Exhibit 10.17

 

 

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

 

CONVERTIBLE PROMISSORY NOTE

 

$1,000,000 U.S. January 12, 2017

 

FOR VALUE RECEIVED, Grom Holdings, Inc., a Delaware corporation (the "Company"),
promises to pay to the order of TeleMate.Net Software, LLC., a Georgia Limited
Liability Company ("Holder"), or its successors and assigns, in lawful money of
the United States of America, the principal amount of this Promissory Note, of
$1,000,000 (one million dollars) with interest thereon at the rate of 0.68% per
annum compounded annually, said principal and all accrued interest thereon being
payable on January 1st of each year beginning with January 1, 2018 and principal
plus unpaid accrued interest being due and payable on or before January 2, 2020,
unless converted into shares of the Company's Common Stock as described herein
below. Notwithstanding the above, the interest rate charged shall in no event
exceed the maximum rate permitted by law.

 

The following is a statement of the rights of Holder and the conditions to which
this Promissory Note is subject, and to which Holder, by the acceptance of this
Promissory Note, agrees:

 

1.       Payment. Unless converted as described herein, all payments of interest
and principal shall be made to the Holder by bank wire transfer, in immediately
available funds, to the account so specified by the Holder in lawful money of
the United States of America (or to such other account as the Holder hereof
shall notify the Company in writing) at the time each payment is due. Under no
circumstances shall the Company have the right to prepay the principal before
the maturity date.

 

2.       Events of Default. The occurrence of any of the following shall
constitute an "Event of Default" under this Promissory Note:

 

(a)       Failure to Pay. If Company shall fail to pay, when due, any interest
or principal due such payment shall not have been made within ten business (10)
days of Company's receipt of Holder's written notice to the Company of such
failure to pay. In such event the entire principal and interest due shall accrue
interest at the compounded rate equal to the lesser of (i) twelve percent (12%)
per annum or (ii) the maximum rate allowably by law, and the failure to make any
payment of principal or interest when due shall cause all amounts owing under
the Promissory Note to become due at once.

 

(c)       Breach of Representations and Warranties. Any representation or
warranty made or deemed made by the Company to the Holder herein is incorrect in
any material respect on the date as of which such representation or warranty was
made or deemed made.

 

(d)      Breach of Covenants. The Company fails to observe or perform any
material covenant, obligation, condition or agreement contained in this
Promissory Note and such failure continues for 5 days after written notice to
the Company.

 

(e)      Voluntary Bankruptcy or Insolvency Proceedings. If the Company shall
(i) apply for or consent to the appointment of a receiver, trustee, liquidator
or custodian of itself or of all or a substantial part of its property, (ii)
make a general assignment for the benefit of its or any of its creditors, (iii)
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
consent to any such relief or to the appointment of or taking possession of its
property by any official in an involuntary case or other proceeding commenced
against it, or (iv) take any action for the purpose of effecting any of the
foregoing.

 

 

 

 1 

 

 

(f)      Involuntary Bankruptcy or Insolvency Proceedings. If proceedings for
the appointment of a receiver, trustee, liquidator or custodian of the Company
or of all or a substantial part of the property thereof, or an involuntary case
or other proceedings seeking liquidation, reorganization or other relief with
respect to the Company or the debts thereof under any bankruptcy, insolvency or
other similar law or hereafter in effect shall be commenced, and an order for
relief entered in such proceeding shall not be dismissed or discharged within
thirty (30) days of the entry of such an order.

