Document:

NextPlay Technologies, Inc. 8-K

Exhibit 10.2 

 

 

SECURED
PROMISSORY
NOTE

 

	Effective Date: October 22, 2021	U.S. $1,665,000.00

 

FORVALUERECEIVED,NEXTPLAY
 TECHNOLOGIES, INC.,aNevadacorporation (“Borrower”),
promises to pay to STREETERVILLE CAPITAL, LLC, a Utah limited
liability company, or its successors or assigns (“Lender”), $1,665,000.00 and any interest, fees, charges, and late
fees accrued hereunder on the date that is twelve (12) months after the Purchase Price Date (the “Maturity Date”)
in accordance with the terms set forth herein and to pay interest on the Outstanding Balance at the rate of ten percent (10%) per annum
from the Purchase Price Date until the same is paid in full. All interest calculations hereunder shall be computed on the basis of a
360-day year comprised of twelve (12) thirty (30) day months, shall compound daily and shall be payable in accordance with the terms
of this Note. This Secured Promissory Note (this “Note”) is issued and made effective as of October 22, 2021 (the
“Effective Date”). This Note is issued pursuant to that certain Note Purchase Agreement dated October 22, 2021, as
the same may be amended from time to time, by and between Borrower and Lender (the “Purchase Agreement”). Certain
capitalized terms used herein are defined in Attachment 1 attached hereto and incorporated herein by this reference.

 

This
Note carries an OID of $150,000.00. In addition, Borrower agrees to pay $15,000.00 to Lender to cover Lender’s legal fees,
accounting costs, due diligence, monitoring and other transaction costs incurred in connection with the purchase and sale of this Note
(the “Transaction Expense Amount”), all of the Transaction Expense Amount and the OID are fully earned and included
in the initial principal balance of this Note as of the Purchase Price Date. The purchase price for this Note shall be $1,500,000.00
(the “Purchase Price”), computed as follows: $1,665,000.00 original principal balance, less the OID, less the Transaction
Expense Amount. The Purchase Price shall be payable by Lender by wire transfer of immediately available funds.

 

		1.	Payments; Etc.

 

1.1. 
Payment. All payments owing hereunder shall be in lawful money of the United States of America and delivered to Lender
at the address or bank account furnished by Lender to Borrower for that purpose. All payments shall be applied first to (a) Lender’s
reasonable costs of collection, if any, then to (b) fees and charges hereunder, if any, then to (c) accrued and unpaid interest hereunder,
and thereafter, to (d) principal hereunder.

 

1.2. 
Prepayment. Borrower may pay all or any portion of the Outstanding Balance earlier than it is due; provided that
in the event Borrower elects to prepay all or any portion of the Outstanding Balance it shall pay to Lender 110% of the portion of the
Outstanding Balance Borrower elects to prepay. Early payments of less than all principal, fees and interest outstanding will not, unless
agreed to by Lender in writing, relieve Borrower of Borrower’s remaining obligations hereunder. For the avoidance of doubt, Equity
Payments shall be considered prepayments under this Section 1.2.

 

1.3. 
Equity Payment Failure. Upon the occurrence of each Equity Payment Failure, the Outstanding Balance shall automatically
be increased by an amount equal to ten percent (10%) of the then- current Outstanding Balance. 

 

1.4.  Transaction
Condition. No later than thirty (30) days after the Closing Date (the “Deadline”), HotPlay must have become a
co-borrower on this Note, that certain Secured Promissory Note given by Borrower for the benefit of Lender dated November 23, 2020
(the “November 2020 Note”), and that certain Secured Promissory Note given by Borrower for the benefit of Lender
dated March 23, 2021 (the “March 2021 Note,” and together with the November 2020 Note, the
“Notes”). In the event that HotPlay has not become a co-borrower on the Notes by the Deadline, the Outstanding
Balance shall automatically increase by an amount equal to twenty-five percent (25%) of the then-current outstanding balance, but,
for the avoidance of doubt, such failure will not be considered an Event of Default (as defined below) hereunder.

 

     

     

    

 

2. 
Security. This Note is secured by the Security Agreement (as defined in the Purchase Agreement), executed by Borrower in
favor of Lender encumbering the collateral set forth therein, as more specifically set forth in the Security Agreement, all the terms
and conditions of which are hereby incorporated into and made a part of this Note.

 

3. 
 Redemption. Beginning on the date that is six (6) months after the Purchase Price Date, Lender
shall have the right, exercisable at any time in its sole and absolute discretion, to redeem any amount of this Note up to the
Maximum Monthly Redemption Amount (such amount, the “Redemption Amount”) per calendar month by providing written notice
to Borrower (each, a “Redemption Notice”). For the avoidance of doubt, Lender may submit to Borrower one (1) or more
Redemption Notices in any given calendar month so long as the aggregate amount being redeemed in such month does not exceed the Maximum
Monthly Redemption Amount. Upon receipt of any Redemption Notice, Borrower shall pay the applicable Redemption Amount in cash to Lender
within seven (7) Trading Days of Borrower’s receipt of such Redemption Notice. Notwithstanding the foregoing, if Borrower does
not pay the applicable Redemption Amount in cash to Lender within three (3) Trading Days of Borrower’s
receipt of a Redemption Notice, then an amount equal to twenty-five percent (25%) of such Redemption Amount will be added to the
Outstanding Balance. Borrower shall have the right to defer up to three (3) separate redemptions for up to thirty (30) days each by providing
written notice to Lender within three (3) Trading Days of its receipt of a Redemption Notice. In the event Borrower elects to exercise
its deferral right, the Outstanding Balance shall automatically be increased by two percent (2%) of the Outstanding Balance as of the
date Borrower exercises such deferral right. 

