Document:

Exhibit 10.16

 

 

PROPRIETARY AND CONFIDENTIAL

 

December 6, 2019

 

Robin Marino

Chairwoman of the Board

Summer Infant, Inc.

1275 Park East Drive

Woonsocket, RI 02895

 

Re:          Interim Chief Executive Officer

 

Dear Ms. Marino:

 

This letter, together with the attached General Business Terms (collectively, the “Agreement”), confirms and sets forth the terms and conditions of the engagement of Winter Harbor LLC (“we,” “us,” “our,” or “Winter Harbor”) to provide advisory and management services, through Stuart Noyes, who will act as Interim Chief Executive Officer (“Interim CEO”) of Summer Infant, Inc. and its various affiliates and subsidiaries if any (collectively, “you,” “your,” “Client” or “Company”).  Upon execution of this letter by each of the parties below, this letter will constitute an agreement between the Company and Winter Harbor (the “Agreement”), and the engagement shall be effective beginning on December 16, 2019.

 

SERVICES TO BE PROVIDED

 

1.              Stuart Noyes to act as principal executive officer of the Company and provide leadership to the executive management team and Company on a day-to-day basis, reporting to the Company’s Board of Directors (the “Board”);

 

2.              Conduct an in-depth assessment of the business, including strengths and weaknesses of the organization and management and present findings to the Board;

 

3.              In conjunction with management, identify and analyze options to restructure cost and stabilize cash flow/growth and develop a restructuring/business plan (the “Plan”) that considers among other options the potential sale of specific assets or business units and/or other restructuring of the Company capital structure that will be presented to the Board;

 

4.              Oversee the Company’s implementation of the Plan and provide regular updates to the Board in intervals to be determined;

 

 

5.              Provide oversight and assistance to management with the on-going forecasting of the Company’s cash flows and its operations, its daily cash management activities and monitor and analyze operational and financial condition;

 

6.              Provide oversight and assistance to management with the compiling of data and analyses necessary to meet the reporting requirements requested by the Company’s lenders;

 

7.              Lead management with respect to communications with the Board, lenders and investors;

 

8.              Assist Company in reacting to unforeseen occurrences that may have an impact on operational performance and liquidity;

 

9.              Act as principal executive officer with respect to the Company’s compliance with securities laws, including providing certifications required in connection with the Company’s periodic reports;

 

10.       Perform such other tasks as are appropriate and requested by the Board.

 

Our Services

 

The Company engages Winter Harbor for the purpose of providing the advisory and management services described above. The Interim CEO shall be responsible for the delivery of the tasks and duties as set forth above, in accordance with the Company’s by-laws and in compliance with applicable provisions of state, federal and other laws.  The Interim CEO will report to the Board during the term of this engagement. The Interim CEO shall be responsible for leading the verification and implementation of the initiatives described above. Winter Harbor may provide additional services beyond those described herein on mutually agreed upon rates, if agreed upon in writing by Winter Harbor and the Board or its designated committee.

 

Winter Harbor is a management consulting firm and not a CPA firm. Winter Harbor does not provide attest services, audits, or other engagements in accordance with standards established by the American Institute of CPAs or auditing standards promulgated by the Public Company Accounting Oversight Board.  We will not audit any financial statements or perform attest procedures with respect to information in conjunction with this engagement.  Our services are not designed, nor should they be relied upon, to identify weaknesses in internal controls, financial statement errors, irregularities, illegal acts or disclosure deficiencies

 

Your Responsibilities

 

In connection with our provision of services, you will perform the tasks, furnish the personnel, provide the resources, and undertake the responsibilities specified below.

 

The Company shall indemnify the Interim CEO and Winter Harbor as set forth in the attached General Business Terms.  The Interim CEO shall be covered as an officer under the Company’s existing director and officer liability insurance policy (the “D&O policy). As a condition of Winter Harbor accepting this engagement, a Certificate of Insurance evidencing such coverage of the Interim CEO shall be furnished to Winter Harbor prior to the effective date of this Agreement. The Company shall give thirty (30) days’ prior written notice to Winter Harbor of cancellation,

 

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nonrenewal, or material change in coverage, scope, or amount of D&O policy. The Company shall also maintain such insurance coverage for the Interim CEO for a period of not less than two (2) years following the date of the termination of the Indemnified Professionals’ services hereunder. Except as stated in this engagement, the risk of loss with respect to the Company’s operations and assets shall be borne by the Company.  Winter Harbor shall not be deemed to have assumed or be liable for any claim, liability, or obligation of the Company whether known or unknown, fixed or contingent accrued or un-accrued.  Except as otherwise required by applicable law, any reference to the nature or results of Winter Harbor’s work may not be communicated to the public through public relations media, news media, sales media, or any other means without the prior written consent of both parties.

 

The Company understands that the services to be rendered hereunder may include the preparation of projections and other forward-looking statements, and numerous factors can affect the actual results of the Company’s operations, which may materially and adversely differ from those projections, and Winter Harbor personnel will be relying on information provided by the Company in the preparation of those projections and other forward-looking statements.

 

To help maximize the value of our work to you and to keep the project moving on schedule, you agree to comply with all of our reasonable requests and to provide us timely access to all information reasonably necessary to our performance of the services.

 

In the event the Company files for relief under Chapter 11 of the Bankruptcy Code, the Company agrees to promptly file an appropriate motion prepared in consultation with Winter Harbor as to matters relating to our retention by the Company and provision of services as contemplated hereunder nun pro tunc to the date of the filing.

 

Fees and Expenses

 

We will bill weekly based on the actual hours worked at the following billing rates, subject to the terms set forth below.

 

Winter Harbor Hourly Rates

(In effect on the date of this Agreement)

 

	
Title 
    	
 
    	
Hourly Rate
    	
 
    
	
Stuart Noyes
    	
 
    	
$
    	
495
    	
 
    
	
Bruce Meier
    	
 
    	
$
    	
395
    	
 
    
	
Director 
    	
 
    	
$
    	
395
    	
 
    
	
Senior Manager
    	
 
    	
$
    	
350
    	
 
    
	
Manager
    	
 
    	
$
    	
325
    	
 
    
	
Associate 
    	
 
    	
$
    	
250
    	
 
    

 

The engagement will be led by Managing Partner, Stuart Noyes, who will act as Interim CEO, and Managing Director, Bruce Meier.

 

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The total weekly fees for the first ten weeks of the engagement shall not exceed $35,000 per week, with the exception of Christmas and New Year’s week, for which fees will be capped at $15,000 per week. For services provided following such ten-week period, Winter Harbor shall be paid according to the billing rates set forth herein for actual hours worked, or such other fees as mutually agreed upon with the Company.

 

All invoices are due immediately upon receipt.  Out-of-pocket expenses (including transportation, lodging, meals, communications, supplies, etc.) will be billed at the actual amounts incurred.

 

Payments for our services shall be by:

 

Wire transfer to:

 

Bank of America, N.A.

100 West 33rd Street

New York, NY 10001

Account Name: Winter Harbor LLC

Account #:  ***

Wire Routing/ABA #:  ***

ACH Routing #:  ***

 

Amounts remaining outstanding for more than 20 days (past due) will be subject to an interest charge of 1.5% per month from the date of invoice.  We reserve the right to suspend further services after such 20-day period until payment is received on past due invoices, in which event we will not be liable for any resulting loss, damage or expense connected with such suspension, provided that such suspension notice is provided at least 10 business days’ in advance to the Company, and this sentence supersedes section 3(c) of the attached General Business Terms.  We understand that our bills should be sent to:

 

Summer Infant, Inc.

Attn:  Paul Francese and Mary Beth Schneider

1275 Park East Drive

Woonsocket, RI 02895

pfrancese@sumrbrands.com and mschneider@sumrbrands.com

 

Retainer

 

The Company previously paid Winter Harbor a $25,000 retainer pursuant to that engagement letter dated November 5, 2019.  We will require an additional retainer in the amount of $25,000 before we commence work under this engagement. The total retainer of $50,000 shall be credited against any amounts due at the termination of this engagement or applied to any open invoices at our discretion. Any retainer amounts remaining upon the satisfaction of all obligations hereunder shall be returned to the Company.