 

3.       Notice and Presentment. The Company hereby waives demand, notice,
presentment, protest and notice of dishonor.

 

4.       Holder's Right to Convert.

 

(a)      In the sole discretion of the Holder, upon five (5) days' notice to the
Company, Holder may convert any part of the Principal Sum due hereunder, plus
accrued interest into shares of the Company's Common Stock (the "Conversion
Shares") at any time from the date hereof, at a conversion price equal to $3.25
per share. In the event of (i) any reclassification (including, without
limitation, a reclassification effected by means of an exchange or tender offer
by the Company), (ii) any consolidation, merger or combination of the Company
with another corporation as a result of which holders of Common Stock shall be
entitled to receive securities or other property (including cash) with respect
to or in exchange for Common Stock or (iii) any sale or conveyance of the
property of the Company as, or substantially as, an entirety to any other
corporation as a result of which holders of Common Stock shall be entitled to
receive securities or other property (including cash) with respect to or in
exchange for Common Stock, then the Company or the successor or purchasing
corporation, as the case may be, shall enter into an Amended and Restated
Promissory Note providing that this Promissory Note shall be convertible into
the kind and amount of securities or other property (including cash) receivable
upon such reclassification, change, consolidation, merger, combination, sale or
conveyance which the Holder of this Promissory Note would have received if this
Promissory Note had been converted immediately prior to such reclassification,
change, consolidation, merger, combination, sale or conveyance. Such Amended and
Restated Promissory Note shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for herein.

 

(c)      Upon providing to the Company or its designated attorney of a facsimile
or original of the Holder's signed Notice of Conversion, the Company shall
forward written instructions to its transfer agent to issue one or more
certificates representing that number of shares of Common Stock into which this
Promissory Note is convertible in accordance with the provisions regarding
conversion set forth in this Promissory Note, with proper restrictive legend, in
the name of Holder (or his nominee) and in such denominations to be specified at
conversion representing the number of shares of Common Stock issuable upon such
conversion, as applicable. The date on which the Notice of Conversion is
effective ("Conversion Date") shall be deemed to be the date on which the Holder
has delivered to the Company at its address for notice a facsimile or original
of the signed Notice of Conversion. This original Promissory Note to be
converted shall be delivered to the Company by the Holder within ten (10) days
thereafter, marked either "Paid in Full" or the Company shall issue a new
Promissory Note to include the terms referenced herein, along with the new
principal balance of this Note.

 

(d)      It shall be the Company's responsibility to take all necessary actions
and to bear all such costs to issue the certificates for the Common Stock
issuable upon conversion of the Promissory Note as provided herein, including
the responsibility and cost for delivery of an opinion letter to the transfer
agent, if so required. The person in whose name the certificate of Common Stock
is to be registered shall be treated as a shareholder of record on and after the
Conversion Date. Upon surrender of any Promissory Notes that are to be converted
in part, the Company or its assigns shall issue to the Holder a new convertible
Promissory Note equal to any remaining Principal Sum due plus the accrued
interest on the Promissory Note through the Date of Conversion.

 

(e)          For purposes of this Promissory Note, "Common Stock" shall mean the
class of common stock of the Company currently outstanding In the event of any
stock split, reverse stock split, stock dividend (including any dividend or
distribution of securities convertible into capital stock with respect to such
common stock), reorganization, reclassification, combination, recapitalization
or other like change with respect to the Company shares (an "Adjustment Event"),
the shares and number of shares of any class or series affected thereby, and all
calculations provided for that are based upon numbers of shares of any class or
series (or prices therefor) affected thereby, shall be equitably adjusted to the
extent necessary to provide Holder the same economic effect as contemplated by
this Promissory Note prior to such stock split, reverse stock split, stock
dividend, reorganization, reclassification, combination, recapitalization or
other like change. The Company shall promptly notify Holder of any Adjustment
Event.

 

 

 

 2 

 

 

5.       Company's Right to Convert.

 