 

		4.	Defaults and Remedies.

 

4.1.  Defaults.
The following are events of default under this Note (each, an “Event of Default”): (a) Borrower fails to pay any
principal, interest, fees, charges, or any other amount when due and payable hereunder (other than an Equity Payment Failure); (b) a
receiver, trustee or other similar official shall be appointed over Borrower or a material part of its assets and such appointment
shall remain uncontested for twenty (20) days or shall not be dismissed or discharged within sixty (60) days; (c) Borrower becomes
insolvent or generally fails to pay, or admits in writing its inability to pay, its debts as they become due, subject to applicable
grace periods, if any; (d) Borrower makes a general assignment for the benefit of creditors; (e) Borrower files a petition for
relief under any bankruptcy, insolvency or similar law (domestic or foreign); (f) an involuntary bankruptcy proceeding is commenced
or filed against Borrower and is not dismissed or stayed within sixty (60) days; (g) Borrower or any pledgor, trustor, or guarantor
of this Note defaults or otherwise fails to observe or perform any covenant, obligation, condition or
agreement of Borrower or such pledgor, trustor, or guarantor contained herein or in any other Transaction Document (as
defined in the Purchase Agreement), other than those specifically set forth in this Section 4.1 and Section 4 of the Purchase
Agreement; (h) any representation, warranty or other statement made or furnished by or on behalf of Borrower or any pledgor,
trustor, or guarantor of this Note to Lender herein, in any Transaction Document, or otherwise in connection with the issuance of
this Note is false, incorrect, incomplete or misleading in any material respect when made or furnished; (i) the occurrence of a
Fundamental Transaction without Lender’s prior written consent; (j) any United States money judgment, writ or similar process
is entered or filed against Borrower or any subsidiary of Borrower or any of its property or other assets for more than
$1,000,000.00, and shall remain unvacated, unbonded or unstayed for a period of twenty (20) calendar days unless otherwise consented
to by Lender; and (k) Borrower fails to observe or perform any covenant set forth in Section 4 of the Purchase Agreement (other than
the covenant with respect to Equity Payment Failures). The occurrence of any event set forth in Section 4.1(g) – (k) above
shall not be considered an Event of Default if such event is cured within fifteen (15) days of the occurrence thereof. No
“Event of Default” shall be deemed to have occurred hereunder until the end of any applicable cure period
relating thereto, assuming such event which would have otherwise caused an Event of Default at the end of the applicable cure
period, is not cured by the end of such applicable cure period.

 

    2 

     

    

 

4.2. 
Remedies. At any time and from time to time after Lender becomes aware of the occurrence of any Event of Default, Lender
may accelerate this Note by written notice to Borrower, with the Outstanding Balance becoming
immediately due and payable in cash at the Mandatory Default Amount. Notwithstanding the foregoing, at any time following the occurrence
of any Event of Default, Lender may, at its option, elect to increase the Outstanding Balance by applying the Default Effect (subject
to the limitation set forth below) via written notice to Borrower without accelerating the Outstanding Balance, in which event the Outstanding
Balance shall be increased as of the date of the occurrence of the applicable Event of Default pursuant to the Default Effect, but the
Outstanding Balance shall not be immediately due and payable unless so declared by Lender (for the avoidance of doubt, if Lender elects
to apply the Default Effect pursuant to this sentence, it shall reserve the right to declare the Outstanding Balance immediately due
and payable at any time and no such election by Lender shall be deemed to be a waiver of its right to declare the Outstanding Balance
immediately due and payable as set forth herein unless otherwise agreed to by Lender in writing). Notwithstanding the foregoing, upon
the occurrence of any Event of Default described in clauses (b), (c), (d), (e) or (f) of Section 4.1, the Outstanding Balance as of the
date of acceleration shall become immediately and automatically due and payable in cash at the
Mandatory Default Amount, without any written notice required by Lender. At any time following the occurrence of any Event of
Default, upon written notice given by Lender to Borrower, interest shall accrue on the Outstanding Balance beginning on the date the
applicable Event of Default occurred at an interest rate equal to the lesser of twenty-two percent (22%) per annum or the maximum rate
permitted under applicable law (“Default Interest”).
In connection with acceleration described herein, Lender need not provide, and Borrower hereby waives, any presentment, demand,
protest or other notice of any kind, and Lender may immediately and without expiration of any grace period enforce any and all of its
rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled
by Lender at any time prior to payment hereunder and Lender shall have all rights as a holder of the Note until such time, if any, as
Lender receives full payment pursuant to this Section 4.2. No such rescission or annulment shall affect any subsequent Event of Default
or impair any right consequent thereon. Nothing herein shall limit Lender’s right to pursue any other remedies available to it
at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.

 

5. 
Unconditional Obligation; No Offset. Borrower acknowledges that this Note is an unconditional, valid, binding and enforceable
obligation of Borrower not subject to offset, deduction or counterclaim of any kind. Borrower hereby waives any rights of offset it now
has or may have hereafter against Lender, its successors and assigns, and agrees to make the payments called for herein in accordance
with the terms of this Note. 

 

6. Waiver. No waiver of any provision of
this Note shall be effective unless it is in the form of a writing signed by the party
granting the waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of any other
provision or consent to any other prohibited action, whether or not similar. No waiver or consent shall constitute a continuing
waiver or consent or commit a party to provide a waiver or consent in the future except to the extent specifically set forth in
writing.

  

    3 

     

    

 

7. Right
of First Refusal. In the event Borrower desires to make a Restricted Issuance, it must first provide notice of such proposed
Restricted Issuance to Lender, which notice must include all of the material terms of the Restricted Issuance. Lender shall then have
a period of ten (10) days to provide financing to the Company on the same terms as outlined in the notice of the potential Restricted
Issuance. If Lender elects to not provide such financing, then Borrower may elect to make the Restricted Issuance on the same terms that
were offered to Lender. In the event Borrower makes such Restricted Issuance, the Outstanding Balance will automatically be increased
by three percent (3%) for each time Borrower makes a Restricted Issuance after Lender has refused to provide financing on the same terms,
which increase will be effective as of the date of each Restricted Issuance; provided, however, the foregoing three percent (3%)
fee will not apply if the funds raised in such Restricted Issuance are used to repay this Note in full. In the event Borrower fails to
notify Lender of a potential Restricted Issuance and offer Lender a right of first refusal with respect to such Restricted Issuance,
the Outstanding Balance will automatically be increased by ten percent (10%) for each time Borrower makes a Restricted Issuance without
first offering Lender the right of first refusal to match the terms of the Restricted Issuance, which increase will be effective as of
the date of each Restricted Issuance. For the avoidance of doubt, in the event Borrower offers Lender the right to match a potential
Restricted Issuance, but subsequently changes the terms of such potential Restricted Issuance after Lender has refused to match the terms
originally offered to it, Borrower must again comply with the terms of this Section as the alteration of the terms of such potential
Restricted Issuance shall constitute a new Restricted Issuance. It is understood and agreed that there are outstanding accrued dividends
on Series A Preferred Stock that at the board’s direction may be converted into a promissory note or a convertible promissory note
and that such conversion will be recognized as an outstanding obligation and not result in an Event of Default or result in an increase
in the Outstanding Balance. 