 

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Other

 

This Agreement, together with the attached General Business Terms, is intended to (i) supersede any prior agreement between the parties and (ii) serve as the entire agreement between the parties with respect to the subject matter hereof, regardless of any billing guidelines or any other policies that the Company may maintain.

 

Business Terms

 

The attached General Business Terms apply to this engagement.

 

Please indicate your agreement with these terms by signing and returning to me the enclosed copy of this letter.  This engagement and the enclosed terms will become effective upon our receipt of your signed copy.  We appreciate the opportunity to be of service to you and look forward to working with you on this engagement.

 

	
Sincerely,
    	
 
    
	
 
    	
 
    
	
WINTER   HARBOR LLC
    	
 
    
	
 
    	
 
    
	
/s/   Stuart W. Noyes
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    
	
 
    	
STUART W. NOYES
    	
 
    
	
 
    	
MEMBER   AND MANAGING PARTNER
    	
 
    
	
 
    	
 
    
	
Attachments:   General Business Terms
    	
 
    
	
 
    	
 
    
	
Acknowledged   and Accepted:
    	
 
    
	
 
    	
 
    
	
SUMMER   INFANT, INC.
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Paul Francese
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
SVP &   CFO
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
Dec. 9,   2019
    	
 
    
				

 

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Attachment to Engagement Letter dated December 6, 2019 between  Winter Harbor LLC and Summer Infant, Inc.

 

GENERAL BUSINESS TERMS

 

These General Business Terms, together with the Engagement Letter (including any and all attachments, exhibits and schedules), constitute the entire understanding and agreement (the “Agreement”) between us with respect to the services and deliverables described in the Engagement Letter.  If there is a conflict between these General Business Terms and the terms of the Engagement Letter, these General Business Terms will govern, except to the extent the Engagement Letter explicitly refers to the conflicting term herein.

 

1. Our Services and Deliverables. We will provide the services and furnish the deliverables (the “Services”) as described in our Engagement Letter and any attachments thereto, as may be modified from time to time by mutual consent.

 

2. Independent Contractor. We are an independent contractor and not your employee, agent, joint venturer or partner, and will determine the method, details and means of performing our Services. We assume full and sole responsibility for, and indemnify you against, the payment of all compensation and expenses of our employees and for all of their state and federal income tax, unemployment insurance, Social Security, payroll and other applicable employee withholdings.

 

3. Fees and Expenses. (a) Our fees and payment terms are set out in our Engagement Letter. Those fees do not include taxes and other governmental charges (which will be separately identified in our invoices.)

 

(b) You acknowledge that where out-of-town personnel are assigned to any project on a long-term basis (as defined from time to time in the applicable provisions of the Internal Revenue Code and related IRS regulations, and currently defined, under IRC Section 162, as a period of time reasonably expected to be greater than one year), the associated compensatory tax costs applied to out-of-town travel and living expenses also shall be calculated on an individual basis, summarized, and assessed to such personnel. In such cases, the expenses for which you shall reimburse us hereunder shall be deemed to include the estimated incremental compensatory tax costs associated with the out-of-town travel and living expenses of our personnel, including tax gross-ups. We shall use reasonable efforts to limit such expenses, and shall follow the Company’s expense and reimbursement policy with respect to such expenses.

 

(c) We reserve the right to suspend Services if invoices are not paid within twenty (20) days of receipt, in which event we will not be liable for any resulting loss, damage or expense connected with such suspension.

 

4. Taxes. (a) You will be responsible for and pay all applicable sales, use, excise, value added, services, consumption and other taxes and duties associated with our performance or your receipt of our Services, excluding taxes on our income generally.

 

(b) If you are required by the laws of any foreign tax jurisdiction to withhold income or profits taxes from our payment, then the amount payable by you upon which the withholding is based shall be paid to us net of such withholding.  You shall pay any such withholding to the applicable tax authority.  However, if after 120 days of the withholding, you do not provide us with official

 

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tax certificates documenting remittance of the taxes, you shall pay to us an amount equal to such withholding.  The tax certificates shall be in a form sufficient to document qualification of the taxes for the foreign tax credit allowable against our corporation income tax.

 

5. Confidentiality and Privacy. (a) With respect to any information supplied in connection with this engagement and designated by either of us as confidential, or which the other should reasonably believe is confidential based on its subject matter or the circumstances of its disclosure (“Confidential Information”), the other agrees to protect the confidential information in a reasonable and appropriate manner, but in no less than the manner in which such party protects its own confidential information, and use confidential information only to perform its obligations under this engagement and for no other purpose. This will not apply to information which is: (i) publicly known, (ii) already known to the recipient, (iii) lawfully disclosed by a third party, (iv) independently developed, (v) disclosed pursuant to legal requirement or order, or (vi) disclosed to taxing authorities or to representatives and advisors in connection with tax filings, reports, claims, audits and litigation.

 

(b) Confidential Information made available hereunder, including copies thereof, shall be returned or destroyed upon request by the disclosing party; provided that the receiving party may retain other archival copies for recordkeeping or quality assurance purposes and receiving party shall make no unauthorized use of such copies.

 

(c) We agree to use any personally identifiable information and data you provide us only for the purposes of this engagement and as you direct, and we will not be liable for any third-party claims related to such use.  We will each take necessary actions to ensure that we comply with applicable laws relating to privacy and/or data protection.

 

(d)  You agree that, upon completion of our engagement, we may use your name, logo and description of services provided to you in our marketing materials, subject to your approval which will not be unreasonably withheld.

 

6. Our Deliverables and Your License. Upon full and final payment of all amounts due us in connection with this engagement, all right, title and interest in the deliverables set out in our Engagement Letter will become your sole and exclusive property, except as set forth below.  We will retain sole and exclusive ownership of all right, title and interest in our proprietary information, processes, methodologies, know-how and software (“Winter Harbor Property”), including such information as existed prior to the delivery of our Services and, to the extent such information is of general application, anything which we may discover, create or develop during our provision of Services for you. To the extent our deliverables to you contain Winter Harbor Property, we grant you a non-exclusive, non-assignable, royalty-free, perpetual license to use it in connection with the deliverables and the subject of the engagement and for no other or further use without our express, prior written consent or to the extent necessary to comply with applicable law.  If our deliverables are subject to any third-party rights in software or intellectual property, we will notify you of such rights. Our deliverables are to be used solely for the purposes intended by this engagement and may not be disclosed, published or used in whole or in part for any other purpose without our express, prior written consent or to the extent necessary to comply with applicable law.

 

7. Your Responsibilities. To the extent applicable, you will cooperate in providing us with office space, equipment, data and access to your personnel as necessary to perform the Services. You

 

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shall provide reliable, accurate and complete information necessary for us to adequately perform the Services and will promptly notify us of any material changes in any information previously provided.  You acknowledge that we are not responsible for independently verifying the truth or accuracy of any information supplied to us by or on behalf of you.

 

8. Our Warranty. We warrant that our Services will be performed with reasonable care in a diligent, professional and competent manner. Our sole obligation will be to correct any non-conformance with this warranty, provided that you give us written notice within ten business days after discovery of any non-conformity associated with the Services performed. The notice will specify and detail the non-conformance and we will have a reasonable amount of time, based on its severity and complexity, to correct the non-conformance.

 

We do not warrant and are not responsible for any third party products or services. Your sole and exclusive rights and remedies with respect to any third party products or services are against the third party vendor and not against us.

 

THIS WARRANTY IS OUR ONLY WARRANTY CONCERNING THE SERVICES AND ANY DELIVERABLE, AND IS MADE EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES AND REPRESENTATIONS, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE, OR OTHERWISE, ALL OF WHICH ARE HEREBY DISCLAIMED.