(a)       If not previously converted by Holder, the Company, in its sole
discretion, may also cause this Promissory Note to be converted at a conversion
rate of $2.00 per share. The Company's right to cause this Note to convert into
shares of its common stock shall only commence on or after November 2, 2019
through the due date of this Promissory Note. In the event of (i) any
reclassification (including, without limitation, a reclassification effected by
means of an exchange or tender offer by the Company), (ii) any consolidation,
merger or combination of the Company with another corporation as a result of
which holders of Common Stock shall be entitled to receive securities or other
property (including cash) with respect to or in exchange for Common Stock or
(iii) any sale or conveyance of the property of the Company as, or substantially
as, an entirety to any other corporation as a result of which holders of Common
Stock shall be entitled to receive securities or other property (including cash)
with respect to or in exchange for Common Stock, then the Company or the
successor or purchasing corporation, as the case may be, shall enter into an
Amended and Restated Promissory Note providing that this Promissory Note shall
be convertible into the kind and amount of securities or other property
(including cash) receivable upon such reclassification, change, consolidation,
merger, combination, sale or conveyance which the Holder of this Promissory Note
would have received if this Promissory Note had been converted immediately prior
to such reclassification, change, consolidation, merger, combination, sale or
conveyance. Such Amended and Restated Promissory Note shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for herein.

 

(b)       Upon providing to the Holder of a facsimile or original of the
Company's signed Notice of Conversion, the Company shall forward written
instructions to its transfer agent to issue one or more certificates
representing that number of shares of Common Stock into which the Principal Sum
is convertible in accordance with the provisions regarding conversion set forth
in this Promissory Note, with proper restrictive legend, if an available
exemption from registration is not then available, in the name of Holder (or his
nominee) and in such denominations to be specified at conversion representing
the number of shares of Common Stock issuable upon such conversion, as
applicable. The date on which the Notice of Conversion is effective ("Conversion
Date") shall be deemed to be the date on which the Company has delivered to the
Holder at its address for notice a facsimile or original of the signed Notice of
Conversion. Upon receipt of the certificate representing the number of shares of
Common Stock by the Holder, this original Promissory Note to be converted shall
be delivered to the Company by the Holder within ten (10) days thereafter,
marked either "Paid in Full" or the Company shall issue a new Promissory Note to
include the terms referenced herein, along with the new principal balance of
this Note.

 

(c)       It shall be the Company's responsibility to take all necessary actions
and to bear all such costs to issue the certificates for the Common Stock
issuable upon conversion of the Promissory Note as provided herein, including
the responsibility and cost for delivery of an opinion letter to the transfer
agent, if so required. The person in whose name the certificate of Common Stock
is to be registered shall be treated as a shareholder of record on and after the
Conversion Date. Upon surrender of any Promissory Notes that are to be converted
in part, the Company or its assigns shall issue to the Holder a new convertible
Promissory Note equal to any remaining Principal Sum due plus the accrued
interest on the Promissory Note through the Date of Conversion.

 

6.       Rights of Holder Upon Default. Upon the occurrence or existence of any
Event of Default and at any time thereafter during the continuance of such Event
of Default, Holder may declare all outstanding obligations payable by Company
hereunder to be immediately due and payable without presentment, demand, protest
or any other notice of any kind, all of which are hereby expressly waived. In
addition to the foregoing remedies, upon the occurrence or existence of any
Event of Default, Holder may exercise any other right, power or remedy granted
to it or otherwise permitted to it by law, either by suit in equity or by action
at law, or both.

 

7.      Voting Rights of Holder. The Holder will have the same voting rights for
the Conversion Shares as if the conversion has occurred.

 

8.       Successors and Assigns. The rights and obligations of the Company and
the Holder of this Promissory Note shall be binding upon and benefit the
successors, assigns, heirs, administrators and transferees of the parties.

 

9.       Waiver and Amendment. Any provision of this Promissory Note may be
amended, waived or modified upon the written consent of the Company and the
Holder.

 

 

 

 3 

 

 

10.    Representations and Warranties. The Company or Holder, as applicable,
represents and warrants as follows:

 

a)       Holder is acquiring this Convertible Note and, upon conversion, the
Holder will acquire the Conversion Shares then issuable, for its own account for
investment only and not with a view towards, or for resale in connection with,
the public sale or distribution thereof, except pursuant to sales registered or
exempted under the 1933 Act; provided, however, that by making the
representations herein, such Holder reserves the right to dispose of Conversion
Shares at any time in accordance with or pursuant to an effective registration
statement covering such Conversion Shares or an available exemption under the
1933 Act.

