EXHIBIT 10.2


 


SECURITIES PURCHASE AGREEMENT


 


This
SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of March 11, 2021, by and between GROM SOCIAL ENTERPRISES,
INC., a Florida corporation, with headquarters located at 2060 NW Boca Raton Boulevard #6, Boca Raton, Florida 33431 (the “Company”),
and FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC, a Delaware limited liability company, with its address at 1040 First Avenue,
Suite 190, New York, NY 10022 (the “Buyer”).


 


WHEREAS:


 


A. 
The Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities
registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”) and Rule 506(b)
promulgated by the United States Securities and Exchange Commission (the “SEC”) under the 1933 Act; and


 


B. 
Buyer desires to purchase from the Company, and the Company desires to issue and sell to the Buyer, upon the terms
and conditions set forth in this Agreement, a Convertible Promissory Note of the Company, in the aggregate principal amount of
$300,000.00 (as the principal amount thereof may be increased pursuant to the terms thereof, and together with any note(s) issued
in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof, in the
form attached hereto as Exhibit A (the “Note”), convertible into shares of common stock of the Company (the
“Common Stock”), upon the terms and subject to the limitations and conditions set forth in such Note; and


 


C. 
A warrant in the Company in accordance with the terms thereof, in the form attached hereto as Exhibit B (the
“Warrant”) exercisable into shares of Common Stock upon the terms and subject to the limitations and conditions set
forth in such Warrant.


 


NOW
THEREFORE, in consideration of the foregoing and of the agreements and covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Buyer hereby agree as follows:


 


 1. Purchase and Sale of the Securites.




 


a.        
Purchase of Note. On the Closing Date (as defined below), the Company shall issue and sell to the Buyer and the Buyer
agrees to purchase from the Company the Note, subject to the terms of the Note and this Agreement as the case may be.


 


b.        
Form of Payment. On the Closing Date, the Buyer shall pay the purchase price of $270,000.00 (the “Purchase
Price”) for the Note and the Warrant, by wire transfer of immediately available funds, in accordance with the Company’s
written wiring instructions, against delivery of the Note, the Warrant, and the Company shall deliver such duly executed Note and
the Warrant on behalf of the Company, to the Buyer.


 


c.         
Warrant. On the Closing Date, the Company shall issue to Buyer the Warrant, subject to the terms of the Warrant and
this Agreement as the case may be.


 


d.        
Closing Date. Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 6 and
Section 7 below, the date and time of the issuance and sale of the Note and the Warrant pursuant to this Agreement (the “Closing
Date”) shall be 4:00 PM, Eastern Time on the date first written above, or such other mutually agreed upon time.


 


e.        
Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on
the Closing Date at such location as may be agreed to by the parties (including via exchange of electronic signatures).


 


 


 






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2.  Buyer’s
Representations and Warranties. The Buyer represents and warrants to the Company as of the Closing Date that:


 


a.        
Investment Purpose. As of the Closing Date, the Buyer is purchasing the Note and the Warrant and the shares of Common
Stock issuable upon conversion or exercise thereof, or otherwise issued pursuant to the Note or Warrant and such additional shares
of Common Stock, if any, as are issuable on account of interest on the Note pursuant to this Agreement, such shares of Common Stock
being collectively referred to herein as the “Conversion Shares” and, collectively with the Note, and the Warrant,
the “Securities”) for its own account and not with a present view towards the public sale or distribution thereof,
except pursuant to sales registered or exempted from registration under the 1933 Act; provided, however, that by
making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum or other specific term
and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an
exemption under the 1933 Act.


 


b.        
Accredited Investor Status. The Buyer is an “accredited investor” as that term is defined in Rule 501(a)
of Regulation D (an “Accredited Investor”).


 


c.        
Reliance on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance upon
specific exemptions from the registration requirements of United States federal and state securities laws and that the Company
is relying upon the truth and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and
the eligibility of the Buyer to acquire the Securities.


 


d.        
Information. The Buyer and its advisors, if any, have been, and for so long as any of the Securities remain outstanding
will continue to be, furnished with all materials relating to the business, finances, and operations of the Company and materials
relating to the offer and sale of the Securities which have been requested by the Buyer or its advisors. The Buyer and its advisors,
if any, have been, and for so long as the Note remains outstanding will continue to be, afforded the opportunity to ask questions
of the Company regarding its business and affairs. Notwithstanding the foregoing, the Company has not disclosed to the Buyer any
material nonpublic information regarding the Company or otherwise, and will not disclose such information unless such information
is disclosed to the public prior to or promptly following such disclosure to the Buyer. Neither such inquiries nor any other due
diligence investigation conducted by Buyer or any of its advisors or representatives shall modify, amend or affect Buyer’s
right to rely on the Company’s representations and warranties contained in Section 3 below.


 


e.        
Governmental Review. The Buyer understands that no United States federal or state agency or any other government
or governmental agency has passed upon or made any recommendation or endorsement of the Securities.


 


f.         
Transfer or Resale. The Buyer understands that (i) the sale or resale of the Securities have not been, and as of
the Issue Date, are currently not being registered under the 1933 Act or any applicable state securities laws, and the Securities
may not be transferred unless (a) the Securities are sold pursuant to an effective registration statement under the 1933 Act; (b)
the Buyer shall have delivered to the Company, at the cost of the Company, an opinion of counsel (which may be the Legal Counsel
Opinion (as defined below)) that shall be in form, substance, and scope customary for opinions of counsel in comparable transactions
to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration,
which opinion shall be accepted by the Company; (c) the Securities are sold or transferred to an “affiliate” (as defined
in Rule 144 promulgated under the 1933 Act (or a successor rule) (“Rule 144”)) of the Buyer who agrees to sell or otherwise
transfer the Securities only in accordance with this Section 2(f) and who is an Accredited Investor; (d) the Securities are sold
pursuant to Rule 144 or other applicable exemption and the Buyer shall have delivered to the Company, at the cost of the Company,
an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions, which
opinion shall be accepted by the Company; (ii) any sale of such Securities made in reliance on Rule 144 may be made only in accordance
with the terms of said Rule and further, if said Rule is not applicable, any 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 thereunder; 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 thereunder (in each case). Nothing in this Section
2(f), including the availability of Rule 144 or another applicable exemption, shall circumvent the registration obligations of
the Registration Rights Agreement.