 

9. Liability and Indemnification.  This engagement is not intended to shift risk normally borne by you to us.

 

(a) To the fullest extent permitted under applicable law, the Company agrees to indemnify and hold harmless each of Winter Harbor, its affiliates and their respective shareholders, members, managers, employees, agents, representatives and subcontractors (each, an “Indemnified Party” and collectively, the “Indemnified Parties”) against any and all losses, claims, damages, liabilities, penalties, obligations and expenses, including the reasonable costs for counsel (“Losses”) actually and reasonably incurred as a result of and in the course of investigating, preparing or defending any action or claim in connection with litigation in which any Indemnified Party is a party, or as to which a claim against an Indemnified Party has been asserted in writing, as and when incurred, caused by, relating to, based upon or arising out of (directly or indirectly) the Indemnified Parties’ acceptance of or the performance or nonperformance of the Services and their obligations under the Agreement; provided, however, (i) such indemnity shall not apply to any such Loss to the extent it is found in a formal judgment by a court of competent jurisdiction to have resulted primarily from such Indemnified Party’s breach of the confidentiality obligations contained in the Agreement, intentional misconduct, bad faith, self-dealing, fraud, gross negligence or willful misconduct, (ii) this indemnity shall not apply to any claim by the Company against Winter Harbor as to Winter Harbor’s breach of Winter Harbor’s express obligations under the Agreement, and (iii) with respect to the Interim CEO, the Interim CEO shall be entitled indemnification to the same extent as extended to the Company’s other executive officers.  The Company further agrees that it will not, without the prior consent of an Indemnified Party, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action, suit or proceeding in respect of which such Indemnified Party seeks indemnification hereunder (whether or not such Indemnified Party is an actual party to such claim, action, suit or proceedings) in a manner that has a material adverse effect on Winter Harbor unless such settlement, compromise or consent includes an

 

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unconditional release of such Indemnified Party from all liabilities arising out of such claim, action, suit or proceeding.

 

(b) We will not be liable for any special, consequential, incidental, indirect or exemplary damages or loss (nor any lost profits, savings or business opportunity).

 

(c) Neither of us will be liable for any delays or failures in performance due to circumstances beyond our reasonable control.

 

(d) These indemnification provisions shall be in addition to any contractual liability which the Company may otherwise have to the Indemnified Parties.  In the event that, at any time whether before or after termination of the engagement or the Agreement, as a result of or in connection with the Agreement or Winter Harbor’s and its personnel’s role under the Agreement, Winter Harbor or any Indemnified Party is required to produce any of its personnel (including former employees) for examination, deposition or other written, recorded or oral presentation, or Winter Harbor or any of its personnel (including former employees) or any other Indemnified Party is required to produce or otherwise review, compile, submit, duplicate, search for, organize or report on any material within such Indemnified Party’s possession or control pursuant to a subpoena or other legal (including administrative) process, the Company will reimburse the Indemnified Party for its out of pocket expenses, including the reasonable fees and expenses of its counsel, and will compensate the Indemnified Party for the time expended by its personnel based on such personnel’s then current hourly rate or, if applicable, the former employees’ former hourly rate, provided that the Company shall not be required to reimburse the Interim CEO for any such expenses that are covered by the D&O policy.

 

(e) If any action, proceeding or investigation is commenced to which any Indemnified Party proposes to demand indemnification hereunder, such Indemnified Party will notify the Company promptly and before incurring any indemnified cost; provided, however, that any failure by such Indemnified Party to notify the Company will not relieve the Company from its obligations hereunder as to cost incurred after the date of notice, except to the extent that such failure shall have actually prejudiced the defense of such action.  The Company shall promptly pay expenses reasonably incurred by any Indemnified Party in defending, participating in, or settling any action, proceeding or investigation in which such Indemnified Party is a party or is threatened in writing to be made a party or otherwise is participating in by reason of the engagement under the Agreement, upon submission of invoices therefor, whether in advance of the final disposition of such action, proceeding, or investigation or otherwise, provided that the Company shall not be required to reimburse the Interim CEO for any such expenses that are covered by the D&O policy.  Each Indemnified Party hereby undertakes, and the Company hereby accepts its undertaking, to repay any and all such amounts so advanced if it shall ultimately be determined that such Indemnified Party is not entitled to be indemnified therefor.  If any such action, proceeding or investigation in which an Indemnified Party is a party is also against the Company, the Company may, in lieu of advancing the expenses of separate counsel for such Indemnified Party, provide such Indemnified Party with legal representation by the same counsel who represents the Company, provided such counsel is reasonably satisfactory to such Indemnified Party, at no cost to such Indemnified Party; provided, however, that if the existence of actual conflicts of interest between such Indemnified Party and the Company such counsel is unable to represent both the Indemnified Party and the Company, then the Indemnified Party shall be entitled to use separate counsel of its own choice, and the Company shall promptly advance its reasonable expenses of

 

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such separate counsel upon submission of invoices therefor.  Nothing herein shall prevent an Indemnified Party from using separate counsel of its own choice at its own expense.  The Company will be liable for any settlement of any claim against an Indemnified Party made with the Company’s prior written consent.

 

(f) In order to provide for just and equitable contribution among the parties if a claim for indemnification pursuant to these indemnification provisions is made but it is found in a final judgment by a court of competent jurisdiction that such indemnification may not be enforced in such case, even though the express provisions hereof provide for indemnification, then the relative fault of the Company, on the one hand, and the Indemnified Parties, on the other hand, in connection with the statements, acts or omissions which resulted in the losses, claims, damages, liabilities and costs giving rise to the indemnification claim and other relevant equitable considerations shall be considered; and further provided that in no event will the Indemnified Parties’ aggregate contribution for all losses, claims, damages, liabilities and expenses with respect to which contribution is available hereunder exceed the amount of fees actually received by the Indemnified Parties pursuant to the Agreement.  No person found liable for a breach of the confidentiality obligations contained in the Agreement, intentional misconduct, bad faith, self-dealing, fraud, gross negligence or willful misconduct shall be entitled to contribution hereunder from any person.

 

(g) Neither termination of the Agreement nor termination of Winter Harbor’s engagement nor the filing of a petition under Chapter 7 or 11 of the United States Bankruptcy Code (nor the conversion of an existing case to one under a different chapter) shall affect these indemnification provisions, which shall hereafter remain operative and in full force and effect; provided, however, that Winter Harbor acknowledges that during the pendency of any Bankruptcy Court approved retention, this Agreement is subject to modification as may be stated within the Bankruptcy Court’s order.

 

(h) The rights provided herein shall not be deemed exclusive of any other rights to which the indemnified parties may be entitled under any other agreements, any applicable law or otherwise.

 

10. Non-Solicitation. During the term of this engagement, and for a period of one year following its expiration or termination, (i) you will not directly or indirectly solicit, employ or otherwise engage any of our employees (including former employees) or contractors who were involved in the engagement and (ii) Winter Harbor will not directly or indirectly solicit, employ or otherwise engage any of the Company’s employees (including former employees) or contractors.

 

11. Termination.

 

(a) Termination for Convenience. Winter Harbor may terminate this Agreement for convenience at any time on 30 days’ prior written notice to the Company. The Company may terminate this Agreement for convenience at any time on 30 days’ prior written notice to Winter Harbor.

 

(b) Termination for Breach. Either party may terminate this Agreement for breach if, within ten days’ notice, the breaching party fails to cure a material breach of this Agreement.

 

(c) To the extent you terminate this Agreement, you will pay us for all Services rendered and expenses incurred up to the effective date of termination.

 

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(d) The terms of this Agreement which relate to confidentiality, ownership and use, limitations of liability and indemnification, non-solicitation and payment obligations shall survive its expiration or termination.

 

12. General. (a) This Agreement supersedes all prior oral and written communications between us, and may be amended, modified or changed only in a writing when signed by both parties.

 

(b) No term of this Agreement will be deemed waived, and no breach of this agreement excused, unless the waiver or consent is in writing signed by the party granting such waiver or consent.  Winter Harbor may not assign this Agreement, by operation of law or otherwise, without obtaining the Company’s prior written consent.

 

(c) We each acknowledge that we may correspond or convey documentation via Internet e-mail and that neither party has control over the performance, reliability, availability, or security of Internet e-mail. Therefore, neither party will be liable for any loss, damage, expense, harm or inconvenience resulting from the loss, delay, interception, corruption, or alteration of any Internet e-mail due to any reason beyond our reasonable control.

