4 Assignability. This
Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and
its successors and assigns. Neither the Borrower nor the Holder shall assign this Note or any rights or obligations hereunder
without the prior written consent of the other. Notwithstanding the foregoing, the Holder may assign its rights hereunder to
any “accredited investor” (as defined in Rule 501(a) of the 1933 Act) in a private transaction from the Holder or
to any of its “affiliates”, as that term is defined under the 1934 Act, without the consent of the Borrower.
Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with a bona fide
margin account or other lending arrangement. The Holder and any assignee, by acceptance of this Note, acknowledge and agree
that following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note represented by
this Note may be less than the amount stated on the face hereof.


 




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4.5 Cost
of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of
collection, including reasonable attorneys’ fees.


 


4.6 Governing
Law; Venue; Attorney’s Fees. This Note shall be governed by and construed in accordance with the laws of the State
of Delaware without regard to principles of conflicts of laws. Any action brought by either party against the other
concerning the transactions contemplated by this Note or any other agreement, certificate, instrument or document
contemplated hereby shall be brought only in the state courts located in the New York, NY or federal courts located in New
York, NY. The Borrower hereby irrevocably waives any objection to jurisdiction and venue of any action instituted hereunder
and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. THE
BORROWER HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTIONS CONTEMPLATED HEREBY. Each party
hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding
in connection with this Note or any other agreement, certificate, instrument or document contemplated hereby or thereby by
mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at
the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve
process in any other manner permitted by law. The prevailing party in any action or dispute brought in connection with this
the Note or any other agreement, certificate, instrument or document contemplated hereby or thereby shall be entitled to
recover from the other party its reasonable attorney’s fees and costs.


 


4.7 Certain
Amounts. Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding Principal
Amount (or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on
such interest, the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on
this Note may be difficult to determine and the amount to be so paid by the Borrower represents stipulated damages and not a
penalty and is intended to compensate the Holder in part for loss of the opportunity to convert this Note and to earn a
return from the sale of shares of Common Stock acquired upon conversion of this Note at a price in excess of the price paid
for such shares pursuant to this Note. The Borrower and the Holder hereby agree that such amount of stipulated damages is not
plainly disproportionate to the possible loss to the Holder from the receipt of a cash payment without the opportunity to
convert this Note into shares of Common Stock.


 


4.8 Purchase
Agreement. The Company and the Holder shall be bound by the applicable terms of the Purchase Agreement and the documents
entered into in connection herewith and therewith.


 


4.9 Notice
of Corporate Events. Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of
Common Stock unless and only to the extent that it converts this Note into Common Stock. The Borrower shall provide the
Holder with prior notification of any meeting of the Borrower’s shareholders (and copies of proxy materials and other
information sent to shareholders). In the event of any taking by the Borrower of a record of its shareholders for the purpose
of determining shareholders who are entitled to receive payment of any dividend or other distribution, any right to subscribe
for, purchase or otherwise acquire (including by way of merger, consolidation, reclassification or recapitalization) any
share of any class or any other securities or property, or to receive any other right, or for the purpose of determining
shareholders who are entitled to vote in connection with any Change in Control or any proposed liquidation, dissolution or
winding up of the Borrower, the Borrower shall mail a notice to the Holder, at least twenty (20) days prior to the record
date specified therein (or thirty (30) days prior to the consummation of the transaction or event, whichever is earlier), of
the date on which any such record is to be taken for the purpose of such dividend, distribution, right or other event, and a
brief statement regarding the amount and character of such dividend, distribution, right or other event to the extent known
at such time. The Borrower shall make a public announcement of any event requiring notification to the Holder hereunder
substantially simultaneously with the notification to the Holder in accordance with the terms of this Section 4.9.


 


4.10 Remedies. The
Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by
vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the
remedy at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or
threatened breach by the Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other
available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions
restraining, preventing or curing any breach of this Note and to enforce specifically the terms and provisions thereof,
without the necessity of showing economic loss and without any bond or other security being required.


 




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4.11 Construction;
Headings. This Note shall be deemed to be jointly drafted by the Company and all the Holder and shall not be construed
against any person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part
of, or affect the interpretation of, this Note.