 


 


 






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g.        
Legends. The Buyer understands that until such time as the Securities, have been registered under the 1933 Act or
may be sold pursuant to any applicable exemption without any restriction as to the number of securities as of a particular date
that can then be immediately sold, the Securities may bear a restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of the certificates for such Securities):


 


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


 


The
legend set forth above shall be removed and the Company shall issue a certificate for the applicable shares of Common Stock without
such legend to the holder of any Security upon which it is stamped or (as requested by such holder) issue the applicable shares
of Common Stock to such holder by electronic delivery by crediting the account of such holder’s broker with The Depository
Trust Company (“DTC”), if, unless otherwise required by applicable state securities laws, (a) such Security
is registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to
an applicable exemption without any restriction as to the number of securities as of a particular date that can then be immediately
sold; or (b) the Company or the Buyer provides the Legal Counsel Opinion (as contemplated by and in accordance herewith) to the
effect that a public sale or transfer of such Security may be made without registration under the 1933 Act, which opinion shall
be accepted by the Company so that the sale or transfer is effected. The Company shall be responsible for the fees of its transfer
agent and all DTC fees associated with any such issuance. The Buyer agrees to sell all Securities, including those represented
by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if
any. In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of
Securities pursuant to an exemption from registration, under any applicable exemption at the Deadline (as defined in the Note),
it will be considered an Event of Default pursuant to Section 3 of the Note.


 


h.        
Authorization; Enforcement. This Agreement has been duly and validly authorized by the Buyer and has been duly executed
and delivered on behalf of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in
accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors’ rights generally and except as may be limited by the exercise of judicial discretion in
applying principles of equity.


 


i.         
Manipulation of Price. The Buyer has not, and to its knowledge no one acting on its behalf has: (i) taken, directly
or indirectly, any action designed to cause or to result, or that could reasonably be expected to cause or result, in the stabilization
or manipulation of the price of any security of the Company; (ii) paid any compensation for soliciting purchases of, any Common
Stock of the Company in the open market; or (iii) paid or agreed to pay to any person any compensation for soliciting another to
purchase any other securities of the Company.


 


j.         
No Shorting. Buyer and its affiliates shall be prohibited from engaging directly or indirectly in any short selling
or hedging transactions with respect to any securities of the Company while this Note is outstanding.


 


3.
Representations and Warranties of the Company. The Company represents and warrants to the Buyer as of the Closing Date
that:


 


 


 






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a.        
Organization and Qualification. The Company and each of its Subsidiaries (as defined below), if any, is a corporation
duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full
power and authority (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where
now owned, leased, used, operated and conducted. Schedule 3(a), if attached hereto, sets forth a list of all of the Subsidiaries
of the Company and the jurisdiction in which each is incorporated. The Company and each of its Subsidiaries is duly qualified as
a foreign corporation to do business and is in good standing in every jurisdiction in which its ownership or use of property or
the nature of the business conducted by it makes such qualification necessary except where the failure to be so qualified or in
good standing would not have a Material Adverse Effect. “Material Adverse Effect” means any material adverse effect
on the business, operations, assets, financial condition or prospects of the Company or its Subsidiaries, if any, taken as a whole,
or on the transactions contemplated hereby or by the agreements or instruments to be entered into in connection herewith. “Subsidiaries”
means any corporation or other organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly,
any equity or other ownership interest.


 


b.        
Authorization; Enforcement. (i) The Company has all requisite corporate power and authority to enter into and perform
this Agreement, the Note, the Warrant, and to consummate the transactions contemplated hereby and thereby and to issue the Securities,
in accordance with the terms hereof and thereof; (ii) the execution and delivery of this Agreement, the Note, and the Warrant by
the Company and the consummation by it of the transactions contemplated hereby and thereby (including without limitation, the issuance
of the Note and the Warrant, as well as the issuance and reservation for issuance of the Conversion Shares issuable upon conversion
of the Note or exercise of the Warrant) have been duly authorized by the Company’s Board of Directors and no further consent
or authorization of the Company, its Board of Directors, its shareholders, or its debt holders is required; (iii) this Agreement,
the Note, and the Warrant, (together with any other instruments executed in connection herewith or therewith) have been duly executed
and delivered by the Company by its authorized representative, and such authorized representative is the true and official representative
with authority to sign this Agreement, the Note, the Warrant, and the other instruments documents executed in connection herewith
or therewith and bind the Company accordingly; and (iv) this Agreement constitutes, and upon execution and delivery by the Company
of the Note, the Warrant, and each of such instruments will constitute, a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with their terms.


 


c.        
Capitalization; Governing Documents. As of February 3, 2021, the authorized capital stock of the Company consists
of: 500,000,000 authorized shares of Common Stock, of which and 189,359,001 shares were outstanding. All of such outstanding shares
of capital stock of the Company and the Conversion Shares, are, or upon issuance will be, duly authorized, validly issued, fully
paid and non-assessable. No shares of capital stock of the Company are subject to preemptive rights or any other similar rights
of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. As
of the effective date of this Agreement, other than as publicly announced prior to such date and reflected in the SEC Documents
(as defined in this Agreement) of the Company (i) there are no outstanding options, warrants, scrip, rights to subscribe for, puts,
calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating
to, or securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries,
or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock
of the Company or any of its Subsidiaries; (ii) other than provided herein, there are no agreements or arrangements under which
the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act;
and (iii) there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any
agreement providing rights to security holders) that will be triggered by the issuance of any of the Securities. The Company has
furnished to the Buyer true and correct copies of the Company’s Certificate of Incorporation as in effect on the date hereof
(“Certificate of Incorporation”), the Company’s Bylaws, as in effect on the date hereof (the “Bylaws”),
and the terms of all securities convertible into or exercisable for Common Stock of the Company and the material rights of the
holders thereof in respect thereto.


 


d.        
Issuance of Conversion Shares. The Conversion Shares are duly authorized and reserved for issuance and, upon conversion
of the Note or exercise of the Warrant in accordance with their respective terms, will be validly issued, fully paid and non-assessable,
and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive
rights or other similar rights of shareholders of the Company and will not impose personal liability upon the holder thereof.


 


e.         
No Broker-Dealer Acknowledgement. Absent a final adjudication
from a court of competent jurisdiction stating otherwise, so long as any amount on the Note or Warrant remains outstanding, the
Company shall not to any person, institution, governmental or other entity, state, claim, allege, or in any way assert, that Holder
is currently, or ever has been a broker-dealer under the Securities Exchange Act of 1934.


