Document:

Exhibit 10.4

 

Esports Entertainment Group, Inc.

170 Pater House, Psaila Street

Birkirkara, Malta, BKR 9077

 

July ___, 2019

 

VIA ELECTRONIC MAIL

 

Re: Waiver Letter – Securities
Purchase Agreement and related documents

 

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

 

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

 

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

 

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

 

     

     

    

 

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

 

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

 

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

 

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

 

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

 

    2

     

    

 

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

 

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

 

ACCEPTED AND AGREED:

 

INVESTOR: 

 

	For Individuals	 	
        For Entities

	 	 	 
	 	 	 
	Name of Investor

	 	Name of Investor

	 	 	 
	 	 	 
	Signature of Investor

	 	Signature of Authorized Person

	 	 	 
	 	 	 
	 	 	Print Name of Authorized Person

	 	 	 
	 	 	 
	 	 	Print Title of Authorized Person

 

    3

     

    

 

Exhibit AExhibit 10.5

 

NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A
LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

Original
Issue Date: November 14, 2018

 

$929,500

 

AMENDED
AND RESTATED

10%
original issue discount

5%
Senior Convertible NOTE

DUE
November 14, 2019

 

THIS
AMENDED AND RESTATED 10% SENIOR CONVERTIBLE NOTE is one of a series of duly authorized and validly issued 5% Senior Convertible
Notes issued at a 10% original issue discount by Esports Entertainment Group, Inc., a Nevada corporation (the “Company”)
(this note, the “Note” and, collectively with the other notes of such series, the “Notes”). This Note
replaces a prior note issued by the Company to the Holder (defined below). 

 

FOR
VALUE RECEIVED, the Company promises to pay to Cavalry Fund I LP, or its registered assigns (the “Holder”), or shall
have paid pursuant to the terms hereunder, the principal sum of $929,500 on the date that is the one year anniversary of the Original
Issue Date, or November 14, 2019 (the “Maturity Date”) or such earlier date as this Note is required or permitted
to be repaid as provided hereunder, and to pay interest to the Holder on the aggregate unconverted and then outstanding principal
amount of this Note in accordance with the provisions hereof. This Note is subject to the following additional provisions:

 

Section
1.Definitions. For the purposes hereof, (a) capitalized terms not otherwise defined herein shall have the meanings
set forth in the Purchase Agreement and (b) the following terms shall have the following meanings:

 

“Alternate
Consideration” shall have the meaning set forth in Section 5(e).

 

    

     

    

 

“Bankruptcy
Event” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in Rule
1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment
of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company
or any Significant Subsidiary thereof, (b) there is commenced against the Company or any Significant Subsidiary thereof any such
case or proceeding that is not dismissed within 60 days after commencement, (c) the Company or any Significant Subsidiary thereof
is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d)
the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial
part of its property that is not discharged or stayed within 60 calendar days after such appointment, (e) the Company or any Significant
Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company or any Significant Subsidiary thereof
calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts or (g) the Company
or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence
in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.

 

“Base
Conversion Price” shall have the meaning set forth in Section 5(b).

 

“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 4(e).

 

“Black
Scholes Value” means the value of the outstanding principal amount of this Note, plus all accrued and unpaid interest hereon
based on the Black and Scholes Option Pricing Model obtained from the “OV” function on Bloomberg L.P. (“Bloomberg”)
determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free
interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement
of the applicable Fundamental Transaction and the Maturity Date, (B) an expected volatility equal to the greater of 100% and the
100 day volatility obtained from the HVT function on Bloomberg as of the Trading Day immediately following the public announcement
of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the sum of the
price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental
Transaction and (D) a remaining option time equal to the time between the date of the public announcement of the applicable Fundamental
Transaction and the Maturity Date.

 

“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any
day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

 

“Buy-In”
shall have the meaning set forth in Section 4(c)(v).

 

“Change
of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof by
an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of
effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of
in excess of 50% of the voting securities of the Company (other than by means of conversion, exercise or exchange of the Notes
or the Securities issued together with the Notes), (b) the Company merges into or consolidates with any other Person, or any Person
merges into or consolidates with the Company and, after giving effect to such transaction, the shareholders of the Company immediately
prior to such transaction own less than 50% of the aggregate voting power of the Company or the successor entity of such transaction,
(c) the Company sells or transfers all or substantially all of its assets to another Person, (d) a replacement at one time or
within a three year period of more than one-half of the members of the Board of Directors which is not approved by a majority
of those individuals who are members of the Board of Directors on the Original Issue Date (or by those individuals who are serving
as members of the Board of Directors on any date whose nomination to the Board of Directors was approved by a majority of the
members of the Board of Directors who are members on the date hereof), or (e) the execution by the Company of an agreement to
which the Company is a party or by which it is bound, providing for any of the events set forth in clauses (a) through (d) above.

 

    2

     

    

 

“Collateral
Agent” means the party appointed agent on behalf of all Purchasers in the Security Agreement dated October 16, 2018 by and
between the Company and the Collateral Agent.

 

“Conversion”
shall have the meaning ascribed to such term in Section 4.

 

“Conversion
Date” shall have the meaning set forth in Section 4(a).

 

“Conversion
Price” shall have the meaning set forth in Section 4(b).

 

“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Note in accordance with the terms
hereof.

 

“Default
Conversion Price” shall have the meaning set forth in Section 4(c).

 

“Default
Interest Rate” shall have the meaning set forth in Section 2(a).

 

“Dilutive
Issuance” shall have the meaning set forth in Section 5(b).

