EXHIBIT 4.1


 


NEITHER THE ISSUANCE
AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH MAY BE THE LEGAL COUNSEL OPINION (AS DEFINED IN THE
PURCHASE AGREEMENT)), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT
TO 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.


 


	Principal Amount: $300,000.00	Issue Date: March 11, 2021
	Actual Amount of Purchase Price: $270,000.00	 


 


CONVERTIBLE PROMISSORY NOTE


 


FOR
VALUE RECEIVED, GROM SOCIAL ENTERPRISES, INC., a Florida corporation (hereinafter called the “Borrower”),
hereby promises to pay to the order of FIRSTFIRE GLOBAL OPPORTUNITIES FUND LLC, a Delaware limited liability company, or
registered assigns (the “Holder”), in the form of lawful money of the United States of America, the principal sum of
$300,000.00 (the “Principal Amount”) (subject to adjustment herein), with a purchase price of $270,000.00 (the “Consideration”)
plus an original issue discount in the amount of $30,000.00 (the “OID”), and to pay interest on the Principal Amount
under this Note at the rate of twelve percent (12%) (the “Interest Rate”) per annum guaranteed from the date that the
amount of Consideration is fully funded in accordance with the terms of this Note until the same becomes due and payable, whether
at maturity or upon acceleration or by prepayment or otherwise, as further provided herein; with the understanding that the first
twelve (12) months of interest (equal to $36,000.00) shall be guaranteed and earned in full as of the Issue Date. The Holder shall
pay the Consideration on the day of the full execution of the Note and all related transactional documents related to this Note,
and the outstanding principal amount under this Note shall be $300,000.00 (which includes the OID). The maturity date for this
Note shall be twelve (12) months from the effective date of the Holder’s payment of the Consideration (“Maturity Date”),
and is the date upon which the principal sum as well as any accrued and unpaid interest and other fees shall be due and payable.
Notwithstanding any other provision of this Note or any related transaction documents, Borrower may prepay this Note only pursuant
to Section 1.9 hereof.


 


It
is further acknowledged and agreed that the Principal Amount owed by Borrower under this Note shall be increased by the amount
of all expenses up to a maximum of $1,000.00 incurred by the Holder relating to any conversion of this Note into shares of Common
Stock. All such expenses shall be deemed added to the Principal Amount hereunder to the extent such expenses are paid by the Holder.


 


Interest
shall commence accruing on the date that the Note is fully funded and shall be computed on the basis of a 365-day year and the
actual number of days elapsed. Any Principal Amount or interest on this Note which is not paid when due shall bear interest at
the rate the lesser of (a) twenty percent (20%) per annum from the due date thereof until the same is paid (“Default Interest”);
or (b) the maximum rate allowed by law.


 


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


 


 


 


 






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


 


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


 


The following terms shall apply to this Note:


 


ARTICLE I. CONVERSION RIGHTS


 


1.1             Conversion
Right. The Holder shall have the right, at any time while the Conversion Shares are subject to an effective Registration Statement,
or if no Registration Statement covering the Conversion Shares is effective, at any time after one hundred eighty (180) days from
the Issue Date hereof, so long as there are amounts outstanding under the Note, to convert all or any portion of the then outstanding
and unpaid Principal Amount and interest (including any Default Interest) into fully paid and non-assessable shares of Common Stock,
as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such
Common Stock shall hereafter be changed or reclassified, at the Conversion Price (as defined below) determined as provided herein
(a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert any portion of
this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially
owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership
of the unconverted portion of this Note or the unexercised or unconverted portion of any other security of the Borrower subject
to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of Conversion Shares
issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made,
would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the then outstanding shares of Common
Stock. For purposes of the proviso set forth in the immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), and Regulations
13D-G thereunder, except as otherwise provided in clause (1) of such proviso, provided, however, that the limitations on
conversion may be waived (up to 9.99%) by the Holder upon, at the election of the Holder, not less than sixty-one (61) days’
prior notice to the Borrower, and the provisions of the conversion limitation shall continue to apply until such 61st day (or such
later date, as determined by the Holder, as may be specified in such notice of waiver). The number of Conversion Shares to be issued
upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion
Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice
of Conversion”), delivered to the Borrower or Borrower’s transfer agent by the Holder in accordance with Section 1.4
below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably
expected to result in, notice) to the Borrower or Borrower’s transfer agent before 11:59 p.m., New York, New York time on
such conversion date (the “Conversion Date”). The term “Conversion Amount” means, with respect to any conversion
of this Note, the sum of (1) the Principal Amount of this Note to be converted in such conversion plus (2) at the Holder’s
option, accrued and unpaid interest, if any, on such Principal Amount at the Interest Rate to the Conversion Date, plus
(3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1)
or (2).


