Document:

cannaeholdingsguarantyv2

EXECUTION VERSION  GUARANTY  dated as of November 30, 2020  Section 1.01. Guaranty.  (a) Subject to the terms and conditions hereof, including but not limited to Section  1.08 below, Cannae Holdings, Inc. (the Guarantor), in consideration of the extension of loans and other  credit accommodations, and for other good and valuable consideration, the receipt and adequacy of which  are hereby acknowledged, hereby, absolutely, unconditionally and irrevocably guarantees the punctual  payment when due, whether by acceleration, demand or otherwise, of all present and future obligations  payable by Cannae Funding C, LLC, a wholly-owned subsidiary of the Guarantor (Obligor 1), and  Cannae Funding D, LLC, a wholly-owned subsidiary of the Guarantor (Obligor 2 and, together with  Obligor 1, the Obligors), to the Administrative Agent, for the benefit of the Lenders on a Pro Rata  Basis (the Beneficiary), under the terms of that certain margin loan agreement, dated as of November 30,  2020 (the Loan Agreement), among the Obligors, Royal Bank of Canada, as administrative agent, Royal  Bank of Canada, as calculation agent, and the lenders from time to time party thereto and the Security  Agreement, provided that such obligations become due and payable prior to the Guarantee Termination  Date (such obligations, the Guaranteed Obligations).  For the avoidance of doubt, amounts that may be  paid-in-kind shall not be deemed due and payable until they are required to be paid in cash.  Without  limiting the generality of the foregoing, the liability of the Guarantor shall extend to all amounts that  constitute part of the Guaranteed Obligations and would be payable by either Obligor to the Beneficiary  under or in respect of the Margin Loan Documentation giving rise to such Guaranteed Obligations  (collectively, the Guaranteed Documents) but for the fact that they are unenforceable or not allowable due  to the existence of a bankruptcy, reorganization or similar proceeding involving either Obligor.  This  Guaranty is a guaranty of payment and not of collection.  (b) Each of the Guarantor, and by its acceptance of this Guaranty, the Beneficiary,  hereby confirm that it is the intention that this Guaranty and the Guaranteed Obligations of the Guarantor  hereunder not constitute a fraudulent transfer or conveyance for purposes of the Debtor Relief Laws, the  Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar foreign, federal  or state law to the extent applicable to this Guaranty and the Guaranteed Obligations of the Guarantor  hereunder.  To effectuate the foregoing intention, the Beneficiary, by its acceptance of this Guaranty, and  the Guarantor hereby irrevocably agree that the Guaranteed Obligations of the Guarantor under this  Guaranty at any time shall be limited to the maximum amount as will result in the Guaranteed Obligations  of the Guarantor under this Guaranty not constituting a fraudulent transfer or conveyance under the  Debtor Relief Laws or any comparable provision of applicable Law.  Section 1.02. Guaranty Absolute.  The Guarantor guarantees that its Guaranteed Obligations  will be paid in accordance with the terms of the Guaranteed Documents, regardless of any law, regulation  or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the  Beneficiary with respect thereto.  The obligations of the Guarantor under or in respect of this Guaranty  are independent of the Guaranteed Obligations or any other Obligations of the Obligors under or in  respect of the Guaranteed Documents, and a separate action or actions may be brought and prosecuted  against the Guarantor to enforce this Guaranty, irrespective of whether any action is brought against either  Obligor or whether either Obligor is joined in any such action or actions.  The liability of the Guarantor  under this Guaranty shall be irrevocable, absolute and unconditional, and the Guarantor hereby  irrevocably waives any defenses (other than payment in full of the Guaranteed Obligations) it may now  have or hereafter acquire in any way relating to any or all of the following:  

 