 

8. 
Opinion of Counsel. In the event that an opinion of counsel is needed for any matter related to this Note, Lender has the
right to have any such opinion provided by its counsel. 

 

9. Governing
Law; Venue. This Note shall be construed and enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Note shall be governed by, the internal laws of the State of Utah, without giving
effect to any choice of law or conflict of law provision or rule (whether of the State of Utah
or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Utah. The
provisions set forth in the Purchase Agreement to determine the proper venue for any disputes are incorporated herein by this
reference.

 

10. 
Arbitration of Disputes. By its issuance or acceptance of this Note, each party agrees to be bound by the Arbitration Provisions
(as defined in the Purchase Agreement) set forth as an exhibit to the Purchase Agreement.

 

11. 
Cancellation. After repayment of the entire Outstanding Balance, this Note
shall be deemed paid in full, shall automatically be deemed canceled, and shall not be reissued.

 

12. 
Amendments. The prior written consent of both parties hereto shall be required for any change or amendment to this Note.

 

13. 
Assignments. Borrower may not assign this Note without the prior written consent of Lender. This Note may be offered, sold,
assigned or transferred by Lender to any of its affiliates without the consent of Borrower, so
long as such transfer is in accordance with applicable federal and state securities laws and written notice is provided to Borrower. 

 

14. 
Notices. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be
given in accordance with the subsection of the Purchase Agreement titled “Notices.” 

 

    4 

     

    

 

15. 
Liquidated Damages. Lender and Borrower agree that in the event Borrower fails to comply with any of the terms or provisions
of this Note, Lender’s damages would be uncertain and difficult (if not impossible) to accurately estimate because of the
parties’ inability to predict future interest rates, future share prices, future trading volumes and other relevant factors. Accordingly,
Lender and Borrower agree that any fees, balance adjustments, Default Interest or other charges assessed under this Note are not penalties
but instead are intended by the parties to be, and shall be deemed, liquidated damages. 

 

16. 
Severability. If any part of this Note is construed to be in violation of any law, such part shall be modified to achieve
the objective of Borrower and Lender to the fullest extent permitted by law and the balance of this Note shall remain in full force and
effect. 

 

[Remainder of page intentionally left blank;
signature page follows] 

 

    5 

     

    

  

IN WITNESS WHEREOF, Borrower has caused this Note to be duly
executed as of the Effective Date.

 

	 	BORROWER:
	 	 
	 	Nextplay Technologies, INC. 
	 	 	 
	 	By:	/s/ Bill Kerby
			Bill Kerby, CEO

 

ACKNOWLEDGED, ACCEPTED AND AGREED:

 

LENDER:

 

Streeterville
Capital, LLC

 

	By:	/s/ John M. Fife	 
	 	John M. Fife, President	 

 

[Signature Page to Secured
Promissory Note]

 

     

     

    

 

ATTACHMENT 1

DEFINITIONS 

 

For purposes of this Note, the following
terms shall have the following meanings: 

 

A1. “Default Effect”
means multiplying the Outstanding Balance as of the date the applicable Event of Default occurred by (a) fifteen percent (15%) for each
occurrence of any Major Default, or (b) five percent (5%) for each occurrence of any Minor Default, and then adding the resulting product
to the Outstanding Balance as of the date the applicable Event of Default occurred, with the sum of the foregoing then becoming the Outstanding
Balance under this Note as of the date the applicable Event of Default occurred; provided that the Default Effect may only be applied
three (3) times hereunder with respect to Major Defaults and three (3) times hereunder with respect to Minor Defaults. Notwithstanding
the foregoing, in no event shall the foregoing balance increases exceed a maximum of thirty percent (30%) of the Outstanding Balance immediately
prior to the first occurrence of an Event of Default in the aggregate.

 

A2. “Equity Payment”
means a payment that is required to be made by Borrower to Lender pursuant to Section 4(iv) of the Purchase Agreement.

 

A3. “Equity Payment Failure”
means the failure by Borrower to make any Equity Payment within ten (10) days of the consummation of the applicable financing.

 

A4. “Fundamental
Transaction” means that (a) (i) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related
transactions, consolidate or merge with or into (whether or not Borrower or any of its subsidiaries is the surviving corporation)
any other person or entity, or (ii) Borrower or any of its subsidiaries shall, directly or
indirectly, in one or more related transactions, sell, lease, license, assign, transfer, convey or otherwise dispose of all
or substantially all of its respective properties or assets to any other person or entity, or (iii) Borrower or any of its
subsidiaries shall, directly or indirectly, in one or more related transactions, allow any other person or entity to make a
purchase, tender or exchange offer that is accepted by the holders of more than 50% of the outstanding shares of voting stock of
Borrower (not including any shares of voting stock of Borrower held by the person or persons making or party to, or associated or
affiliated with the persons or entities making or party to, such purchase, tender or exchange offer), or (iv) Borrower or any of its
subsidiaries shall, directly or indirectly, in one or more related transactions, consummate a stock or share purchase agreement or
other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement)
with any other person or entity whereby such other person or entity acquires more than 50% of the outstanding shares of voting stock
of Borrower (not including any shares of voting stock of Borrower held by the other persons or entities making or party to, or
associated or affiliated with the other persons or entities making or party to, such stock or share purchase agreement or other
business combination), or (v) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related
transactions, reorganize, recapitalize or reclassify the Common Stock, other than an increase in the number of authorized shares of
Borrower’s Common Stock, or reverse splits of its outstanding and authorized shares of Common Stock to meet Nasdaq listing
requirements or (b) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and
14(d) of the 1934 Act and the rules and regulations promulgated thereunder) is or shall become the “beneficial owner”
(as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by
issued and outstanding voting stock of Borrower.

