Document:

Exhibit 10.2

 

	 

                                                                                 
	 

                                             

                                             

 

	 	
         

        Intercreditor Deed

         

         

         

        3⁄4

        Wayne Edward Dearing (Seller Security Agent)

        Each Person named in Schedule 1 (Sellers)

        The Crone Law Group, P.C. (New Lender Security Agent)

        Each Person named in Schedule 2 (New Lenders)

        Grom Social Enterprises, Inc. (GSE)

        Grom Holdings, Inc. (Grom)

        TD Holdings Limited (TDH)

        Top Draw Animation HongKong Limited (TDAHK)

        The Crone Law Group, P.C. (Escrow Agent)

        3⁄4

         

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

	Level 32
        Wu Chung House 213 Queen's Road East

        Hong Kong

        T +852 2841
        6888 F +852 2810 0235

        minterellison.com
	

 

 

 

 

    	 	1	 

     

    

 

Intercreditor deed

 

 

	Details	4
	Agreed terms	8
	1.   Defined terms and interpretation	8
	1.1   Defined terms	8
	1.2   Successors and Assigns	13
	1.3   Headings	13
	1.4   Miscellaneous	14
	1.5   Effect as a Deed	15
	1.6   Third Party Rights	15
	2.   Repayment of the Seller Notes	15
	3.   Closing Obligations	15
	3.1   Closing obligations of GSE and the Security Providers	15
	3.2   Closing obligations of the New Lender Security Agent	16
	3.3   Closing obligations of the Seller Security Agent	17
	4.   Escrow Arrangement	17
	4.1   Escrow Documents	17
	4.2   Authorisations	18
	4.3   Return of Escrow Documents	18
	5.   Consent	18
	5.1   Conditions precedent	18
	5.2   Consent	18
	5.3   Effectiveness of this Deed	19
	5.4   Delivery of Security Documents	19
	6.   Securities and distributions	20
	6.1   Application of this Clause	20
	6.2   Equal ranking	20
	6.3   Application of money and proceeds	20
	6.4   Contingent liabilities	21
	6.5   Arrangements paramount	21
	6.6   Continuation	21
	6.7   Other property	21

 

 

 

    	 	2	 

     

    

 

	7.   Dealings between Security Holders	22
	7.1   Application of this Clause	22
	7.2   Title documents	22
	7.3   Distribution	22
	7.4   Dealing with a Security	22
	7.5   Increasing the Secured Obligation	23
	7.6   Default under Security	23
	7.7   Exercise of Powers and enforcement	23
	7.8   Sale of Secured Assets	23
	8.   Representations and warranties	23
	8.1   General representations and warranties	23
	8.2   By the Security Providers	24
	8.3   Reliance and survival	25
	9.   Security Provider provisions	25
	9.1   Acknowledgment	25
	9.2   Co-operation	25
	9.3   Cross default	25
	9.4   No subrogation	25
	9.5   Provide copies of Security and variations	26
	10.   Payments	26
	10.1   Manner of payment	26
	10.2   Payments and receipts in foreign currency	26
	10.3   Due day for payment	26
	11.   Costs, expenses and Taxes	26
	11.1   Costs and expenses of Security Providers	26
	11.2   Amendment costs	26
	11.3   Enforcement costs	27
	11.4   Taxes, fees and charges	27
	12.   Notices and other communications	27
	12.1   Service of notices	27
	12.2   Effective on receipt	27
	13.   Assignment	28
	13.1   By Security Holder	28
	13.2   By Security Providers	28

 

 

 

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	14.   Protection provisions	28
	14.1   Security Holder not liable	28
	14.2   Security Holder not restricted	28
	14.3   Indemnities and reimbursement obligations	29
	14.4   Reinstating avoided transaction	29
	14.5   Authorised Representatives and communications	29
	15.   General provisions	29
	15.1   Consideration	29
	15.2   Prompt performance	29
	15.3   Powers	30
	15.4   Consent and waivers	30
	15.5   Notices or demands as evidence	30
	15.6   Severability	30
	15.7   Amendments	30
	15.8   Termination	30
	15.9   Governing law	30
	15.10   Jurisdiction	30
	15.11   Service of process	31
	15.12   No Presumption	31
	15.13   Counterparts	31
	Schedule 1 – The Sellers	32
	Schedule 2 – The New Lenders	33
	Signing page	34

 

 

 

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Details

 

	Date	13 March 2020

 

Parties

 

	Name	Wayne Edward Dearing as security agent for himself and on behalf of the Sellers (as defined below)
	Short form name	Seller Security Agent
	Notice details	
        Address: 12 Zinia Street, Valle Verde 2, Pasig City, Philippines
        1605

        Email: wdearing@topdrawanimation.com

 

	 	 
	Name	Each Person named in Schedule 1
	Short form name	collectively, the Sellers
	Notice details	As specified in Schedule 1

 

	 	 
	Name	The Crone Law Group, P.C. as security agent on behalf of the New Lenders
	Short form name	New Lender Security Agent
	Place of incorporation	State of California in the US
	Notice details	
        Address: 500 Fifth Ave, Suite 938, New York, NY 10110

        Email: mcrone@cronelawgroup.com

        Fax number: (818) 688-3130

        Attention: Mark E. Crone

 

	 	 
	Name	Each Person named in Schedule 2
	Short form name	collectively, the New Lenders
	Notice details	As specified in Schedule 2

 

	 	 
	Name	Grom Social Enterprises, Inc.
	Short form name	GSE
	Place of incorporation	Florida
	Notice details	
        Address: 2060 NW Boca Raton Boulevard, Suite #6 Boca Raton Florida
        33431

        Emails: mel@gromsocial.com and darren@gromsocial.com

        Fax number: (844) 704-4766

        Attention: Melvin Leiner and Darren Marks

 

    	 	5	 

     

    

 

	 	 
	Name	Grom Holdings, Inc. 
	Short form name	Grom
	Place of incorporation	Delaware
	Notice details	
        Address: 2711 Centerville Road, Suite 400, City of Wilmington19808,
        County of New Castle, Delaware

        

 

	 	 
	Name	TD Holdings Limited
	Short form name	TDH
	Place of incorporation	Hong Kong (company number 996145)
	Notice details	
        Address: Rooms 1009-1012, 10/F, K. Wah Centre, 191 Java Road,
        North Point, Hong Kong

        

 

	 	 
	Name	Top Draw Animation HongKong Limited 
	Short form name	TDAHK
	Role	Hong Kong (company number 738855)
	Notice details	
        Address: Rooms 1009-1012, 10/F, K. Wah Centre, 191 Java Road,
        North Point, Hong Kong

        

 

	 	 
	Name	The Crone Law Group, P.C. as escrow agent
	Short form name	Escrow Agent
	Place of incorporation	State of California in the US
	Notice details	
        Address: 500 Fifth Ave, Suite 938, New York, NY 10110

        

 

 

 

 

 

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Background

 

		A	By a share sale agreement dated 20 June 2016 and entered into between the Sellers and Grom (as the same may be amended, supplemented
or otherwise modified from time to time) (the SPA), the Sellers agreed to sell, and Grom agreed to purchase, the entire
issued share capital of TDH pursuant to the terms and subject to the conditions therein.

 

		B	In accordance with the SPA, the consideration for the sale and purchase of the entire issued share capital of TDH was partially
paid by way of (i) the Short Term Note (as defined below) in the amount of US$500,000; and (ii) the Buyer Notes (as defined below)
in the amount of US$4,000,000. The obligations of the Short Term Note and the Buyer Notes were guaranteed by, among other things,
the provision of the Guarantees (as defined below) by TDH and TDAHK, respectively, in favour of the Seller Security Agent under
the Seller Debentures (as defined below). The Guarantees were secured by, among other things, the fixed and floating charges created
under the Seller Debentures (as defined below).