 


 


 






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f.         
Acknowledgment of Dilution. The Company understands and acknowledges the potentially dilutive effect of the Conversion
Shares to the Common Stock upon the conversion of the Note or exercise of the Warrant. The Company further acknowledges that its
obligation to issue, upon conversion of the Note or exercise of the Warrant, the Conversion Shares, in accordance with this Agreement,
the Note, and the Warrant are absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership
interests of other shareholders of the Company.


 


g.        
Ranking; No Conflicts. The Note shall be a subordinate debt obligation of the Company. The execution, delivery and
performance of this Agreement and the Note by the Company and the consummation by the Company of the transactions contemplated
hereby and thereby (including, without limitation, the issuance and reservation for issuance of the Conversion Shares) will not
(i) conflict with or result in a violation of any provision of the Certificate of Incorporation or Bylaws; or (ii) violate or conflict
with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both
could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement,
note, evidence of indebtedness, indenture, patent, patent license or instrument to which the Company or any of its Subsidiaries
is a party; or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations and regulations of any self-regulatory organizations to which the Company or its securities is
subject) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries
is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations
as would not, individually or in the aggregate, have a Material Adverse Effect); or (iv) trigger any anti-dilution or ratchet provision
contained in any other contract in which the Company is a party thereto or any security issued by the Company. Neither the Company
nor any of its Subsidiaries is in violation of its Certificate of Incorporation, Bylaws or other organizational documents and neither
the Company nor any of its Subsidiaries is in default (and no event has occurred which with notice or lapse of time or both could
put the Company or any of its Subsidiaries in default) under, and neither the Company nor any of its Subsidiaries has taken any
action or failed to take any action that would give to others any rights of termination, amendment, acceleration or cancellation
of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party or by which any property
or assets of the Company or any of its Subsidiaries is bound or affected, except for possible defaults as would not, individually
or in the aggregate, have a Material Adverse Effect. The businesses of the Company and its Subsidiaries, if any, are not being
conducted, and shall not be conducted so long as the Buyer owns any of the Securities, in violation of any law, ordinance or regulation
of any governmental entity. Except as specifically contemplated by this Agreement and as required under the 1933 Act and any applicable
state securities laws, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration
with, any court, governmental agency, regulatory agency, self-regulatory organization or stock market or any third party in order
for it to execute, deliver or perform any of its obligations under this Agreement, the Note, and the Warrant in accordance with
the terms hereof or thereof or to issue and sell each of the Note and the Warrant in accordance with the terms hereof and, upon
conversion of the Note or exercise of the Warrant, issue Conversion Shares. All consents, authorizations, orders, filings and registrations
which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date
hereof. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.


 


h.        
SEC Documents; Financial Statements. The Company has timely filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934,
as amended (the “1934 Act”) (all of the foregoing filed prior to the date hereof and all exhibits included therein
and financial statements and schedules thereto and documents (other than exhibits to such documents) incorporated by reference
therein, being hereinafter referred to herein as the “SEC Documents”). As of their respective dates, the SEC Documents
complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made, not misleading. None of the statements made in any
such SEC Documents is, or has been, required to be amended or updated under applicable law (except for such statements as have
been amended or updated in subsequent filings prior the date hereof). As of their respective dates, the financial statements of
the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements
and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles, consistently applied, during the periods involved and fairly present
in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof
and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments). Except as set forth in the financial statements of the Company included in the SEC Documents,
the Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business
subsequent to February 19, 2021, and (ii) obligations under contracts and commitments incurred in the ordinary course of business
and not required under generally accepted accounting principles to be reflected in such financial statements, which, individually
or in the aggregate, are not material to the financial condition or operating results of the Company. The Company is subject to
the reporting requirements of the 1934 Act. The Company has never been a “shell company” as described in Rule 144(i)(1)(i).


 


 






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i.         
Absence of Certain Changes. Since February 19, 2021, there has been no material adverse change and no material adverse
development in the assets, liabilities, business, properties, operations, financial condition, results of operations, prospects
or 1934 Act reporting status of the Company or any of its Subsidiaries.


 


j.         
Absence of Litigation. There is no action, suit, claim, proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its
Subsidiaries, threatened against or affecting the Company or any of its Subsidiaries, or their officers or directors in their capacity
as such, that could have a Material Adverse Effect. The SEC Documents contain a complete list and summary description of any pending
or, to the knowledge of the Company, threatened proceeding against or affecting the Company or any of its Subsidiaries, without
regard to whether it would have a Material Adverse Effect. The Company and its Subsidiaries are unaware of any facts or circumstances
which might give rise to any of the foregoing. Notwithstanding the foregoing, the Buyer acknowledges the existence of all litigations
disclosed and outstanding the SEC Documents.


 


k.        
Intellectual Property. The Company and each of its Subsidiaries owns or possesses the requisite licenses or rights
to use all patents, patent applications, patent rights, inventions, know-how, trade secrets, trademarks, trademark applications,
service marks, service names, trade names and copyrights (“Intellectual Property”) necessary to enable it to conduct
its business as now operated (and, as presently contemplated to be operated in the future); there is no claim or action by any
person pertaining to, or proceeding pending, or to the Company’s knowledge threatened, which challenges the right of the
Company or of a Subsidiary with respect to any Intellectual Property necessary to enable it to conduct its business as now operated
(and, as presently contemplated to be operated in the future); to the best of the Company’s knowledge, the Company’s
or its Subsidiaries’ current and intended products, services and processes do not infringe on any Intellectual Property or
other rights held by any person; and the Company is unaware of any facts or circumstances which might give rise to any of the foregoing.
The Company and each of its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value
of their Intellectual Property.


 


l.         
No Materially Adverse Contracts, Etc. Neither the Company nor any of its Subsidiaries is subject to any charter,
corporate or other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the Company’s
officers has or is expected in the future to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is
a party to any contract or agreement which in the judgment of the Company’s officers has or is expected to have a Material
Adverse Effect.


 


m.      
Tax Status. The Company and each of its Subsidiaries has made or filed all federal, state and foreign income and
all other tax returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent
that the Company and each of its Subsidiaries has set aside on its books provisions reasonably adequate for the payment of all
unpaid and unreported taxes) and has paid all taxes and other governmental assessments and charges that are material in amount,
shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and has set
aside on its books provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority
of any jurisdiction, and the officers of the Company know of no basis for any such claim. The Company has not executed a waiver
with respect to the statute of limitations relating to the assessment or collection of any foreign, federal, state or local tax.
None of the Company’s tax returns is presently being audited by any taxing authority.