 

A5. “HotPlay” means
HotPlay Enterprises Limited.

 

A6. “Major Default”
means any Event of Default occurring under Sections 4.1(a) or 4.1(k).

 

A7. “Mandatory Default Amount”
means the Outstanding Balance following the application of the Default Effect.

 

A8. “Maximum Monthly Redemption Amount”
means $375,000.

 

A9. “Minor Default” means any
Event of Default that is not a Major Default. A10. “OID” means an original issue discount.

 

A11. “Outstanding Balance”
means as of any date of determination, the Purchase Price, as reduced or increased, as the case may be, pursuant to the terms hereof
for payment, offset, or otherwise, plus the OID, the Transaction Expense Amount, accrued but unpaid interest, collection and
enforcements costs (including attorneys’ fees) incurred by Lender, transfer, stamp, issuance and similar taxes and fees
incurred under this Note.

 

     

     

    

 

A12. “Purchase Price Date” means the
date the Purchase Price is delivered by Lender to Borrower.

 

A13. “Restricted Issuance”
means the issuance of any promissory note, debenture, or other instrument that evidences a debt obligation of Borrower to any person or
entity who is not an officer or director of the Company, or which is not HotPlay or any affiliate of HotPlay or the Company. The term
“Restricted Issuance” shall also not include any promissory note, debenture, or other instrument that evidences a debt obligation
of Borrower which is offered to be sold, or which is sold, to any governmental (local, state or federal) agency or entity, nor shall it
include any governmental (local, state or federal) grants.

 

A14. “Trading Day”
means any day on which the New York Stock Exchange (or such other principal market for the Common Stock) is open for trading.

 

[Remainder of page intentionally left blank]NextPlay Technologies, Inc. 8-K

Exhibit 10.3 

 

SE
C U R I T Y AG R E E M E N T

 

THIS
SECURITY AGREEMENT (this “Agreement”),
dated as of October 22, 2021, is executed by NextPlay Technologies, Inc., a Nevada corporation (“Debtor”), in favor
of Streeterville Capital, LLC, a Utah limited liability company (“Secured Party”).

 

A.                
Debtor has issued to Secured Party a certain Secured Promissory Note of even date herewith, as may be amended from time to time,
in the original face amount of $1,665,000.00 (the “Note”).

 

B.                 
In order to induce Secured Party to extend the credit evidenced by the Note, Debtor has agreed to enter into this Agreement and
to grant Secured Party a security interest in the Collateral (as defined below).

 

NOW, THEREFORE,
in consideration of the above recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged,
Debtor hereby agrees with Secured Party as follows:

 

1. 
Definitions and Interpretation. When used in this Agreement, the following terms have the following respective meanings:

 

“Collateral” has
the meaning given to that term in Section 2 hereof.

 

“Intellectual
Property” means all patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses (software or otherwise),
information, know-how, inventions, discoveries, published and unpublished works of authorship, processes, any and all other proprietary
rights, and all rights corresponding to all of the foregoing throughout the world, now owned and existing or hereafter arising, created
or acquired.

 

“Lien”
shall mean, with respect to any property, any security interest, mortgage, pledge, lien, claim, charge or other encumbrance in, of, or
on such property or the income therefrom, including, without limitation, the interest of a vendor or lessor under a conditional sale agreement,
capital lease or other title retention agreement, or any agreement to provide any of the foregoing, and the filing of any financing statement
or similar instrument under the UCC or comparable law of any jurisdiction.

 

“Obligations”
means (a) all loans, advances, future advances, debts, liabilities and obligations, howsoever arising, owed by Debtor or any of its
affiliates and/or subsidiaries to Secured Party or any affiliate of Secured Party of every kind and description, now existing or
hereafter arising, whether created by the Note, this Agreement, that certain Note Purchase Agreement of even date herewith, entered
into by and between Debtor and Secured Party (the “Purchase Agreement”), any other Transaction Documents (as
defined in the Purchase Agreement), any other agreement between Debtor or any affiliate or subsidiary of Secured Party) and Secured
Party (or any affiliate of Secured Party) or any other promissory note issued by Debtor (or any affiliate or subsidiary of Debtor)
in favor of Secured Party (or any affiliate of Secured Party), any modification or amendment to any of the foregoing, guaranty of
payment or other contract or by a quasi-contract, tort, statute or other operation of law, whether incurred or owed directly to
Secured Party or as an affiliate of Secured Party or acquired by Secured Party or an affiliate of Secured Party by purchase, pledge
or otherwise, (b) all costs and expenses, including attorneys’ fees, incurred by Secured Party or any affiliate of Secured
Party in connection with the Note or in connection with the collection or enforcement of any portion of the indebtedness,
liabilities or obligations described in the foregoing clause (a), (c) the payment of all other sums, with interest thereon, advanced
in accordance herewith to protect the security of this Agreement, and (d) the performance of the covenants and agreements of Debtor
(or any of its affiliates or subsidiaries) contained in this Agreement and all other Transaction Documents.

 

 

    1 

    	 

    

 

“Permitted
Liens” means (a) Liens for taxes not yet delinquent or Liens for taxes being contested in good faith and by appropriate proceedings
for which adequate reserves have been established,

(b) Liens in favor of Secured Party under this Agreement or
arising under the other Transaction Documents or prior agreements between Debtor and Secured Party (or its affiliates).

 

“UCC”
means the Uniform Commercial Code as in effect in the jurisdiction whose laws would govern the security interest in, including without
limitation the perfection thereof, and foreclosure of the applicable Collateral, or any equivalent laws in any other jurisdiction that
govern the grant of a security interest in the types of assets encumbered by this Agreement.