 

(d) This Agreement shall be governed by and construed in accordance with the laws of the State of Connecticut without giving effect to conflict of law rules.  The parties hereto agree that any and all disputes or claims arising hereunder shall be settled by binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association.  Any arbitration will be conducted in Westport, Connecticut.  Any arbitration award may be entered in and enforced by any court having jurisdiction thereof, and the parties consent and commit themselves to the jurisdiction of the courts of the State of Connecticut for purposes of any enforcement of any arbitration award.  Except as may be required by law, neither a party nor an arbitrator may disclose the existence, content, or results of any arbitration hereunder without the prior written consent of both parties.

 

(e) If any portion of this Agreement is found invalid, such finding shall not affect the enforceability of the remainder hereof, and such portion shall be revised to reflect our mutual intention.

 

(f) This Agreement shall not provide third parties with any remedy, cause, liability, reimbursement, claim of action or other right in law or in equity for any matter governed by or subject to the provisions of this Agreement.

 

(g)  In the event the Company files for Chapter 11, the Company and Winter Harbor agree that the Bankruptcy Court shall have exclusive jurisdiction over any and all matters arising under or in connection with this Agreement.

 

*  *  *

 

11Exhibit 10.1

 

COMMON
STOCK PURCHASE AGREEMENT

 

This
Common Stock Purchase Agreement (the “Agreement”) is entered into as of March 11, 2020 (provided, however, that this
Agreement shall only be effective as of the Execution Date (as defined in this Agreement)), by and between Simplicity Esports
and Gaming Company, a Delaware corporation (the “Company”), and TRITON FUNDS LP, a Delaware limited partnership (the
“Investor”). The Company and the Investor may be referred to herein collectively as the “Parties” and
each individually as a “Party.”

 

RECITALS:

 

WHEREAS,
upon the terms and subject to the conditions contained herein, the Investor shall invest up to Five Hundred Thousand Dollars ($500,000)
to acquire shares of the Company’s common stock par value $0.0001 per share (the “Common Stock”) after an effective
Registration Statement;

 

WHEREAS,
such investment will be made in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities
Act of 1933, as amended (the “1933 Act”), Rule 506 of Regulation D promulgated by the SEC under the 1933 Act, and/or
upon such other exemption from the registration requirements of the 1933 Act as may be available with respect to the investment
in Common Stock to be made hereunder; and

 

WHEREAS,
contemporaneously with the execution and delivery of this Agreement, the Parties are executing and delivering a Registration Rights
Agreement substantially in the form attached hereto as Exhibit A (the “Registration Rights Agreement”) pursuant to
which the Company has agreed to provide certain registration rights under the 1933 Act, and the rules and regulations promulgated
thereunder, and applicable state securities laws;

 

NOW
THEREFORE, in consideration of the foregoing recitals, which shall be considered an integral part of this Agreement, the covenants
and agreements set forth hereafter, and other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and the Investor hereby agree as follows:

 

SECTION
1. DEFINITIONS

 

Section
1.01 DEFINITIONS. For all purposes of and under this Agreement, the following terms shall have the respective meanings
below, and such meanings shall be equally applicable to the singular and plural forms of such defined terms.

 

	 	(a)	“1934
    Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar federal statute, and the rules and regulations
    of the SEC thereunder, all as the same will then be in effect.
	 	 	 
	 	(b)	“Affiliate”
    means, with respect to a specified Person, any other Person that directly or indirectly Controls, is Controlled by or is under
    common Control with, the specified Person.
	 	 	 
	 	(c)	“Control”
    means (a) the possession, directly or indirectly, of the power to vote 10% or more of the securities or other equity interests
    of a Person having ordinary voting power, (b) the possession, directly or indirectly, of the power to direct or cause the
    direction of the management and policies of a Person, by contractor otherwise, or (c) being a director, officer, executor,
    trustee or fiduciary (or their equivalents) of a Person or a Person that controls such Person.

 

    	 	 	 

     

    

 

	 	(d)	“Business
    Day” shall mean any day on which the Principal Market for the Shares is open for trading from the hours of 9:30 am until
    4:00 pm.
	 	 	 
	 	(e)	“Commitment
    Period” shall mean the period beginning on the Execution Date and ending on the earlier to occur of (1) the date that
    Investor has purchased $500,000 of Shares pursuant to this Agreement and (2) December 31, 2020.
	 	 	 
	 	(f)	“Document
    Preparation Fee” shall mean a $5,000 cash payment made by Company to Investor immediately following the Execution Date.
	 	 	 
	 	(g)	“Execution
    Date” shall mean the last date that this Agreement is signed by the parties hereto
	 	 	 
	 	(h)	“Governmental
    Entity” means any federal, state, municipal, local or foreign government and any court, tribunal, arbitral body, administrative
    agency, department, subdivision, entity, commission or other governmental, government appointed, quasi-governmental or regulatory
    authority, reporting entity or agency, domestic, foreign or supranational.
	 	 	 
	 	(i)	“Investment
    Amount” shall mean the number of Shares in a Purchase Notice multiplied by the Purchase Price.
	 	 	 
	 	(j)	“Investment
    Documents” shall mean this Agreement, the Registration Rights Agreement, the Registered Offering Transaction Documents
    (as defined in the Registration Rights Agreement) and any other certificate, instrument or document contemplated hereby or
    thereby.
	 	 	 
	 	(k)	“Law”
    means any applicable foreign, federal, state or local law (including common law), statute, treaty, rule, directive, regulation,
    ordinances and similar provisions having the force or effect of law or an Order of any Governmental Entity.
	 	 	 
	 	(l)	“Order”
    means any judgment, writ, decree, determination, award, compliance agreement, settlement agreement, injunction, ruling, charge,
    judicial or administrative order, determination or other restriction of any Governmental Entity or arbitrator.
	 	 	 
	 	(m)	“Person”
    means a natural person, a corporation, a limited liability company, a partnership, an association, a trust or any other entity
    or organization, including a government or political subdivision or any agency or instrumentality thereof.
	 	 	 
	 	(n)	“Principal
    Market” shall mean the New York Stock Exchange, the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market,
    the Nasdaq Global Select Market or the OTC Markets, whichever is the market on which the Common Stock is listed.
	 	 	 
	 	(o)	“Purchase
    Notice” shall mean a written notice sent to the Investor by the Company stating the number of Shares that the Company
    intends to sell to the Investor pursuant to the terms of this Agreement and which the Investor is obligated to buy, in each
    case subject to the terms and conditions herein.

 

    	 	 	 

     

    

 

	 	(p)	“Registration
    Statement” means the registration statement of the Company filed under the 1933 Act covering the Shares issuable hereunder.
	 	 	 
	 	(q)	“SEC”
    shall mean the U.S. Securities and Exchange Commission.
	 	 	 
	 	(r)	“Shares”
    shall mean the shares of Common Stock issued pursuant to the terms of this Agreement.

 

Section
1.02 INTERPRETIVE PROVISIONS. Unless the express context otherwise requires, the words “hereof,” “herein,”
and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole
and not to any particular provision of this Agreement; terms defined in the singular shall have a comparable meaning when used
in the plural, and vice versa; the terms “Dollars” and “$” mean United States Dollars, unless otherwise
specified herein; references herein to a specific Section, Subsection, Recital or Exhibit shall refer, respectively, to Sections,
Subsections, Recitals or Exhibits of this Agreement; wherever the word “include,” “includes,” or “including”
is used in this Agreement, it shall be deemed to be followed by the words “without limitation”; references herein
to any gender shall include each other gender; references herein to any contract or agreement (including this Agreement) mean
such contract or agreement as amended, supplemented or modified from time to time in accordance with the terms thereof; with respect
to the determination of any period of time, the word “from” means “from and including” and the words “to”
and “until” each means “to but excluding”; references herein to any Law or any license mean such Law or
license as amended, modified, codified, reenacted, supplemented or superseded in whole or in part, and in effect from time to
time; and references herein to any Law shall be deemed also to refer to all rules and regulations promulgated thereunder.