 


n.        
Transactions with Affiliates. Except for arm’s length transactions pursuant to which the Company or any of
its Subsidiaries makes payments in the ordinary course of business upon terms no less favorable than the Company or any of its
Subsidiaries could obtain from third parties and other than the grant of stock options described in the SEC Documents, none of
the officers, directors, or employees of the Company is presently a party to any transaction with the Company or any of its Subsidiaries
(other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing
for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the Company, any corporation, partnership, trust or other
entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.


 


 


 






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o.        
Disclosure. All information relating to or concerning the Company or any of its Subsidiaries set forth in this Agreement
and provided to the Buyer pursuant to the terms hereof and otherwise in connection with the transactions contemplated hereby is
true and correct in all material respects and the Company has not omitted to state any material fact necessary in order to make
the statements made herein or therein, in light of the circumstances under which they were made, not misleading. No event or circumstance
has occurred or exists with respect to the Company or any of its Subsidiaries or its or their business, properties, prospects,
operations or financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement
by the Company but which has not been so publicly announced or disclosed (assuming for this purpose that the Company’s reports
filed under the 1934 Act are being incorporated into an effective registration statement filed by the Company under the 1933 Act).


 


p.        
Acknowledgment Regarding Buyer’s Purchase of Securities. The Company acknowledges and agrees that the Buyer
is acting solely in the capacity of arm’s length purchaser with respect to this Agreement and the transactions contemplated
hereby. The Company further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any statement made by the Buyer
or any of its respective representatives or agents in connection with this Agreement and the transactions contemplated hereby is
not advice or a recommendation and is merely incidental to the Buyer’s purchase of the Securities. The Company further represents
to the Buyer that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation
of the Company and its representatives.


 


q.        
No Integrated Offering. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf,
has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances
that would require registration under the 1933 Act of the issuance of the Securities to the Buyer. The issuance of the Securities
to the Buyer will not be integrated with any other issuance of the Company’s securities (past, current or future) for purposes
of any shareholder approval provisions applicable to the Company or its securities.


 


r.         
No Brokers. Other than the use of Kingswood Capital, the Company has taken no action which would give rise to any
claim by any person for brokerage commissions, transaction fees or similar payments relating to this Agreement or the transactions
contemplated hereby.


 


s.         
Permits; Compliance. The Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate
its properties and to carry on its business as it is now being conducted (collectively, the “Company Permits”), and
there is no action pending or, to the knowledge of the Company, threatened regarding suspension or cancellation of any of the Company
Permits. Neither the Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of the Company
Permits, except for any such conflicts, defaults or violations which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. Since February 19, 2021, neither the Company nor any of its Subsidiaries has received
any notification with respect to possible conflicts, defaults or violations of applicable laws, except for notices relating to
possible conflicts, defaults or violations, which conflicts, defaults or violations would not have a Material Adverse Effect.


 


 t.         
 Environmental Matters.




 


(i)        

There are, to the Company’s knowledge, with respect to the Company or any of its Subsidiaries or any predecessor
of the Company, no past or present violations of Environmental Laws (as defined below), releases of any material into the environment,
actions, activities, circumstances, conditions, events, incidents, or contractual obligations which may give rise to any common
law environmental liability or any liability under the Comprehensive Environmental Response, Compensation and Liability Act of
1980 or similar federal, state, local or foreign laws and neither the Company nor any of its Subsidiaries has received any notice
with respect to any of the foregoing, nor is any action pending or, to the Company’s knowledge, threatened in connection
with any of the foregoing. The term ”Environmental Laws” means all federal, state, local or foreign laws relating
to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”)
into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments,
licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.


 


 


 






    	 	7	 



     


    

 


(ii)         Other
than those that are or were stored, used or disposed of in compliance with applicable law, no Hazardous Materials are
contained on or about any real property currently owned, leased or used by the Company or any of its Subsidiaries, and no
Hazardous Materials were released on or about any real property previously owned, leased or used by the Company or any of its
Subsidiaries during the period the property was owned, leased or used by the Company or any of its Subsidiaries, except in
the normal course of the Company’s or any of its Subsidiaries’ business.


 


(iii)      
There are no underground storage tanks on or under any real property owned, leased or used by the Company or any of its
Subsidiaries that are not in compliance with applicable law.


 


u.        
Title to Property. The Company and its Subsidiaries have good and marketable title in fee simple to all real property
and good and marketable title to all personal property owned by them which is material to the business of the Company and its Subsidiaries,
in each case free and clear of all liens, encumbrances and defects except such as are described in Schedule 3(u), if attached hereto,
or such as would not have a Material Adverse Effect. Any real property and facilities held under lease by the Company and its Subsidiaries
are held by them under valid, subsisting and enforceable leases with such exceptions as would not have a Material Adverse Effect.


 


v.        
Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses
in which the Company and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has any reason to believe that
it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect. Upon written
request the Company will provide to the Buyer true and correct copies of all policies relating to directors’ and officers’
liability coverage, errors and omissions coverage, and commercial general liability coverage.


 


w.      
Internal Accounting Controls. The Company and each of its Subsidiaries maintain a system of internal accounting controls
sufficient, in the judgment of the Company’s board of directors, to provide reasonable assurance that (i) transactions are
executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization;
and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.


 


x.        
Foreign Corrupt Practices. Neither the Company, nor any of its Subsidiaries, nor any director, officer, agent, employee
or other person acting on behalf of the Company or any Subsidiary has, in the course of his actions for, or on behalf of, the Company,
used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity;
made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated
or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.


 


y.        
Solvency. The Company (after giving effect to the transactions contemplated by this Agreement) is solvent (i.e.,
its assets have a fair market value in excess of the amount required to pay its probable liabilities on its existing debts as they
become absolute and matured) and currently the Company has no information that would lead it to reasonably conclude that the Company
would not, after giving effect to the transaction contemplated by this Agreement, have the ability to, nor does it intend to take
any action that would impair its ability to, pay its debts from time to time incurred in connection therewith as such debts mature.
The Company’s financial statements for its most recent fiscal year end and interim financial statements have been prepared
assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business.


 


 


 






    	 	8	 



     


    

 


z.        
No Investment Company. The Company is not, and upon the issuance and sale of the Securities as contemplated by this
Agreement will not be an “investment company” required to be registered under the Investment Company Act of 1940 (an
“Investment Company”). The Company is not controlled by an Investment Company.


 


aa.      
No
Off-Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company or any of its
Subsidiaries and an unconsolidated or other off-balance sheet entity that is required to be disclosed by the Company in its 1934
Act filings and is not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.