 

Unless otherwise defined herein, all terms defined in the
UCC have the respective meanings given to those terms in the UCC.

 

2. 
Grant of Security Interest. As security for the Obligations, Debtor hereby pledges to Secured Party and grants to Secured
Party a security interest in all right, title, interest, claims and demands of Debtor in and to the property described in Schedule
A hereto, and all replacements, proceeds, products, and accessions thereof (collectively, the “Collateral”), which
Security Interest shall be subordinate only to the Permitted Liens.

 

3. 
Authorization to File Financing Statements. Debtor hereby irrevocably authorizes Secured Party at any time and from time
to time to file in any filing office in any Uniform Commercial Code jurisdiction or other jurisdiction of Debtor or its subsidiaries any
financing statements or documents having a similar effect and amendments thereto that provide any other information required by the Uniform
Commercial Code (or similar law of any non-United States jurisdiction, if applicable) of such state or jurisdiction for the sufficiency
or filing office acceptance of any financing statement or amendment, including whether Debtor is an organization, the type of organization
and any organization identification number issued to Debtor. Debtor agrees to furnish any such information to Secured Party promptly upon
Secured Party’s request.

 

4.                  
General Representations and Warranties. Debtor represents and warrants to Secured Party that (a) Debtor is the owner of
the Collateral and that no other person has any right, title, claim or interest (by way of Lien or otherwise) in, against or to the Collateral,
other than Permitted Liens, (b) upon the filing of UCC-1 financing statements with the appropriate state office (or an equivalent in the
appropriate foreign office), Secured Party shall have a perfected security interest in the Collateral to the extent that a security interest
in the Collateral can be perfected by such filing, except for Permitted Liens, (c) Debtor has received at least a reasonably equivalent
value in exchange for entering into this Agreement, (d) Debtor is not insolvent, as defined in any applicable state or federal statute,
nor will Debtor be rendered insolvent by the execution and delivery of this Agreement to Secured Party; and (e) as such, this Agreement
is a valid and binding obligation of Debtor.

 

		5.	Additional Covenants. Debtor hereby agrees:

 

5.1. 
to perform all acts that may be necessary to maintain, preserve, protect and perfect in the Collateral, the Lien granted to Secured
Party therein, and the perfection and priority of such Lien;

 

5.2. 
to procure, execute (including endorse, as applicable), and deliver from time to time any endorsements, assignments, financing
statements, certificates of title, and all other instruments, documents and/or writings reasonably deemed necessary or appropriate by
Secured Party to perfect, maintain and protect Secured Party’s Lien hereunder and the priority thereof;

 

    2 

    	 

    

 

		5.3.	to provide at least fifteen (15) days prior written notice to Secured Party of any of

the following events: (a) any changes
or alterations of Debtor’s name, (b) any changes with respect to Debtor’s address or principal place of business, (c) the
formation of any subsidiaries of Debtor in North America, or (d) any changes in location of the Collateral;

 

5.4. 
upon the occurrence of an Event of Default (as defined in the Note) under the Note and, thereafter, at Secured Party’s request,
to endorse (up to the outstanding amount under such promissory notes at the time of Secured Party’s request), assign and deliver
any promissory notes and all other instruments, documents, or writings included in the Collateral to Secured Party, accompanied by such
instruments of transfer or assignment duly executed in blank as Secured Party may from time to time specify;

 

5.5. 
to the extent the Collateral is not delivered to Secured Party pursuant to this Agreement, to keep the Collateral at the principal
office of Debtor (unless otherwise agreed to by Secured Party in writing), and not to relocate the Collateral to any other locations without
the prior written consent of Secured Party;

 

5.6. 
not to sell or otherwise dispose, or offer to sell or otherwise dispose, of the Collateral or any interest therein (other than
inventory in the ordinary course of business);

 

5.7. 
not to, directly or indirectly, allow, grant or suffer to exist any Lien upon any of the Collateral, other than Permitted Liens;

 

5.8. 
not to grant any license or sublicense under any of its Intellectual Property, or enter into any other agreement with respect to
any of its Intellectual Property, except in the ordinary course of Debtor’s business;

 

5.9. 
to the extent commercially reasonable and in Debtor’s good faith business judgment: (a) to file and prosecute diligently
any patent, trademark or service mark applications pending as of the date hereof or hereafter until all Obligations shall have been paid
in full, (b) to make application on unpatented but patentable inventions and on trademarks and service marks, (c) to preserve and maintain
all rights in all of its Intellectual Property, and (d) to ensure that all of its Intellectual Property is and remains enforceable. Any
and all costs and expenses incurred in connection with each of Debtor’s obligations under this Section 5.9 shall be borne by Debtor.
Debtor shall not knowingly and unreasonably abandon any right to file a patent, trademark or service mark application, or abandon any
pending patent application, or any other of its Intellectual Property, without the prior written consent of Secured Party except for Intellectual
Property that Debtor determines, in the exercise of its good faith business judgment, is not or is no longer material to its business;

 

5.10.  
upon the request of Secured Party at any time or from time to time, and at the sole cost and expense (including, without limitation,
reasonable attorneys’ fees) of Debtor, Debtor shall take all actions and execute and deliver any and all instruments, agreements,
assignments, certificates and/or documents reasonably required by Secured Party to collaterally assign any and all of Debtor’s patent,
copyright and trademark registrations and applications now owned or hereafter acquired to and in favor of Secured Party; and

 

5.11.   at
any time amounts paid by Secured Party under the Transaction Documents are used to purchase Collateral, Debtor shall perform all
acts that may be necessary, and otherwise fully cooperate with Secured Party, to cause (a) any such amounts paid by Secured Party to
be disbursed directly to the sellers of any such Collateral, (b) all certificates of title pertaining to such Collateral (as
applicable) to be properly filed and reissued to reflect Secured Party’s Lien on such Collateral, and (c) all such reissued
certificates of title to be delivered to and held by Secured Party.