 

SECTION
2. PURCHASE AND SALE OF COMMON STOCK

 

Section
2.01 PURCHASE AND SALE OF COMMON STOCK. Subject to the terms and conditions set forth herein, the Company shall sell to
the Investor, and the Investor shall purchase from the Company, a number of Shares having an aggregate purchase price of Five
Hundred Thousand Dollars ($500,000).

 

Section
2.02 DELIVERY OF PURCHASE NOTICES. Subject to the terms and conditions herein, and from time to time during the Commitment
Period, the Company may, in its sole discretion, deliver one or more Purchase Notices to the Investor, each of which shall state
the number of Shares which the Company intends to sell to the Investor on a Closing (as defined below). The Purchase Notice shall
be in the form attached hereto as Exhibit B and incorporated herein by reference. During the Commitment Period, the Company shall
not submit a Purchase Notice until the Closing pursuant to any prior Purchase Notice has been completed.

 

Section
2.03 PURCHASE PRICE. The purchase price for each Share (the “Purchase Price”) shall be equal to 90% of the
VWAP (as defined below) as determined on the Closing Date (the “Determination Date”). For purposes herein, “VWAP”
shall for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
for trading on the Principal Market, the lowest daily volume weighted average price of the Common Stock during the 5 Trading Day
period immediately prior to the Determination Date, 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)), (b) if the Common Stock is not then listed or quoted for trading on the Principal
Market, and if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group,
Inc. (or a similar organization or agency succeeding to its functions of reporting prices), 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 is determined
in good faith by the Board of Directors of the Company after taking into consideration factors it deems appropriate, including,
without limitation, recent sale and offer prices of the capital stock of the Company in private transactions negotiated at arm’s
length. For purposes herein, “Trading Day” shall mean any day on which the Principal Market is generally open for
business and on which the Common Stock is then traded. For the avoidance of doubt, the Purchase Price shall be recalculated with
respect to each sale of Shares pursuant to a Purchase Notice.

 

    	 	 	 

     

    

 

Section
2.04 CONDITIONS TO INVESTOR’S OBLIGATION TO PURCHASE SHARES.

 

	 	(a)	Notwithstanding
    anything to the contrary in this Agreement, the Company shall not be entitled to deliver a Purchase Notice and the Investor
    shall not be obligated to purchase any Shares at a Closing unless each of the following conditions are satisfied:

 

	 	(i)	at
    all times during the period beginning on the related Purchase Notice and ending on and including the related Closing, the
    Common Stock shall have been listed or quoted for trading on the Principal Market and shall not have been suspended from trading
    thereon for a period of two (2) consecutive Business Days during the Commitment Period and the Company shall not have been
    notified of any pending or threatened proceeding or other action to suspend the trading of the Common Stock;
	 	 	 
	 	(ii)	the
    Company shall have complied with its obligations and is otherwise not in breach of or in default under, this Agreement, the
    Registration Rights Agreement or any other agreement executed between the Parties in connection with the transactions contemplated
    in the Investment Documents (the “Transactions”), which has not been cured prior to delivery of the applicable
    Purchase Notice;
	 	 	 
	 	(iii)	no
    injunction shall have been issued and remain in force, or action commenced by a governmental authority which has not been
    stayed or abandoned, prohibiting the purchase or the issuance of the Shares; and
	 	 	 
	 	(iv)	the
    issuance of the Shares will not violate any requirements of the Principal Market.

 

	 	(b)	If
    any of the events described in Section 2.04(a)(i) through Section 2.04(a)(iv) above occurs prior to a Closing, then the Investor
    shall have no obligation to purchase the Shares set forth in the applicable Purchase Notice.

 

Section
2.05 MECHANICS OF PURCHASE OF SHARES. The Closing of the sale and purchase of Shares pursuant to a Purchase Notice (each,
a “Closing”) shall occur on the third Business Day (the “Closing Date”) following notification by the
Investor the Shares have been received in its custodial account. On each applicable Closing, the Investor shall deliver to the
Company the applicable Investment Amount by wire transfer of immediately available funds to an account designated by the Company.
In addition, with respect to each Closing, and prior to, at, or following such Closing, each of the Company and Investor shall
deliver to each other all documents, instruments and writings as reasonably requested by either of them pursuant to this Agreement
in order to implement and effect the Transactions.

 

    	 	 	 

     

    

 

Section
2.06 LIMITATION ON AMOUNT OF OWNERSHIP. Notwithstanding anything to the contrary in this Agreement, in no event shall the
Investor be entitled to purchase that number of Shares, which when added to the sum of the number of shares of Common Stock beneficially
owned (as such term is defined under Section 13(d) and Rule 13d-3 of the 1934 Act), by the Investor, would exceed 9.99% of the
number of shares of Common Stock outstanding on the Closing, as determined in accordance with Rule 13d-1(j) of the 1934 Act.

 

Section
2.07 NO SHORT SALES. No short sales shall be permitted by the Investor or its affiliates during the Commitment Period.

 

Section
2.08 NO DISCLOSURE. The Company shall not disclose non-public information to the Investor.

 

SECTION
3. INVESTOR’S REPRESENTATIONS AND WARRANTIES

 

Investor
hereby makes the following representations and warranties to the Company, and such representations and warranties shall be deemed
automatically remade by Investor on, and as of, each Closing Date:

 

Section
3.01 AUTHORIZATION OF TRANSACTIONS. Investor is a limited partnership, duly organized and in good standing in the State
of Delaware and has the requisite power and capacity to execute and deliver the Investment Documents to which it is a party and
to perform its obligations hereunder and thereunder. The execution, delivery and performance by Investor of the applicable Investment
Documents and the consummation of the Transactions have been duly and validly authorized by all requisite action on the part of
Investor. The Investment Documents to which Investor is a party have been duly and validly executed and delivered by Investor.
Each Investment Document to which Investor is a party constitutes the valid and legally binding obligation of Investor, enforceable
against Investor in accordance with its terms and conditions, except to the extent enforcement thereof may be limited by applicable
bankruptcy, insolvency or other Laws affecting the enforcement of creditors’ rights or by the principles governing the availability
of equitable remedies.

 

Section
3.02 GOVERNMENTAL APPROVALS; NON-CONTRAVENTION. No consent, Order, action or non-action of, or filing,
notification, declaration or registration with, any Governmental Entity is necessary for the execution, delivery or
performance by Investor of this Agreement or any other Investment Document to which Investor is a party. The execution,
delivery and performance by Investor of the Investment Documents to which Investor is a party, and the consummation by
Investor of the Transactions, do not violate any Laws or Orders to which Investor is subject. or violate, breach or conflict
with any provision of Investor’s organizational documents

 

Section
3.03 INVESTMENT REPRESENTATIONS.

 

	 	(a)	Investor
    understands and agrees that the consummation of this Agreement including the delivery of the Shares to Investor as contemplated
    hereby constitutes the offer and sale of securities under the 1933 Act and applicable state statutes.
	 	 	 
	 	(b)	Investor
    is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D under the 1933 Act (an “Accredited
    Investor”).
	 	 	 
	 	(c)	Investor
    understands that the Shares are being offered and sold to Investor in reliance upon specific exemptions from the registration
    requirements of United States federal and state securities Laws and that the Company is relying upon the truth and accuracy
    of, and Investor’s compliance with, the representations, warranties, agreements, acknowledgments and understandings
    of Investor set forth herein in order to determine the availability of such exemptions and the eligibility of Investor to
    acquire the Shares.

 

    	 	 	 

     

    

 

	 	(d)	Investor
    and its advisors, if any, have been furnished with all materials relating to the business, finances and operations of the
    Company and materials relating to the offer and sale of the Shares which have been requested by Investor or its advisors.
    Investor and its advisors, if any, have been afforded the opportunity to ask questions of the Company. Investor understands
    that its investment in the Shares involves a significant degree of risk.
	 	 	 