 

“Dilutive
Issuance Notice” shall have the meaning set forth in Section 5(b).

 

“DWAC”
means the Deposit or Withdrawal at Custodian system at The Depository Trust Company.

 

“Event
of Default” shall have the meaning set forth in Section 7(a).

 

“Exempt
Issuance” shall have the meaning set forth in the Purchase Agreement which is hereby revised to include (i) an issuance
of securities in an offering up to $1,000,000 (on terms no favorable than the terms contained herein); and (ii) warrants to purchase
50,000 shares of the Company’s common stock to be issued to Cavalry Fund I LP.

 

“Fundamental
Transaction” shall have the meaning set forth in Section 5(e).

 

“Indebtedness”
shall have the meaning set forth in the Purchase Agreement.

 

“Liens”
shall have the meaning set forth in the Purchase Agreement.

 

“Mandatory
Default Amount” means the sum of (a) (i) 130% of the outstanding principal amount of this Note plus (ii) accrued and unpaid
interest hereon, including Default Interest, and (b) all other amounts, costs, expenses and liquidated damages due in respect
of this Note.

 

“New
York Courts” shall have the meaning set forth in Section 8(e).

 

“Note
Register” shall have the meaning set forth in Section 3(c).

 

“Notice
of Conversion” shall have the meaning set forth in Section 4(a).

 

    3

     

    

 

“Option
Value” means the value of a Common Stock Equivalent based on the Black Scholes Option Pricing model obtained from the “OV”
function on Bloomberg determined as of (A) the Trading Day prior to the public announcement of the issuance of the applicable
Common Stock Equivalent, if the issuance of such Common Stock Equivalent is publicly announced or (B) the Trading Day immediately
following the issuance of the applicable Common Stock Equivalent if the issuance of such Common Stock Equivalent is not publicly
announced, for pricing purposes and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period
equal to the remaining term of the applicable Common Stock Equivalent as of the applicable date of determination, (ii) an expected
volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as of (A) the Trading
Day immediately following the public announcement of the applicable Common Stock Equivalent if the issuance of such Common Stock
Equivalent is publicly announced or (B) the Trading Day immediately following the issuance of the applicable Common Stock Equivalent
if the issuance of such Common Stock Equivalent is not publicly announced, (iii) the underlying price per share used in such calculation
shall be the highest VWAP of the Common Stock during the period beginning on the Trading Day prior to the execution of definitive
documentation relating to the issuance of the applicable Common Stock Equivalent and ending on (A) the Trading Day immediately
following the public announcement of such issuance, if the issuance of such Common Stock Equivalent is publicly announced or (B)
the Trading Day immediately following the issuance of the applicable Common Stock Equivalent if the issuance of such Common Stock
Equivalent is not publicly announced, (iv) a zero cost of borrow and (v) a 360 day annualization factor.

 

“Original
Issue Date” means the date of the first issuance of the Notes, regardless of any transfers of any Note and regardless of
the number of instruments which may be issued to evidence such Notes.

 

“Permitted
Indebtedness” means (a) the indebtedness evidenced by the Notes, (b) capital lease obligations and purchase money indebtedness
incurred in connection with the acquisition of machinery and equipment as long as such capital leases and indebtedness are approved
in advance by the Collateral Agent, (c) up to $1,000,000 in an offering of notes having terms not more favorable than hereunder
and (d) any indebtedness set forth on Schedule 3.1(aa) to the Purchase Agreement.

 

“Permitted
Lien” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental
charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good
faith and by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Company)
have been established in accordance with GAAP, (b) Liens imposed by law which were incurred in the ordinary course of the Company’s
business, such as carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other
similar Liens arising in the ordinary course of the Company’s business, and which (x) do not individually or in the aggregate
materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business
of the Company and its consolidated Subsidiaries or (y) are being contested in good faith by appropriate proceedings, which proceedings
have the effect of preventing for the foreseeable future the forfeiture or sale of the property or asset subject to such Lien,
(c) Liens incurred in connection with Permitted Indebtedness under clauses (a) and (b) thereunder, and Liens set forth on Schedule
3.1(aa) to the Purchase Agreement.

 

“Purchase
Agreement” means the Securities Purchase Agreement, dated as of October 16, 2018 among the Company and the original Holders,
as amended, modified or supplemented from time to time in accordance with its terms.

 

    4

     

    

 

“Qualified
Financing” means a registered public offering of shares of the Company’s Common Stock (and warrants if included in
Qualified Financing), from which the Company receives gross proceeds of not less than $5,000,000 and the Company’s Trading
Market is a national securities exchange.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Share
Delivery Date” shall have the meaning set forth in Section 4(c)(ii).

 

“Successor
Entity” shall have the meaning set forth in Section 5(e).

 

“Trading
Day” means a day on which the principal Trading Market is open for trading.

 

“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the
date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the
New York Stock Exchange, or any market of the OTC Markets, Inc. (or any successors to any of the foregoing).

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based
on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)) (or a similar organization or agency succeeding
to its functions of reporting prices), (b)  if no volume weighted average price of the Common Stock is reported for the Trading
Market, the most recent bid price per share of the Common Stock so reported, or (c) in all other cases, the fair market value
of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority of the
outstanding principal amount of the Notes then outstanding and reasonably acceptable to the Company, the fees and expenses of
which shall be paid by the Company.

 

Section
2.Interest/Prepayment.