 

(b)     Accredited Status. Holder is an "accredited investor" as that term is
defined in Rule 501(a)(3) of Regulation D.

 

(c)       Reliance on Exemptions. Holder understands that the Convertible Note
is being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States Federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and such
Holder's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Holder set forth herein in order to
determine the availability of such exemptions and the eligibility of such Holder
to acquire such securities.

 

(d)     Information. Holder and its advisors (and his or, its counsel), if any,
have been furnished with all materials relating to the business, finances and
operations of the Company and information he deemed material to making an
informed investment decision regarding his purchase of the Convertible Note and
the Shares, which have been requested by such Holder. Such Holder and its
advisors, if any, have been afforded the opportunity to ask questions of the
Company and its management. Neither such inquiries nor any other due diligence
investigations conducted by such Holder or its advisors, if any, or its
representatives shall modify, amend or affect such Holder's right to rely on the
Company's representations and warranties contained in Section 3 below. Such
Holder understands that its investment in the Convertible Note and the
Conversion Shares involves a high degree of risk. Holder is in a position
regarding the Company, which, based upon employment, family relationship or
economic bargaining power, enabled and enables Holder to obtain information from
the Company in order to evaluate the merits and risks of this investment. Such
Holder has sought such accounting, legal and tax advice, as it has considered
necessary to make an informed investment decision with respect to its
acquisition of the Convertible Note and the Conversion Shares.

 

(f)      Existence; Compliance with Laws. The Company is (i) a corporation duly
formed, validly existing and in good standing under the laws of the state of its
jurisdiction of organization and has the requisite power and authority, and the
legal right, to own, lease and operate its properties and assets and to conduct
its business as it is now being conducted and (ii) in compliance with all laws
and governmental orders.

 

(g)      Power and Authority. The Company has the power and authority, and the
legal right, to execute and deliver this Promissory Note and to perform its
obligations hereunder.

 

(g)      Authorization; Execution and Delivery. The execution and delivery of
this Promissory Note by the Company and the performance of its obligations
hereunder have been duly authorized by all necessary limited liability action in
accordance with all applicable laws. The Company has duly executed and delivered
this Note.

 

(h)      No Approvals. No consent or authorization of, filing with, notice to or
other act by, or in respect of, any governmental authority or any other person
is required in order for the Company to execute, deliver, or perform any of its
obligations under this Promissory Note.

 

(i)       No Governmental Review. Holder understands that no United States
Federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Convertible Note or
the Conversion Shares, or the fairness or suitability of the investment in the
Convertible Note or the Conversion Shares, nor have such authorities passed upon
or endorsed the merits of the offering of the Convertible Note or the Conversion
Shares.

 

 

 

 4 

 

 

(f)      Transfer or. Resale. Holder understands that: (i) the Convertible Note
has not been and is not being registered under the 1933 Act or any state
securities laws, and may not be offered for sale, sold, assigned or transferred
unless (A) subsequently registered there under, or (B) such Holder shall have
delivered to the Company an opinion of counsel, in a generally acceptable form,
to the effect that such securities to be sold, assigned or transferred may be
sold, assigned or transferred pursuant to an exemption from such registration
requirements; (ii) any sale of such securities made in reliance on Rule 144
under the 1933 Act (or a successor rule thereto) ("Rule 144") may be made only
in accordance with the terms of Rule 144 and further, if Rule 144 is not
applicable, any resale of such securities under circumstances in which the
seller (or the person through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the 1933 Act) may require compliance
with some other exemption under the 1933 Act or the rules and regulations of the
SEC there under; and (iii) neither the Company nor any other person is under any
obligation to register such securities under the 1933 Act or any state
securities laws or to comply with the terms and conditions of any exemption
there under.

 

(g)        Legends. Holder understands that the certificates or other
instruments representing the Convertible Note and or the Conversion Shares shall
bear a restrictive legend in substantially the following form (and a stop
transfer order may be placed against transfer of such stock certificates):

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN
OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS.