	 	(e)	At
    no time was Investor presented with or solicited by any leaflet, newspaper or magazine article, radio or television advertisement,
    or any other form of general advertising or solicited or invited to attend a promotional meeting otherwise than in connection
    and concurrently with such communicated offer. Investor is not purchasing the Shares acquired by Investor hereunder as a result
    of any “general solicitation” or “general advertising,” as such terms are defined in Regulation D
    under the 1933 Act, which includes, but is not limited to, any advertisement, article, notice or other communication regarding
    the Shares acquired by Investor hereunder published in any newspaper, magazine or similar media or on the internet or broadcast
    over television, radio or the internet or presented at any seminar or any other general solicitation or general advertisement.
	 	 	 
	 	(f)	Investor
    is acquiring the Shares for its own account as principal, not as a nominee or agent, for investment purposes only, and not
    with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from
    registration under the 1933 Act. No other Person has a direct or indirect beneficial interest in the Shares. Further, Investor
    does not have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participations
    to such Person or to any third Person, with respect to the Shares.
	 	 	 
	 	(g)	Investor
    understands that (i) the sale or re-sale of the Shares has not been and is not being registered under the 1933 Act or any
    applicable state securities Laws, and the Shares may not be transferred unless (1) the Shares are sold pursuant to an effective
    registration statement under the 1933 Act (whether pursuant to the Registration Rights Agreement or otherwise), (2) Investor
    shall have delivered to the Company, at the cost of Investor, an opinion of counsel that shall be in form, substance and scope
    customary for opinions of counsel in comparable transactions to the effect that the Shares to be sold or transferred may be
    sold or transferred pursuant to an exemption from such registration, which opinion shall be accepted by the Company, (3) the
    Shares are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under the 1933 Act (or a
    successor rule) (“Rule 144”)) of Investor who agrees to sell or otherwise transfer the Shares only in accordance
    with this Section and who is an Accredited Investor, (4) the Shares are sold pursuant to Rule 144, (5) the Shares are sold
    pursuant to Regulation S under the 1933 Act (or a successor rule) (“Regulation S”), or (6) the Shares are sold
    pursuant to the exemption from registration afforded under Section 4(a)(1) or Section 4(a)(7) of the 1933 Act, and Investor
    shall have delivered to the Company, at the cost of Investor, an opinion of counsel that shall be in form, substance and scope
    customary for opinions of counsel in corporate transactions, which opinion shall be accepted by the Company; (ii) any sale
    of such Shares made in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if said
    Rule is not applicable, any re-sale of such Shares under circumstances in which the seller (or the Person through whom the
    sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some
    other exemption under the 1933 Act or the rules and regulations of the Securities and Exchange Commission thereunder; and
    (iii) neither the Company nor any other Person is under any obligation to register such Shares under the 1933 Act or any state
    securities Laws or to comply with the terms and conditions of any exemption thereunder (in each case).

 

    	 	 	 

     

    

 

	 	(h)	Investor,
    either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial
    matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated
    the merits and risks of such investment. Investor is able to bear the economic risk of an investment in the Shares and, at
    the present time, is able to afford a complete loss of such investment.
	 	 	 
	 	(i)	Investor
    understands that no United States federal or state agency or any other governmental or state agency has passed on or made
    recommendations or endorsement of the Shares or the suitability of the investment in the Shares nor have such authorities
    passed upon or endorsed the merits of the Transactions.
	 	 	 
	 	(j)	Any
    legend required by the securities Laws of any state to the extent such Laws are applicable to the Shares represented by the
    certificate so legended shall be included on any certificates representing the Shares until such Shares are registered for
    resale pursuant to the 1933 Act. Investor also understands that the Shares may bear the following or a substantially similar
    legend until such Shares are registered for resale pursuant to the 1933 Act:

 

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR REGISTERED
OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED,
PLEDGED, OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION AND REGISTRATION ARE NOT REQUIRED. ANY TRANSFER
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE NOT
SET FORTH HEREIN.

 

Section
3.04 BROKERS. Investor has not engaged any investment banker, finder, broker or sales agent or any other Person in connection
with the origin, negotiation, execution, delivery or performance of any Investment Document to which it is a party, or the Transactions.

 

SECTION
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

Except
as disclosed on the Company’s filings with the SEC pursuant to the 1933 Act or the 1934 Act, the Company represents and
warrants to the Investor as follows:

 

    	 	 	 

     

    

 

Section
4.01 ORGANIZATION AND QUALIFICATION. The Company is a corporation duly organized and validly existing in good standing
under the Laws of the State of Delaware, and has the requisite corporate power and authorization to own its properties and to
carry on its business as now being conducted. Both the Company and the companies it owns or controls (“Subsidiaries”)
are duly qualified to do business and are in good standing in every jurisdiction in which its ownership of property or the nature
of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or
be in good standing would not have a Material Adverse Effect. As used in this Agreement, “Material Adverse Effect”
means a change, event, circumstance, effect or state of facts that has had or is reasonably likely to have, a material adverse
effect on the business, properties, assets, operations, results of operations or financial condition of the Company and its Subsidiaries,
if any, taken as a whole, or on the Transactions, or on the authority or ability of the Company to perform its obligations under
the Investment Documents.

 

Section
4.02 AUTHORIZATION; ENFORCEMENT; COMPLIANCE WITH OTHER INSTRUMENTS.

 

	 	(a)	The
    Company has the requisite corporate power and authority to enter into the Investment Documents and to issue the Shares in
    accordance with the terms hereof and thereof.
	 	 	 
	 	(b)	The
    execution and delivery of the Investment Documents by the Company and the consummation by it of the Transactions, including
    without limitation the issuance of the Shares pursuant to this Agreement, have been duly and validly authorized by the Company’s
    Board of Directors and no further consent or authorization is required by the Company, its Board of Directors, or its shareholders.
	 	 	 
	 	(c)	The
    Investment Documents have been duly and validly executed and delivered by the Company.
	 	 	 
	 	(d)	The
    Investment Documents constitute the valid and binding obligations of the Company enforceable against the Company in accordance
    with their terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency,
    reorganization, moratorium, liquidation or similar Laws relating to, or affecting generally, the enforcement of creditors’
    rights and remedies.

 

Section
4.03 ISSUANCE OF SHARES. Upon issuance in accordance with this Agreement, the Shares will be validly issued, fully paid
for and non-assessable and free from all taxes, liens and charges with respect to the issuance thereof.

 

Section
4.04 INSURANCE. Each of the Company’s Subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as management of the Company reasonably believes to be prudent and customary
in the businesses in which the Company and its Subsidiaries are engaged. Neither the Company nor any of its Subsidiaries has been
refused any insurance coverage sought or applied for and neither the Company nor its Subsidiaries has any reason to believe that
it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

 

Section
4.05 DILUTIVE EFFECT. The Company understands and acknowledges that the number of shares of Common Stock issuable upon
purchases pursuant to this Agreement will increase in certain circumstances including, but not necessarily limited to, the circumstance
wherein the trading price of the Common Stock declines during the Commitment Period. The Company’s executive officers and
directors have studied and fully understand the nature of the Transactions and recognize that they have a potential dilutive effect
on the shareholders of the Company. The Board of Directors of the Company has concluded, in its good faith business judgment,
and with full understanding of the implications, that such issuance is in the best interests of the Company. The Company specifically
acknowledges that, subject to such limitations as are expressly set forth in the Investment Documents, its obligation to issue
shares of Common Stock upon purchases pursuant to this Agreement is absolute and unconditional regardless of the dilutive effect
that such issuance may have on the ownership interests of other shareholders of the Company.

 

    	 	 	 

     

    

 

SECTION
5. COVENANTS OF THE COMPANY

 

Section
5.01 BEST EFFORTS. The Company shall use all commercially reasonable efforts to timely satisfy each of the conditions set
forth in this Agreement.

 

Section
5.02 REPORTING STATUS. Until one of the following occurs, the Company shall file all reports required to be filed with
the SEC pursuant to the 1934 Act, and the Company shall not terminate its status, or take an action or fail to take any action,
which would terminate its status as a reporting company under the 1934 Act: (i) the occurrence of the Expiration Date provided
that the Investor has the right to sell all of the Shares without restrictions pursuant to Rule 144 promulgated under the 1933
Act, or such other exemption or pursuant to the Registration Statement, or (ii) the date on which the Investor has sold all the
Shares.