 

		C	GSE, being the holding company of Grom, proposes to issue the Convertible Notes (as defined below) in the aggregate amount
of US$3,000,000 in favour of the New Lenders on the terms and conditions of the Convertible Notes Subscription Agreements (as defined
below), the proceeds of which shall be used for, among other things, the partial repayment of the Seller Notes. As security for
the obligations of the Convertible Notes:

 

		(i)	Grom proposes to enter into the New Lender TDH Share Charge in favour of the New Lender Security Agent (on behalf of the New
Lenders);

 

		(ii)	TDH proposes to enter into the New Lender TDH Debenture and the New Lender TDAHK Share Charge in favour of the New Lender Security
Agent (on behalf of the New Lenders); and

 

		(iii)	TDAHK proposes to enter into the New Lender TDAHK Debenture in favour of the New Lender Security Agent (on behalf of the New
Lenders).

 

		D	As further security for the obligations of the Seller Notes:

 

		(i)	Grom proposes to enter into the Seller TDH Share Charge in favour of the Seller Security Agent (for himself and on behalf of
the Sellers); and

 

		(ii)	TDH proposes to enter into the Seller TDAHK Share Charge in favour of the Seller Security Agent (for himself and on behalf
of the Sellers).

 

		E	The Parties agree that the Seller Security and the New Lender Security shall rank equally on a pari passu basis, and
the Parties will cooperate on the enforcement of such Security, as set out in this Deed.

 

 

 

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Agreed terms

 

		1.	Defined terms and interpretation

 

		1.1	Defined terms

 

In this Deed:

 

Account Bank means the bank
with which The Crone Law Group, P.C. has established the Company Account which it maintains funds on behalf of GSE.

 

Approval means any approval,
clearance, license, authorisation, release, order, or consent required to be obtained from, or any registration, qualification,
permit, designation, declaration, filing, notice, statement or other communication required to be filed with or delivered to, any
Governmental Authority or any other Person, or any waiver of any of the foregoing or from any Governmental Authority or any other
Person.

 

Authorised Representative means:

 

		(a)	in respect of each Security Provider, a director or company secretary, or a Person it notifies to the Security Holders (with
a certified true copy of that Person's specimen signature) as being authorised to act as its authorised representative for the
purposes of this Deed; and

 

		(b)	in respect of a Security Holder, a Person notified to the other Parties to act as its/his/her authorised representative for
the purposes of this Deed.

 

Avoidance has the meaning
given to it in Clause 14.4 (Reinstating avoided transaction).

 

Business Day means a day on
which commercial banks in Hong Kong are generally open for business (other than a Saturday, Sunday, public holiday or a day on
which commercial banks do not open for business owing to a tropical cyclone warning signal number 8 or above or a "black"
rainstorm warning signal being in force in Hong Kong).

 

Buyer Notes has the meaning
given to it in the SPA.

 

Closing Date means the date
of completion of the issue and subscription of the Convertible Notes.

 

Companies Ordinance means
the Companies Ordinance (Chapter 622 of the Laws of Hong Kong).

 

Company Account means the
bank account designated by GSE for receiving the proceeds from the issue of the Convertible Notes.

 

Confirmation has the meaning
given to it in Clause 4.1(c) (Escrow Documents).

 

Convertible Notes means certain
convertible notes in the aggregate principal amount of US$3,000,000 of GSE issued in favour of the New Lenders.

 

 

 

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Convertible Notes Subscription
Agreements means collectively the subscription agreements dated on or around the date of this Deed and entered into between
GSE and each New Lender in relation to, among other things, the subscription of the Convertible Notes.

 

Encumbrance means any interest
or equity of any Person (including any right to acquire, option or right of pre-emption or first offer or first refusal) or any
mortgage, charge, pledge, lien, assignment, hypothecation, security interest, title retention or other security agreement or arrangement
or any restriction on use, voting, transfer, receipt of income or exercise of any other attribute of ownership.

 

Escrow Agent means The Crone
Law Group, P.C. in its capacity as escrow agent for the benefit of the Security Providers and the Security Holders.

 

Escrow Documents means collectively
(a) the documents to be delivered to the Escrow Agent by the Security Providers pursuant to Clause 3.1(b)(i) and 3.1(b)(iii);
(b) the documents to be delivered to the Escrow Agent by the New Lender Security Agent pursuant to Clause 3.2; and (c) the
documents to be delivered to the Escrow Agent by the Seller Security Agent pursuant to Clause 3.3(a), and each an Escrow
Document.

 

Event of Default means an
event of default (however described) under any of the Seller Security and the New Lender Security.

 

Governmental Authority means
any nation or government or any federation, province or state or any other political subdivision thereof; any entity, authority
or body exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including
any government authority, agency, department, board, commission, instrumentality, securities exchange, supervisory or regulatory
body of any country, or any political subdivision thereof, any court, tribunal or arbitrator, and any self-regulatory organisation.

 

Governmental Order means any
applicable order, ruling, decision, verdict, decree, writ, subpoena, mandate, precept, command, directive, consent, approval, award,
judgment, injunction or other similar determination or finding by, before or under the supervision of any Governmental Authority.

 

Guarantees means collectively
the guarantees provided by TDH and TDAHK, respectively, in favour of the Seller Security Agent pursuant to the Seller Debentures.

 

Hong Kong means the Hong Kong
Special Administrative Region of the People's Republic of China.

 

Law or Laws means any
constitutional provision, statute or other law, rule, regulation, guidance, decisions, published official policy or published official
interpretation of any Governmental Authority and any injunction, judgment, order, ruling, assessment or writ issued by any Governmental
Authority.

 

Loss means a loss, claim,
action, damage, liability, cost, charge, expense, penalty, fine or any other outgoing suffered, paid or incurred.

 

New Lender Security Agent Agreement
means the security agent agreement dated on or around the date of this Deed and entered into between the New Lender Security
Agent and each New Lender.

 

New Lender Debentures means
collectively the New Lender TDH Debenture and the New Lender TDAHK Debenture.

 

 

 

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New Lender Indebtedness means
all outstanding indebtedness incurred by the Security Providers under the New Lender Transaction Documents as at the date of this
Deed.

 

New Lender Secured Assets means
all property and assets being the subject of the New Lender Security.

 

New Lender Security means
any Encumbrance granted, created or expressed to be created under the New Lender Security Documents.

 

New Lender Security Documents
means collectively:

 

		(a)	the New Lender Debentures; and

 

		(b)	the New Lender Share Charges.

 

New Lender Share Charges means
collectively the New Lender TDH Share Charge and the New Lender TDAHK Share Charge.

 

New Lender Subscription Amount
means the aggregate subscription amount payable by the New Lenders for their respective subscription of the Convertible Notes,
which shall be an amount no less than US$3,000,000.

 

New Lender TDAHK Debenture means
the debenture to be entered into between TDAHK as chargor and the New Lender Security Agent (on behalf of the New Lenders).

 

New Lender TDAHK Share Charge
means the share charge to be entered into between TDH as chargor and the New Security Agent (on behalf of the New Lenders), which
creates a security interest over all shares held by TDH in the issued share capital of TDAHK.

 

New Lender TDH Debenture means
the debenture to be entered into between TDH as chargor and the New Lender Security Agent (on behalf of the New Lenders).

 

New Lender TDH Share Charge
means the share charge to be entered into between Grom as chargor and the New Security Agent (on behalf of the New Lenders), which
creates a security interest over the entire issued share capital of TDH.

 

New Lender Transaction Documents
means collectively:

 

		(a)	the Convertible Notes Subscription Agreements;

 

		(b)	the document(s) creating and constituting the Convertible Notes;

 

		(c)	the New Lender Security Agent Agreement;

 

		(d)	this Deed; and

 

		(e)	the New Lender Security Documents.

 

 

 

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Party means each party to
this Deed, and Parties shall be construed accordingly.

 

Payment Instruction has the
meaning given to it in Clause 3.1(a) (Closing deliverables of GSE and the Security Providers).

 

Person shall include an individual,
corporation, company, partnership, firm, trustee, trust, executor, administrator or other legal personal representative; unincorporated
association, joint venture, syndicate or other business enterprise; any governmental, administrative or regulatory authority or
agency; and their respective successors, legal personal representatives and assigns, as the case may be; and pronouns shall have
a similarly extended meaning.

 

Power means, in respect of
a Security Holder, any right, power, discretion or remedy of that Security Holder under any of its Security or applicable law.