 


bb.      
No Disqualification Events. None of the Company, any of its predecessors, any affiliated issuer, any director, executive
officer, other officer of the Company participating in the offering hereunder, any beneficial owner of twenty percent (20%) or
more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as
that term is defined in Rule 405 under the 1933 Act) connected with the Company in any capacity at the time of sale (each, an “Issuer
Covered Person”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii)
under the 1933 Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3).
The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event.


 


cc.      
Manipulation
of Price. The Company has not, and to its knowledge no one acting on its behalf has: (i) taken, directly or indirectly, any
action designed to cause or to result, or that could reasonably be expected to cause or result, in the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of any of the Securities; (ii) sold, bid for, purchased,
or paid any compensation for soliciting purchases of, any of the Securities; or (iii) paid or agreed to pay to any person any compensation
for soliciting another to purchase any other securities of the Company.


 


dd.      
Bank Holding Company Act. Neither the Company nor any of its Subsidiaries is subject to the Bank Holding Company Act
of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”). Neither the Company nor any of its Subsidiaries or affiliates owns or controls, directly or indirectly, five percent
(5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total equity
of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its
Subsidiaries or affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject
to the BHCA and to regulation by the Federal Reserve.


 


ee.      
Illegal or Unauthorized Payments; Political Contributions. Neither the Company nor any of its Subsidiaries nor, to the
Company’s knowledge, any of the officers, directors, employees, agents or other representatives of the Company or any of
its Subsidiaries or any other business entity or enterprise with which the Company or any Subsidiary is or has been affiliated
or associated, has, directly or indirectly, made or authorized any payment, contribution or gift of money, property, or services,
whether or not in contravention of applicable law, (i) as a kickback or bribe to any person; or (ii) to any political organization,
or the holder of or any aspirant to any elective or appointive public office except for personal political contributions not involving
the direct or indirect use of funds of the Company or any of its Subsidiaries.


 


ff.      
Breach
of Representations and Warranties by the Company. The Company agrees that if the Company breaches any of the representations
or warranties set forth in this Section 3 and in addition to any other remedies available to the Buyer pursuant to this Agreement,
it will be considered an Event of Default under Section 3 of the Note.


 


 4. ADDITIONAL COVENANTS, AGREEMENTS AND ACKNOWLEDGEMENTS.




 


a.        
Best Efforts. The parties shall use their best efforts to satisfy timely each of the conditions described in Section
6 and 7 of this Agreement.


 


 


 


 






    	 	9	 



     


    

 


b.        
Use of Proceeds. The Company shall use the proceeds for working capital by the Company; provided further that none
of the proceeds shall be used for the repayment of any indebtedness owed to officers, directors or employees of the Company or
their affiliates or in violation or contravention of any applicable law, rule or regulation.


 


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


 


d.        
Restriction on Activities. Commencing as of the date first above written, and until the earlier of payment of the
Note in full or full conversion of the Note, or full exercise of the Warrant, the Company shall not, directly or indirectly, without
the Buyer’s prior written consent, which consent shall not be unreasonably withheld: (a) change the nature of its business
in any material respect; or (b) sell, divest, acquire, change the structure of any material assets other than in the ordinary course
of business.


 


e.        
Listing. The Company, for so long as the Buyer owns any of the Securities, will maintain the listing and trading
of its Common Stock on the Principal Market or any equivalent replacement exchange or electronic quotation system (including but
not limited to the Pink Sheets electronic quotation system) and will comply in all respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the Financial Industry Regulatory Authority (“FINRA”) and
such exchanges, as applicable. The Company shall promptly provide to the Buyer copies of any notices it receives from the Principal
Market and any other exchanges or electronic quotation systems on which the Common Stock is then traded regarding the continued
eligibility of the Common Stock for listing on such exchanges and quotation systems.


 


f.         
Corporate Existence. The Company will, so long as the Buyer beneficially owns any of the Securities, maintain its
corporate existence and shall not sell all or substantially all of the Company’s assets, except in the event of a merger
or consolidation or sale of all or substantially all of the Company’s assets, where the surviving or successor entity in
such transaction (i) assumes the Company’s obligations hereunder and under the agreements and instruments entered into in
connection herewith, and (ii) is a publicly traded corporation whose Common Stock is listed for trading or quotation on the Principal
Market, any tier of the NASDAQ Stock Market, the New York Stock Exchange (including the NYSE American).


 


g.        
No Integration. The Company shall not make any offers or sales of any security (other than the Securities) under
circumstances that would require registration of the Securities being offered or sold hereunder under the 1933 Act or cause the
offering of the Securities to be integrated with any other offering of securities by the Company for the purpose of any stockholder
approval provision applicable to the Company or its securities.


 


 


 






    	 	10	 



     


    

 


h.        
Breach of Covenants. The Company acknowledges and agrees that if the Company breaches any of the covenants set forth
in this Section 4, in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an
Event of Default under Section 3 of the Note.


 


i.          
Compliance with 1934 Act; Public Information Failures. For so long as the Buyer beneficially owns any of the Securities
or common stock issued thereunder, the Company shall comply with the reporting requirements of the 1934 Act; and the Company shall
continue to be subject to the reporting requirements of the 1934 Act. During the period that the Buyer beneficially owns the Note,
if the Company shall (i) fail for any reason to satisfy the requirements of Rule 144(c)(1), including, without limitation, the
failure to satisfy the current public information requirements under Rule 144(c), or (ii) if the Company has ever been an issuer
described in Rule 144(i)(1)(i) or becomes such an issuer in the future, and the Company shall fail to satisfy any condition set
forth in Rule 144(i)(2) (each, a “Public Information Failure”) then, as partial relief for the damages to the Buyer
by reason of any such delay in or reduction of its ability to sell the Securities (which remedy shall not be exclusive of any other
remedies available pursuant to this Agreement, the Note, or at law or in equity), the Company shall pay to the Buyer an amount
in cash equal to three percent (3%) of the Purchase Price on each of the day of a Public Information Failure and on every thirtieth
day (pro-rated for periods totaling less than thirty days) thereafter until the date such Public Information Failure is cured.
The payments to which a Buyer shall be entitled pursuant to this Section 4(i) are referred to herein as “Public Information
Failure Payments.” Public Information Failure Payments shall be paid on the earlier of (i) the last day of the calendar month
during which such Public Information Failure Payments are incurred; and (ii) the third business day after the event or failure
giving rise to the Public Information Failure Payments is cured. In the event the Company fails to make Public Information Failure
Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate of eight percent (8%) per
month (prorated for partial months) until paid in full. As used in this Agreement, the term “business day” shall mean
any day other than a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are authorized or required
by law or executive order to remain closed.