 


 1.2             Conversion Price.




 


(a) 
Calculation of Conversion Price. The per share conversion price into which Principal Amount and interest (including
any Default Interest) under this Note shall be convertible into shares of Common Stock hereunder (the “Conversion Price”)
shall be $0.06 per share (the “Fixed Conversion Price”); provided however, that if an Event of Default (as defined
herein) exists, or at any time after the Issue Date hereof, but prior to the Conversion Date has existed, the Conversion Price
shall be the lesser of (i) $0.03 per share (the “Default Fixed Conversion Price”); or (ii) seventy percent (70%) of
the lowest trading price of the Common Stock during the ten (10) consecutive trading days including and immediately preceding the
Conversion Date (the “Alternate Conversion Price”). To the extent the Conversion Price is below the par value per share,
the Borrower will take all steps necessary to solicit the consent of the stockholders to reduce the par value to the lowest value
possible under law, provided however that the Borrower agrees to honor all conversions submitted pending this increase. If at any
time the Conversion Price as determined hereunder for any conversion would be less than the par value of the Common Stock, then
at the sole discretion of the Holder, the Conversion Price hereunder may equal such par value for such conversion and the Conversion
Amount for such conversion may be increased to include Additional Principal, where “Additional Principal” means such
additional amount to be added to the Conversion Amount to the extent necessary to cause the number of conversion shares issuable
upon such conversion to equal the same number of conversion shares as would have been issued had the Conversion Price not been
adjusted by the Holder to the par value price. In the event the Borrower has a DTC “Chill” on its shares, an additional
discount of ten percent (10%) shall apply to the Conversion Price while that “Chill” is in effect.


 


 


 






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(b) Conversion
Price During Major Announcements. Notwithstanding anything contained in Section 1.2(a) to the contrary, in the event the Borrower
(i) makes a public announcement that it intends to be acquired by, consolidate or merge with any other corporation or entity (other
than a merger in which the Borrower is the surviving or continuing corporation and its capital stock is unchanged) or sell or transfer
all or substantially all of the assets of the Borrower, or (ii) any person, group or entity (including the Borrower) publicly announces
a tender offer to purchase fifty percent (50%) or more of the Common Stock (or any other takeover scheme) (any such transaction
referred to in clause (i) or (ii) being referred to herein as a “Change in Control” and the date of the announcement
referred to in clause (i) or (ii) is being referred to herein as the “Announcement Date”), then the Conversion Price
shall, effective upon the Announcement Date and continuing through the Adjusted Conversion Price Termination Date (as defined below),
be equal to the lower of (x) the Conversion Price and (y) a twenty-five percent (25%) discount to the Acquisition Price (as defined
below). From and after the Adjusted Conversion Price Termination Date, the Conversion Price shall be determined as set forth in
Section 1.2(a). For purposes hereof, “Adjusted Conversion Price Termination Date” shall mean, with respect to any proposed
Change in Control for which a public announcement as contemplated by this Section 1.2(b) has been made, the date upon which the
Borrower (in the case of clause (i) above) or the person, group or entity (in the case of clause (ii) above) consummates or publicly
announces the termination or abandonment of the proposed Change in Control which caused this Section 1.2(b) to become operative.
For purposes hereof, “Acquisition Price” shall mean a price per share of Common Stock derived by dividing (x) the total
consideration (in cash, equity, earn- out or similar payments or otherwise) paid or to be paid to the Borrower or its shareholders
in the Change in Control transaction by (y) the number of authorized shares of Common Stock outstanding as of the business day
prior to the Announcement Date.


 


1.3             Authorized and Reserved Shares. The Borrower covenants that at all times until the Note is satisfied in full, the
Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights,
to provide for the issuance of a number of Conversion Shares equal to the greater of: (a) 20,000,000 shares of Common Stock or
(b) the sum of (i) the number of Conversion Shares issuable upon the full conversion of this Note (assuming no payment of Principal
Amount or interest) as of any issue date (taking into consideration any adjustments to the Conversion Price pursuant to Section
2 hereof or otherwise) multiplied by (ii) three (3) (the “Reserved Amount”). In the event that the Borrower
shall be unable to reserve the entirety of the Reserved Amount (the “Reserve Amount Failure”), the Borrower shall promptly
take all actions necessary to increase its authorized share capital to accommodate the Reserved Amount (the “Authorized Share
Increase”), including without limitation, all board of directors actions and approvals and promptly (but no less than sixty
(60) days following the calling and holding a special meeting of its shareholders no more than sixty (60) days following the Reserve
Amount Failure to seek approval of the Authorized Share Increase via the solicitation of proxies. Notwithstanding the foregoing,
in no event shall the Reserved Amount be lower than the initial Reserved Amount, regardless of any prior conversions. The Borrower
represents that upon issuance, the Conversion Shares will be duly and validly issued, fully paid and non- assessable. In addition,
if the Borrower shall issue any securities or make any change to its capital structure which would change the number of Conversion
Shares into which this Note shall be convertible at the then current Conversion Price, the Borrower shall at the same time make
proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free
from preemptive rights, for conversion of this Note. The Borrower (i) acknowledges that it has irrevocably instructed its transfer
agent to issue certificates for the Conversion Shares or instructions to have the Conversion Shares issued as contemplated by Section
1.4(f) hereof, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are
charged with the duty of executing stock certificates or cause the Borrower to electronically issue shares of Common Stock to execute
and issue the necessary certificates for the Conversion Shares or cause the Conversion Shares to be issued as contemplated by Section
1.4(f) hereof in accordance with the terms and conditions of this Note.