 2  (a) any lack of validity or enforceability of any Guaranteed Document or any  agreement or instrument relating thereto;  (b) any change in the time, manner or place of payment of, or in any other term of,  all or any of its Guaranteed Obligations or any other Obligations of either Obligor under or in respect of  the Guaranteed Documents, or any other amendment or waiver of or any consent to departure from any  Guaranteed Document, including, without limitation, any increase in its Guaranteed Obligations resulting  from the extension of additional credit to either Obligor;  (c) any taking, exchange, release or non-perfection of the Collateral or any other  collateral, or any taking, release, amendment or waiver of, or consent to departure from, any other  guaranty, for all or any of its Guaranteed Obligations;  (d) any manner of application of Collateral or any other collateral, or proceeds  thereof, to all or any of its Guaranteed Obligations, or any manner of sale or other disposition of any  Collateral or any other collateral for all or any of its Guaranteed Obligations or any other assets of either  Obligor;  (e) any change, restructuring or termination of the corporate structure or existence of  either Obligor, any insolvency, bankruptcy, reorganization or other similar proceeding affecting either  Obligor or the Guarantor or its assets, or any resulting discharge of any obligation of either Obligor or the  Guarantor contained in the Guaranteed Documents;  (f) any failure of the Beneficiary to disclose to the Guarantor any information  relating to the business, condition (financial or otherwise), operations, performance, properties or  prospects of either Obligor now or hereafter known to the Beneficiary (the Guarantor waiving any duty on  the part of the Beneficiary to disclose such information);  (g) the failure of any other Person to execute or deliver any other guaranty or  agreement or the release or reduction of liability of any other guarantor or surety with respect to its  Guaranteed Obligations; or  (h) any other circumstance, or any existence of or reliance on any representation by  the Beneficiary, that might otherwise constitute a defense available to, or a discharge of, either Obligor or  any other guarantor or surety other than satisfaction in full of the Obligations.  This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any  time any payment of the Guarantor’s Guaranteed Obligations is rescinded or must otherwise be returned  by the Beneficiary or any other Person upon the insolvency, bankruptcy or reorganization of either  Obligor or the Guarantor, all as though such payment had not been made.  Section 1.03. Waiver and Acknowledgments.  (a) The Guarantor hereby unconditionally and irrevocably waives promptness,  diligence, notice of acceptance, presentment, demand for performance, notice of nonperformance, default,  acceleration, protest or dishonor and any other notice with respect to any of its Guaranteed Obligations  and this Guaranty (other than any demand, presentment or notice expressly required by the Guaranteed  Documents) and any requirement that the Beneficiary protect, secure, perfect or insure any Lien or any  property subject thereto or exhaust any right or take any action against either Obligor or any other Person  or any Collateral.  

 

 3  (b) The Guarantor hereby acknowledges that this Guaranty is continuing in nature  and applies to all of its Guaranteed Obligations, whether existing now or in the future.  (c) The Guarantor hereby unconditionally and irrevocably waives any defense  arising by reason of any claim or defense based upon an election of remedies by the Beneficiary that in  any manner impairs, reduces, releases or otherwise adversely affects the subrogation, reimbursement,  exoneration, contribution or indemnification rights of the Guarantor or other rights of the Guarantor to  proceed against either Obligor, any other guarantor or any other Person or any Collateral and any defense  based on any right of set-off or counterclaim against or in respect of any obligations of the Guarantor  under this Guaranty; provided that the Guarantor shall be entitled to exercise or assert, as the case may be,  any right, claim or defense that is available to either Obligor other than any right, claim or defense arising  out of a bankruptcy or similar proceeding with respect to either Obligor.  (d) The Guarantor hereby unconditionally and irrevocably waives any duty on the  part of the Beneficiary to disclose to the Guarantor any matter, fact or thing relating to the business,  condition (financial or otherwise), operations, performance, properties or prospects of either Obligor now  or hereafter known by the Beneficiary.  (e) The Guarantor acknowledges that it will receive substantial direct and indirect  benefits from the financing arrangements and other accommodations contemplated by the Guaranteed  Documents and that the waivers set forth in this Guaranty are knowingly made in contemplation of such  benefits.  (f) The Beneficiary shall not be obligated to file any claims relating to the  Obligations in the event that either Obligor becomes subject to a bankruptcy, reorganization or similar  proceeding, and the failure of the Beneficiary to so file shall not affect the Guarantor’s obligations under  this Guaranty.  Section 1.04. Expenses.  The Guarantor will pay on demand (without duplication) all out-of- pocket expenses, including the reasonable fees and disbursements of the Beneficiary’s counsel, incurred  in the enforcement or protection of the rights of the Beneficiary under this Guaranty; provided that the  Guarantor shall not be liable for any expenses of the Beneficiary if no payment under this Guaranty is  due.  Section 1.05. Subrogation.  The Guarantor hereby unconditionally and irrevocably agrees not  to exercise any rights that it may now have or hereafter acquire against either Obligor or any insider  guarantor that arise from the existence, payment, performance or enforcement of the Guarantor’s  Guaranteed Obligations under or in respect of any Guaranteed Document, including, without limitation,  any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to  participate in any claim or remedy of the Beneficiary against any other insider guarantor or any  Collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or  common law, including, without limitation, the right to take or receive from either Obligor or any other  insider guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner,  payment or security on account of such claim, remedy or right, unless and until the date of termination of  the Facility.  If any amount shall be paid to the Guarantor in violation of the immediately preceding  sentence at any time prior to the latest of (a) the date of termination of the Facility and (b) the Maturity  Date, such amount shall be received and held in trust for the benefit of the Beneficiary, shall be  segregated from other property and funds of the Guarantor and shall forthwith be paid or delivered to the  Beneficiary in the same form as so received (with any necessary endorsement or assignment) to be  credited and applied to the Guarantor’s Guaranteed Obligations and all other amounts payable by it under  this Guaranty, whether matured or unmatured, in accordance with the terms of the Guaranteed  