 


j.         
Disclosure of Transactions and Other Material Information. By 9:00 a.m., New York time, three (3) Business Days following
the date this Agreement has been fully executed and funded, the Company shall file a Current Report on Form 8-K describing the
terms of the transactions contemplated by this Agreement in the form required by the 1934 Act and attaching this Agreement, the
form of Note (the “8-K Filing”). From and after the filing of the 8-K Filing with the SEC, the Buyer shall not be in
possession of any material, nonpublic information received from the Company, any of its Subsidiaries or any of their respective
officers, directors, employees or agents that is not disclosed in the 8-K Filing. In addition, effective upon the filing of the
8-K Filing, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether
written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, affiliates, employees
or agents, on the one hand, and the Buyer or any of its affiliates, on the other hand, shall terminate.


 


k.        
Legal Counsel Opinions. Upon the request of the Buyer from to time to time, the Company shall be responsible, at
its cost, for promptly supplying to the Company’s transfer agent and the Buyer a customary legal opinion letter of its counsel
(the “Legal Counsel Opinion”) to the effect that the resale of the Conversion Shares by the Buyer or its affiliates,
successors and assigns is exempt from the registration requirements of the 1933 Act pursuant to Rule 144, provided the requirements
of Rule 144 are satisfied and provided the Conversion Shares are not then registered under the 1933 Act for resale pursuant to
an effective registration statement, or other applicable exemption, provided the requirements of such other applicable exemption
are satisfied. Buyer will take no action or inaction that would invalidate the proposed opinion. Buyer will provide the customary
representations to counsel in order to provide such an opinion. Should the Company’s legal counsel fail for any reason other
than that the requirements of said exemption are unavailable in the reasonable opinion of counsel to issue the Legal Counsel Opinion,
the Buyer may, at the Company’s cost, secure another legal counsel to issue the Legal Counsel Opinion, and the Company will
instruct its transfer agent to accept such opinion. The Company hereby agrees that it may never take the position that it is a
“shell company” in connection with its obligations under this Agreement or otherwise.


 


l.         
Most-Favored Nation. So long as any of the Securities are outstanding, upon any issuance by the Company or any of
its subsidiaries of any new security, with any term that the Buyer reasonably believes is more favorable to the holder of such
security or with a term in favor of the holder of such security that the Buyer reasonably believes was not similarly provided to
the Buyer in the Note, the Warrant, or under this Agreement, then (i) the Company shall notify the Buyer of such additional or
more favorable term within one (1) business day of the issuance or amendment (as applicable) of the respective security, and (ii)
such term, at Buyer’s option, shall become a part of the transaction documents with the Buyer (regardless of whether the
Company complied with the notification provision of this Section). The types of terms contained in another security that may be
more favorable to the holder of such security include, but are not limited to, terms addressing conversion discounts, prepayment
rate, conversion lookback periods, interest rates, and original issue discounts. If Buyer elects to have the term become a part
of the transaction documents with the Buyer, then the Company shall immediately deliver acknowledgment of such adjustment in form
and substance reasonably satisfactory to the Buyer (the “Acknowledgment”) within one (1) business day of Company’s
receipt of request from Buyer (the “Adjustment Deadline”), provided that Company’s failure to timely provide
the Acknowledgement shall not affect the automatic amendments contemplated hereby.


 


 


 






    	 	11	 



     


    

 


m.      
Non-Public Information. The Company covenants and agrees that neither it, nor any other person acting on its behalf
will provide the Buyer or its agents or counsel with any information that constitutes, or the Company reasonably believes constitutes,
material non-public information, unless prior thereto the Buyer shall have consented to the receipt of such information and agreed
with the Company to keep such information confidential. The Company understands and confirms that the Buyer shall be relying on
the foregoing covenant in effecting transactions in securities of the Company. To the extent that the Company delivers any material,
non-public information to the Buyer without such Buyer’s consent, the Company hereby covenants and agrees that such Buyer
shall not have any duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective officers, directors,
agents, employees or affiliates, not to trade on the basis of, such material, non-public information, provided that the Buyer shall
remain subject to applicable law. To the extent that any notice provided, information provided, or any other communications made
by the Company, to the Buyer, constitutes or contains material non-public information regarding the Company or any Subsidiaries,
the Company shall simultaneously file such notice or other material information with the SEC pursuant to a Current Report on Form
8-K. In addition to any other remedies provided by this Agreement or the related transaction documents, if the Company provides
any material non-public information to the Buyer without their prior written consent, and it fails to immediately (no later than
that business day) file a Form 8-K disclosing this material non-public information, it shall pay the Buyer as partial liquidated
damages and not as a penalty a sum equal to $3,000 per day beginning with the day the information is disclosed to the Buyer and
ending and including the day the Form 8-K disclosing this information is filed.


 


n.      
Right of Participation/Refusal in Subsequent Offerings.


 


i.       
From the date first written above until eighteen (18) months thereafter, the Company will not, (i) directly or indirectly,
offer, sell, grant any option to purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase
or other disposition of) any of its or its Subsidiaries' debt, equity or equity equivalent securities, including without limitation
any debt, preferred shares or other instrument or security that is, at any time during its life and under any circumstances, convertible
into or exchangeable or exercisable for Common Stock (any such offer, sale, grant, disposition or announcement being referred
to as a "Subsequent Placement"); or (ii) enter into any definitive agreement with regard to the foregoing, in each case
unless the Company shall have first complied with this Section 4.


 


ii.      
The
Company shall deliver to the Buyer an irrevocable written notice (the "Offer Notice") of any proposed or intended issuance
or sale or exchange (the "Offer") of the securities being offered (the "Offered Securities") in a Subsequent
Placement, which Offer Notice shall (w) identify and describe the Offered Securities, (x) describe the price and other terms
upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued, sold or exchanged,
(y) identify the persons or entities (if known) to which or with which the Offered Securities are to be offered, issued, sold
or exchanged and (z) offer to issue and sell to or exchange with the Buyer the greater of (i) at least one hundred percent (100%)
of the Offered Securities (the “Subscription Amount”); or (ii) the principal amount of the Note issued hereunder.