 


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


 


 1.4             Method of Conversion.




 


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


 


 


 


 






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


 


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


 


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


 


 


 






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


 


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


 


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


 


“NEITHER THE ISSUANCE
AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH MAY BE THE LEGAL COUNSEL OPINION (AS DEFINED IN THE
PURCHASE AGREEMENT)), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT
TO 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.”


 


 


 






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


 


 1.6             Effect of Certain Events.




 


(a)
Effect of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially
all of the assets of the Borrower, or the consolidation, merger or other business combination of the Borrower with or into any
other Person (as defined below) or Persons when the Borrower is not the survivor shall either: (i) be deemed to be an Event of
Default pursuant to which the Borrower shall be required to pay to the Holder upon the consummation of and as a condition to such
transaction an amount equal to the Default Amount (defined in Section 3.24); or (ii) be treated pursuant to Section 1.6(b) hereof.
“Person” shall mean any individual, corporation, limited liability Borrower, partnership, association, trust or other
entity or organization.


 


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


 


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


 


 


 


 






    	 	6	 



     


    

 


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


 


(e) Dilutive Issuance.
If, for any securities issued by the Borrower on or after the issue date hereof, excluding any exchange securities for securities
entered into prior to the issue date hereof, the Borrower, at any time while this Note or any amounts due hereunder are outstanding,
issues, sells or grants (or has issued, sold or granted as of the Issue Date, as the case may be) any option to purchase, or sells
or grants any right to reprice, or otherwise disposes of, or issues (or has sold or issued, as the case may be, or announces any
sale, grant or any option to purchase or other disposition), securities convertible into, exercisable for, or otherwise entitle
any person or entity the right to acquire, shares of Common Stock (including, without limitation, upon conversion of this Note,
and any convertible notes or warrants outstanding as of or following the Issue Date), in each or any case at an effective price
per share that is lower than the then Conversion Price (such lower price, the “Base Conversion Price” and such issuances,
collectively, a “Dilutive Issuance”) (it being agreed that if the holder of the Common Stock or other securities so
issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise
or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance,
be entitled to receive shares of Common Stock at an effective price per share that is lower than the Conversion Price, such issuance
shall be deemed to have occurred for less than the Conversion Price on such date of the Dilutive Issuance), then the Conversion
Price shall be reduced, at the option of the Holder, to a price equal the Base Conversion Price. If the Borrower enters into a
Variable Rate Transaction (as that term is commonly used), despite the prohibition set forth in the Purchase Agreement, the Borrower
shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible price per share at which such securities
could be issued in connection with such Variable Rate Transaction. Such adjustment shall be made whenever such Common Stock or
other securities are issued. Notwithstanding the foregoing, no adjustment will be made under this Section 1.6(e) in respect of
an Exempt Issuance. In the event of an issuance of securities involving multiple tranches or closings, any adjustment pursuant
to this Section 1.6(e) shall be calculated as if all such securities were issued at the initial closing. This Section shall also
be subject to the mechanics of Section 1.6(g) “Pending Legislation” clause herein. If any adjustment made under this
Section is the result of a variable priced feature of the relevant security, only the actual price of the issuance will be incorporated
herein as the new Fixed Conversion Price, but the variable feature itself will not be incorporated herein.


 


An
“Exempt Issuance” shall mean the issuance of (a) shares of Common Stock or other securities to officers or directors
of the Borrower pursuant to any stock or option or similar equity incentive plan duly adopted for such purpose, by a majority of
the non-employee members of the Borrower’s Board of Directors or a majority of the members of a committee of non-employee
directors established for such purpose in a manner which is consistent with the Borrower’s prior business practices; (b)
securities issued pursuant to a merger, consolidation, acquisition or similar business combination approved by a majority of the
disinterested directors of the Borrower, provided that any such issuance shall only be to a Person (or to the equity holders of
a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic
with the business of the Borrower and shall provide to the Borrower additional benefits in addition to the investment of funds,
but shall not include a transaction in which the Borrower is issuing securities primarily for the purpose of raising capital or
to an entity whose primary business is investing in securities; (c) securities issued pursuant to any equipment loan or leasing
arrangement, real property leasing arrangement or debt financing from a bank or similar financial institution approved by a majority
of the disinterested directors of the Borrower; (d) securities issued under the Form 1-A or S-1 filed and declared effective by
the Securities and Exchange Commission as of the date hereof; (e) existing convertible debt and equity lines of credit in existence
on the date hereof, (f) private placements of Common Stock by the Borrower; or (g) securities issued with respect to which the
Holder waives its rights in writing under this Section 1.6(e).