 

    3 

    	 

    

 

		6.	Authorized Action by Secured Party. Debtor hereby irrevocably appoints Secured Party as

its attorney-in-fact (which appointment
is coupled with an interest) and agrees that Secured Party may perform (but Secured Party shall not be obligated to and shall incur no
liability to Debtor or any third party for failure so to do) any act which Debtor is obligated by this Agreement to perform, and to exercise
such rights and powers as Debtor might exercise with respect to the Collateral, including the right to (a) collect by legal proceedings
or otherwise and endorse, receive and receipt for all dividends, interest, payments, proceeds and other sums and property now or hereafter
payable on or on account of the Collateral; (b) enter into any extension, reorganization, deposit, merger, consolidation or other agreement
pertaining to, or deposit, surrender, accept, hold or apply other property in exchange for the Collateral; (c) make any compromise or
settlement, and take any action Secured Party deems advisable, with respect to the Collateral, including without limitation bringing a
suit in Secured Party’s own name to enforce any Intellectual Property; (d) endorse Debtor’s name on all applications, documents,
papers and instruments necessary or desirable for Secured Party in the use of any Intellectual Property; (e) grant or issue any exclusive
or non-exclusive license under any Intellectual Property to any person or entity; (f) assign, pledge, sell, convey or otherwise transfer
title in or dispose of any Intellectual Property to any person or entity; (g) cause the Commissioner of Patents and Trademarks, United
States Patent and Trademark Office (or as appropriate, such equivalent agency in foreign countries) to issue any and all patents and related
rights and applications to Secured Party as the assignee of Debtor’s entire interest therein; (h) file a copy of this Agreement
with any governmental agency, body or authority, including without limitation the United States Patent and Trademark Office and, if applicable,
the United States Copyright Office or Library of Congress, at the sole cost and expense of Debtor; (i) insure, process and preserve the
Collateral; (j) pay any indebtedness of Debtor relating to the Collateral; (k) execute and file UCC financing statements and other documents,
certificates, instruments and agreements with respect to the Collateral or as otherwise required or permitted hereunder; and (l) take
any and all appropriate action and execute any and all documents and instruments that may be necessary or useful to accomplish the purposes
of this Agreement; provided, however, that Secured Party shall not exercise any such powers granted pursuant to clauses (a) through
(g) above prior to the occurrence of an Event of Default and shall only exercise such powers during the continuance of an Event of Default.
The powers conferred on Secured Party under this Section 6 are solely to protect its interests in the Collateral and shall not impose
any duty upon it to exercise any such powers. Secured Party shall be accountable only for the amounts that it actually receives as a result
of the exercise of such powers, and neither Secured Party nor any of its stockholders, directors, officers, managers, employees or agents
shall be responsible to Debtor for any act or failure to act, except with respect to Secured Party’s own gross negligence or willful
misconduct. Nothing in this Section 6 shall be deemed an authorization for Debtor to take any action that it is otherwise expressly prohibited
from undertaking by way of other provision of this Agreement.

 

		7.	Default and Remedies. 

 

7.1. 
Default. Debtor shall be deemed in default under this Agreement upon the occurrence of an Event of Default.

 

7.2. 
Remedies. Upon the occurrence of any such Event of Default, Secured Party shall have the rights of a secured creditor under the
UCC, all rights granted by this Agreement and by law, including, without limiting the foregoing, (a) the right to require Debtor to assemble
the Collateral and make it available to Secured Party at a place to be designated by Secured Party, and (b) the right to take peaceably
possession of the Collateral, and for that purpose Secured Party may peaceably enter upon
premises on which the Collateral may be situated and remove the Collateral therefrom. Debtor hereby agrees that fifteen (15) days’
notice of a public sale of any Collateral or notice of the date after which a private sale of any Collateral may take place is reasonable.
In addition, Debtor waives any and all rights that it may have to a judicial hearing in advance of the enforcement of any of Secured
Party’s rights and remedies hereunder, including, without limitation, Secured Party’s right following an Event of Default
to take immediate possession of Collateral and to exercise Secured Party’s rights and remedies with respect thereto. Secured Party
may also have a receiver appointed to take charge of all or any portion of the Collateral and to exercise all rights of Secured Party
under this Agreement. Secured Party may exercise any of its rights under this Section 7.2 without demand or notice of any kind. The remedies
in this Agreement, including without limitation this Section 7.2, are in addition to, not in limitation of, any other right, power, privilege,
or remedy, either in law, in equity, or otherwise, to which Secured Party may be entitled. No failure or delay on the part of Secured
Party in exercising any right, power, or remedy will operate as a waiver thereof, nor will any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any other right hereunder. All of Secured Party’s rights and remedies,
whether evidenced by this Agreement or by any other agreement, instrument or document shall be cumulative and may be exercised singularly
or concurrently.

 

    4 

    	 

    

 

7.3. 
Standards for Exercising Rights and Remedies. To the extent that applicable law imposes duties on Secured Party to exercise
remedies in a commercially reasonable manner, Debtor acknowledges and agrees that it is not commercially unreasonable for Secured Party
(a) to fail to incur expenses reasonably deemed significant by Secured Party to prepare Collateral for disposition, (b) to fail to obtain
third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental
or third party consents for the collection or disposition of Collateral to be collected or disposed of, (c) to fail to exercise collection
remedies against account debtors or other persons obligated on Collateral or to fail to remove liens or encumbrances on or any adverse
claims against Collateral, (d) to exercise collection remedies against account debtors and other persons obligated on Collateral directly
or through the use of collection agencies and other collection specialists, (e) to advertise dispositions of Collateral through publications
or media of general circulation, whether or not the Collateral is of a specialized nature, (f) to contact other persons, whether or not
in the same business as Debtor, for expressions of interest in acquiring all or any portion of the Collateral, (g) to hire one or more
professional auctioneers to assist in the disposition of Collateral, whether or not the Collateral is of a specialized nature,