 

Receiver means any receiver,
manager, receiver and manager or other similar officer appointed by a Security Holder pursuant to a Security.

 

Repayment Amount has the meaning
given to it in Clause 2(a) (Repayment of the Seller Notes).

 

Repayment Date means the date
on which the Repayment Amount is transferred to the Seller Account and received by the Seller, which shall be a date no later than
one (1) Business Day after the Closing Date.

 

Secured Assets means collectively
the Seller Secured Assets and the New Lender Secured Assets.

 

Secured Obligations means:

 

		(a)	all present and future obligations and liabilities (whether actual or contingent, whether now existing or hereafter arising,
whether or not for the payment of money and including any obligation or liability to pay damages and whether jointly or severally
or in any other capacity) of the Security Providers to the Security Holders under the Seller Transaction Documents or the New Lender
Transaction Documents (as the case may be), whether for outstanding principal, interest, fees, cost, expenses, indemnities or otherwise;
and

 

		(b)	in the event of any proceeding(s) for the collection or enforcement of any of the obligations or liabilities described in sub-paragraph
(a) above, the expenses of taking, holding, preparing for sale or transfer, selling or otherwise disposing of or realising the
security constituted by this Deed including, without limitation, the fees of legal and other advisers and court costs,

 

but shall not include any obligation
or liability to the extent that if it were so included in any Security Document or any part thereof would give rise to financial
assistance within the meaning of sections 274 and 275 of the Companies Ordinance unless such financial assistance is not prohibited
by virtue of section 275 and sections 277 to 289 of the Companies Ordinance.

 

Security means collectively
the Seller Security and the New Lender Security.

 

 

 

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Security Holder means each
of Security Holder A and Security Holder B, and collectively the Security Holders.

 

Security Holder A means collectively
the Sellers and the Seller Security Agent (for himself and on behalf of the Sellers).

 

Security Holder B means collectively
the New Lenders and the New Lender Security Agent (on behalf of the New Lenders).

 

Security Provider means each
of Grom, TDH and TDAHK, and collectively the Security Providers.

 

Seller Account means the bank
account designated by the Sellers for receiving the Repayment Amount.

 

Seller Debentures means collectively
the Seller TDH Debenture and the Seller TDAHK Debenture.

 

Seller Indebtedness means
all outstanding indebtedness incurred by the Security Providers under the Seller Transaction Documents as at the date of this Deed.

 

Seller Notes means collectively
the Short Term Note and the Buyer Notes.

 

Seller Secured Assets means
all property and assets being the subject of the Seller Security.

 

Seller Security means any
Encumbrance granted, created or expressed to be created under the Seller Security Documents.

 

Seller Security Documents means
collectively:

 

		(a)	the Seller Debentures; and

 

		(b)	the Seller Share Charges.

 

Seller Security Trust Deed means
the security trust deed dated 11 July 2016 and entered into between the Seller Security Agent and each Seller.

 

Seller Share Charges means
collectively the Seller TDH Share Charge and the Seller TDAHK Share Charge.

 

Seller TDAHK Debenture the
guarantee and debenture dated 11 July 2016 and entered into between TDAHK as guarantor and chargor and the Seller Security Agent
(for himself and on behalf of the Sellers).

 

Seller TDAHK Share Charge
means the share charge to be entered into between TDH as chargor and the Seller Security Agent (for himself and on behalf of the
Sellers), which creates a security interest over all shares held by TDH in the issued share capital of TDAHK.

 

Seller TDH Debenture means
the guarantee and debenture dated 11 July 2016 and entered into between TDH as guarantor and chargor and the Seller Security Agent
(for himself and on behalf of the Sellers).

 

 

 

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Seller TDH Share Charge means
the share charge to be entered into between Grom as chargor and the Seller Security Agent (for himself and on behalf of the Sellers),
which creates a security interest over the entire issued share capital of TDH.

 

Seller Transaction Documents means
collectively:

 

		(a)	the SPA;

 

		(b)	the Seller Notes;

 

		(c)	the Seller Security Trust Deed;

 

		(d)	this Deed; and

 

		(e)	the Seller Security Documents.

 

Short Term Note means the
short term buyer notes dated 1 July 2016 and entered into between Grom and each of the Sellers.

 

SPA has the meaning given
to it in the Background.

 

Tax or Taxes means all applicable
forms of taxation, duties, levies imposts and social security charges, whether direct or indirect, including but not limited to
corporate income tax, wage withholding tax, national social security contributions and employee social security contributions,
value added tax, business tax, customs and excise duties, capital tax and other legal transaction taxes, dividend withholding tax,
dividend distribution tax, land taxes, environmental taxes and duties and any other type of taxes or duties payable by virtue of
any applicable national, regional or local Law and which may be due directly or by virtue of joint and several liability in any
relevant jurisdiction; together with any interest, penalties, surcharges or fines relating to them, due, payable, levied, imposed
upon or claimed to be owed in any relevant jurisdiction.

 

US means the United States
of America.

 

US Dollar or USD or
US$ means United States Dollars, the lawful currency of the US.

 

		1.2	Successors and Assigns

 

The expressions "Seller",
"Seller Security Agent", "New Lender", "New Lender Security Agent" and "Party"
shall where the context permits include their respective successors and permitted assigns and permitted transferees and any Persons
deriving title under them.

 

		1.3	Headings

 

The headings and subtitles used in
this Deed are used for convenience only and are not to be considered in construing or interpreting this Deed.

 

 

 

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		1.4	Miscellaneous

 

In this Deed, unless the
context requires otherwise:

 

		(a)	references to "Background", "Clauses" and "Schedules" are references to
the background to, clauses of and schedules to this Deed;

 

		(b)	references to the singular shall include the plural and vice versa and references to the masculine shall include the feminine
or neuter and vice versa;

 

		(c)	the term "or" is not exclusive;

 

		(d)	the terms "herein", "hereof", and other similar words refer to this Deed as a whole and not
to any particular section, clause, paragraph or other subdivision;

 

		(e)	the terms "include" and "including" shall be construed to mean "including without limitation";

 

		(f)	the terms "shall", "will", and "agrees" are mandatory, and the term "may"
is permissive;

 

		(g)	the term "day" means "calendar day" and the term "month" means "calendar month";

 

		(h)	references to "assets" include present and future properties, rights and assets of every description;

 

		(i)	references to "indebtedness" include any obligation (whether incurred as principal or as surety) for the payment
or repayment of money, whether present or future, actual or contingent;

 

		(j)	references to statutory provisions shall be construed as references to those provisions as amended or re-enacted or as their
application is modified by other provisions from time to time and shall include references to any provisions of which they are
re-enactments (whether with or without modification);

 

		(k)	references to any document are to be construed as references to such document as amended, supplemented, extended, restated,
novated and/or replaced in any manner from time to time;

 

		(l)	references to a legal term for a legal document, court, judicial process, action, remedy, legal status, official or any other
legal concept, in respect of a jurisdiction other than Hong Kong, shall be deemed to be a reference to whatever most closely equates
to the Hong Kong legal term in that jurisdiction;

 

		(m)	references to dates and times are references to Hong Kong dates and times;

 

		(n)	a rule of construction does not apply to the disadvantage of a Party because the Party was responsible for the preparation
of this Deed or any part of it;

 

		(o)	the Background and Schedules to this Deed form part of it and shall have the same force and effect as if expressly set out
in the body of this Deed; and

 

		(p)	a "certified true copy" of a document, unless otherwise expressly provided herein, refers to a copy of such
document certified by (i) a director or (if so agreed by the Party receiving such copy) the company secretary of the relevant Person
producing such copy; or (ii) (if so agreed by the Party receiving such copy) a certified public accountant or the Hong Kong legal
adviser to the relevant Person producing such copy, as a true copy of the original document.

 

 

 

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		1.5	Effect as a Deed

 

The Parties intend that this Deed
shall take effect as a deed notwithstanding the fact that a Party may only execute this Deed under hand.