 

(a) Interest.
Interest shall accrue to the Holder on the aggregate unconverted and then outstanding principal amount of this Note at the rate
of five percent (5%) per annum, calculated on the basis of a 360-day year and shall accrue daily commencing on the Original Issue
Date until payment in full of the outstanding principal (or conversion to the extent applicable), together with all accrued and
unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made. During the existence of an
Event of Default, interest shall accrue at the lesser of (i) the rate of 18% per annum, or (ii) the maximum amount permitted by
law (the lesser of clause (i) or (ii), the “Default Interest Rate”).

 

(b) Prepayment.
The Notes may be prepaid: (i) at any time until the 180th day following the Original Issue Date at an amount equal to 110% of
outstanding principal balance of the Note and accrued and unpaid interest, and (ii) anytime after the 180th day following the
Original Issue Date at an amount equal to 125% of outstanding principal balance of the Notes and accrued and unpaid interest.
In order to prepay the Notes, the Company shall provide twenty (20) Trading Days prior written notice to the Holder, during which
time the Holder may convert the Notes in whole or in part at the Conversion Price.

 

    5

     

    

 

Section
3.Registration of Transfers and Exchanges.

 

(a) Different
Denominations. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations,
as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer or exchange.

 

(b) Investor
Representations. This Note has been issued subject to certain investment representations of the original Holder set forth
in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable federal
and state securities laws and regulations.

 

(c) Reliance
on Note Register. Prior to due presentment for transfer to the Company of this Note, the Company and any agent of the Company
may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving
payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such
agent shall be affected by notice to the contrary.

 

Section
4.Conversion.

 

(a) Voluntary
Conversion. After the Original Issue Date until this Note is no longer outstanding, this Note shall be convertible, in whole
or in part, at any time, and from time to time, into shares of Common Stock at the option of the Holder. The Holder shall effect
conversions by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A (each,
a “Notice of Conversion”), specifying therein the principal amount of this Note to be converted and the date on which
such conversion shall be effected (such date, the “Conversion Date”). If no Conversion Date is specified in a Notice
of Conversion, the Conversion Date shall be the date that such Notice of Conversion is delivered hereunder. No ink-original Notice
of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice
of Conversion form be required. To effect conversions hereunder, the Holder shall not be required to physically surrender this
Note to the Company unless the entire principal amount of this Note, plus all accrued and unpaid interest thereon, has been so
converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Note in an amount
equal to the applicable conversion. The Holder and the Company shall maintain records showing the principal amount(s) converted
in each conversion, the date of each conversion, and the Conversion Price in effect at the time of each conversion. The Company
may deliver an objection to any Notice of Conversion within one Business Day of delivery of such Notice of Conversion. In the
event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest
error. 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 may be
less than the amount stated on the face hereof. 

 

(b)Mandatory
Conversion. This Note (and any accrued or unpaid interest) shall automatically convert into the Company’s common stock,
or into the Company’s common stock and warrants (if warrants are included in the Qualified Financing), upon the closing
of a Qualified Financing at a price per share equal to the lower of (i) the Conversion Price and (ii) 80% of the offering price
in the Qualified Financing. At least five days prior to the closing of the Qualified Financing, the Company will notify the Holder
in writing of the terms of the Qualified Financing. By way of example, if Notes in the principal amount of $2,000,000 are sold
in this offering, and units consisting of one share of common stock and one warrant are sold in the Qualified Financing at a price
of $1.00 per unit, the Note Holders, as a group, would receive 3,333,333 shares of common stock and 3,333,333 warrants upon the
conversion of the Notes (excluding shares and warrants which would be issued for accrued interest). The Warrants issued upon conversion
would have the same terms as the warrants sold in the Qualified Offering.

 

    6

     

    

 

(c) Conversion
Price. The “Conversion Price” in effect on any Conversion Date means, as of any Conversion Date or other date
of determination, sixty cents ($0.60) per share (subject to adjustment as provided herein), provided, however, that if
an Event of Default has occurred, regardless of whether such Event of Default has been cured or remains ongoing, the Note shall
be convertible at 80% of the lowest closing price during the prior twenty (20) Trading Days of the Common Stock as reported on
the Trading Market (the “Default Conversion Price”).

 

(d) Mechanics
of Conversion or Prepayment.

 

(i) Conversion
Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon a conversion hereunder
shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Note to be converted by
(y) the Conversion Price in effect at the time of such conversion.

 

(ii) Delivery
of Certificate Upon Conversion. Not later than two (2) Trading Days after each Conversion Date (the “Share Delivery
Date”), the Company shall deliver, or cause to be delivered, to the Holder any certificate or certificates required to be
delivered by the Company under this Section 4(d) which, on or after the six month anniversary of the Original Issue Date, shall
be free of restrictive legends and trading restrictions (other than those which may then be required by the Purchase Agreement)
and such shares shall be delivered electronically through the Depository Trust Company or another established clearing corporation
performing similar functions provided the Holder has provided to the Company complete delivery instructions as required by the
Notice of Conversion.

 

(iii) Failure
to Deliver Certificates. If, in the case of any Notice of Conversion, such certificate or certificates are not delivered to
or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to
the Company at any time on or before its receipt of such certificate or certificates, to rescind such Conversion, in which event
the Company shall promptly return to the Holder any original Note delivered to the Company and the Holder shall promptly return
to the Company the Common Stock certificates issued to such Holder pursuant to the rescinded Notice of Conversion.