 


iii.     
To
accept an Offer, in whole or in part, the Buyer must deliver a written notice to the Company prior to the end of the next business
day after the Buyer’s receipt of the Offer Notice (the “Offer Period”), setting forth the portion of the Subscription
Amount that the Buyer elects to purchase (the “Notice of Acceptance”). The Company shall have ten (10) business days
from the expiration of the Offer Period to complete the Subsequent Placement and in connection therewith to issue and sell the
Subscription Amount to the Buyer but only upon terms and conditions (including, without limitation, unit prices and interest rates)
that are not more favorable to the Buyer or less favorable to the Company than those set forth in the Offer Notice. Following such
ten (10) business day period, the Company shall publicly announce either (A) the consummation of the Subsequent Placement or (B)
the termination of the Subsequent Placement.


 


iv.      
Notwithstanding
anything to the contrary contained herein, if the Company desires to modify or amend the terms and conditions of the Offer prior
to the expiration of the Offer Period, the Company shall deliver to the Buyer a new Offer Notice and the Offer Period shall expire
on the next business day after the Buyer's receipt of such new Offer Notice.


 


v.       
If
by the fifteenth (15th) business day following delivery of the Offer Notice no public disclosure regarding a transaction
with respect to the Offered Securities has been made, and no notice regarding the abandonment of such transaction has been received
by the Buyer, such transaction shall be deemed to have been abandoned and the Buyer shall not be deemed to be in possession of
any material, non-public information with respect to the Company.


 


 


 


 






    	 	12	 



     


    

 


o.      
Registration Rights. Buyer shall have the Registration Rights Agreement attached hereto as Exhibit C.


 


As used
in this Agreement, the term “business day” shall mean any day other than a Saturday, Sunday or a day on which commercial
banks in the city of New York, New York are authorized or required by law or executive order to remain closed.


 


5. Transfer
Agent Instructions. The Company shall issue irrevocable instructions to the Company’s transfer agent to issue
certificates, registered in the name of the Buyer or its nominee, upon conversion of the Note, the Warrant, the Conversion
Shares, in such amounts as specified from time to time by the Buyer to the Company in accordance with the terms thereof (the
“Irrevocable Transfer Agent Instructions”). In the event that the Company proposes to replace its transfer agent,
the Company shall provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent
Instructions in a form as initially delivered pursuant to this Agreement (including but not limited to the provision to
irrevocably reserved shares of Common Stock in the Reserved Amount (as defined in the Note)) signed by the successor transfer
agent to the Company and the Company. Prior to registration of the Conversion Shares under the 1933 Act or the date on which
the Conversion Shares may be sold pursuant to any applicable exemption without any restriction as to the number of Securities
as of a particular date that can then be immediately sold, all such certificates shall bear the restrictive legend as
specified in this Agreement. The Company warrants that: (i) no instruction other than the Irrevocable Transfer Agent
Instructions referred to in this Section 5 will be given by the Company to its transfer agent and that the Securities shall
otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement, the
Note, and the Warrant; (ii) it will not direct its transfer agent not to transfer or delay, impair, or hinder its transfer
agent in transferring (or issuing electronically or in certificated form) any certificate for Securities to be issued to the
Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement; (iii) it will
not fail to remove (or directs its transfer agent not to remove or impairs, delays, or hinders its transfer agent from
removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for
any Securities issued to the Buyer upon conversion of or otherwise pursuant to the Note or Warrant as and when required by
the Note, the Warrant, and this Agreement; and (iv) it will provide any required corporate resolutions and issuance approvals
to its transfer agent within six (6) hours of each conversion of the Note or exercise of the Warrant. Nothing in this Section
shall affect in any way the Buyer’s obligations and agreement set forth herein to comply with all applicable prospectus
delivery requirements, if any, upon resale of the Securities. If the Buyer provides the Company, at the cost of the Company,
with (A) an opinion of counsel in form, substance and scope customary for opinions in comparable transactions, to the effect
that a public sale or transfer of such Securities may be made without registration under the 1933 Act and such sale or
transfer is effected, or (B) the Buyer provides reasonable assurances that the Securities can be sold pursuant to any
applicable exemption, the Company shall permit the transfer, and, in the case of the Securities, promptly instruct its
transfer agent to issue one or more certificates, free from restrictive legend, in such name and in such denominations as
specified by the Buyer. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm
to the Buyer, by vitiating the intent and purpose of the transactions contemplated hereby. Accordingly, the Company
acknowledges that the remedy at law for a breach of its obligations under this Section 5 may be inadequate and agrees, in the
event of a breach or threatened breach by the Company of the provisions of this Section, that the Buyer shall be entitled, in
addition to all other available remedies, to an injunction restraining any breach and requiring immediate transfer, without
the necessity of showing economic loss and without any bond or other security being required.


 


6. Conditions
to the Company’s Obligation to Sell. The obligation of the Company hereunder to issue and sell the Securities to
the Buyer at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions
thereto, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time
in its sole discretion:


 


a.        
The Buyer shall have executed this Agreement and delivered the same to the Company.


 


b.        
The Buyer shall have delivered the Purchase Price in accordance with the terms herein.


 


c.        
The representations and warranties of the Buyer shall be true and correct in all material respects as of the date when made
and as of the Closing Date, as though made at that time (except for representations and warranties that speak as of a specific
date), and the Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to the Closing Date.


 


 


 


 






    	 	13	 



     


    

 


d.        
No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization
having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated
by this Agreement.


 


7. Conditions
to The Buyer’s Obligation to Purchase. The obligation of the Buyer hereunder to purchase the Securities, on the
Closing Date, is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided
that these conditions are for the Buyer’s sole benefit and may be waived by the Buyer at any time in its sole
discretion:


 


a.        
The Company shall have executed this Agreement and delivered the same to the Buyer.


 


b.        
The Company shall have delivered to the Buyer the duly executed Note in such denominations as the Buyer shall request and
in accordance with Section 1 above.


 


c.        
The Warrant, Irrevocable Transfer Agent Instructions, and the Registration Rights Agreement in form and substance satisfactory
to the Buyer, shall have been delivered to and acknowledged in writing by the Company’s Transfer Agent.


 


d.        
The representations and warranties of the Company shall be true and correct in all material respects as of the date when
made and as of Closing Date, as though made at such time (except for representations and warranties that speak as of a specific
date) and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date.


 


e.        
No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization
having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated
by this Agreement.


 


f.         
No event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including
but not limited to a change in the 1934 Act reporting status of the Company or the failure of the Company to be timely in its 1934
Act reporting obligations.


 


g.        
The Company shall have delivered to the Buyer (i) a certificate evidencing the formation and good standing of the Company
and each of its Subsidiaries in such entity’s jurisdiction of formation issued by the Secretary of State (or comparable office)
of such jurisdiction, as of a date within ten (10) days of the Closing Date, and (ii) resolutions adopted by the Company’s
Board of Directors at a duly called meeting or by unanimous written consent authorizing this Agreement and all other documents,
instruments and transactions contemplated hereby.