 

		1.6	Third Party Rights

 

Notwithstanding any terms of this
Deed:

 

		(a)	the Contracts (Rights of Third Parties) Ordinance (Chapter 623 of the Laws of Hong Kong) shall not apply to this Deed and,
unless specifically provided herein, no Person other than the Parties shall have any rights under it nor shall it be enforceable
by any Person other than the Parties; and

 

		(b)	the consent of any third party is not required for any variation to (including any release or compromise of any liability under)
or termination of this Deed.

 

		2.	Repayment of the Seller Notes

 

		(a)	GSE shall use at least US$3,000,000 of the proceeds received from the issue of the Convertible Notes (the Repayment Amount)
to partially repay or settle the Seller Indebtedness, such that the outstanding amount payable under the Seller Notes after such
repayment or settlement shall be US$1,000,000 or less. The Sellers and Grom shall enter into an amending agreement with respect
to the Seller Notes on or around the Repayment Date to reflect, among other things, the partial repayment of the Seller Notes,
in such form and substance satisfactory to the Sellers and Grom.

 

		(b)	Each New Lender agrees, confirms and acknowledges that the New Lender Subscription Amount shall be used to partially repay
or settle the Seller Indebtedness as set out in Clause 2(a) (Repayment of the Seller Notes).

 

		(c)	Subject to the performance of Clause 2(a) on the Closing Date as evidenced by the receipt of the Payment Instruction
by the Seller Security Agent in accordance with Clause 3.1(a), each of the Sellers and the Seller Security Agent consents
to the creation of the indebtedness (whether actual or contingent) under the Convertible Notes in the aggregate principal amount
of no more than US$3,000,000 by GSE on the Closing Date, and agrees that the creation of such indebtedness is not a breach of,
or default under, the Seller Security, any Seller Transaction Document or this Deed.

 

		3.	Closing Obligations

 

		3.1	Closing obligations of GSE and the Security Providers

 

		(a)	On the Closing Date, GSE shall deliver or cause to be delivered to the Seller Security Agent a copy of the irrevocable payment
instruction (the Payment Instruction) duly executed by The Crone Law Group, P.C. (as the accountholder of the Company Account)
and acknowledged by the Account Bank instructing the Account Bank to transfer the Repayment Amount in immediately available US
Dollar funds from the Company Account to the Seller Account.

 

		(b)	On the Closing Date, the Security Providers shall:

 

 

 

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		(i)	deliver or cause to be delivered by way of electronic means to the Escrow Agent (to be held in escrow for the benefit of the
Security Providers, the Sellers and the Seller Security Agent):

 

		(A)	at least two (2) undated counterparts of the Seller TDH Share Charge duly executed by Grom;

 

		(B)	such ancillary documents duly executed by the relevant Security Provider as scheduled to the Seller TDH Share Charge (except
for such signature pages to those ancillary documents that are to be executed by Mr. Wayne Edward Dearing in his capacity as a
director of TDH);

 

		(C)	at least two (2) undated counterparts of the Seller TDAHK Share Charge duly executed by TDH; and

 

		(D)	such ancillary documents duly executed by the relevant Security Provider as scheduled to the Seller TDAHK Share Charge (except
for such signature pages to those ancillary documents that are to be executed by Mr. Wayne Edward Dearing in his capacity as a
director of TDAHK);

 

		(ii)	deliver or cause to be delivered by way of electronic means to the Seller Security Agent (or its Authorised Representative)
(and the Security Providers undertake to deliver or cause to be delivered the originals to the Seller Security Agent (or its Authorised
Representative) in accordance with Clause 5.4(c)(ii)):

 

		(A)	the share certificate as required under the Seller TDH Share Charge, with the common seal of TDH affixed thereto; and

 

		(B)	the share certificate as required under the Seller TDAHK Share Charge, with the common seal of TDAHK affixed thereto;

 

		(iii)	deliver or cause to be delivered by way of electronic means to the Escrow Agent (to be held in escrow for the benefit of the
Security Providers, the New Lenders and the New Lender Security Agent):

 

		(A)	at least two (2) undated counterparts of the New Lender TDH Share Charge duly executed by Grom, together with the share certificate
as required under the New Lender TDH Share Charge;

 

		(B)	at least two (2) undated counterparts of the New Lender TDAHK Share Charge duly executed by TDH, together with the share certificate
as required under the New Lender TDAHK Share Charge;

 

		(C)	at least two (2) undated counterparts of the New Lender TDH Debenture duly executed by TDH; and

 

		(D)	at least two (2) undated counterparts of the New Lender TDAHK Debenture duly executed by TDAHK.

 

		3.2	Closing obligations of the New Lender Security Agent

 

On the Closing Date, the New Lender
Security Agent shall deliver or cause to be delivered by way of electronic means to the Escrow Agent (to be held in escrow for
the benefit of the Security Providers, the New Lenders and the New Lender Security Agent):

 

		(a)	at least two (2) undated counterparts of the New Lender TDH Share Charge duly executed by the New Lender Security Agent;

 

 

 

    	 	16	 

     

    

 

		(b)	at least two (2) undated counterparts of the New Lender TDAHK Share Charge duly executed by the New Lender Security Agent;

 

		(c)	at least two (2) undated counterparts of the New Lender TDH Debenture duly executed by the New Lender Security Agent; and

 

		(d)	at least two (2) undated counterparts of the New Lender TDAHK Debenture duly executed by the New Lender Security Agent.

 

		3.3	Closing obligations of the Seller Security Agent

 

On the Closing Date, the Seller Security
Agent shall:

 

		(a)	deliver or cause to be delivered by way of electronic means to the Escrow Agent (to be held in escrow for the benefit of the
Security Providers, the Sellers and the Seller Security Agent) (and the Seller Security Agent undertakes to deliver or cause to
be delivered the originals to the Escrow Agent in accordance with Clause 5.4(c)(iii)):

 

		(i)	at least two (2) undated counterparts of the Seller TDH Share Charge duly executed by the Seller Security Agent; and

 

		(ii)	at least two (2) undated counterparts of the Seller TDAHK Share Charge duly executed by the Seller Security Agent; and

 

		(b)	execute in his capacity as a director of TDH the signature pages to such ancillary documents to be executed by Mr. Wayne Edward
Dearing as a director of TDH as scheduled to the Seller TDH Share Charge, and to hold such documents in his capacity as Seller
Security Agent; and

 

		(c)	execute in his capacity as a director of TDAHK the signature pages to such ancillary documents to be executed by Mr. Wayne
Edward Dearing as a director of TDAHK as scheduled to the Seller TDAHK Share Charge, and to hold such documents in his capacity
as Seller Security Agent.

 

		4.	Escrow Arrangement

 

		4.1	Escrow Documents

 

		(a)	The Escrow Agent shall immediately notify all Parties in writing upon receipt of all Escrow Documents on the Closing Date.

 

		(b)	The Escrow Agent shall hold the Escrow Documents on trust for the benefit of the relevant Security Providers and the Security
Holders from the Closing Date to the Repayment Date.

 

		(c)	On the Repayment Date, the Seller Security Agent shall notify the Escrow Agent in writing confirming the fulfilment of the
conditions precedent under Clause 5.1 (Conditions precedent) (the Confirmation). Upon receipt of the Confirmation,
the Escrow Agent shall effect and deliver the Seller Share Charges and the New Lender Security Documents in accordance with Clause
5.3 (Effectiveness of this Deed) and Clause 5.4 (Delivery of Security Documents).

 

 

 

    	 	17	 

     

    

 

		4.2	Authorisations

 

		(a)	With respect to the Seller Share Charges, each of the Security Providers, the Sellers and the Seller Security Agent hereby
authorises the Escrow Agent to, upon receipt of the Confirmation, (i) date the original counterparts of each Seller Share Charge
to which it/he is a party; and (ii) deliver the Seller Share Charges to the Security Providers and the Seller Security Agent on
the Repayment Date. The e-mailed copies of the documents referred to in Clause 3 (Closing Obligations) shall be deemed
to be originals for the purposes of this Clause 4.2(a) and Clause 5.3 (Effectiveness of this Deed).