 

(iv) Obligation
Absolute; Partial Liquidated Damages. The Company’s obligations to issue and deliver the Conversion Shares upon conversion
of this Note in accordance with the terms hereof, are absolute and unconditional, irrespective of any action or inaction by the
Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any
Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or
alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law
by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the
Company to the Holder in connection with the issuance of such Conversion Shares; provided, however, that such delivery
shall not operate as a waiver by the Company of any such action the Company may have against the Holder. In the event the Holder
of this Note shall elect to convert any or all of the outstanding principal amount hereof, the Company may not refuse conversion
based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation of law,
agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and or enjoining conversion
or prepayment of all or part of this Note shall have been sought and obtained, and the Company posts a surety bond for the benefit
of the Holder in the amount of 150% of the outstanding principal amount of this Note, which is subject to the injunction, which
bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which
shall be payable to the Holder to the extent it obtains judgment. In the absence of such injunction, the Company shall issue Conversion
Shares upon a properly noticed conversion. If the Company fails for any reason to deliver to the Holder such certificate or certificates
pursuant to Section 4(d)(ii) by the Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and
not as a penalty, for each $1,000 of principal amount being converted, $10 per Trading Day (increasing to $20 per Trading Day
on the fifth (5th) Trading Day after such Conversion Date) for each Trading Day after such Share Delivery Date until
such certificates are delivered or Holder rescinds such conversion. In no event shall liquidated damages for any one conversion
exceed $1,000 for the first ten (10) Trading Days. Nothing herein shall limit a Holder’s right to pursue actual damages
or declare an Event of Default pursuant to Section 7 hereof for the Company’s failure to deliver Conversion Shares within
the period specified herein and the Holder shall have the right to pursue all remedies available to it hereunder, at law or in
equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights
shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.

 

    7

     

    

 

(v) Compensation
for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available to the Holder,
if the Company fails for any reason to deliver to the Holder such certificate or certificates by the Share Delivery Date pursuant
to Section 4(d)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase (in an open
market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver
in satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the conversion
relating to such Share Delivery Date (a “Buy-In”), then the Company shall (A) pay in cash to the Holder (in addition
to any other remedies available to or elected by the Holder) the amount, if any, by which (x) the Holder’s total purchase
price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number
of shares of Common Stock that the Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale
price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions) and (B)
at the option of the Holder, either reissue (if surrendered) this Note in a principal amount equal to the principal amount of
the attempted conversion (in which case such conversion shall be deemed rescinded) or deliver to the Holder the number of shares
of Common Stock that would have been issued if the Company had timely complied with its delivery requirements under Section 4(d)(ii).
For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an
attempted conversion of this Note with respect to which the actual sale price of the Conversion Shares (including any brokerage
commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately preceding sentence,
the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts
payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing
herein shall limit a 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 shares of Common Stock upon conversion of this Note as required pursuant to the terms hereof.

 

(vi) Reservation
of Shares Issuable Upon Conversion. The Company covenants that it will reserve and keep available out of its authorized and
unissued shares of Common Stock for the purpose of issuances upon conversion of this Note (and other purposes further detailed
in the Purchase Agreement), free from preemptive rights or any other actual contingent purchase rights of Persons other than the
Holder (and the other holders of the Notes), not less than the amount of shares designated in Section 4.9 of the Purchase Agreement.
The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly
issued, fully paid and nonassessable.

 

    8

     

    

 

(vii) Fractional
Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Note. As
to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Company shall at
its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by
the Conversion Price or round up to the next whole share.

 

(viii) Transfer
Taxes and Expenses. The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without
charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery
of such certificates, provided that, the Company shall not be required to pay any tax that may be payable in respect of any transfer
involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of this
Note so converted and the Company shall not be required to issue or deliver such certificates unless or until the Person or Persons
requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction
of the Company that such tax has been paid. The Company shall pay all Transfer Agent fees required for same-day processing of
any Notice of Conversion and all fees to the Depository Trust Company (or another established clearing corporation performing
similar functions) required for same-day electronic delivery of the Conversion Shares.

 

(e)Holder’s
Conversion Limitations. The Company shall not effect any conversion of this Note, and a Holder shall not have the right to
convert any portion of this Note, to the extent that after giving effect to the conversion set forth on the applicable Notice
of Conversion, the Holder (together with the Holder’s Affiliates, and any Persons acting as a group together with the Holder
or any of the Holder’s Affiliates) 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 its Affiliates
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 are issuable upon (i) conversion of the remaining,
unconverted principal amount of this Note beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion
of the unexercised or unconverted portion of any other securities of the Company subject to a limitation on conversion or exercise
analogous to the limitation contained herein (including, without limitation, any other Notes or the Warrants) beneficially owned
by the Holder or any of its Affiliates.  Except as set forth in the preceding sentence, for purposes of this Section 4(e),
beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. To the extent that the limitation contained in this Section 4(e) applies, the determination of whether this Note is
convertible (in relation to other securities owned by the Holder together with any Affiliates) and of which principal amount of
this Note is convertible shall be in the sole discretion of the Holder, and the submission of a Notice of Conversion shall be
deemed to be the Holder’s determination of whether this Note may be converted (in relation to other securities owned by
the Holder together with any Affiliates) and which principal amount of this Note is convertible, in each case subject to the Beneficial
Ownership Limitation. To ensure compliance with this restriction, the Holder will be deemed to represent to the Company each time
it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this paragraph
and the Company shall have no obligation to verify or confirm the accuracy of such determination. 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 4(e), in determining the number of outstanding shares
of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following:
(i) the Company’s most recent periodic or annual report filed with the SEC, as the case may be, (ii) a more recent public
announcement by the Company, or (iii) a more recent written notice by the Company or the Company’s 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 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 immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion
of this Note held by the Holder. The Holder, upon not less than 61 days’ prior notice to the Company, may increase the Beneficial
Ownership Limitation provisions of this Section 4(e) solely with respect to the Holder’s Note, provided that the Beneficial
Ownership Limitation in no event exceeds 9.99% of the number of shares of Common Stock outstanding immediately after giving effect
to the issuance of shares of Common Stock upon conversion of this Note held by the Holder and the provisions of this Section 4(e)
shall continue to apply. Any such increase or decrease will not be effective until the 61st day after such notice is delivered
to the Company. The Holder may also decrease the Beneficial Ownership Limitation provisions of this Section 4(e) solely with respect
to the Holder’s Note at any time, which decrease shall be effectively immediately upon delivery of notice to the Company.
The Beneficial Ownership Limitation provisions of this paragraph shall be construed and implemented in a manner otherwise than
in strict conformity with the terms of this Section 4(e) to correct this paragraph (or any portion hereof) which may be defective
or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary
or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor
holder of this Note.