 


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


 


 


 






    	 	7	 



     


    

 


(g) Pending
Legislation. As of the Issue Date hereof, proposed legislation exists, namely proposed amendments to Rule 144(d)(3)(ii)
proposed on December 22, 2020 in SEC Release 2020-336, that would fundamentally change the economic terms of this Note. In
the event the rule becomes law and becomes effective while any amounts are outstanding under this Note or the Warrant,
any Conversion Price hereof that is deemed to be market-adjusted or market-variable in nature as defined therein, shall be
automatically amended so that this Note contains only the Fixed Conversion Price of $0.06 per share, or if an Event of
Default has or is occurring, the Default Fixed Conversion Price of $0.03 shall apply. In the event the final rule, or any
other combination of final rules, make this provision inoperable, invalid, or otherwise has an effect that changes the
economics of the transactions contemplated hereby, including the imposition of the Default Fixed Conversion Price, the
pertinent clause or mechanic of operation shall be stricken so that only the Fixed Conversion Price provision shall
remain.


 


1.7                
Adjustments to Conversion Price. At any time after the Issue Date, (i) if in the case that the Borrower’s Common
Stock is not deliverable by DWAC (including if the Borrower’s transfer agent has a policy prohibiting or limiting delivery
of shares of the Borrower’s Common Stock specified in a Notice of Conversion); (ii) if the Borrower ceases to be a reporting
company pursuant or subject to the Exchange Act; (iii) if the Borrower loses a market (including the OTC Pink, OTCQB or an equivalent
replacement exchange) for its Common Stock; (iv) if the Borrower fails to maintain its status as “DTC Eligible” for
any reason; (v) if the Note cannot be converted into free trading shares on or after six (6) months from the Issue Date; (vi) if
at any time the Borrower does not maintain or replenish the Reserved Amount (as defined herein) within three (3) business days
of the request of the Holder; (vii) if the Borrower fails to maintain the listing of its Common Stock on at least one of any tier
of the OTC Markets or an equivalent replacement exchange, any tier of the Nasdaq Stock Market, the New York Stock Exchange (including
the NYSE American); (viii) if the Borrower fails to comply with the reporting requirements of the Exchange Act; the reporting requirements
necessary to satisfy the availability of Rule 144 to the Holder or its assigns, including but not limited to the timely fulfillment
of its filing requirements as a fully-reporting issuer registered with the SEC; (ix) if the Borrower effectuates a reverse split
of its Common Stock without twenty (20) days prior written notice to the Holder; (x) if, once listed, subsequently OTC Markets
changes the Borrower’s designation to ‘No Information’ (Stop Sign), ‘Caveat Emptor’ (Skull and Crossbones),
or ‘OTC’, ‘Other OTC’ or ‘Grey Market’ (Exclamation Mark Sign); (xi) the restatement of any
financial statements filed by the Borrower with the SEC for any date or period from two (2) years prior to the Issue Date of this
Note and until this Note is no longer outstanding, if the result of such restatement would, by comparison to the un-restated financial
statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement;
(xii) any cessation of trading of the Common Stock on at least one of any tier of the OTC Markets or an equivalent replacement
exchange, any tier of the Nasdaq Stock Market, the New York Stock Exchange (including the NYSE American), and such cessation of
trading shall continue for a period of three consecutive (3) Trading Days; (xiii) the Borrower loses the “bid” price
for its Common Stock ($0.0001 on the “Ask” with zero market makers on the “Bid” per Level 2); or (xiv)
if the Holder is notified in writing by the Borrower or the Borrower’s transfer agent that the Borrower does not have the
necessary amount of authorized and issuable shares of Common Stock available to satisfy the issuance of Shares pursuant to a Conversion
Notice, then in addition to all other remedies under this Note, the Holder shall be entitled to apply a fifteen percent (15%) discount
for each occurrence, cumulative, or otherwise to the Conversion Price and that discount shall apply to all future conversions under
the Note.


 


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


 


 


 


 






    	 	8	 



     


    

 


1.9                
Prepayment. Notwithstanding anything to the contrary contained in this Note, subject to the terms of this Section,
at any time during the period beginning on the Issue Date and ending at Maturity (“Prepayment Termination Date”), Borrower
shall have the right, exercisable on not less than five (5) Trading Days prior written notice to the Holder of this Note, to prepay
up to the outstanding balance on this Note (principal and accrued interest), in full, in accordance with this Section. Any notice
of prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to the Holder of the Note at its registered
addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note; (2) the date of prepayment which shall
be not more than five (5) Trading Days from the date of the Optional Prepayment Notice; and (3) the amount (in dollars) that the
Borrower is paying. Notwithstanding Holder’s receipt of the Optional Prepayment Notice the Holder may convert, or continue
to convert the Note in whole or in part until the Optional Prepayment Amount (as defined herein) is paid to the Holder. On the
date fixed for prepayment (the “Optional Prepayment Date”), the Borrower shall make payment of the Optional Prepayment
Amount (as defined below) to or upon the order of the Holder as specified by the Holder in writing to the Borrower at least one
(1) business day prior to the Optional Prepayment Date.  If the Borrower exercises its right to prepay the Note, the Borrower
shall make payment to the Holder of one hundred fifteen percent (115%) of the total amount outstanding under the Note including,
but not limited to all principal, interest, fees, and defaults (the “Optional Prepayment Amount”).