 

		(b)	With respect to the New Lender Security Documents, each of the Security Providers, the New Lenders and the New Lender Security
Agent hereby authorises the Escrow Agent to, upon receipt of the Confirmation, (i) date the original counterparts of each New Lender
Security Document to which it/he is a party; and (ii) deliver the New Lender Security Documents to the Security Providers and the
New Lender Security Agent on the Repayment Date. The e-mailed copies of the documents referred to in Clause 3 (Closing
Obligations) shall be deemed to be originals for the purposes of this Clause 4.2(b) and Clause 5.3 (Effectiveness
of this Deed).

 

		4.3	Return of Escrow Documents

 

If the Seller Security Agent notifies
the Escrow Agent in writing that the conditions precedent under Clause 5.1 (Conditions precedent) have not been fulfilled,
the Escrow Agent shall, within three (3) Business Days of such notice:

 

		(a)	return to Grom the originals of the Escrow Documents received by it pursuant to Clause 5.4(b)(i); and

 

		(b)	return to the New Lender Security Agent the originals of the Escrow Documents received by it pursuant to Clause 5.4(b)(ii).

 

		5.	Consent

 

		5.1	Conditions precedent

 

The granting of the consent under
Clause 5.2 (Consent) is subject to the fulfilment of each of the following conditions:

 

		(a)	on the Closing Date, the Seller Security Agent shall have received a written confirmation in writing from the Escrow Agent
confirming that the Escrow Agent has received the Escrow Documents in accordance with Clause 3 (Closing Obligations);
and

 

		(b)	the Repayment Amount shall have been transferred to the Seller Account in accordance with the Payment Instruction and received
by the Sellers, and the Seller Notes shall have been partially repaid or settled in accordance with Clause 2 (Repayment
of Seller Notes) such that the outstanding amount payable under the Seller Notes will be US$1,000,000 or less.

 

		5.2	Consent

 

Subject to the fulfilment of the
conditions precedent under Clause 5.1 (Conditions precedent), each of the Sellers and the Seller Security Agent consents
to the creation of the New Lender Security and agrees that the creation and existence of the New Lender Security is not a breach
of, or default under, the Seller Security, any Seller Transaction Document or this Deed.

 

 

 

    	 	18	 

     

    

 

		5.3	Effectiveness of this Deed

 

Upon the granting of consent under
Clause 5.2 (Consent), (i) the Escrow Agent shall date and deliver the Seller Share Charges and the New Lender Security
Documents in accordance with Clause 4.2 (Authorisations), and the Seller Share Charges and the New Lender Security Documents
shall take effect on the Repayment Date; and (ii) the Seller Security and the New Lender Security shall be subject to the provisions
of Clause 6 (Securities and distributions) and Clause 7 (Dealings between Security Holders). For the
purposes of this Clause 5.3, the e-mailed copies of the documents referred to in Clause 3 (Closing Obligations)
shall be deemed to be originals for the purposes of the effectiveness of the Seller Share Charges and the New Lender Security Documents.

 

		5.4	Delivery of Security Documents

 

		(a)	On the Repayment Date, the Escrow Agent shall deliver a copy of each of (i) the Seller Share Charges dated as of the Repayment
Date and duly executed by all parties thereto; and (ii) the New Lender Security Documents dated as of the Repayment Date and duly
executed by all parties thereto, to the Security Providers and the Security Holders.

 

		(b)	As soon as practicable and in any event within three (3) Business Days after the Repayment Date:

 

		(i)	the Security Providers shall deliver or cause to be delivered to the Escrow Agent the originals of the Escrow Documents as
set out in Clause 3.1(b)(i) and Clause 3.1(b)(iii); and

 

		(ii)	the New Lender Security Agent shall deliver or cause to be delivered to the Escrow Agent the originals of the Escrow Documents
set out in Clause 3.2.

 

		(c)	As soon as practicable and in any event within ten (10) Business Days after the Repayment Date:

 

		(i)	the Escrow Agent shall:

 

		(A)	deliver or cause to be delivered to the Seller Security Agent (or its Authorised Representative):

 

		(I)	one (1) original counterpart of the Seller TDH Share Charge duly executed by Grom, together with the originals of the documents
as set out in Clause 3.1(b)(i)(B);

 

		(II)	one (1) original counterpart of the Seller TDAHK Share Charge duly executed by TDH, together with the originals of the documents
as set out in Clause 3.1(b)(i)(D);

 

		(III)	a certified true copy of each of the Convertible Notes and the Convertible Notes Subscription Agreements dated as of the Closing
Date and duly executed by all parties thereto, in such form and substance satisfactory to the Seller Security Agent; and

 

		(IV)	a certified true copy of each New Lender Security Document dated as of the Repayment Date and duly executed by all parties
thereto, in such form and substance satisfactory to the Seller Security Agent;

 

 

 

    	 	19	 

     

    

 

		(B)	deliver or cause to be delivered to the Security Providers one (1) original of each New Lender Security Document dated as of
the Repayment Date and duly executed by all parties thereto;

 

		(C)	deliver or cause to be delivered to the New Lender Security Agent:

 

		(I)	one (1) original of each New Lender Security Document dated as of the Repayment Date and duly executed by all parties thereto,
together with the share certificates as required under the respective New Lender Security Documents; and

 

		(II)	a certified true copy of each Seller Share Charge dated as of the Repayment Date and duly executed by all parties thereto,
in such form and substance satisfactory to the New Lender Security Agent; and

 

		(ii)	the Security Providers shall deliver or cause to be delivered to the Seller Security Agent (or its Authorised Representative)
the originals of the share certificates as set out in Clause 3.1(b)(ii); and

 

		(iii)	the Seller Security Agent (or its Authorised Representative) shall deliver or cause to be delivered to the Escrow Agent one
(1) original counterpart of each Seller Share Charge duly executed by the Seller Security Agent set out in Clause 3.3(a).

 

		6.	Securities and distributions

 

		6.1	Application of this Clause

 

The application of this Clause
6 is subject to the granting of consent under Clause 5 (Consent).

 

		6.2	Equal ranking

 

In respect of all Secured Assets,
the Seller Security ranks equally with the New Lender Security for all Secured Obligations under the respective Securities, without
priority of one over the other.

 

		6.3	Application of money and proceeds

 

All money and proceeds received or recovered from the
disposal of, or other dealing with, the Secured Assets (whether or not arising from the enforcement of any Security including any
insurance or compensation proceeds for loss or damage to the Secured Assets payable to a Security Holder), must be applied and
distributed:

 

		(a)	in the case of an enforcement of any Security, first to pay costs, charges, liabilities and expenses of any Receiver appointed
by a Security Holder under the Security in exercising or performing any Power (or attempting to do so) relating to the enforcement
and the Secured Assets, and any remuneration of that Receiver; and

 

		(b)	in any case after payment of amounts referred to in Clause 6.3(a) (Application of money and proceeds), to
each of Security Holder A and Security Holder B to pay Secured Obligations rateably based on the proportion which each of Security
Holder A's Secured Obligations and Security Holder B's Secured Obligations bears to the aggregate of the Secured Obligations of
Security Holder A and Security Holder B,

 

or as otherwise agreed by the Security Holders in writing.

 

 

 

    	 	20	 

     

    

 

		6.4	Contingent liabilities

 

If a Security secures a contingent liability owed to
a Security Holder, until that Security Holder is satisfied that the contingent liability has been extinguished, that Security Holder
may retain from the proceeds of the exercise of any Power an amount consistent with the arrangements established under Clause 6.2
(Equal ranking) and Clause 6.3 (Application of money and proceeds) which it reasonably estimates to be the
amount of the contingent liability.

 

		6.5	Arrangements paramount

 

This Deed and the arrangements in it apply despite
anything which might otherwise affect them, including:

 

		(a)	anything contained in any Security;

 

		(b)	the order of creation, execution, attachment, perfection, filing for registration or registration of any Security;

 

		(c)	the order in which any Secured Obligations secured by any Security was made available or came into existence;

 

		(d)	an increase or decrease in the amount secured by any Security for any reason;

 

		(e)	the order in which any Powers are exercised (including the appointment of a Receiver), whether under a Security or any other
document relating to any Secured Obligations secured by any Security;

 

		(f)	any partial discharge or release of any Security or Secured Assets;

 

		(g)	any notice received by a Security Holder pursuant to a Security, or of an Encumbrance; or

 

		(h)	any law, rule of equity or order or decision of any Governmental Authority to the contrary.