 


4.12 Usury.
To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim,
and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or
at any time hereafter in force, in connection with any action or proceeding that may be brought by the Holder in order to
enforce any right or remedy under this Note. Notwithstanding any provision to the contrary contained in this Note, it is
expressly agreed and provided that the total liability of the Company under this Note for payments which under the applicable
law are in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the
“Maximum Rate”), and, without limiting the foregoing, in no event shall any rate of interest or default interest,
or both of them, when aggregated with any other sums which under the applicable law in the nature of interest that the
Company may be obligated to pay under this Note exceed such Maximum Rate. It is agreed that if the maximum contract rate of
interest allowed by applicable law and applicable to this Note is increased or decreased by statute or any official
governmental action subsequent to the Issue Date, the new maximum contract rate of interest allowed by law will be the
Maximum Rate applicable to this Note from the effective date thereof forward, unless such application is precluded by
applicable law. If under any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to the
Holder with respect to indebtedness evidenced by this the Note, such excess shall be applied by the Holder to the unpaid
principal balance of any such indebtedness or be refunded to the Company, the manner of handling such excess to be at the
Holder’s election.


 


4.13 Severability. In
the event that any provision of this Note is invalid or unenforceable under any applicable statute or rule of law (including
any judicial ruling), then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall
be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable
under any law shall not affect the validity or enforceability of any other provision of this Note.


 


4.14 [Intentionally
Omitted].


 


4.15 Dispute
Resolution. In the case of a dispute as to the determination of the Conversion Price, Conversion Amount, any prepayment
amount or Default Amount, Issue, Closing or Maturity Date, the closing bid price, or fair market value (as the case may be)
or the arithmetic calculation of the Conversion Price or the applicable prepayment amount(s) (as the case may be), the
Borrower or the Holder shall submit the disputed determinations or arithmetic calculations via facsimile (i) within one (1)
Trading Day after receipt of the applicable notice giving rise to such dispute to the Borrower or the Holder or (ii) if no
notice gave rise to such dispute, at any time after the Holder learned of the circumstances giving rise to such dispute. If
the Holder and the Borrower are unable to agree upon such determination or calculation within one (1) Trading Day of such
disputed determination or arithmetic calculation (as the case may be) being submitted to the Borrower or the Holder, then the
Borrower shall, within one (1) Trading Day, submit (a) the disputed determination of the Conversion Price, the closing bid
price, the or fair market value (as the case may be) to an independent, reputable investment bank selected by the Borrower
and approved by the Holder or (b) the disputed arithmetic calculation of the Conversion Price, Conversion Amount, any
prepayment amount or Default Amount, to an independent, outside accountant selected by the Holder that is reasonably
acceptable to the Borrower. The Borrower shall cause at its expense the investment bank or the accountant to perform the
determinations or calculations and notify the Borrower and the Holder of the results no later than one (1) Trading Day from
the time it receives such disputed determinations or calculations. Such investment bank’s or accountant’s
determination or calculation shall be binding upon all parties absent demonstrable error.


 


4.16
[Intentionally Omitted].


 




    	14



     


    

 


4.17 Amortization
Payments. The Borrower shall make the following amortization payments (each an “Amortization Payment”) in
cash to the Holder towards the repayment of this Note, as provided in the following table:


 


	Payment Date:	 	Payment Amount:	 
	 	 	 	 
	12/07/2020	 	$	40,075.75	 
	01/07/2021	 	$	40,075.75	 
	02/08/2021	 	$	40,075.75	 
	03/08/2021	 	$	40,075.75	 
	04/07/2021	 	$	40,075.75	 
	05/07/2021	 	$	40,075.75	 
	06/07/2021	 	$	40,075.75	 
	07/07/2021	 	$	40,075.75	 
	08/07/2021	 	$	39,952.34	 



 


(a)
With respect to the first Amortization Payment originally due on December 7, 2020 (the “First Amortization
Payment”), the Company may notify the Holder on or before December 7, 2020, that the Company is electing to extend the
due date of the First Amortization Payment to January 7, 2021 (the “First Amortization Payment Extension”) as
further provided herein. If the Company exercises the First Amortization Payment Extension, then the First Amortization
Payment shall be due on January 7, 2021 and the Company shall pay $4,007.57 (the “First Amortization Payment Extension
Fee”) to the Holder on or before December 7, 2020. For the avoidance of doubt, the First Amortization Payment Extension
shall not affect the due date of any other Amortization Payment and the First Amortization Payment Extension Fee shall not
reduce the amounts owed under the Note. The Company shall not be permitted to exercise the First Amortization Payment
Extension if an Event of Default occurs under the Note.