 

 4  Documents, or to be held as Collateral for any of the Guarantor’s Guaranteed Obligations or other  amounts payable by it under this Guaranty thereafter arising.  If (i) all of the Guaranteed Obligations and  all other amounts payable under this Guaranty shall have been paid in full in cash and (ii) the Maturity  Date shall have occurred, the Beneficiary, by its acceptance of this Guaranty, will, at the Guarantor’s  request and expense, execute and deliver to the Guarantor appropriate documents, without recourse and  without representation or warranty, necessary to evidence the transfer by subrogation to the Guarantor of  an interest in the Guaranteed Obligations resulting from such payment made by the Guarantor pursuant to  this Guaranty.  Section 1.06. Payment Free and Clear of Taxes.  Any and all payments by the Guarantor under  this Guaranty shall be made in accordance with the provisions of this Guaranty and the provisions of  Section 2.10 of the Loan Agreement (and the Guarantor shall make such payments of Taxes, Indemnified  Taxes or Other Taxes to the extent described in Section 2.10 of the Loan Agreement), as though such  payments were made by the relevant Obligor(s).  Any obligation of the Obligors under Section 2.10 of the  Loan Agreement to pay any additional amounts to, or indemnify, any Lender for any taxes that are  required to be withheld or deducted from payments made to any Lender or to pay for, or indemnify any  Lender for, any stamp and other similar taxes, shall apply mutatis mutandis (and without duplication) to  the Guarantor with respect to this Guaranty and payments made hereunder.  Section 1.07. No Waiver; Remedies.  No failure on the part of the Beneficiary to exercise, and  no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial  exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other  right.  The remedies herein provided are cumulative and not exclusive of any remedies provided by law.  Section 1.08. Termination.  This Guaranty shall remain in full force and effect, and be binding  upon the Guarantor and its successors and permitted assigns, and inure to the benefit of the Beneficiary  and its successors and permitted assigns, until the earlier of (x) the payment in full in Dollars of all  Obligations and the satisfactory performance and/or payment of all other obligations under the Margin  Loan Documentation, and all Commitments shall have terminated or expired or (y) the date that is one (1)  year following the Closing Date (such date, the “Guarantee Termination Date”); provided, however, that  at any point in time following the date that is eight (8) months following the Closing Date, at which the  “current public information” conditions set forth in Rule 144(c)(1) under the Securities Act of 1933, as  amended, are satisfied with respect to the Issuers, this Guaranty shall not be enforceable by the  Beneficiary at such time.  For the avoidance of doubt, if at any point prior to the date that is one (1) year  following the Closing Date the “current public information” conditions set forth in Rule 144(c)(1) under  the Securities Act of 1933, as amended, are not satisfied with respect to the Issuers, this Guaranty shall be  enforceable by the Beneficiary in accordance with its terms.  Notwithstanding anything herein or in the  Margin Loan Documentation to the contrary, following the termination of this Guaranty in accordance  with this Section 1.08 (or at any time this Guaranty is unenforceable hereunder), the Guarantor shall have  no liability (in contract or otherwise) to the Beneficiary (or its successors or permitted assigns), including,  without limitation, for any breach of, under or in connection with this Guaranty or any Margin Loan  Documentation, including, without limitation, Articles 3, 5 and 6 of the Loan Agreement.  Section 1.09. Assignments under this Guaranty.  This Guaranty shall be binding upon the  Guarantor, its successors and assigns, and inure to the benefit of and be enforceable by the Beneficiary  and its permitted successors, transferees and assigns.  The Guarantor shall have no right to assign its  rights hereunder or any interest herein without the prior written consent of the Beneficiary.  Section 1.10. Limitation of Liability.  Notwithstanding anything to the contrary contained  herein or in the Loan Agreement, whether express or implied, the Guarantor shall in no event be required  