 

		6.6	Continuation

 

Subject to Clause 14.4 (Reinstating
avoided transaction), the priority arrangements in this Deed will continue until:

 

		(a)	there is no longer any Secured Assets; or

 

		(b)	agreed otherwise by the Security Holders in writing.

 

		6.7	Other property

 

Nothing in this Deed affects the operation of a Security
to the extent it secures property or assets other than the Secured Assets.

 

 

 

    	 	21	 

     

    

 

		7.	Dealings between Security Holders

 

		7.1	Application of this Clause

 

The application of this Clause
7 is subject to the granting of consent under Clause 5 (Consent).

 

		7.2	Title documents

 

Unless otherwise agreed between
the Security Holders:

 

		(a)	subject to the provisions of the Seller Share Charges and the New Lender Share Charges, the Seller Security Agent has the right
to possession of each document of title to the Seller Secured Assets, and each other document evidencing or conferring any right
or benefit on or in relation to the Seller Secured Assets;

 

		(b)	the New Lender Security Agent has the right to possession of each document of title to the New Lender Secured Assets (other
than the Seller Secured Assets), and each other document evidencing or conferring any right or benefit on or in relation to the
New Lender Secured Assets (other than the Seller Secured Assets); and

 

		(c)	if the Seller Security Agent fully releases all Seller Secured Assets from the Seller Security and the New Lender Security
remains outstanding at that time, the Seller Security Agent agrees to deliver to the New Lender Security Agent all documents of
title within the Seller Security Agent's possession or control to the Seller Secured Assets which then remains subject to the New
Lender Security.

 

		7.3	Distribution

 

If a Security Holder (Recipient) receives or
recovers an amount pursuant to its Security which the other Security Holder (Claimant) has a right to receive pursuant to
this Deed, the Recipient must:

 

		(a)	promptly notify the Claimant of the amount received or recovered; and

 

		(b)	promptly pay an equivalent amount (net of its reasonable enforcement and costs incurred in obtaining the amount) to, or as
directed by, the Claimant.

 

On the Claimant's receipt of the Recipient's payment
under Clause 7.3(b) (Distribution), each Security Provider acknowledges that the Recipient will be taken to not have
received the relevant amount, and the Security Provider's liability to the Recipient will not be reduced or discharged by that
amount.

 

This Clause 7.3 (other than Clause 7.3(a))
(Distribution) applies to any amount received by the Recipient from the Claimant which the Claimant subsequently claims
because of Clause 14.4 (Reinstating avoided transaction).

 

		7.4	Dealing with a Security

 

A Security Holder must not transfer, assign or otherwise
deal with any of its Security except:

 

		(a)	for the purpose of enforcement of a Security in accordance with this Deed;

 

		(b)	where any Person taking a transfer or assignment of that Security first enters into a deed with the other Parties on the same
terms as this Deed; or

 

		(c)	where the other Security Holder first agrees in writing.

 

 

 

    	 	22	 

     

    

 

		7.5	Increasing the Secured Obligation

 

Each Security Holder agrees not to increase the amount
of, or grant additional, financial accommodation comprising Secured Obligations without the other Security Holder's prior written
consent.

 

		7.6	Default under Security

 

Each Security Holder must notify the other Security
Holder at least three (3) Business Days in advance of any decision or wish on its part to enforce its Security, together with:

 

		(a)	reasonable details of any Event of Default that has occurred under its Security; and

 

		(b)	a breakdown of the Secured Obligations owed to it and secured by its Security.

 

		7.7	Exercise of Powers and enforcement

 

		(a)	No Security Holder is required to obtain the consent of the other Security Holder before exercising a Power in relation to
the Secured Obligations.

 

		(b)	The Security Holders will consult with each other in good faith and co-operate to the extent possible, with a view to determining
what action is to be taken before enforcing their respective Powers under a Security and as to the enforcement of those Powers
and any Security.

 

		7.8	Sale of Secured Assets

 

On the sale of any Secured Assets pursuant to an enforcement
by a Security Holder of its Security, the other Security Holder must provide to the enforcing Security Holder duly executed releases
of the other Security Holder's Security concerning that Secured Assets in registrable form (if applicable), together with any other
necessary documents to enable registration of, the releases.

 

		8.	Representations and warranties

 

		8.1	General representations and warranties

 

Each Party represents and warrants to each other Party
that:

 

		(a)	in respect of each of GSE, Grom, TDH and TDAHK, it is a corporation or company (as the case may be) duly incorporated under
the Laws of its jurisdiction of incorporation and is validly existing, in good standing and solvent, and has full power, authority
and legal right to own its property and assets and to carry on its businesses;

 

		(b)	it/he/she has full power, authority and legal right to enter into and engage in the transactions contemplated by this Deed
and have taken or obtained all necessary corporate and other action to authorise the execution and performance of this Deed;

 

 

 

    	 	23	 

     

    

 

		(c)	the obligations expressed to be assumed by it/him/her under this Deed are legal, valid and binding and enforceable obligations
and no limit on its powers will be exceeded as a result of the performance by it/him/her of any of its/his/her obligations hereunder;

 

		(d)	neither the execution of this Deed nor the performance by it/him/her of any of its/his/her obligations or the exercise of any
of its/his/her rights hereunder will conflict with or result in a breach of any Law, Governmental Order, Approval, agreement or
obligation applicable to it/him/her or (where applicable) its constitutional documents or cause any limitation placed on it or
the powers of its directors to be exceeded;

 

		(e)	in any proceedings (whether arbitration or otherwise) taken in Hong Kong in relation to this Deed, the choice of Hong Kong
Law as the governing law of this Deed will be recognised and enforced in Hong Kong after compliance with the applicable procedural
rules in Hong Kong;

 

		(f)	all Approvals required from any Governmental Authority or any other Person:

 

		(i)	for or in connection with the execution, validity, performance and enforcement of this Deed;

 

		(ii)	for it to enter into, exercise its rights and comply with or perform its/his/her obligations in this Deed and the transactions
contemplated by it/him/her; and

 

		(iii)	in respect of each of GSE, Grom, TDH and TDAHK, to make this Deed admissible in evidence in its jurisdiction of incorporation,

 

have been duly obtained and/or
effected and are in full force and effect.

 

		8.2	By the Security Providers

 

Each Security Provider:

 

		(a)	represents and warrants to each Security Holder that:

 

		(i)	it has given each Security Holder true and complete copies of all the Seller Security and the New Lender Security, and those
documents evidence all terms of Encumbrances held by the Security Holders over the Secured Assets;

 

		(ii)	it has fully disclosed in writing to each Security Holder all facts, documents or other information known to it and material
to the assessment of the nature and amount of risk undertaken by each Security Holder in entering into and performing this Deed;
and

 

		(iii)	all information it provided to each Security Holder in connection with this Deed is accurate in all material respects and not
deficient, misleading or deceptive in any material respect (whether by its inclusion or by omission of other information); and

 

		(b)	repeats each of the above representations and warranties with reference to the facts and circumstances at the time, on each
day until this Deed terminates.

 

 

 

    	 	24	 

     

    

 

		8.3	Reliance and survival

 

Each Party giving a representation and warranty in
this Clause 8 (Representations and warranties) acknowledges that:

 

		(a)	each Security Holder has entered into this Deed in reliance on those representations and warranties; and

 

		(b)	those representations and warranties survive execution and delivery of the Security and the provision of financial accommodation
under them.

 

		9.	Security Provider provisions

 

		9.1	Acknowledgment

 

Each Security Provider acknowledges that:

 

		(a)	its obligations under or in relation to each Security given to a Security Holder are not in any way affected by this Deed (other
than as expressly provided in this Deed) or by any failure by a Security Holder to comply with this Deed; and

 

		(b)	this Deed is for the benefit of the Security Holders, and not for the benefit of any Security Provider.

 

		9.2	Co-operation

 

Each Security Provider undertakes to each Security
Holder to co-operate and do everything necessary for the effective implementation of this Deed.