 


1.10             
Repayment from Proceeds. While any portion of the outstanding Principal Amount and interest (including Default Interest)
under this Note are due and owing, if the Borrower receives cash proceeds from any source or series of related or unrelated sources,
including but not limited to, the issuance of equity or debt, the conversion of outstanding warrants of the Borrower, the issuance
of securities pursuant to an equity line of credit of the Borrower or the sale of assets, the Borrower shall, within one (1) business
day of Borrower’s receipt of such proceeds, inform the Holder of such receipt, following which the Holder shall have the
right in its sole discretion to require the Borrower to immediately apply all or any portion of such proceeds to repay all or any
portion of the outstanding Principal Amount and interest (including any Default Interest) then due under this Note. Failure of
the Borrower to comply with this provision shall constitute an Event of Default. In the event that such proceeds are received by
the Holder prior to the Maturity Date, the required prepayment shall be subject to the terms of Section 1.9 herein.


 


ARTICLE II. RANKING AND CERTAIN COVENANTS


 


2.1                
Ranking and Security. The obligations of the Borrower under this Note shall be subordinate with respect to any and
all Indebtedness incurred as of or following the Issue Date.


 


2.2                
Other Indebtedness. So long as the Borrower shall have any obligation under this Note, the Borrower shall not (directly
or indirectly through any Subsidiary or affiliate) incur or suffer to exist or guarantee any Indebtedness that is senior to or
pari passu with (in priority of payment and performance) the Borrower’s obligations hereunder unless the proceeds of such
Indebtedness are used to pay off the interest and principal under this Note. As used in this Section 2.2, the term “Borrower”
means the Borrower and any Subsidiary of the Borrower. As used herein, the term “Indebtedness” means (a) all indebtedness
of the Borrower for borrowed money, but not including deferred purchase price obligations in place as of the Issue Date and as
disclosed in the SEC Documents or obligations to trade creditors incurred in the ordinary course of business; (b) all obligations
of the Borrower evidenced by notes, bonds, debentures or other similar instruments; (c) purchase money indebtedness hereafter incurred
by the Borrower to finance the purchase of fixed or capital assets, including all capital lease obligations of the Borrower which
do not exceed the purchase price of the assets funded; (d) all guarantee obligations of the Borrower in respect of obligations
of the kind referred to in clauses (a) through (c) above that the Borrower would not be permitted to incur or enter into; and (e)
all obligations of the kind referred to in clauses (a) through (d) above that the Borrower is not permitted to incur or enter into
that are secured or unsecured by (or for which the holder of such obligation has an existing right, contingent or otherwise, to
be secured or unsecured by) any lien or encumbrance on property (including accounts and contract rights) owned by the Borrower,
whether or not the Borrower has assumed or become liable for the payment of such obligation.


 


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


 


 


 






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2.4                
Restriction on Stock Repurchases and Debt Repayments. So long as the Borrower shall have any obligation under this
Note, the Borrower shall not without the Holder’s written consent redeem, repurchase or otherwise acquire (whether for cash
or in exchange for property or other securities or otherwise) in any one transaction or series of related transactions any shares
of capital stock of the Borrower or any warrants, rights or options to purchase or acquire any such shares.


 


2.5                
Sale of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without
the Holder’s written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary
course of business. Any consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition,
but otherwise such consent shall not be unreasonably withheld, conditioned, or delayed.


 


2.6                
Advances and Loans; Affiliate Transactions. So long as the Borrower shall have any obligation under this Note, the
Borrower shall not, without the Holder’s written consent, lend money, give credit, make advances to or enter into any transaction
with any person, firm, joint venture or corporation, including, without limitation, officers, directors, employees, subsidiaries
and affiliates of the Borrower, except loans, credits or advances (a) in existence or committed on the Issue Date and which the
Borrower has informed Holder in writing prior to the Issue Date, (b) in regard to transactions with unaffiliated third parties,
made in the ordinary course of business, or (c) in regard to transactions with unaffiliated third parties, not in excess of $150,000.00.
So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent,
repay any affiliate (as defined in Rule 144) of the Borrower in connection with any indebtedness or accrued amounts owed to any
such party outside the ordinary course of business.


 


2.7                
Section 3(a)(9) or 3(a)(10) Transaction. So long as this Note is outstanding, the Borrower shall not enter into any
transaction or arrangement structured in accordance with, based upon, or related or pursuant to, in whole or in part, either Section
3(a)(9) of the Securities Act (a “3(a)(9) Transaction”) or Section 3(a)(l0) of the Securities Act (a “3(a)(l0)
Transaction”). In the event that the Borrower does enter into, or makes any issuance of Common Stock related to a 3(a)(9)
Transaction or a 3(a)(l0) Transaction while this note is outstanding, a liquidated damages charge of twenty-five percent (25%)
of the outstanding principal balance of this Note, but not less than Twenty-Five Thousand Dollars ($25,000), will be assessed and
will become immediately due and payable to the Holder at its election in the form of a cash payment or added to the balance of
this Note (under Holder's and Borrower's expectation that this amount will tack back to the Issue Date).