 

 5  to pay or be liable to the Beneficiary for any consequential, indirect or punitive damages, opportunity  costs or lost profits.  Section 1.11. GOVERNING LAW; JURISDICITON.  This Guaranty shall be governed by and  construed in accordance with the laws of the State of New York.  The Guarantor hereby irrevocably  consents to, for the purposes of any proceeding arising out of this Guaranty, the jurisdiction of the courts  of the State of New York and the United States District Court located in the borough of Manhattan in  New York City.  Section 1.12. Miscellaneous.  (a) Defined Terms.  Capitalized terms used but not defined herein have the  respective meaning given to such terms in the Loan Agreement.  (b) Integration.  This Guaranty (i) shall supersede any prior or contemporaneous  representation, statements or agreements, oral or written, made by or between the Guarantor and the  Beneficiary with regard to the subject matter hereof and (ii) may be amended only by a written instrument  executed by the Guarantor and the Beneficiary; provided that this Guaranty may be amended, by a written  instrument executed solely by the Guarantor, to extend the Guarantee Termination Date in accordance  with Sections 2.08(f) or 4.03(a)(vi) of the Loan Agreement.  (c) Severability.  If at any time any one or more of the provisions contained in this  Guaranty should be held invalid, illegal or unenforceable in any respect, the Guarantor and the  Beneficiary shall not be required to comply with such provision for so long as such provision is held to be  invalid, illegal or unenforceable, but the validity, legality and enforceability of the remaining provisions  contained in this Guaranty shall not in any way be affected or impaired (it being further understood and  agreed that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself  affect the validity of such provision in any other jurisdiction).  The Guarantor and the Beneficiary, by its  acceptance of this Guaranty, shall endeavor in good faith negotiations to replace the invalid, illegal or  unenforceable provisions with valid provisions the economic effect of which comes as close as possible to  that of the invalid, illegal or unenforceable provisions.  (d) Counterparts.  Delivery of an executed signature page of this Guaranty by  facsimile or other electronic transmission (e.g. “pdf” or “tif” format) shall be effective as delivery of a  manually executed counterpart hereof.  (e) WAIVER OF JURY TRIAL.  EACH OF THE GUARANTOR AND THE  BENEFICIARY, BY ITS ACCEPTANCE OF THIS GUARANTY, HEREBY IRREVOCABLY  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 GUARANTY OR ANY OTHER MARGIN LOAN  DOCUMENTATION OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY  (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  Section 1.13. Representation and Warranties, The Guarantor (x) represents and warrants to the  Beneficiary that any representations and warranties with respect to the Guarantor contained in the Loan  Agreement are true and correct and (y) covenants to the Beneficiary that it will comply with any  covenants in the Loan Agreement expressly applicable to the Guarantor.  