 

Section
5.03 USE OF PROCEEDS. The Company will use the proceeds from the sale of the Shares for general corporate and working capital
purposes and acquisitions or assets, businesses or operations or for other purposes that the Board of Directors, in good faith
deem to be in the best interest of the Company.

 

Section
5.04 FINANCIAL INFORMATION. During the Commitment Period, the Company agrees to make available to the Investor via EDGAR
or other electronic means the following documents and information on the forms set forth: (i) within five (5) Business Days after
the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K, its Quarterly Reports on Form 10-Q, any Current Reports
on Form 8-K and any Registration Statements or amendments filed pursuant to the 1933 Act; (ii) copies of any notices and other
information made available or given to the shareholders of the Company generally, contemporaneously with the making available
or giving thereof to the shareholders; and (iii) except as may be required to be limited by Law or the rules or requirements of
the Principal Market, within two (2) calendar days of filing or delivery thereof, copies of all documents filed with, and all
correspondence sent to, the Principal Market, any securities exchange or market, or the Financial Industry Regulatory Association,
unless such information is material nonpublic information.

 

Section
5.05 LISTING. The Company shall promptly secure and maintain the listing of all of the Registrable Securities on the Principal
Market and each other national securities exchange and automated quotation system, if any, upon which shares of Common Stock are
then listed (subject to official notice of issuance) and shall maintain, such listing of all Registrable Securities from time
to time issuable under the terms of the Investment Documents. Neither the Company nor any of its Subsidiaries shall take any action
which would be reasonably expected to result in the delisting or suspension of the Common Stock on the Principal Market (excluding
suspensions of not more than one (1) Business Day resulting from business announcements by the Company). The Company shall promptly
provide to the Investor copies of any notices it receives from the Principal Market regarding the continued eligibility of the
Common Stock for listing on such automated quotation system or securities exchange. The Company shall pay all fees and expenses
in connection with satisfying its obligations under this Section 5.05.

 

    	 	 	 

     

    

 

Section
5.06 CORPORATE EXISTENCE. The Company shall use all commercially reasonable efforts to preserve and continue the corporate
existence of the Company.

 

Section
5.07 NOTICE OF CERTAIN EVENTS AFFECTING REGISTRATION; SUSPENSION OF RIGHT TO SUBMIT A PURCHASE NOTICE. The Company shall
promptly notify the Investor upon the occurrence of any of the following events in respect of a Registration Statement or related
prospectus in respect of an offering of the Shares: (i) receipt of any request for additional information by the SEC or any other
federal or state governmental authority during the period of effectiveness of the Registration Statement for amendments or supplements
to the Registration Statement or related prospectus; (ii) the issuance by the SEC or any other Governmental Authority of any stop
order suspending the effectiveness of any Registration Statement or the initiation of any proceedings for that purpose; (iii)
receipt of any notification with respect to the suspension of the qualification or exemption from qualification of any of the
Shares for sale in any jurisdiction or the initiation or notice of any proceeding for such purpose; (iv) the happening of any
event that makes any statement made in such Registration Statement or related prospectus or any document incorporated or deemed
to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in the Registration
Statement, related prospectus or documents so that, in the case of a Registration Statement, it will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein
not misleading, and that in the case of the related prospectus, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and (v) the Company’s reasonable determination that a post-effective
amendment or supplement to the Registration Statement would be appropriate, and the Company shall promptly make available to Investor
any such supplement or amendment to the related prospectus.

 

Section
5.08 TRANSFER AGENT. The Company shall deliver instructions to its transfer agent to issue Shares to the Investor that
are issued to the Investor pursuant to the Investment Documents.

 

Section
5.09 ACKNOWLEDGEMENT OF TERMS. The Company hereby represents and warrants to the Investor that: (i) it is voluntarily
entering into this Agreement of its own freewill, (ii) it is not entering this Agreement under economic duress, (iii)
the terms of this Agreement are reasonable and fair to the Company, and (iv) the Company has had independent legal counsel of
its own choosing review this Agreement, advise the Company with respect to this Agreement, and represent the Company in
connection with this Agreement.

 

SECTION
6. INDEMNIFICATION

 

Section
6.01 GENERAL INDEMNIFICATION. In consideration of the Parties’ mutual obligations set forth in the Investment Documents,
each Party (the “Indemnifying Party”) agrees to indemnify, defend and hold harmless the other Party and such other
Party’s Affiliates and each of their respective directors, officers, managers, partners, employees, agents, equity holders,
successors and assigns (each, an “Indemnified Party”), from and against any and all losses, damages, deficiencies,
liabilities, assessments, fines, penalties, judgments, actions, claims, costs, disbursements, fees, expenses or settlements of
any kind or nature, including legal, accounting and other professional fees and expenses, and including reasonable attorneys’
fees and disbursements (the “Indemnified Liabilities”) incurred or suffered by any Indemnified Party arising out of,
based upon or resulting from (I) any misrepresentation or breach of any representation or warranty made by the Indemnifying Party
in any Investment Document; (II) any breach of any covenant, agreement or obligation of the Indemnifying Party contained in the
Investment Document; or (III) any cause of action, suit or claim brought or made against such Indemnified Party and arising out
of or resulting from the execution, delivery, performance or enforcement of the Investment Documents. To the extent that the foregoing
undertaking by the Indemnifying Party may be unenforceable for any reason, the Indemnifying Party shall make the maximum contribution
to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable Law. The indemnity
provisions contained herein shall be in addition to any cause of action or similar rights any Indemnified Party may have, and
any liabilities to which the Indemnifying Party may be subject.

 

    	 	 	 

     

    

 

Section
6.02 PROCEDURES FOR INDEMNIFICATION. In the event that an Indemnified Party shall incur or suffer any Losses in respect
of which indemnification may be sought under this SECTION 6 against the Indemnifying Party, the Indemnified Party shall assert
a claim for indemnification by providing a written notice (the “Notice of Loss”) to the Indemnifying Party stating
the nature and basis of such indemnification. The Notice of Loss shall be provided to the Indemnifying Party as soon as practicable
after the Indemnified Party becomes aware that it has incurred or suffered a Loss.

 

Section
6.03 PAYMENT. Upon a determination of liability under this SECTION 6 the Indemnifying Party shall pay or cause to be paid
to the Indemnified Party the amount so determined within five (5) Business Days after the date of such determination. If there
should be a dispute as to the amount or manner of determination of any indemnity obligation owed under this Agreement, the Indemnifying
Party shall nevertheless pay when due such portion, if any, of the obligation that is not subject to dispute. Upon the payment
in full of any amounts due under this SECTION 6 with respect to any claim, the Indemnifying Party shall be subrogated to the rights
of the Indemnified Party against any Person with respect to the subject matter of such claim.

 

SECTION
7. MICELLANEOUS

 

Section
7.01 LAW GOVERNING THIS AGREEMENT; ADDITIONAL PROVISIONS.

 

	 	(a)	This
    Agreement 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 shall be brought only
    in the state or federal courts located in Los Angeles, California. The Parties hereby irrevocably waive 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 Parties agree to submit to the in personam jurisdiction of such courts. 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 Agreement or any other Investment Documents 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 Agreement 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.

 

    	 	 	 

     

    

 

	 	(b)	EACH
    PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
    ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS, THE PERFORMANCE
    THEREOF OR THE FINANCINGS CONTEMPLATED THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)
    CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
    OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE
    OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
    IN THIS Section 7.01(b). Each of the Parties acknowledge that each has been represented in connection with the signing of
    this waiver by independent legal counsel selected by the respective Party and that such Party has discussed the legal consequences
    and import of this waiver with legal counsel. Each of the Parties further acknowledge that each has read and understands the
    meaning of this waiver and grants this waiver knowingly, voluntarily, without duress and only after consideration of the consequences
    of this waiver with legal counsel.
	 	 	 