 

    9

     

    

 

Section
5.Certain Adjustments.

 

(a) Stock
Dividends and Stock Splits. If the Company, at any time while this Note is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock Equivalents
(which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon conversion of, or payment
of interest on, the Notes or pursuant to any of the other Transaction Documents), (ii) subdivides outstanding shares of Common
Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common
Stock into a smaller number of shares or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares
of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the
number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such event, and
of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment
made pursuant to this Section shall become effective immediately after the record date for the determination of shareholders entitled
to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision,
combination or re-classification.

 

(b) Subsequent
Equity Sales. If, at any time, for so long as the Note or any amounts accrued and payable thereunder remain outstanding, the
Company or any Subsidiary, as applicable, sells or grants any option to purchase or sells or grants any right to reprice, or otherwise
disposes of or issues (or announces any sale, grant or any option to purchase or other disposition), any Common Stock or Common
Stock Equivalents entitling any Person to acquire shares of Common Stock at an effective price per share that is lower than the
Conversion Price then in effect (such lower price, the “Base Conversion Price” and each such issuance or announcement
a “Dilutive Issuance”), then the Conversion Price shall be immediately reduced to equal the Base Conversion Price.
Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued.

 

If
any Common Stock Equivalent is amended or adjusted, and such price as so amended shall be less than the Conversion Price in effect
at the time of such amendment or adjustment, then the Conversion Price shall be adjusted upon each such issuance or amendment
as provided in this Section 5(b). In case any Common Stock Equivalent is issued in connection with the issue or sale of other
securities of the Company, together comprising one integrated transaction, (x) the Common Stock Equivalents will be deemed to
have been issued for the Option Value of such Common Stock Equivalents and (y) the other securities issued or sold in such integrated
transaction shall be deemed to have been issued or sold for the difference of (I) the aggregate consideration received by the
Company less any consideration paid or payable by the Company pursuant to the terms of such other securities of the Company, less
(II) the Option Value. If any shares of Common Stock or Common Stock Equivalents are issued or sold or deemed to have been issued
or sold for cash, the amount of such consideration received by the Company will be deemed to be the net amount received by the
Company therefor. If any shares of Common Stock or Common Stock Equivalents are issued or sold for a consideration other than
cash, the amount of such consideration received by the Company will be the fair value of such consideration, except where such
consideration consists of publicly traded securities, in which case the amount of consideration received by the Company will be
the VWAP of such public traded securities on the date of receipt. If any shares of Common Stock or Common Stock Equivalents are
issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the
amount of consideration therefor will be deemed to be the fair value of such portion of the net assets and business of the non-surviving
entity as is attributable to such shares of Common Stock or Common Stock Equivalents, as the case may be.

 

If
the holder of Common Stock or Common Stock Equivalents outstanding on the Original Issue Date or issued after the Original Issuance
Date 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 then in
effect, such issuance shall be deemed to have occurred for less than the Conversion Price on such date and such issuance shall
be deemed to be a Dilutive Issuance.

 

If
the Company enters into a Variable Rate Transaction despite the prohibition set forth in the Purchase Agreement, the Company shall
be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible conversion price at which such securities
may be converted or exercised under the terms of such Variable Rate Transaction.

 

    10

     

    

 

The
Company shall notify the Holder in writing, no later than the Trading Day following the issuance of any Common Stock or Common
Stock Equivalents subject to this Section 5(b), indicating therein the applicable issuance price, or applicable reset price, exchange
price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”). For purposes of clarification,
whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 5(b), upon the occurrence of any Dilutive
Issuance, the Holder is entitled to receive a number of Conversion Shares based upon the Base Conversion Price on or after the
date of such Dilutive Issuance, regardless of whether the Holder accurately refers to the Base Conversion Price in the Notice
of Conversion.

 

The
provisions of this Section 5(b) shall apply each time a Dilutive Issuance occurs after the Original Issue Date for so long as
the Note or any amounts accrued and payable thereunder remain outstanding, but any adjustment of the Conversion Price pursuant
to this Section 5(b) shall be downward only. Notwithstanding the foregoing, no adjustment will be made under this Section 5(b)
in respect of an Exempt Issuance.