 

  IN WITNESS WHEREOF, the Guarantor has executed this Guaranty by its duly authorized  officer as of the day first above written.     CANNAE HOLDINGS, INC.          By: /s/ Michael L. Gravelle    Name: Michael L. Gravelle    Title: Executive Vice President, General  Counsel, and Corporate SecretaryExhibit
10.1

 

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

 

	Principal
    Amount: $750,000.00	Issue
    Date: November 23, 2020
	Actual
    Amount of Purchase Price: $675,000.00	 

 

SELF-AMORTIZATION
PROMISSORY NOTE

 

FOR
VALUE RECEIVED, SIMPLICITY ESPORTS AND GAMING COMPANY, a Delaware corporation (hereinafter called the “Borrower”
or the “Company”) (Trading Symbol: WINR), hereby promises to pay to the order of ____________________, a Delaware
limited partnership, or registered assigns (the “Holder”), in the form of lawful money of the United States of America,
the principal sum of $750,000.00, which amount is the $675,000.00 actual amount of the purchase price (the “Consideration”)
hereof plus an original issue discount in the amount of $75,000.00 (the “OID”) (subject to adjustment herein) (the
“Principal Amount”) and to pay interest on the unpaid Principal Amount hereof at the rate of twelve percent (12%)
(the “Interest Rate”) per annum (with the understanding that the first twelve months of interest (equal to $90,000.00)
shall be guaranteed and earned in full as of the Issue Date, provided, however, that if the Note is repaid in its entirety on
or prior to February 23, 2021, then the interest shall be accrued on a per annum basis based on the number of days elapsed as
of the repayment date) from the date hereof (the “Issue Date”) until the same becomes due and payable, whether at
maturity or upon acceleration or by prepayment or otherwise, as further provided herein. The maturity date shall be twelve (12)
months from the Issue Date (the “Maturity Date”), and is the date upon which the principal sum, the OID, as well as
any accrued and unpaid interest and other fees, shall be due and payable.

 

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

 

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

 

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

 

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

 

    	1

     

    

 

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

 

The
following terms shall also apply to this Note:

 

ARTICLE
I. CONVERSION RIGHTS UPON DEFAULT

 

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

 

    	2

     

    

 

1.2
Conversion Price.

 

(a)
Calculation of Conversion Price. The per share conversion price with respect to the shares of Common Stock hereunder into
which Principal Amount and interest (including any Default Interest) under this Note shall be convertible into at any time following
the Uncured Default Date shall equal the lesser of (i) 105% multiplied by the closing bid price of the Common Stock on the Principal
Market on the Issue Date or (ii) the closing bid price of the Common Stock on the Principal Market on the Trading Day immediately
preceding the date of the respective conversion (the “Conversion Price”). If at any time the Conversion Price as determined
hereunder for any conversion would be less than the par value of the Common Stock, then at the sole discretion of the Holder,
the Conversion Price hereunder may equal such par value for such conversion and the Conversion Amount for such conversion may
be increased to include Additional Principal, where “Additional Principal” means such additional amount to be added
to the Conversion Amount to the extent necessary to cause the number of conversion shares issuable upon such conversion to equal
the same number of conversion shares as would have been issued had the Conversion Price not been adjusted by the Holder to the
par value price. The Conversion Price is subject to equitable adjustments for stock splits, stock dividends or rights offerings
by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower, combinations,
recapitalization, reclassifications, extraordinary distributions and similar events. Holder shall be entitled to deduct $1,500.00
from the conversion amount in each Notice of Conversion to cover Holder’s fees associated with each Notice of Conversion,
provided, however, that the aforementioned deduction shall only apply for the initial ten (10) conversions under this Note.

