Item
1.01. Entry into Material Definitive Agreement.
ADVANCED®
Exclusive Energy Drink Distribution Agreement
On
September 8, 2021, Simplicity Esports and Gaming Company (the “Company”) entered into an Exclusive Energy Drink Distribution
Agreement with Advanced, LLC, a Minnesota limited liability company (“ADVANCED®”) pursuant to which Advanced granted
the Company exclusive rights to sell and distribute certain ADVANCED® products across the Company’s nationwide network (the
“Agreement”).
Pursuant
to the Agreement, ADVANCED® granted the Company an exclusive right to distribute certain products of ADVANCED®, which is a producer
of gaming supplements specifically tailored for video game players, within a 50-mile radius of each of the Company’s PLAYlive esports
gaming centers (which are owned or franchised by our wholly owned subsidiaries Simplicity Esports LLC or PLAYlive Nation, Inc.). In addition,
without exclusivity, the Company may sell ADVANCED® products online via its corporate websites.
In
consideration for the Company’s distribution and marketing know-how and resources, ADVANCED® agreed to pay the Company $1,000
per month for each retail outlet participating in the Agreement as listed on Exhibit B, through which the Company will distribute of
ADVANCED® products. While these fees will accrue monthly, they will be payable by ADVANCED® in advance on a quarterly basis,
within thirty (30) days of the end of each quarter during the term of the Agreement.
During
the term of the Agreement, the Company agreed to purchase at least $1,000 per month of ADVANCED® products for each retail sales outlet
participating in this Agreement (which consist of certain PLAYlive locations set forth in Exhibit B to the Agreement). ADVANCED®
agreed to provide the Company with a 50% discount off Manufacturer’s Suggested Retail Price (“MSRP”) for all ADVANCED®
supplement products and 35% off MSRP for all ADVANCED® shaker products distributed by the Company under the Agreement.
The
term of the Agreement commenced upon on September 8, 2021 and will continue for a twenty-four (24) month period. Unless terminated, the
term of the Agreement will automatically renew at the end of the initial term for additional 12-month terms. Either party may elect not
to renew the Agreement upon notice to the other party at least sixty (60) days prior to the end of the initial term or a renewal term.
The
Agreement may be terminated at any time upon the mutual written agreement of the parties, or by either Party upon thirty (30) days’
prior written notice to the other party upon the material breach by the other party of any of its covenants, agreements, representations
or warranties set forth in the Agreement, unless such breach is cured within such thirty (30) day notice period. Additionally, the Agreement
may be terminated by either party upon, among other things, the discontinuance, dissolution, liquidation and/or winding up of the other
party’s business,
Finally,
the Agreement may be terminated by either party for any reason upon not less than ninety (90) days advance written notice to the other
party.
Upon
termination, all rights and licenses granted by either party to the other under the Agreement will terminate and the Company will cease
the sale of ADVANCED® products pursuant to the Agreement.
The
Agreement contains certain customary representations, warranties, indemnification provisions, and non-circumvention provisions that are
typical in licensing agreements such as the Agreement.
The
description of the Agreement does not purport to be complete and is qualified in its entirety by reference to the Agreement, a copy of
which is filed as Exhibit 10.1 hereto and are incorporated herein by reference.