 


2.8                
Preservation of Business and Existence, etc. So long as the Borrower shall have any obligation under this Note, the
Borrower shall not, without the Holder’s written consent, (a) change the nature of its business in a material respect; (b)
sell, divest, change the structure of any material assets other than in the ordinary course of business; or (c) enter into any
Variable Rate Transactions or Merchant Cash Advance transactions except as in effect the date hereof. In addition, so long as the
Borrower shall have any obligation under this Note, the Borrower shall maintain and preserve, and cause each of its Subsidiaries
to maintain and preserve, its existence, rights and privileges, and become or remain, and cause each of its Subsidiaries (other
than dormant Subsidiaries that have no or minimum assets) to become or remain, duly qualified and in good standing in each jurisdiction
in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification
necessary. Furthermore, so long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the
Holder’s written consent, solicit any offers for, respond to any unsolicited offers for, or conduct any negotiations with,
any other person or entity with respect to any Variable Rate Transaction or investment.


 


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


 


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


 


 


 


 






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ARTICLE III. EVENTS OF DEFAULT


 


It shall be considered an event
of default if any of the following events listed in this Article III (each, an “Event of Default”) shall occur; provided
however, that Borrower shall have three (3) calendar days to cure any Event of Default under this Note or any of the other
Transaction Documents, unless another time period (whether longer or shorter) is specified therein:


 


3.1                
Conversion and the Shares. The Borrower (i) fails to issue Conversion Shares to the Holder (or announces or threatens
in writing that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in
accordance with the terms of this Note; (ii) fails to transfer or cause its transfer agent to transfer (issue) (electronically
or in certificated form) any certificate for the Conversion Shares issuable to the Holder upon conversion of or otherwise pursuant
to this Note as and when required by this Note; (iii) reserve the Reserved Amount at all times; or (iv) the Borrower itself, or
the Borrower directs its transfer agent, not to transfer or delays, impairs, or hinders its transfer agent in transferring (or
issuing electronically or in certificated form) any certificate for the Conversion Shares issuable to the Holder upon conversion
of or otherwise pursuant to this Note as and when required by this Note, or fails to remove (or directs its transfer agent not
to remove or impairs, delays, or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer
instructions in respect thereof) on any certificate for any Conversion Shares issued to the Holder upon conversion of, or otherwise
pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat that it does not
intend to honor the obligations described in this paragraph) and any such failure shall continue uncured (or any written announcement,
statement or threat not to honor its obligations shall not be rescinded in writing) for five (5) Trading Days after the Holder
shall have delivered a Notice of Conversion. It is an obligation of the Borrower to remain current in its obligations to its transfer
agent. It shall be an Event of Default of this Note, if a conversion of this Note is delayed, hindered, or frustrated due to a
balance owed by the Borrower to its transfer agent. If at the option of the Holder, the Holder advances any funds to the Borrower’s
transfer agent in order to process a conversion, such advanced funds shall be paid by the Borrower to the Holder, in cash within
forty-eight (48) hours of notice from the Holder, or in shares of the Borrower’s Common Stock, in the Holder’s sole
discretion.


 


3.2                
Breach of Agreements and Covenants. The Borrower breaches any material agreement, covenant or other material term
or condition contained in the Purchase Agreement, this Note, the Warrant, the Irrevocable Transfer Agent Instructions or in any
agreement, statement or certificate given in writing pursuant hereto or in connection herewith or therewith.


 


3.3                
Breach of Representations and Warranties. Any material representation or warranty of the Borrower made in the Purchase
Agreement, this Note, the Warrant, the Irrevocable Transfer Agent Instructions or in any agreement, statement or certificate given
in writing pursuant hereto or in connection herewith or therewith shall be false or misleading in any material respect when made
and the breach of which has (or with the passage of time will have) a material adverse effect on the rights of the Holder with
respect to this Note or the Purchase Agreement.


 


3.4                
Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors,
or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business,
or such a receiver or trustee shall otherwise be appointed.


 


3.5                
Judgments. Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary
of the Borrower or any of its property or other assets for more than $150,000.00, and shall remain unvacated, unbonded or unstayed
for a period of twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.


 


3.6                
Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or
involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower
or any subsidiary of the Borrower.


 


3.7                
Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of
any tier of the OTC Markets, or any tier of the Nasdaq Stock Market or the New York Stock Exchange (including the NYSE American).


 


 


 


 






    	 	11	 



     


    

 


3.8              
Failure to Comply with the 1934 Act. At any time after the Issue Date, the Borrower shall fail to comply with the
reporting requirements of the 1934 Act or the Borrower shall cease to be subject to the reporting requirements of the 1934 Act.


 


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


 


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


 


3.11             
Maintenance of Assets. The failure by Borrower to maintain any material intellectual property rights, personal, real
property or other assets which are necessary to conduct its business (whether now or in the future).


 


3.12             
Financial Statement Restatement. The restatement of any financial statements filed by the Borrower with the SEC for
any date or period from two (2) years prior to the Issue Date of this Note and until this Note is no longer outstanding, if the
result of such restatement would, by comparison to the un-restated financial statement, have constituted a material adverse effect
on the rights of the Holder with respect to this Note or the Purchase Agreement.