 

(c) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 5(a) above, if at any time the Company grants, issues
or sells any Common Stock, Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata
to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled
to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired
if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without regard to
any limitations on conversion hereof, including without limitation, the Beneficial Ownership Limitation) 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 shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights
(provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would
result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such
Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such
extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right
thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

(d) Pro
Rata Distributions. During such time as this Note is outstanding, if the Company shall declare or make any dividend or other
distribution of its assets or rights or warrants to acquire its assets, or subscribe for or purchase any security other than Common
Stock, to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution
of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,
scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Note,
then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would
have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this
Note (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation)
immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which
the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding
the Beneficial Ownership Limitation with respect to the Company or any other publicly-traded corporation subject to Section 13(d)
of the Exchange Act, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial
ownership of any shares of common stock as a result of such Distribution to such extent) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the
Holder exceeding the Beneficial Ownership Limitation with respect to the Company or any other publicly-traded corporation subject
to Section 13(d) of the Exchange Act).

 

    11

     

    

 

(e) Fundamental
Transaction. (1) If, at any time while this Note is outstanding, (i) the Company, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly,
effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets
in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether
by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange
their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common
Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization
or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted
into or exchanged for other securities, cash or property, (v) the Company, directly or indirectly, in one or more related transactions
consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the
outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making
or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or
other business combination) (each a “Fundamental Transaction”), then, upon any subsequent conversion of this Note,
the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately
prior to the occurrence of such Fundamental Transaction (without regard to any limitation on the conversion of this Note), the
number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation,
and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction
by a holder of the number of shares of Common Stock for which this Note is convertible immediately prior to such Fundamental Transaction
(without regard to any limitation on the conversion of this Note). For purposes of any such conversion, the determination of the
Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Conversion
Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the
Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon
any conversion of this Note following such Fundamental Transaction. The Company shall not effect a Fundamental Transaction unless
it gives the Holder at least ten (10) Trading Days prior notice together with sufficient details so the Holder can make an informed
decision as to whether it elects to accept the Alternative Consideration. If a public announcement of the Fundamental Transaction
has not been made, the notice to the Holder may not be given until the Company files a Form 8-K or other report disclosing the
Fundamental Transaction. (2) Notwithstanding anything to the contrary, in the event of a Fundamental Transaction that is (x) an
all cash transaction, (y) a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the Exchange Act, or (z) a Fundamental
Transaction involving a person or entity not traded on a national securities exchange or trading market (with such exchange or
market including, without limitation, the Nasdaq Global Select Trading Market, the Nasdaq Global Market, or the Nasdaq Capital
Market, The New York Stock Exchange, Inc., the NYSE American or the OTCQB), the Company or any Successor Entity (as defined below)
shall, at the Holder’s option, concurrently with the consummation of the Fundamental Transaction, purchase this Note from
the Holder by paying to the Holder the higher of (i) an amount of cash equal to the Black Scholes Value of the outstanding principal
of this Note on the date of the consummation of such Fundamental Transaction, or (ii) the product of (a) the number of Conversion
Shares issuable upon full conversion of this Note (without regard to any limitation on conversion of this Note) and (b) the positive
difference between the cash per share paid in such Fundamental Transaction minus the then in effect Conversion Price. (3) If Section
5(e)(1) and (2) are not applicable, the Company shall cause any successor entity in a Fundamental Transaction in which the Company
is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this
Note and the other Transaction Documents (as defined in the Purchase Agreement) in accordance with the provisions of this Section
5(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without
unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange
for this Note a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance
to this Note which is convertible for a corresponding number of shares of capital stock of such Successor Entity (or its parent
entity) equivalent to the shares of Common Stock acquirable and receivable upon conversion of this Note (without regard to any
limitations on the conversion of this Note) prior to such Fundamental Transaction, and with a conversion price which applies the
Conversion Price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common
Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital
stock and such conversion price being for the purpose of protecting the economic value of this Note immediately prior to the consummation
of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence
of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the
date of such Fundamental Transaction, the provisions of this Note and the other Transaction Documents referring to the “Company”
shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the
obligations of the Company under this Note and the other Transaction Documents with the same effect as if such Successor Entity
had been named as the Company herein. Notwithstanding anything in this Section 5(e), an Exempt Issuance (as defined in the Purchase
Agreement) shall not be deemed a Fundamental Transaction.

 

    12

     

    

 

(f) Calculations.
All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.
For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall
be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and outstanding.

 

(g) Notice
to the Holder.

 

(i)Adjustment
to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5, the Company shall
promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement
of the facts requiring such adjustment.

 

(ii)Notice
to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on
the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)
the Company shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any rights, (D) the approval of any shareholders of the Company shall be required
in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any
sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common
Stock is converted into other securities, cash or property or (E) the Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be filed at each office
or agency maintained for the purpose of conversion of this Note, and shall cause to be delivered to the Holder at its last address
as it shall appear upon the Note Register, at least 20 calendar days prior to the applicable record or effective date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption,
rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled
to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it
is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities,
cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided
that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the
corporate action required to be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains,
material, non-public information regarding the Company or any of the Subsidiaries (as determined in good faith by the Company),
the Company or its successor shall simultaneously file such notice with the SEC pursuant to a Current Report on Form 8-K. If the
Company does not simultaneously file the required Form 8-K, the Holder shall be entitled penalties in accordance with Section
4.6 of the Purchase Agreement. The Holder shall remain entitled to convert this Note during the 20-day period commencing on the
date of such notice through the effective date of the event triggering such notice except as may otherwise be expressly set forth
herein.