 

		9.3	Cross default

 

Each Security Provider agrees that, irrespective of
the terms of any Security, if an Event of Default occurs under a Security Holder's Security, an Event of Default is taken to have
occurred under the other Security Holder's Security.

 

		9.4	No subrogation

 

Each Security Provider irrevocably and unconditionally
waives its rights to, and must not, claim or exercise a right of subrogation or contribution in respect of, request a transfer
or assignment of, or otherwise directly or indirectly claim the benefit of, a Security Holder's Power or a Security, unless:

 

		(a)	all Secured Obligations have been fully and finally repaid and each Security Holder is satisfied that no Avoidance will occur;
or

 

		(b)	each Security Holder has first consented in writing.

 

 

 

    	 	25	 

     

    

 

		9.5	Provide copies of Security and variations

 

Each Security Provider must provide to each Security
Holder a certified true copy of:

 

		(a)	each Security of the other Security Holder to which it is a party, on the same day that the Security is created (or on the
date of this Deed if already in existence); and

 

		(b)	any variation or replacement to such Security, on the same day that the variation or replacement comes into effect.

 

		10.	Payments

 

		10.1	Manner of payment

 

All payments by a Security Provider or a Security Holder
under this Deed must be made in immediately available funds, in US Dollars and in full without set-off, counterclaim or, unless
prohibited by law, deduction or withholding.

 

		10.2	Payments and receipts in foreign currency

 

If for any reason a Security Holder receives or recovers
any amount (Paid Amount) under or in relation to this Deed in a currency other than US Dollars, the amount which the Security
Holder will be taken to have received or recovered for the purposes of this Deed will be the US Dollar amount to which the Security
Holder could have converted the Paid Amount, in accordance with its normal procedures, at the time of the receipt or recovery less
the costs of the conversion.

 

		10.3	Due day for payment

 

If the due date for payment of any
amount under this Deed is not a Business Day, the due date for that payment shall instead be the next Business Day in the same
calendar month (if there is one) or the preceding Business Day (if there is not).

 

		11.	Costs, expenses and Taxes

 

		11.1	Costs and expenses of Security Providers

 

Each Security Provider will pay its own costs and expenses
in connection with this Deed.

 

		11.2	Amendment costs

 

If a Security Provider requests an amendment, waiver
or consent under this Deed, the Security Provider shall on demand reimburse the relevant Security Holder all costs and expenses
(including legal fees) reasonably incurred by such Security Holder in responding to, evaluating, negotiating or complying with
that request or requirement.

 

 

 

    	 	26	 

     

    

 

		11.3	Enforcement costs

 

Each Security Provider shall on demand pay to each
Security Holder the amount of all costs and expenses (including legal fees) reasonably incurred by such Security Holder in connection
with the exercise, enforcement or protection of, or the attempt to exercise, enforce or protect, a Power under this Deed.

 

		11.4	Taxes, fees and charges

 

Each Security Provider must pay all:

 

		(a)	Taxes, fees and charges in connection with this Deed or any payment, receipt, supply or other transaction carried out pursuant
to, or contemplated by, this Deed, including Taxes passed onto a Security Holder by another financial institution or supplier of
goods and services; and

 

		(b)	fines and penalties for late payment or non-payment of those amounts, except where the Security Provider places a Security
Holder in cleared funds to make the payment not less than five (5) Business Days before the due date and the Security Holder
fails to make the payment.

 

Each Security Provider must pay or reimburse each Security
Holder on demand for all such amounts which are payable or which the Security Holder determines in good faith to be payable.

 

		12.	Notices and other communications

 

		12.1	Service of notices

 

A notice, demand, consent, approval, service of proceedings
or other communication under this Deed (Notice) must be:

 

		(a)	in writing, in English and signed by a Person duly authorised by the sender; and

 

		(b)	(i) hand delivered; or (ii) sent by prepaid post or internationally recognised courier service; or (iii) sent by email; or
(iv) sent by facsimile, to the recipient's address, facsimile number or email address for Notices specified in the 'Details' section
of this Deed, in each case as varied by any Notice given by the recipient to the sender.

 

		12.2	Effective on receipt

 

A Notice given in accordance with Clause 12.1
(Service of notices) takes effect when received (or at a later time specified in it), and is taken to be received:

 

		(a)	if hand delivered, on delivery; or

 

		(b)	if sent by prepaid post or internationally recognised courier service, two (2) Business Days after the date of posting (or
seven (7) Business Days after the date of posting if posted to or from a place outside Hong Kong); or

 

 

 

    	 	27	 

     

    

 

		(c)	if sent by way of email to the recipient's email address for Notices specified in the 'Details' section of this Deed, upon
such email being sent by the sender and no transmission error message being received by the sender; or

 

		(d)	if sent by facsimile, when the sender's facsimile system generates a message confirming successful transmission of the entire
Notice unless, within eight (8) Business Hours after the transmission, the recipient informs the sender that it has not received
the entire Notice,

 

but if the delivery, receipt or transmission is not
on a Business Day or is after 5.00pm on a Business Day, the Notice is taken to be received at 9.00am on the next Business Day.

 

		13.	Assignment

 

		13.1	By Security Holder

 

A Security Holder may not assign, transfer or dispose
of its Security to or in favour of any Person unless that Person enters into a deed with the other Parties by which it undertakes
that it is bound by all of the terms of this Deed as a Security Holder the rights and obligations of the Security Holder are transferred
by novation to that Person. In addition to any rights a Security Holder may have under this Clause 13.1 (By Security
Holder), each Party agrees with each Security Holder that is a security trustee that:

 

		(a)	a Security Holder may assign its rights and novate or otherwise transfer its obligations under this Deed to any replacement
or successor security trustee that is appointed in accordance with the Seller Security Trust Deed or the New Lender Security Agent
Agreement, as the case may be (New Security Trustee); and

 

		(b)	if requested, it will enter in to a novation deed with that Security Holder and any New Security Trustee in a form acceptable
to the Security Holder and the New Security Trustee.

 

		13.2	By Security Providers

 

A Security Provider may not assign, transfer or otherwise
deal with its rights, interests or obligations under this Deed without the prior written consent of all Security Holders.

 

		14.	Protection provisions

 

		14.1	Security Holder not liable

 

To the extent permitted by Law, a Security Holder will
not be liable to anyone for any Loss in relation to an exercise or attempted exercise of a Power, or a failure or delay in doing
so.

 

		14.2	Security Holder not restricted

 

A Security Holder need not:

 

		(a)	exercise a Power, give a consent or make a decision under a Security unless the Security expressly provides otherwise; or

 

		(b)	resort to an Encumbrance, guarantee or Power before resorting to any other of them.

 

 

 

    	 	28	 

     

    

 

		14.3	Indemnities and reimbursement obligations

 

A Security Holder need not incur an expense or make
a payment before enforcing an indemnity or reimbursement obligation in this Deed. Unless otherwise stated, each such indemnity
or reimbursement obligation is separate and independent of each other obligation of the Party giving it, is absolute, irrevocable,
unconditional and payable on demand and continues despite any settlement of account, termination of this Deed or any Security or
anything else.

 

		14.4	Reinstating avoided transaction

 

If a payment or other transaction relating to this
Deed or a Security is void, voidable, unenforceable or defective for any reason or a related claim is upheld, conceded or settled
(each an Avoidance), then even though any Party knew or should have known of the Avoidance:

 

		(a)	the liability of the Parties and each Security Holder's Powers will be what it would have been, and will continue, as if the
payment or transaction had not occurred; and

 

		(b)	the Parties will immediately execute and do anything required by a Security Holder to restore the Parties to the position they
were in immediately before the Avoidance (including reinstating this Deed).

 

This Clause 14.4 (Reinstating avoided transaction)
survives any termination or full or partial discharge or release of any Security.

 

		14.5	Authorised Representatives and communications

 

Each Security Provider:

 

		(a)	irrevocably authorises each Security Holder to rely on a certificate by any Person purporting to be its director or company
secretary as to the identity and signatures of its Authorised Representatives, and to rely on any notice or other document contemplated
by this Deed which bears the purported signature (whether given by facsimile or otherwise) of its Authorised Representative; and

 

		(b)	warrants that those Persons have been authorised to give notices and communications under or in connection with this Deed.