 

The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Conversion Shares upon
which it is stamped, if, unless otherwise required by state securities laws, (i)
in connection with a sale transaction, provided the Conversion Shares are
registered under the 1933 Act or (ii) in connection with a sale transaction,
such holder provides the Company with an opinion of counsel, in form acceptable
to the Company and its counsel, to the effect that a public sale, assignment or
transfer of the Conversion Shares may be made without registration under the
1933 Act.

 

(h)         Authorization, Enforcement. This Promissory Note has been duly and
validly authorized, executed and delivered on behalf of such Holder and is a
valid and binding agreement of such Holder enforceable in accordance with its
terms, except as such enforceability may be limited by general principles of
equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation and other similar laws relating to, or affecting generally, the
enforcement of applicable creditors' rights and remedies.

 

(i)          Receipt of Documents. Holder and his or its counsel has received
and read in their entirety: (i) this Promissory Note and each representation,
warranty and covenant set forth herein; (ii) all due diligence and other
information necessary to verify the accuracy and completeness of such
representations, warranties and covenants; (iii) and answers to all questions
the Holder submitted to the Company regarding an investment in the Company; and
the Holder has relied on the information contained therein and has not been
furnished any other documents, literature, memorandum or prospectus.

 

(j)       Due Formation of Corporate and Other Holders. If the Holder(s) is a
corporation, trust, partnership, limited liability company or other entity that
is not an individual person, it has been formed and validly exists and has not
been organized for the specific purpose of purchasing the Convertible Note and
is not prohibited from doing so.

 

(k)       Due Authorization of Fiduciary Holders. If the Holder(s) is purchasing
this in a fiduciary capacity for another person or entity, including without
limitation a corporation, partnership, trust or any other entity, the Holder(s)
has been duly authorized and empowered to execute this Agreement and such other
person fulfills all the requirements for purchase of the Convertible Note and
agrees to be bound by the obligations, representations, warranties, and
covenants contained herein. Upon request of the Company, the Holder(s) will
provide true, complete and current copies of all relevant documents creating the
Holder(s), authorizing its investment in the Company and/or evidencing the
satisfaction of the foregoing.

 

 

 

 5 

 

 

(1)        No Legal Advice from the Company. The Holder(s) acknowledge that it
had the opportunity to review this Agreement and the transactions contemplated
by this Agreement with his or its own legal counsel and investment and tax
advisors. The Holder is relying solely on such counsel and advisors and not on
any statements or representations of the Company or any of its representatives
or agents for legal, tax or investment advice with respect to this investment,
the transactions contemplated by this Agreement or the securities laws of any
jurisdiction.

 

11.       Affirmative Covenants. Until all amounts outstanding in this
Promissory Note have been paid in full, the Company shall:

 

(a)         Maintenance of Existence. (a) Preserve, renew and maintain in full
force and effect its corporate or organizational existence and (b) take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business.

 

(b)         Compliance. Comply with (a) all of the terms and provisions of its
organizational documents; (b) its obligations under its material contracts and
agreements; and (c) all laws and governmental orders applicable to it and its
business.

 

(c)         Payment Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature.

 

(d)        Notice of Events of Default. As soon as possible and in any event
within two (2) Business Days after it becomes aware that a Default or an Event
of Default has occurred, notify the Holder in writing of the nature and extent
of such Default or Event of Default and the action, if any, it has taken or
proposes to take with respect to such Default or Event of Default.

 

(e)         Further Assurances. Upon the request of the Holder, execute and
deliver such further instruments and do or cause to be done such further acts as
may be necessary or advisable to carry out the intent and purposes of this Note.

 

12.       Governing Law. The descriptive headings of the several sections and
paragraphs of this Promissory Note are inserted for convenience only and do not
constitute a part of this Promissory Note. This Promissory Note and all actions
arising out of or in connection with this Promissory Note shall be governed by
and construed in accordance with the laws of the State of Delaware, without
regard to the conflicts of law provisions of the State of Delaware, or of any
other state.