(h)  
to dispose of Collateral by utilizing Internet sites that provide for the auction of assets of the types included in the Collateral
or that have the reasonable capability of doing so, or that match buyers and sellers of assets, (i) to dispose of assets in wholesale
rather than retail markets, (j) to disclaim disposition warranties, (k) to purchase insurance or credit enhancements to insure Secured
Party against risks of loss, collection or disposition of Collateral or to provide to Secured Party a guaranteed return from the collection
or disposition of Collateral, or (l) to the extent deemed appropriate by Secured Party, to obtain the services of other brokers, investment
bankers, consultants and other professionals to assist Secured Party in the collection or disposition of any of the Collateral. Debtor
acknowledges that the purpose of this Section is to provide non-exhaustive indications of what actions or omissions by Secured Party would
fulfill Secured Party’s duties under the UCC in Secured Party’s exercise of remedies against the Collateral and that other
actions or omissions by Secured Party shall not be deemed to fail to fulfill such duties solely on account of not being indicated in this
Section. Without limitation upon the foregoing, nothing contained in this Section shall be construed to grant any rights to Debtor or
to impose any duties on Secured Party that would not have been granted or imposed by this Agreement or by applicable law in the absence
of this Section.

 

7.4.  
shall not be required to marshal any present or future Collateral for, or other assurances of payment of, the Obligations or to
resort to such Collateral or other assurances of payment in any particular order, and all of its rights and remedies hereunder and
in respect of such Collateral and other assurances of payment shall be cumulative and in addition to all other rights and remedies,
however existing or arising. To the extent that it lawfully may, Debtor hereby agrees that it will not invoke any law relating to
the marshalling of Collateral which might cause delay in or impede the enforcement of Secured Party’s rights and remedies
under this Agreement or under any other instrument creating or evidencing any of the Obligations or under which any of the
Obligations is outstanding or by which any of the Obligations is secured or payment thereof is otherwise assured, and, to the extent
that it lawfully may, Debtor hereby irrevocably waives the benefits of all such laws.

 

    5 

    	 

    

 

		7.5.	Application of Collateral Proceeds. The proceeds and/or avails of the Collateral,

or any part thereof, and the proceeds
and the avails of any remedy hereunder (as well as any other amounts of any kind held by Secured Party at the time of, or received by
Secured Party after, the occurrence of an Event of Default) shall be paid to and applied as follows:

 

(a) 
First, to the payment of reasonable costs and expenses, including all amounts expended to preserve the value of the Collateral,
of foreclosure or suit, if any, and of such sale and the exercise of any other rights or remedies, and of all proper fees, expenses, liability
and advances, including reasonable legal expenses and attorneys’ fees, incurred or made hereunder by Secured Party;

 

(b) 
Second, to the payment to Secured Party of the amount then owing or unpaid on the Note (to be applied first to accrued interest
and fees and second to outstanding principal) and all amounts owed under any of the other Transaction Documents or other documents included
within the Obligations; and

 

(c) 
Third, to the payment of the surplus, if any, to Debtor, its successors and assigns, or to whosoever may be lawfully entitled to
receive the same.

 

In the absence of final payment and
satisfaction in full of all of the Obligations, Debtor shall remain liable for any deficiency.

 

		8.	Miscellaneous.

8.1. 
Notices. Any notice required or permitted hereunder shall be given in the manner provided in the subsection titled “Notices”
in the Purchase Agreement, the terms of which are incorporated herein by this reference.

 

8.2. 
Non-waiver. No failure or delay on Secured Party’s part in exercising any right hereunder shall operate as a waiver
thereof or of any other right nor shall any single or partial exercise of any such right preclude any other further exercise thereof or
of any other right.

 

8.3. 
Amendments and Waivers. This Agreement may not be amended or modified, nor may any of its terms be waived, except by written
instruments signed by Debtor and Secured Party. Each waiver or consent under any provision hereof shall be effective only in the specific
instances for the purpose for which given.

 

8.4. 
Assignment. This Agreement shall be binding upon and inure to the benefit of Secured Party and Debtor and their respective
successors and assigns; provided, however, that Debtor may not sell, assign or delegate rights and obligations hereunder without
the prior written consent of Secured Party.

 

8.5.  Cumulative
Rights, etc. The rights, powers and remedies of Secured Party under this Agreement shall be in addition to all rights, powers and
remedies given to Secured Party by virtue of any applicable law, rule or regulation of any governmental authority, or the Note, all
of which rights, powers, and remedies shall be cumulative and may be exercised successively or concurrently without impairing
Secured Party’s rights hereunder. Debtor waives any right to require Secured Party to proceed against any person or entity or
to exhaust any Collateral or to pursue any remedy in Secured Party’s power.

    6 

    

    

 

8.6. 
Partial Invalidity. If any part of this Agreement is construed to be in violation of any law, such part shall be modified
to achieve the objective of the parties to the fullest extent permitted and the balance of this Agreement shall remain in full force and
effect.

 

8.7. 
Expenses. Debtor shall pay on demand all reasonable fees and expenses, including reasonable attorneys’ fees and expenses,
incurred by Secured Party in connection with the custody, preservation or sale of, or other realization on, any of the Collateral or the
enforcement or attempt to enforce any of the Obligations which are not performed as and when required by this Agreement.

 

8.8. 
Entire Agreement. This Agreement and the other Transaction Documents,
taken together, constitute and contain the entire agreement of Debtor and Secured Party with respect to this particular matter and supersede
any and all prior agreements, negotiations, correspondence, understandings and communications between the parties, whether written or
oral, respecting the subject matter hereof.

 

8.9. 
Governing Law; Venue. Except as otherwise specifically set forth herein, the parties expressly agree that this Agreement
shall be governed solely by the laws of the State of Utah, without giving effect to the principles thereof regarding the conflict of laws;
provided, however, that enforcement of Secured Party’s rights and remedies against the Collateral as provided herein will
be subject to the UCC. The provisions set forth in the Purchase Agreement to determine the proper venue for any disputes are incorporated
herein by this reference.

 

8.10.  
Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO DEMAND THAT ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE RELATIONSHIPS OF THE PARTIES HERETO BE
TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON LAW OR ANY APPLICABLE STATUTE,
LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT IT IS KNOWINGLY AND VOLUNTARILY WAIVING ITS RIGHT TO DEMAND TRIAL
BY JURY.