 

Section
6.Negative Covenants. As long as any portion of this Note remains outstanding, unless the holders of at least 75%
in principal amount of the then outstanding Notes shall have otherwise given prior written consent, the Company shall not, and
shall not permit any of the Subsidiaries to, directly or indirectly:

 

(a) other
than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed money
of any kind, including, but not limited to, a guarantee, on or with respect to any of its property or assets now owned or hereafter
acquired or any interest therein or any income or profits therefrom;

 

(b) other
than Permitted Liens, enter into, create, incur, assume or suffer to exist any Liens of any kind, on or with respect to any of
its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;

 

(c) amend
its charter documents, including, without limitation, its certificate of incorporation and bylaws, in any manner that materially
and adversely affects any rights of the Holder;

 

(d) other
than with respect to Permitted Indebtedness, repay, repurchase or offer to repay, repurchase or otherwise acquire more than a
de minimis number of shares of its Common Stock or Common Stock Equivalents other than as to the Conversion Shares or Warrant
Shares as permitted or required under the Transaction Documents;

 

(e) other
than with respect to Permitted Indebtedness repay, repurchase or offer to repay, repurchase or otherwise acquire any Indebtedness,
other than the Notes if on a pro-rata basis, other than regularly scheduled principal and interest payments as such terms are
in effect as of the Original Issue Date, provided that such payments shall not be permitted if, at such time, or after giving
effect to such payment, any Event of Default exists or occurs;

 

(f) pay
cash dividends or distributions on any equity securities of the Company;

 

    13

     

    

 

(g) enter
into any transaction with any Affiliate of the Company which would be required to be disclosed in any public filing with the SEC
assuming that the Company is subject to the Securities Act or the Exchange Act, unless such transaction is made on an arm’s-length
basis and expressly approved by a majority of the disinterested directors of the Company (even if less than a quorum otherwise
required for board approval);

 

(h) issue
any equity securities of the Company other than pursuant to the provisions of the Purchase Agreement or an Exempt Issuance; or

 

(i) enter
into any agreement with respect to any of the foregoing.

 

Section
7.Events of Default.

 

(a) “Event
of Default” means, wherever used herein, any of the following events (whatever the reason for such event and whether
such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any
court, or any order, rule or regulation of any administrative or governmental body):

 

(i) any
default in the payment of (A) the principal amount of any Note or (B) interest, late fees, liquidated damages and other amounts
owing to a Holder on any Note, as and when the same shall become due and payable (whether on a Conversion Date, Payment Date or
the Maturity Date, or by acceleration or otherwise) which default, solely in the case of an interest payment or other default
under clause (B) above, is not cured within five Trading Days;

 

(ii) the
Company shall fail to observe or perform any other covenant or agreement contained in the Notes (other than a breach by the Company
of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed in clause (xi) below)
or any Transaction Document which failure is not cured, if possible to cure, within the earlier to occur of (A) seven Trading
Days after notice of such failure is sent by the Holder or by any other Holder to the Company and (B) 10 Trading Days after the
Company has become aware of such failure;

 

(iii) a
default or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument)
shall occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which
the Company or any Subsidiary is obligated (and not covered by any other clause of this Section 7) which default or event of default
if not cured, if possible to cure, within the earlier to occur of (i) seven Trading Days after notice of such default sent by
Holder or by any other holder to the Company and (ii) 10 Trading Days after the Company has become aware of such default;

 

(iv) any
representation or warranty made in this Note, any other Transaction Document, any written statement pursuant hereto or thereto
or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or
incorrect in any material respect as of the date when made or deemed made;

 

(v) the
Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy
Event;

 

    14

     

    

 

(vi) the
Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture
agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced,
any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation
greater than $100,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness
becoming or being declared due and payable prior to the date on which it would otherwise become due and payable and such default
is not cured within the earlier to occur of (i) seven Trading Days after notice of such default sent by Holder or by any other
holder to the Company and (ii) 10 Trading Days after the Company has become aware of such default;

 

(vii) the
Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible to resume
listing or quotation for trading thereon within 10 Trading Days;

 

(viii) Except
for an Exempt Issuance, the Company shall be a party to any Change of Control Transaction or shall agree to sell or dispose of
all or in excess of 50% of its assets in one transaction or a series of related transactions (whether or not such sale would constitute
a Change of Control Transaction);

 

(ix) from
and after the Original Issue Date, the Company fails to have authorized and reserved the amount of shares designated in Section
4.9 of the Purchase Agreement (without regard to any limitations on conversion hereof, including without limitation, the Beneficial
Ownership Limitation) and shall not have cured such failure within 10 Trading Days of such failure;

 

(x) the
Company shall fail for any reason, except if caused by the action or inaction of the Holder to deliver certificates to a Holder
prior to the second (2nd) Trading Day after a Conversion Date pursuant to Section 4(d) or the Company shall provide
at any time notice to the Holder, including by way of public announcement, of the Company’s intention to not honor requests
for conversions of any Notes in accordance with the terms hereof; or

 

(xi) any
monetary judgment, writ or similar final process shall be entered or filed against the Company, any Subsidiary or any of their
respective property or other assets for more than $100,000, and such judgment, writ or similar final process shall remain unvacated,
unbonded or unstayed for a period of 10 calendar days.

 

(b) Remedies
Upon Event of Default. If any Event of Default occurs, the outstanding principal amount of this Note, plus accrued but unpaid
interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become, at the
Holder’s election, immediately due and payable in cash at the Mandatory Default Amount. Upon the payment in full of the
Mandatory Default Amount, the Holder shall promptly surrender this Note to or as directed by the Company. In connection with such
acceleration described herein, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or
other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its
rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded
and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the Note until
such time, if any, as the Holder receives full payment pursuant to this Section 7(b). No such rescission or annulment shall affect
any subsequent Event of Default or impair any right consequent thereon.