 

13.       Expenses. The Company shall reimburse the Holder on demand for all
reasonable out-of-pocket costs, expenses and fees (including reasonable expenses
and fees of its external counsel) incurred by the Holder in connection with the
transactions contemplated hereby including the negotiation, documentation and
execution of this Promissory Note and the enforcement of the Holder's rights
hereunder.

 

14.       No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising on the part of the Holder, of any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.

 

15.       Attorneys' Fees. In the event of any suit, action, or proceeding
brought by Holder for collection of any payment in default hereunder, the
prevailing party shall be entitled to recover its reasonable attorneys' fees,
court costs, and litigation expenses in such action or proceeding. "Prevailing
party," within the meaning of this Section, includes any party who agrees to
dismiss an action upon payment by the other party of sums alleged to be owed.

 

16.       Severability. If any term or provision of this Promissory Note is
invalid, illegal or unenforceable in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect any other term or provision of
this Promissory Note invalidate or render unenforceable such term or provision
in any other jurisdiction. Upon such determination that any term or other
provision is invalid, illegal or unenforceable, the parties hereto shall
negotiate in good faith to modify this Promissory Note so as to effect the
original intent of the parties as closely as possible in a mutually acceptable
manner in order that the transactions contemplated hereby be consummated as
originally contemplated to the greatest extent possible.

 

 

 

 6 

 

 

17.       Registration of Transfers and Exchanges.

 

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

 

b)          Investment Representations. This Promissory Note may be transferred
or exchanged only in compliance with applicable federal and state securities
laws and regulations.

 

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

 

18.       Notice. Any notice required by the provisions of this Promissory Note
will be in writing and will be deemed effectively given: (a) upon personal
delivery to the party to be notified; (b) when sent electronically by email,
telex or facsimile if sent during normal business hours of the recipient; if
not, then on the next business day; (c) Five (5) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid; or (d)
One (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt.

 

If to Holder:

 

Telemate.Net Software LLC
Attn: Steven Tabaska, CEO
5555 Triangle Pkwy, Suite 150

 

Norcross, GA 30092

 

and

 

Telemate.Net Software LLC

Attn: John O'Reilly, President & COO
5555 Triangle Pkwy, Suite 150

Norcross, GA 30092

 

If to Company:

 

Attn: Melvin Leiner, Executive Vice President

2060 NW Boca Raton, Boulevard,

Suite #6, Boca Raton, Fl. 33431

 

Or, as to each party, at such other address as shall be designated by such party
in a written notice to the other parties.

 

IN WITNESS WHEREOF, the Company has caused this Promissory Note to be issued as
of the date first written above.

 

GROM HOLDINGS, INC.

 

By:/s/ Melvin Leiner
Melvin Leiner, Executive Vice President

 

Accepted and agreed to by:

 

TELEMATE.NET SOFTWARE,LLC

 

By: /s/ Steven Tabaska      1/12/17

       Steven Tabaska, Manager of LLC and CEO

 

NetSpective WebFilter LLC

 

By: /s/ Steven Tabaska      1/12/17

Steven Tabaska, Manager of LLC and CEO

 

 

 

 

 7 

 

 

Exhibit 1

 

NOTICE OF CONVERSION

 

(To be executed by the Holder or Company in order to convert all or part of the
Convertible Promissory Note into Shares of Common Stock in accordance with the
terms of this Promissory Note.)

 

To: GROM HOLDINGS, INC.

 

The undersigned hereby converts $_________________ of the principal and $_____
of the interest due under the Convertible Promissory Note dated as
of_____________ , 201_ (the "Note") issued by Grom Holdings, Inc. (the
"Borrower") by delivery of shares of Borrower's Common Stock, par value $0.001
per share on and subject to the conditions set forth in the Note.

 

1.  Date of Conversion

 

2.  Conversion Price

 

3. Total Shares To Be Delivered:

 

4.  Total number of certificates

 

  a.  Shares Certificate 1

 

  b.  Shares Certificate 2

 

  c.  Shares Certificate 3

 

 

   

By:_______________________

       Name:

       Title:

 

 

 

 

 

 8