 


(b)
If the Company exercised the First Amortization Payment Extension and fully complied with Section 4.17(a) of this Note, then
the Company may notify the Holder on or before January 7, 2021, that the Company is electing to further extend the due date
of the First Amortization Payment to February 8, 2021 (the “Additional First Amortization Payment Extension”) as
further provided herein. If the Company exercises the Additional First Amortization Payment Extension, then the First
Amortization Payment shall be due on February 8, 2021 and the Company shall pay $4,007.57 (the “Additional First
Amortization Payment Extension Fee”) to the Holder on or before January 7, 2021. For the avoidance of doubt, the
Additional First Amortization Payment Extension shall not affect the due date of any other Amortization Payment and the
Additional First Amortization Payment Extension Fee shall not reduce the amounts owed under the Note. The Company shall not
be permitted to exercise the Additional First Amortization Payment Extension if an Event of Default occurs under the
Note.


 


(c)
With respect to the second Amortization Payment originally due on January 7, 2021 (the “Second Amortization
Payment”), the Company may notify the Holder on or before January 7, 2021, that the Company is electing to extend the
due date of the Second Amortization Payment to February 8, 2021 (the “Second Amortization Payment Extension”) as
further provided herein. If the Company exercises the Second Amortization Payment Extension, then the Second Amortization
Payment shall be due on February 8, 2021 and the Company shall pay $4,007.57 (the “Second Amortization Payment
Extension Fee”) to the Holder on or before January 7, 2021. For the avoidance of doubt, the Second Amortization Payment
Extension shall not affect the due date of any other Amortization Payment and the Second Amortization Payment Extension Fee
shall not reduce the amounts owed under the Note. The Company shall not be permitted to exercise the Second Amortization
Payment Extension if an Event of Default occurs under the Note.


 


4.18 Right
of First Refusal. If at any time while this Note is outstanding, the Borrower has a bona fide offer of capital or
financing from any 3rd party (except with respect to the Borrower’s sale of its Common Stock, which may also include a
common stock purchase warrant component if such sale of Common Stock is pursuant to a registered underwritten offering by a
registered broker-dealer on behalf of the Borrower), that the Borrower intends to act upon, then the Borrower must first
offer such opportunity to the Holder to provide such capital or financing to the Borrower on the same terms as each
respective 3rd party’s terms. Should the Holder be unwilling or unable to provide such capital or financing to the
Borrower within 2 trading days from Holder’s receipt of written notice of the offer (the “Offer Notice”)
from the Borrower, then the Borrower may obtain such capital or financing from that respective 3rd party upon the exact same
terms and conditions offered by the Borrower to the Holder, which transaction must be completed within 30 days after the date
of the Offer Notice. If the Borrower does not receive the capital or financing from the respective 3rd party within 30 days
after the date of the respective Offer Notice, then the Borrower must again offer the capital or financing opportunity to the
Holder as described above, and the process detailed above shall be repeated. The Offer Notice must be sent via electronic
mail to _________________. This Section 4.18 shall not apply to any bona fide offer of capital or financing from an officer
or director of the Borrower.


 


[signature
page follows]


 




    	15



     


    

 


IN
WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer on August 7, 2020.


 


SIMPLICITY
ESPORTS AND GAMING COMPANY


 


	By:	/s/
    Roman Franklin	 
	Name:
    	Roman
    Franklin	 
	Title:
    	President	 


 




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EXHIBIT
A — NOTICE OF CONVERSION


 


The
undersigned hereby elects to convert $ __________________principal amount of the Note (defined below) into that number of shares of Common
Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of SIMPLICITY ESPORTS
AND GAMING COMPANY, a Delaware corporation (the “Borrower”), according to the conditions of the self-amortization
promissory note of the Borrower dated as of August 7, 2020 (the “Note”), as of the date written below. No fee will
be charged to the Holder for any conversion, except for transfer taxes, if any.


 


Box
Checked as to applicable instructions:


 


	 	[  ]	The
    Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the
    undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).
	 	 	 
	 	 	Name
    of DTC Prime Broker:
	 	 	Account
    Number:
	 	[  ]	The
    undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock
    set forth below (which numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately
    below or, if additional space is necessary, on an attachment hereto:


 


	Date of Conversion:	 	 	 
	Applicable Conversion Price:	 	$	
	Costs Incurred by the Undersigned to Convert 
the Note into Shares of Common Stock:	 	$	 


	Number of Shares of Common Stock to be 
Issued Pursuant to Conversion of the Note:	 	 	 
	Amount of Principal Balance Due remaining Under the Note after this conversion:	 	 	 



 


	By:	 	 
	Name:	 	 
	Title:	 	 
	Date:	 	 


 




    	17