 


 8. Governing Law; Miscellaneous.




 


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


 


 


 






    	 	14	 



     


    

 


b.        
Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original
but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party. A facsimile or .pdf signature shall be considered due execution and shall be binding upon
the signatory thereto with the same force and effect as if the signature were an original, not a facsimile or .pdf signature. Delivery
of a counterpart signature hereto by facsimile or email/.pdf transmission shall be deemed validly delivery thereof.


 


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


 


d.        
Severability. In the event that any provision of this Agreement, the Note, the Warrant, or any other agreement or
instrument delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with
such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision of this Agreement, the Note, the Warrant, or any other agreement, certificate, instrument
or document contemplated hereby or thereby.


 


e.        
Entire Agreement; Amendments. This Agreement, the Note, the Warrant, and the instruments referenced herein contain
the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set
forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect
to such matters. No provision of this Agreement or any agreement or instrument contemplated hereby may be waived or amended other
than by an instrument in writing signed by the Buyer.


 


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


 


If to the Company, to:


 


GROM SOCIAL ENTERPRISES,
INC.


2060 NW Boca Raton Boulevard #6


Boca Raton, Florida 33431


Attention: Darren M. Marks


e-mail:


 


If to the Buyer:


 


FIRSTFIRE GLOBAL OPPORTUNITIES
FUND LLC


1040 First Avenue, Suite 190


New York, NY
10022


Attention: Eli Fireman


e-mail: eli@firstfirecapital.com


 


 


 






    	 	15	 



     


    

 


With a copy by e-mail only to (which copy shall
not constitute notice):


 


FABIAN VANCOTT 


Attn: Anthony Michael Panek


e-mail: apanek@fabianvancott.com


 


g.        
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors
and assigns. Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the prior
written consent of the other. Notwithstanding the foregoing, subject to the provisions hereof, the Buyer may assign its rights
hereunder to any person that purchases Securities in a private transaction from the Buyer or to any of its “affiliates,”
as that term is defined under the 1934 Act, without the consent of the Company.


 


h.        
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.


 


i.         
Survival. The representations and warranties of the Company and the agreements and covenants set forth in this Agreement
shall survive the closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of the Buyer. The
Company agrees to indemnify and hold harmless the Buyer and all their officers, directors, employees and agents for loss or damage
arising as a result of or related to any breach or alleged breach by the Company of any of its representations, warranties and
covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses
as they are incurred.


 


j.         
Publicity. The Company, and the Buyer shall have the right to review a reasonable period of time before issuance
of any press releases, SEC, Principal Market or FINRA filings, or any other public statements with respect to the transactions
contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval of the Buyer,
to make any press release or SEC, Principal Market (or other applicable trading market) or FINRA filings with respect to such transactions
as is required by applicable law and regulations (although the Buyer shall be consulted by the Company in connection with any such
press release prior to its release and shall be provided with a copy thereof and be given an opportunity to comment thereon).


 


k.        
Expense Reimbursement; Further Assurances. At the Closing to occur as of the Closing Date, the Company shall pay
on behalf of the Buyer or reimburse the Buyer for its legal fees and expenses incurred in connection with this Agreement, pursuant
to the disbursement authorization signed by the Company of even date. Each party 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 the other 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.


 


l.         
No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties
to express their mutual intent, and no rules of strict construction will be applied against any party.


 


m.      
Indemnification. In consideration of the Buyer’s execution and delivery of this Agreement and acquiring the
Securities hereunder, and in addition to all of the Company’s other obligations under this Agreement or the Note, the Company
shall defend, protect, indemnify and hold harmless the Buyer and its stockholders, partners, members, officers, directors, employees
and direct or indirect investors and any of the foregoing persons’ agents or other representatives (including, without limitation,
those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”)
from and against any and all third party actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities
and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified
Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or
breach of any representation or warranty made by the Company in this Agreement, the Note, the Warrant or any other agreement, certificate,
instrument or document contemplated hereby or thereby, (b) any breach of any covenant, agreement or obligation of the Company contained
in this Agreement, the Note, the Warrant or any other agreement, certificate, instrument or document contemplated hereby or thereby
or (c) any cause of action, suit or claim brought or made against such Indemnitee by a third party (including for these purposes
a derivative action brought on behalf of the Company) and arising out of or resulting from (i) the execution, delivery, performance
or enforcement of this Agreement, the Note, the Warrant or any other agreement, certificate, instrument or document contemplated
hereby or thereby; (ii) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds
of the issuance of the Securities; or (iii) the status of the Buyer or holder of the Securities as an investor in the Company pursuant
to the transactions contemplated by this Agreement. To the extent that the foregoing undertaking by the Company may be unenforceable
for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities
that is permissible under applicable law.


 


 


 






    	 	16	 



     


    

 


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


 


o.        
Payment Set Aside. To the extent that the Company makes a payment or payments to the Buyer hereunder or pursuant
to the Note, or the Buyer enforces or exercises its rights hereunder or thereunder, and such payment or payments or the proceeds
of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set
aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver
or any other person or entity under any law (including, without limitation, any bankruptcy law, foreign, state or federal law,
common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred.


 


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


 


 


[Signature
Page Follows]


 


 


 


 


 


 


 


 


 


 


 






    	 	17	 



     


    

 


IN WITNESS WHEREOF, the undersigned
Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.


 


GROM SOCIAL ENTERPRISES, INC.


 


 


 


	By: /s/ Mel Leiner                                   
	Name: Mel Leiner
	Title: Executive Vice President


 


 


FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC


 


By: FirstFire Capital Management, LLC


 


 


	By: /s/ Eli Fireman                                   
	ELI FIREMAN, Manager


 


 


SUBSCRIPTION AMOUNT:


 


	Principal Amount of Note: $300,000.00
	Purchase Price of Note: $270,000.00*


 


 


 


 


*The purchase price of
$270,000.00 shall be paid promptly after the full execution of the Note and related transaction documents.


 


 


 


 






    	 	18	 



     


    

 


EXHIBIT A



 


FORM OF NOTE


 


[attached hereto]


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 






    	 	19	 



     


    

 


EXHIBIT B


 


FORM OF WARRANT


 


[attached hereto]



 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 



    	 	20	 



     


    

 



EXHIBIT C


 


REGISTRATION RIGHTS AGREEMENT


 


(attached)


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 



    	 	21