 


3.13             
Reverse Splits. The Borrower effectuates a reverse split of its Common Stock without twenty (20) days prior written
notice to the Holder.


 


3.14             
Replacement of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower
fails to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in
a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve
shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.


 


3.15             
DTC “Chill”. The DTC places a “chill” (i.e. a restriction placed by DTC on one or more of
DTC’s services, such as limiting a DTC participant’s ability to make a deposit or withdrawal of the security at DTC)
on any of the Borrower’s securities.


 


3.16             
Illegality. Any court of competent jurisdiction issues an order declaring this Note, the Purchase Agreement, or any
provision hereunder or thereunder to be illegal.


 


3.17.             
DWAC
Eligibility. In addition to the Event of Default in Section 3.15, the Common Stock is otherwise not eligible for trading through
the DTC’s Fast Automated Securities Transfer or Deposit/Withdrawal at Custodian programs.


 


3.18             
Variable Rate Transactions; Dilutive Issuances. The Borrower (i) issues shares of Common Stock (or convertible securities
or Purchase Rights) pursuant to an equity line of credit of the Borrower or otherwise in connection with a Variable Rate Transaction
except for existing lines of credit or Variable Rate Transactions existing as of the date hereof; (ii) adjusts downward the “floor
price” at which shares of Common Stock (or convertible securities or Purchase Rights) may be issued under an equity line
of credit or otherwise in connection with a Variable Rate Transaction (or entered into in the future) except for existing lines
of credit or Variable Rate Transactions existing as of the date hereof; or (iii) a Dilutive Issuance is triggered as provided in
this Note.


 


3.19             
Bid Price. The Borrower shall subsequently lose the “bid” price for its Common Stock ($0.0001 on the
“Ask” with zero market makers on the “Bid” per Level 2) or a market (including the OTC Pink, OTCQB or an
equivalent replacement marketplace or exchange).


 


3.20             
Inside Information. Any attempt by the Borrower or its officers, directors, or affiliates to intentionally transmit,
convey, disclose, or any actual transmittal, conveyance, or disclosure by the Borrower or its officers, directors, or affiliates
of, material non-public information concerning the Borrower, to the Holder or its successors and assigns, which is not immediately
cured by Borrower’s filing of a Form 8-K pursuant to Regulation FD on that same date


 


 


 


 






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3.21             
Unavailability of Rule 144. If, at any time on or after the date which is six (6) months after the Issue Date, except
due to the Holder’s actions or inactions, the Holder is unable to (i) obtain a standard “144 legal opinion letter”
from an attorney reasonably acceptable to the Holder, the Holder’s brokerage firm (and respective clearing firm), and the
Borrower’s transfer agent in order to facilitate the Holder’s conversion of any portion of the Note into free trading
shares of the Borrower’s Common Stock pursuant to Rule 144; or (ii) thereupon deposit such shares into the Holder’s
brokerage account.


 


3.22             
Suspension of Trading of Common Stock. If, at any time, the Borrower’s Common Stock (i) is suspended from trading;
(ii) halted from trading; or (iii) fails to be quoted or listed (as applicable) on any level of the OTC Markets, any tier of the
NASDAQ Stock Market, the New York Stock Exchange, (including the NYSE American).


 


3.23             
Failure to Timely Register. If the Borrower shall fail to meet any of the deadlines
or any of its other obligations under the Registration Rights Agreement entered into by the parties in connection herewith.


 


3.24             
Rights
and Remedies Upon an Event of Default. Upon the occurrence and during the continuation of any Event of Default specified in
this Article III, this Note shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction
of its obligations hereunder, an amount (the “Default Amount”) equal to the Principal Amount then outstanding plus
accrued interest (including any Default Interest) through the date of full repayment multiplied by one hundred twenty-five percent
(125%). Holder may, in its sole discretion, determine to accept payment part in Common Stock and part in cash. For purposes of
payments in Common Stock, the conversion formula set forth in Section 1.2, including the lesser of the Default Fixed Conversion
Price and the Alternate Conversion Price (subject to Section 1.6(g)) applying. Upon an uncured Event of Default, all amounts payable
hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly
waived by the Borrower, together with all costs, including, without limitation, legal fees and expenses, of collection, and the
Holder shall be entitled to exercise all other rights and remedies available at law or in equity, including, without limitation.


 


ARTICLE IV. MISCELLANEOUS


 


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


 


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


 


If to the Borrower, to:


 


GROM SOCIAL ENTERPRISES, INC.