 

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

 

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

 

1.4
Method of Conversion.

 

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

 

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

 

    	3

     

    

 

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

 

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

 

    	4

     

    

 

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

 

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

 

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

 

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

 

    	5

     

    

 

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

 

1.6
Effect of Certain Events.

 

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

 

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

 

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

 

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

 

(e)
Dilutive Issuance. If the Borrower, at any time while this Note or any amounts due hereunder are outstanding, issues, sells
or grants (or has issued, sold or granted as of the Issue Date, as the case may be) any option to purchase, or sells or grants
any right to reprice, or otherwise disposes of, or issues (or has sold or issued, as the case may be, or announces any sale, grant
or any option to purchase or other disposition), any Common Stock or other securities convertible into, exercisable for, or otherwise
entitle any person or entity the right to acquire, shares of Common Stock (including, without limitation, upon conversion of this
Note, and any convertible notes or warrants outstanding as of or following the Issue Date), in each or any case at an effective
price per share that is lower than the then Conversion Price (such lower price, the “Base Conversion Price” and such
issuances, collectively, a “Dilutive Issuance”) (it being agreed that if the holder of the Common Stock or other securities
so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise
or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance,
be entitled to receive shares of Common Stock at an effective price per share that is lower than the Conversion Price, such issuance
shall be deemed to have occurred for less than the Conversion Price on such date of the Dilutive Issuance), then the Conversion
Price shall be reduced, at the option of the Holder, to a price equal to the Base Conversion Price. Such adjustment shall be made
whenever such Common Stock or other securities are issued. Notwithstanding the foregoing, no adjustment will be made under this
Section 1.6(e) in respect of an Exempt Issuance. In the event of an issuance of securities involving multiple tranches or closings,
any adjustment pursuant to this Section 1.6(e) shall be calculated as if all such securities were issued at the initial closing.

 

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

 

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

 

1.7
[Intentionally Omitted].

 

    	7

     

    

 

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

 

1.9
Prepayment. At any time prior to the date that an Event of Default occurs under this Note (the “Prepayment Period”),
the Borrower shall have the right, exercisable on one (1) Trading Day prior written notice to the Holder of the Note, to prepay
the outstanding Principal Amount and interest then due under this Note in accordance with this Section 1.9. Any notice of prepayment
hereunder (an “Optional Prepayment Notice”) shall be delivered to the Holder of the Note at its registered addresses
and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall
be one (1) Trading Day from the date of the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional
Prepayment Date”), the Borrower shall make payment of the amounts designated below to or upon the order of the Holder as
specified by the Holder in writing to the Borrower at least one (1) business day prior to the Optional Prepayment Date. If the
Borrower exercises its right to prepay the Note in accordance with this Section 1.9, the Borrower shall make payment to the Holder
of an amount in cash equal to the sum of: (w) 100% multiplied by the Principal Amount then outstanding plus (x) accrued
and unpaid interest on the Principal Amount to the Optional Prepayment Date.

 

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

 

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

 

ARTICLE
II. RANKING AND CERTAIN COVENANTS

 

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

 

2.2
[Intentionally Omitted].

 

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

 

2.4
[Intentionally Omitted].

 

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

 

    	8

     

    

 

2.6
[Intentionally Omitted].

 

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

 

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

 

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

 

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

 

ARTICLE
III. EVENTS OF DEFAULT

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	10

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE
IV. MISCELLANEOUS

 

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

 

    	11

     

    

 

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

 

If
to the Borrower, to:

 

SIMPLICITY
ESPORTS AND GAMING COMPANY

7000
W. Palmetto Park Rd., Suite 505

Boca
Raton, FL 33433

Attention:
Jed Kaplan

e-mail:
jkaplan@simplicityesports.com

 

If
to the Holder:

 

_____________________

_____________________

e-mail:
_______________

 

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

 

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

 

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

 

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

 

    	12

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

    	13

     

    

 

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

 

4.14
[Intentionally Omitted].

 

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

 

4.16
[Intentionally Omitted].

 

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

 

	Payment Date:	 	Payment Amount:	 
	 	 	 	 
	2/23/2021	 	$	84,000.00	 
	3/23/2021	 	$	84,000.00	 
	4/23/2021	 	$	84,000.00	 
	5/21/2021	 	$	84,000.00	 
	6/23/2021	 	$	84,000.00	 
	7/23/2021	 	$	84,000.00	 
	8/23/2021	 	$	84,000.00	 
	9/23/2021	 	$	84,000.00	 
	10/22/2021	 	$	84,000.00	 
	11/23/2021	 	$	84,000.00	 

 