	 	(c)	The
    prevailing Party in any dispute hereunder shall be entitled to recover from the other Party its reasonable attorneys’
    fees and costs.
	 	 	 
	 	(d)	In
    the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable
    under any applicable statute or rule of Law, 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 any agreement.
	 	 	 
	 	(e)	The
    headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
    This Agreement shall not be construed as if it had been prepared by one of the Parties, but rather as if both Parties had
    prepared the same.

 

Section
7.02 LEGAL FEES; AND MISCELLANEOUS FEES. Except as otherwise set forth in the Investment Documents, including the Document
Preparation Fee (including but not limited to Section V of the Registration Rights Agreement), each Party shall pay the fees and
expenses of its advisers, counsel, the accountants and other experts, if any, and all other expenses incurred by such Party incident
to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all stamp and other
taxes and duties levied in connection with the issuance of any Shares. The Company will pay the Document Preparation Fee on the
Execution Date.

 

Section
7.03 SURVIVAL. The representations and warranties of the Company and the Investor contained in this Agreement shall survive
the Closing and the expiration of this Agreement.

 

    	 	 	 

     

    

 

Section
7.04 NOTICES.

 

	 	(a)	Any
    notice or other communications required or permitted hereunder shall be in writing and shall be sufficiently given if personally
    delivered to it or sent by email, overnight courier or registered mail or certified mail, postage prepaid, addressed as follows:

 

if
to the Company, to:

 

Simplicity
Esports and Gaming Company

7000 W. Palmetto Park Road, Suite 505

Boca Raton, Florida 33433

Attention:
Jed Kaplan

Email:
jkaplan@simplicityesports.com

 

With
a copy, which shall not constitute notice, to:

 

Anthony
L.G., PLLC

Attn: Laura Anthony

625
N. Flagler Drive, Suite 600

West Palm Beach, FL 33401

Email: lanthony@anthonypllc.com

 

If
to Investor, to:

 

Triton
Funds LP

Attn: Marc Indeglia

1262 Prospect Street

La Jolla, CA 92037

Email:
tritonfunds@tritonfunds.com

 

	 	(b)	Any
    Party may change its address for notices hereunder upon notice to each other Party in the manner for giving notices hereunder.
	 	 	 
	 	(c)	Any
    notice hereunder shall be deemed to have been given (i) upon receipt, if personally delivered, (ii) on the day after dispatch,
    if sent by overnight courier, (iii) upon dispatch, if transmitted by email with return receipt requested and received and
    (iv) three (3) days after mailing, if sent by registered or certified mail.

 

Section
7.05 AMENDMENTS; NO WAIVERS; NO THIRD-PARTY BENEFICIARIES.

 

	 	(a)	This
    Agreement may be amended, modified, superseded, terminated or cancelled, and any of the terms, covenants, representations,
    warranties or conditions hereof may be waived, only by a written instrument executed by both Parties.
	 	 	 
	 	(b)	Every
    right and remedy provided herein shall be cumulative with every other right and remedy, whether conferred herein, at law,
    or in equity, and may be enforced concurrently herewith, and no waiver by any Party of the performance of any obligation by
    the other Party shall be construed as a waiver of the same or any other default then, theretofore, or thereafter occurring
    or existing.
	 	 	 
	 	(c)	Neither
    any failure or delay in exercising any right or remedy hereunder or in requiring satisfaction of any condition herein nor
    any course of dealing shall constitute a waiver of or prevent any Party from enforcing any right or remedy or from requiring
    satisfaction of any condition. No notice to or demand on a Party waives or otherwise affects any obligation of that Party
    or impairs any right of the Party giving such notice or making such demand, including any right to take any action without
    notice or demand not otherwise required by this Agreement. No exercise of any right or remedy with respect to a breach of
    this Agreement shall preclude exercise of any other right or remedy, as appropriate to make the aggrieved Party whole with
    respect to such breach, or subsequent exercise of any right or remedy with respect to any other breach.

 

    	 	 	 

     

    

 

	 	(d)	Notwithstanding
    anything else contained herein, no Party shall seek, nor shall any Party be liable for, consequential, punitive or exemplary
    damages, under any tort, contract, equity, or other legal theory, with respect to any breach (or alleged breach) of this Agreement
    or any provision hereof or any matter otherwise relating hereto or arising in connection herewith.

 

Section
7.06 FURTHER ASSURANCES. Following the Execution Date, each Party shall execute and deliver such documents and other papers
and take such further action as may be reasonably required to carry out the provisions of the Investment Documents.

 

Section
7.07 SUCCESSORS AND ASSIGNS; BENEFIT. The provisions of this Agreement shall be binding upon and inure to the benefit of
the Parties and their respective successors and assigns. No Party may assign, delegate or otherwise transfer any of its rights
or obligations under this Agreement without the written consent of the other Parties. Nothing in this Agreement, expressed or
implied, shall confer on any Person other than the Parties, and their respective successors and assigns, any rights, remedies,
obligations, or liabilities under or by reason of this Agreement.

 

Section
7.08 ENTIRE AGREEMENT. This Agreement and the other Investment Documents constitute the entire agreement between the Parties
with respect to the subject matter hereof and thereof and supersedes all prior agreements and understandings, both oral and written,
between the Parties with respect to the subject matter hereof and thereof.

 

Section
7.09 SPECIFIC PERFORMANCE. Each Party agrees that irreparable damage would occur if any provision of this Agreement were
not performed in accordance with the terms hereof and that each Party shall be entitled to seek specific performance of the terms
hereof in addition to any other remedy at law or in equity.

 

Section
7.10 COUNTERPARTS. This Agreement may be executed in two or more counterparts, all of which shall be considered one and
the same agreement and shall become effective when counterparts have been signed by each of the Parties and delivered to the other
Parties, it being understood that each Party need not sign the same counterpart. A facsimile copy or electronic transmission of
a signature page shall be deemed to be an original signature page. A Party’s signature on the signature page hereof evidences
such Party’s agreement to be bound by the terms and conditions of this Agreement. Each undersigned signatory hereby certifies
that he or she has read and understands this Agreement, the representations made by the Party for which such signatory is executing
this Agreement are true and accurate, and that such Party agrees to be bound by its terms.

 

[Signatures
appear on following page]

 

    	 	 	 

     

    

 

IN
WITNESS WHEREOF, the parties have caused this Common Stock Purchase Agreement to be duly executed by their respective officers
thereunto duly authorized as of the day and year written below.

 

	 	Simplicity
    Esports and Gaming Company
	 	 	 
	 	By:	/s/
    Roman Franklin
	 	Name:	Roman
    Franklin
	 	Title:	President
	 	Date:	March
    12, 2020 
	 	 	 
	 	Triton
    Funds LP
	 	 
	 	By:	/s/
    Tyler Hoffman 
	 	Name:	TYLER
    HOFFMAN 
	 	Title:	AUTHORIZED
    SIGNATORY
	 	Date:	MARCH
    11, 2020

 

    	 	 	 

     

    

 

Exhibit
A

Registration
Rights Agreement

 

(Attached)

 

    	 	 	 

     

    

 

Exhibit
B

Form
of Purchase Notice

 

Date:[                             ]

 

Triton
Funds LP Attn: Marc Indeglia 1262 Prospect Street La Jolla, CA 92037

Email:
tritonfunds@tritonfunds.com

 

This
is a Purchase Notice, as defined in and subject to the terms and conditions of that certain Common Stock Purchase Agreement (the
“Agreement”), dated as of March 11, 2020, by and between Simplicity Esports and Gaming Company, a Delaware corporation
(the “Company”), and TRITON FUNDS LP, a Delaware limited partnership (the “Investor”). Defined terms used
herein without definition shall have the meanings given in the Agreement.

 

The
Company hereby informed the Investor that the Company hereby elects to exercise its right pursuant to this Agreement to require
Investor to purchase                       Shares.
The purchase price for each Share (the “Purchase Price”) shall be equal to 90% of the VWAP as determined on the Closing
Date.

 

The
Closing Date for this transaction shall be three Business Days from the date set forth above.

 

	 	Regards,
	 	 
	 	Simplicity
    Esports and Gaming Company
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:

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