2060 NW Boca Raton Boulevard #6


Boca Raton, Florida 33431


Attention: Darren M. Marks


e-mail:


 


 


 


 






    	 	13	 



     


    

 


If to the Holder:


 


FIRSTFIRE GLOBAL OPPORTUNITIES FUND LLC


1040 First Avenue, Suite 190 New York, NY
10022


Attention: Eli Fireman


e-mail: eli@firstfirecapital.com


 


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


 


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


 


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


 


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


 


4.6                
Governing Law; Venue; Attorney’s Fees. This Note shall be governed by and construed in accordance with the
laws of the State of 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 Note or any other agreement, certificate, instrument or document contemplated
hereby shall be brought only in the state courts located in the state of New York or federal courts located in the state of New
York. The Borrower hereby irrevocably waives any objection to jurisdiction and venue of any action instituted hereunder and shall
not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. THE BORROWER HEREBY
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTIONS CONTEMPLATED HEREBY. Each party hereby irrevocably waives
personal service of process and consents to process being served in any suit, action or proceeding in connection with this Note
or any other agreement, certificate, instrument or document contemplated hereby or thereby by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under
this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. The prevailing party
in any action or dispute brought in connection with this the Note or any other agreement, certificate, instrument or document contemplated
hereby or thereby shall be entitled to recover from the other party its reasonable attorney’s fees and costs.


 


 


 


 






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


 


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


 


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


 


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


 


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


 


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


 


 


 






    	 	15	 



     


    

 


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


 


4.14             
Most-Favored Nation. So long as this Note is outstanding, upon any issuance by the Borrower or any of its subsidiaries
of any new security, with any term that the Holder 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 Holder reasonably believes was not similarly provided to the Holder in
this Note, then (i) the Borrower shall notify the Holder 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 Holder’s option, shall become
a part of the transaction documents with the Holder (regardless of whether the Borrower complied with the notification provision
of this Section 4.14). 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 Holder elects to have the term become a part of the transaction documents with the Holder,
then the Borrower shall immediately deliver acknowledgment of such adjustment in form and substance reasonably satisfactory to
the Holder (the “Acknowledgment”) within one (1) business day of Borrower’s receipt of request from Holder (the
“Adjustment Deadline”), provided that Borrower’s failure to timely provide the Acknowledgement shall not affect
the automatic amendments contemplated hereby.


 


4.15             
Dispute Resolution. In the case of a dispute as to the determination of the Conversion Price, Conversion Amount,
any prepayment amount or Default Amount, Issue, Closing or Maturity Date, the closing bid price, or fair market value (as the case
may be) or the arithmetic calculation of the Conversion Price or the applicable prepayment amount(s) (as the case may be), the
Borrower or the Holder shall submit the disputed determinations or arithmetic calculations via facsimile (i) within one (1) Trading
Day after receipt of the applicable notice giving rise to such dispute to the Borrower or the Holder or (ii) if no notice gave
rise to such dispute, at any time after the Holder learned of the circumstances giving rise to such dispute. If the Holder and
the Borrower are unable to agree upon such determination or calculation within five (5) Trading Days of such disputed determination
or arithmetic calculation (as the case may be) being submitted to the Borrower or the Holder, then the Borrower shall, within three
(3) Trading Days, submit (a) the disputed determination of the Conversion Price, the closing bid price, the or fair market value
(as the case may be) to an independent, reputable investment bank selected by the Borrower and approved by the Holder or (b) the
disputed arithmetic calculation of the Conversion Price, Conversion Amount, any prepayment amount or Default Amount, to an independent,
outside accountant selected by the Holder that is reasonably acceptable to the Borrower. The Borrower shall cause at its expense
the investment bank or the accountant to perform the determinations or calculations and notify the Borrower and the Holder of the
results no later than one (1) Trading Day from the time it receives such disputed determinations or calculations. Such investment
bank’s or accountant’s determination or calculation shall be binding upon all parties absent demonstrable error.


 


 


[signature
page follows]


 


 






    	 	16	 



     


    

 


IN WITNESS WHEREOF, Borrower
has caused this Note to be signed in its name by its duly authorized officer on March 11, 2021.


 


GROM SOCIAL ENTERPRISES, INC.


 


 


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


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 






    	 	17	 



     


    

 


EXHIBIT A -- NOTICE OF CONVERSION


 


The undersigned
hereby elects to convert $ principal amount of the Note (defined below) into that number of shares of Common Stock to
be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of GROM SOCIAL ENTERPRISES,
INC., a Florida corporation (the “Borrower”), according to the conditions of the Convertible Promissory Note of
the Borrower dated as of March 11, 2021 (the “Note”), as of the date written below. No fee will be charged to the Holder
for any conversion, except for transfer taxes, if any.


 


Box Checked as to applicable instructions:


 


	☐	The Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).
	 	 
	 	Name of DTC Prime Broker:
	 	Account Number:


 


	☐	The undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below (which numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately below or, if additional space is necessary, on an attachment hereto:
	 	
        FIRSTFIRE GLOBAL OPPORTUNITIES FUND LLC

        1040 First Avenue, Suite 190 New York, NY
        10022

        Attn: Eli Fireman

        e-mail: eli@firstfirecapital.com



 


	Date of Conversion:		 	 
	Applicable Conversion Price:	$		 
	Costs Incurred by the Undersigned to Convert the Note into Shares of Common Stock:	$	
        
	 
	Number of Shares of Common Stock to be Issued Pursuant to Conversion of the Note:	 	
         

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

         
	 


 


	By:                                                                
	Name:
	Title:
	Date:


 


 


 


 


 


 






    	 	18