 

    15

     

    

 

(c) Interest
Rate Upon Event of Default. Commencing on the occurrence of any Event of Default and until such Event of Default is cured,
this Note shall accrue interest at an interest rate equal to the Default Interest Rate.

 

(d) Conversion
Price Upon Event of Default. Commencing on the occurrence of any Event of Default and until such Event of Default is cured,
this Note shall be convertible at the Default Conversion Price.

 

Section
8.Miscellaneous.

 

(a) No
Rights as Stockholder Until Conversion. This Note does not entitle the Holder to any voting rights, dividends or other rights
as a stockholder of the Company prior to the conversion hereof other than as explicitly set forth in Section 5.

 

(b) Notices.
All notices, offers, acceptance and any other acts under this Agreement (except payment) shall be in writing, and shall be sufficiently
given if delivered to the addressees in person, by Federal Express or similar receipted next business day delivery, as follows:

 

	 	If
to the Company:	Esports Entertainment Group, Inc.
	 	 	170
Pater House, Psaila Street
	 	 	Birkirkara,
Malta, BKR 9077
	 	 	Attention:
Chief Executive Officer
	 	 	 
	 	with
a copy to:	Lucosky Brookman LLP
	 	(which
shall not	101 Wood Avenue South, Fifth Floor
	 	constitute
notice)	Iselin, NJ 08830
	 	 	 
	 	If
to Holder:	Cavalry Fund I LP
	 	 	61
Kinderkamack Road
	 	 	Woodcliff
Lake, NJ 07677
	 	 	Attention:
Thomas Walsh

 

or
to such other address as any of them, by notice to the other may designate from time to time. Time shall be counted to, or from,
as the case may be, the date of delivery.

 

(c) Absolute
Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest and late fees, as applicable,
on this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation
of the Company. This Note ranks pari passu with all other Notes now or hereafter issued under the Purchase Agreement.

 

(d) Lost
or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange
and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed
Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence
of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company.

 

    16

     

    

 

(e) Exclusive
Jurisdiction; Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Note
shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard
to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement
and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its
respective Affiliates, directors, officers, shareholders, employees or agents) shall only be commenced in the state and federal
courts sitting in New York County, New York (the “New York Courts”). Each party hereto hereby irrevocably submits
to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or
with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for
such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any
such suit, action or proceeding 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 applicable law. Each party hereto hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this
Note or the transactions contemplated hereby.

 

(f) Waiver.
Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed to be a
waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Company
or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note on any
other occasion. Any waiver by the Company or the Holder must be in writing.

 

(g) Severability.
If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any
provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances.
If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury,
the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under
applicable law. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead,
or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would
prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Note as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Note, and
the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants
that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder,
but will suffer and permit the execution of every such as though no such law has been enacted.

 

    17

     

    

 

(h) Remedies,
Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall be cumulative
and in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity
(including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s
right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note.  The
Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided
herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof)
shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other
obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder
will cause irreparable harm to the Holder and that the remedy at law for any such breach would be inadequate. The Company therefore
agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available
remedies, to an injunction restraining any such breach or any such threatened breach, without the necessity of showing economic
loss and without any bond or other security being required. The Company shall provide all information and documentation to the
Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions
of this Note.

 

(i) Next
Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day.

 

(j) Headings.
The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be deemed to limit
or affect any of the provisions hereof.

 

(k) Piggy-back
Registration. After the Original Issue Date until this Note is no longer outstanding, the Holder shall have the right, to
include the Conversion Shares issuable upon the conversion of this Note as part of any registration of securities filed by the
Company (other than pursuant to Form S-4, Form S-8, or any equivalent form, or any Form
S-1 that the Company files with the SEC on or before May 30, 2019 with respect to a firm commitment underwritten offering).
The Company shall bear all fees and expenses related to registering the Conversion Shares pursuant to this Section 8(k), but the
Holder shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holder to represent
it in connection with the sale of the Conversion Shares. In the event of such a proposed registration, the Company shall furnish
the then Holder with not less than thirty (30) days written notice prior to the proposed date of filing of such registration statement.
The Holder shall exercise the “piggy-back” rights provided for herein by giving written notice within ten (10) days
of the receipt of the Company’s notice of its intention to file a registration statement.

 

(Signature
Pages Follow)

 

    18

     

    

 

IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above
indicated.

 

	 	Esports
    Entertainment Group, Inc.
	 	 	 
	 	By:	 
	 	Name:	Grant Johnson
	 	Title:	Chief Executive Officer

 

    19

     

    

 

ANNEX
A

NOTICE
OF CONVERSION

 

The
undersigned hereby elects to convert principal under the 10% Senior Convertible Note due November 14, 2019 of Esports Entertainment
Group, Inc., a Nevada corporation (the “Company”), into shares of common stock (the “Common Stock”), of
the Company according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the
name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering
herewith such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will be charged
to the holder for any conversion, except for such transfer taxes, if any.

 

By
the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common
Stock does not exceed the amounts specified under Section 4 of this Note, as determined in accordance with Section 13(d) of the
Exchange Act.

 

The
undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with
any transfer of the aforesaid shares of Common Stock.

 

Conversion
calculations:

 

Date
to Effect Conversion: ______________________________________

 

Principal
Amount of Note to be Converted: _________________________

 

Number
of shares of Common Stock to be issued: ____________________

 

Signature:
____________________________

 

Name:
_______________________________

 

DWAC
Instructions:

 

Broker
No: ___________________________

 

Account
No: __________________________

 

 

20

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