(a)
With respect to the first Amortization Payment originally due on February 23, 2021 (the “First Amortization Payment”),
the Company may notify the Holder on or before February 23, 2021, that the Company is electing to extend the due date of the First
Amortization Payment to March 23, 2021 (the “First Amortization Payment Extension”) as further provided herein. If
the Company exercises the First Amortization Payment Extension, then the First Amortization Payment shall be due on March 23,
2021 and the Company shall pay $8,400.00 (the “First Amortization Payment Extension Fee”) to the Holder on or before
February 23, 2021. For the avoidance of doubt, the First Amortization Payment Extension shall not affect the due date of any other
Amortization Payment and the First Amortization Payment Extension Fee shall not reduce the amounts owed under the Note. The Company
shall not be permitted to exercise the First Amortization Payment Extension if an Event of Default occurs under the Note.

 

    	14

     

    

 

(b)
If the Company exercised the First Amortization Payment Extension and fully complied with Section 4.17(a) of this Note, then the
Company may notify the Holder on or before March 23, 2021, that the Company is electing to further extend the due date of the
First Amortization Payment to April 23, 2021 (the “Additional First Amortization Payment Extension”) as further provided
herein. If the Company exercises the Additional First Amortization Payment Extension, then the First Amortization Payment shall
be due on April 23, 2021 and the Company shall pay $8,400.00 (the “Additional First Amortization Payment Extension Fee”)
to the Holder on or before March 23, 2021. For the avoidance of doubt, the Additional First Amortization Payment Extension shall
not affect the due date of any other Amortization Payment and the Additional First Amortization Payment Extension Fee shall not
reduce the amounts owed under the Note. The Company shall not be permitted to exercise the Additional First Amortization Payment
Extension if an Event of Default occurs under the Note.

 

(c)
With respect to the second Amortization Payment originally due on March 23, 2021 (the “Second Amortization Payment”),
the Company may notify the Holder on or before March 23, 2021, that the Company is electing to extend the due date of the Second
Amortization Payment to April 23, 2021 (the “Second Amortization Payment Extension”) as further provided herein. If
the Company exercises the Second Amortization Payment Extension, then the Second Amortization Payment shall be due on April 23,
2021 and the Company shall pay $8,400.00 (the “Second Amortization Payment Extension Fee”) to the Holder on or before
March 23, 2021. For the avoidance of doubt, the Second Amortization Payment Extension shall not affect the due date of any other
Amortization Payment and the Second Amortization Payment Extension Fee shall not reduce the amounts owed under the Note. The Company
shall not be permitted to exercise the Second Amortization Payment Extension if an Event of Default occurs under the Note.

 

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

 

[signature
page follows]

 

    	15

     

    

 

IN
WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer on November 23, 2020.

 

SIMPLICITY
ESPORTS AND GAMING COMPANY

 

	By:	 	 
	Name:
    	Jed
    Kaplan	 
	Title:
    	Chief
    Executive Officer	 

 

    	16

     

    

 

EXHIBIT
A — NOTICE OF CONVERSION

 

The
undersigned hereby elects to convert $                     principal
amount of the Note (defined below) into that number of shares of Common Stock to be issued pursuant to the conversion of the Note
(“Common Stock”) as set forth below, of SIMPLICITY ESPORTS AND GAMING COMPANY, a Delaware corporation (the
“Borrower”), according to the conditions of the self-amortization promissory note of the Borrower dated as of November
23, 2020 (the “Note”), as of the date written below. No fee will be charged to the Holder for any conversion, except
for transfer taxes, if any.

 

Box
Checked as to applicable instructions:

 

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

 

 

	 	Date
    of Conversion:	 
	 	Applicable
    Conversion Price:	$	 
	 	Costs
        Incurred by the Undersigned to Convert

        the
        Note into Shares of Common Stock:
	 

        $
	 
	 	Number
        of Shares of Common Stock to be

        Issued
        Pursuant to Conversion of the Note:
	 

         
	 
	 	Amount
    of Principal Balance Due remaining Under the Note after this conversion:	 

         
	 

 

	By:	 	 
	Name:	 	 
	Title:	 	 
	Date:

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