 

8.11.  
Purchase Agreement; Arbitration of Disputes. By executing this Agreement, each party agrees to be bound by the terms, conditions
and general provisions of the Purchase Agreement and the other Transaction Documents, including without limitation the Arbitration Provisions
(as defined in the Purchase Agreement) set forth as an exhibit to the Purchase Agreement.

 

8.12.  
Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original and all of
which together shall constitute one instrument. Any electronic copy of a party’s executed counterpart will be deemed to be an executed
original.

 

8.13.  
Further Assurances. Debtor shall do and perform, or cause to be done and performed, all such further acts and things, and
shall execute and deliver all such other agreements, certificates, instruments and documents, as Secured Party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

8.14.  
Time of the Essence. Time is expressly made of the essence with respect to each and every provision of this Agreement.

 

 

    7 

    	 

    

 

 

 

[Remainder of page intentionally
left blank; signature page follows]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    8 

    	 

    

IN WITNESS WHEREOF, Secured Party
and Debtor have caused this Agreement to be executed as of the day and year first above written.

 

 

 

 

	 	SECURED PARTY:
	 	 
	 	STREETERVILLE CAPITAL, LLC
	 	 
	 	By:	
	 	 	John M. Fife, President
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	DEBTOR:
	 	 
	 	NEXTPLAY TECHNOLOGIES, INC.
	 	 	 
	 	By:	
	 	 	Bill Kerby, CEO

 

 

 

 

 

 

[Signature Page to Security
Agreement]

     

    

    

 

SCHEDULE A

TO SECURITY AGREEMENT

 

All right, title,
interest, claims and demands of Debtor in and to all of Debtor’s assets owned as of the date hereof and/or acquired by Debtor at
any time while the Obligations are still outstanding, including without limitation, the following property:

 

1. 
All equity interests in all wholly- or partially-owned subsidiaries of Debtor, including but not limited to, Axion Ventures, Inc.,
HotPlay Enterprises Limited and Longroot Ltd.

 

2. 
All customer accounts, insurance contracts, and clients underlying such insurance contracts.

 

3. All goods and equipment now owned or
hereafter acquired, including, without limitation, all laboratory equipment, growing equipment, computer equipment, office
equipment, machinery, containers, fixtures, vehicles, and any interest in any of the foregoing, and all attachments, accessories,
accessions, replacements, substitutions, additions, and improvements to any of the foregoing, wherever located;

 

4. 
All inventory now owned or hereafter acquired, including, without limitation, all merchandise, raw materials, parts, supplies,
packing and shipping materials, work in process and finished products including such inventory as is temporarily out of Debtor’s
custody or possession or in transit and including any returns upon any accounts or other proceeds, including insurance proceeds, resulting
from the sale or disposition of any of the foregoing and any documents of title representing any of the above, and Debtor’s books
relating to any of the foregoing;

 

5.  All
accounts receivable, revenues or royalties, contract rights, general intangibles, healthcare insurance receivables, payment
intangibles and commercial tort claims, now owned or hereafter acquired, including, without limitation, all patents, patent rights
and patent applications (including without limitation, the inventions and improvements described and claimed therein, and (a) all
reissues, divisions, continuations, renewals, extensions and continuations-in-part thereof, (b) all income, royalties, damages,
proceeds and payments now and hereafter due or payable under or with respect thereto, including, without limitation, damages and
payments for past or future infringements thereof, (c) the right to sue for past, present and future infringements thereof, and (d)
all rights corresponding thereto throughout the world), trademarks and service marks (and applications and registrations therefor),
inventions, discoveries, copyrights and mask works (and applications and registrations therefor), trade names, trade styles,
software and computer programs including source code, trade secrets, methods, published and unpublished works of authorship,
processes, know how, drawings, specifications, descriptions, and all memoranda, notes, and records with respect to any research and
development, goodwill, license agreements, information, any and all other proprietary rights, franchise agreements, blueprints,
drawings, purchase orders, customer lists, route lists, infringements, claims, computer programs, computer disks, computer tapes,
literature, reports, catalogs, design rights, income tax refunds, payments of insurance and rights to payment of any kind and
whether in tangible or intangible form or contained on magnetic media readable by machine together with all such magnetic media, and
all rights corresponding to all of the foregoing throughout the world, now owned and existing or hereafter arising, created or
acquired;

 

6. All now existing and hereafter arising
accounts, contract rights, royalties, license rights and all other forms of obligations owing to Debtor arising out of the sale or
lease of goods, the licensing of technology or the rendering of services by Debtor (subject, in each case, to the contractual rights
of third parties to require funds received by Debtor to be expended in a particular manner), whether or not earned by performance,
and any and all credit insurance, guaranties, and other security therefor, as well as all merchandise returned to or reclaimed by
Debtor and Debtor’s books relating to any of the foregoing;

     

    

    

 

7. 
All documents, cash, deposit accounts, letters of credit, letter of credit rights, supporting obligations, certificates of deposit,
instruments, chattel paper, electronic chattel paper, tangible chattel paper and investment property, including, without limitation, all
securities, whether certificated or uncertificated, security entitlements, securities accounts, commodity contracts and commodity accounts,
and all financial assets held in any securities account or otherwise, wherever located, now owned or hereafter acquired and Debtor’s
books relating to the foregoing;

 

8. 
Those certain Promissory Notes or other debts now owned by the Company, but originally issued by Axion Ventures, Inc. to the order
of each of Cern One, Red Anchor Trading Corp. Limited, Nithinan Boonyawattanapisut, and John Todd Bonner, in the aggregate amount of

$7,675,024.00.

 

9. 
All other assets, goods and personal property of Debtor, wherever located, whether tangible or intangible, and whether now owned
or hereafter acquired; and

 

10. 
Any and all claims, rights and interests in any of the above and all substitutions for, additions and accessions to and proceeds
and products thereof, including, without limitation, insurance, condemnation, requisition or similar payments and the proceeds thereof.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00335-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00335-of-00352.parquet"}]]