 

		15.	General provisions

 

		15.1	Consideration

 

Each Party acknowledges entering into this Deed for
valuable consideration received from the other Parties.

 

		15.2	Prompt performance

 

If a time is not specified for the performance of an
obligation under this Deed, it must be performed promptly.

 

 

 

    	 	29	 

     

    

 

		15.3	Powers

 

Powers under this Deed are cumulative and do not limit
or exclude Powers under Law. Full or partial exercise of a Power does not prevent a further exercise of that or any other Power.
No failure or delay in exercising a Power operates as a waiver or representation. Unless expressly provided in this Deed, no Power
nor any Security merges in, limits, adversely affects or is adversely affected by any other Power, Security or judgment which a
Security Holder (or anyone claiming through it) may have or obtain.

 

		15.4	Consent and waivers

 

A consent or waiver by a Security Holder in relation
to this Deed is effective only if in writing. If given subject to conditions, the consent or waiver only takes effect subject to
compliance with those conditions to the Security Holder's satisfaction.

 

		15.5	Notices or demands as evidence

 

A notice or certificate from or demand by a Security
Holder stating that a default or Event of Default has occurred under its Security, or that a specified sum of money is owing or
payable under its Security, is taken to be correct unless proved incorrect.

 

		15.6	Severability

 

If, at any time, any provision of this Deed is or becomes
illegal, invalid or unenforceable in any respect under the Law of any jurisdiction, neither the legality, validity or enforceability
of the remaining provisions of this Deed under the Law of that jurisdiction nor the legality, validity or enforceability of that
or any other provision of this Deed under the Law of any other jurisdiction shall in any way be affected or impaired thereby.

 

		15.7	Amendments

 

Any amendment or waiver of any provision of this Deed
and any waiver of any default (in whole or in part) under this Deed shall only be effective if and to the extent that it is made
in writing and signed by the Parties. Any amendment or waiver effected in accordance with this Clause 15.7 (Amendments)
shall be binding upon each of the Parties.

 

		15.8	Termination

 

Without prejudice to the termination of this Deed under
any applicable Laws, this Deed shall terminate upon the payment and discharge in full of the Secured Obligations owed to either
(i) the Sellers, to the satisfaction of the Seller Security Agent; or (ii) the New Lenders, to the satisfaction of the New Lender
Security Agent.

 

		15.9	Governing law

 

This Deed and any non-contractual
obligations arising out of or in connection with it are governed by and shall be construed in accordance with the Laws of Hong
Kong.

 

		15.10	Jurisdiction

 

The courts of Hong Kong have exclusive
jurisdiction to settle any dispute arising out of or in connection with this Deed (including a dispute regarding the existence,
validity or termination of this Deed) and any non-contractual obligations arising out of or in connection with it (a Dispute).
The Parties agree that the courts of Hong Kong are the most appropriate and convenient courts to settle any Dispute and accordingly
no Party will argue to the contrary. This Clause 15.10 (Jurisdiction) is for the benefit of the Security Holders
and the Receiver(s) only. As a result, none of the Security Holders and/or the Receiver(s) shall be prevented from taking proceedings
relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, each Security Holder or Receiver may
take concurrent proceedings in any number of jurisdictions.

 

 

 

    	 	30	 

     

    

 

		15.11	Service of process

 

		(a)	Without preventing any other mode of service, any document in an action or process may be served on any Party by being delivered
to or left for that Party at its address for service of notices specified in the 'Details' section of this Deed.

 

		(b)	Each of the Sellers and the Seller Security Agent irrevocably appoints Fansway Secretaries Limited of Rooms 1009-1012, 10/F,
K. Wah Centre, 191 Java Road, North Point, Hong Kong as its agent to accept service of process under or in connection with this
Deed, and Fansway Secretaries Limited accepts the appointment. If for any reason Fansway Secretaries Limited shall cease to be
its process agent, the Seller Security Agent (for himself and on behalf of the Sellers) shall forthwith appoint a new process agent
and deliver to each Party a copy of the new process agent's acceptance of that appointment within three (3) Business Days of such
appointment.

 

		(c)	Each of the New Lenders and the New Lender Security Agent shall appoint a process agent in Hong Kong to accept service of process
under or in connection with this Deed (the Process Agent) as soon as possible, and in any event no later than thirty (30)
days from the date of this Deed, and the New Lender Security Agent (on behalf of the New Lenders) shall deliver to each Party a
copy of the Process Agent's acceptance of that appointment within three (3) Business Days of such appointment. If for any reason
the Process Agent shall cease to be its process agent, the New Lender Security Agent (on behalf of the New Lenders) shall forthwith
appoint a new process agent and deliver to each Party a copy of the new process agent's acceptance of that appointment within three
(3) Business Days of such appointment.

 

		(d)	Each of GSE and Grom irrevocably appoints TDH as its agent to accept service of process under or in connection with this Deed,
and TDH accepts the appointment. If for any reason TDH shall cease to be its process agent, GSE and Grom shall forthwith appoint
a new process agent and deliver to each Party a copy of the new process agent's acceptance of that appointment within three (3)
Business Days of such appointment.

 

		(e)	Nothing in this Deed shall affect the right to serve process in any other manner permitted by the applicable Laws.

 

		15.12	No Presumption

 

Each Party acknowledges that any
applicable Law that would require interpretation of any claimed ambiguities in this Deed against the Party that drafted it has
no application and is expressly waived. If any claim is made by a Party relating to any conflict, omission or ambiguity in the
provisions of this Deed, no presumption or burden of proof or persuasion will be implied because this Deed was prepared by or at
the request of any Party or its counsel.

 

		15.13	Counterparts

 

This Deed may be executed in any
number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same
instrument. Facsimiled or e-mailed copies of signatures shall be deemed to be originals for purposes of the effectiveness of this
Deed.

 

This Deed is executed as a deed and delivered on the date stated
at the beginning of this Deed.

 

 

 

    	 	33	 

     

    

 

Signing page

 

EXECUTED as a deed.

 

Sellers

 

	
        SIGNED, SEALED AND DELIVERED by

        WAYNE EDWARD DEARING
	 	

 

 

 

 

	
        SIGNED, SEALED AND DELIVERED by

        DAVID ARDEN PEABODY
	 	

 

 

 

 

	
        SIGNED, SEALED AND DELIVERED by

        MICHAEL ALLARDICE GORDON HISCOCK
	 	

 

 

 

 

    	 	34	 

     

    

 

Seller Security Agent

 

	
        SIGNED, SEALED AND DELIVERED by

        WAYNE EDWARD DEARING
	 	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	35	 

     

    

 

New Lenders 

 

	
        EXECUTED AND DELIVERED AS A DEED by

         

        The Crone Law Group, P.C., being the lawful attorney of
        New Lenders

         

         

         

        
	 	 

 

 

 

 

 

 

 

 

 

 

 

    	 	36	 

     

    

 

New Lender Security Agent

 

	
        EXECUTED AND DELIVERED AS A DEED by

        The Crone Law Group, P.C.
	 	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	37	 

     

    

 

GSE

 

	
        EXECUTED AND DELIVERED AS A DEED by

        GROM SOCIAL ENTERPRISES, INC.
	 	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	38	 

     

    

 

Security Provider

 

	
        EXECUTED AND DELIVERED AS A DEED by

        GROM HOLDINGS, INC.
	 	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	39	 

     

    

 

Security Provider

 

	
        EXECUTED AND DELIVERED AS A DEED by TD HOLDINGS
LIMITED, acting by two directors, in accordance with section 127 and 128 of the Companies Ordinance (Cap. 622)
	 	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	40	 

     

    

 

Security Provider

 

	EXECUTED AND DELIVERED AS A DEED

                            by TOP DRAW ANIMATION HONGKONG LIMITED,

                           acting by two directors, in accordance with

                           section 127 and 128 of the Companies Ordinance (Cap.
622)
	 	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	41	 

     

    

 

Escrow Agent

 

	
        EXECUTED AND DELIVERED AS A DEED by

        The Crone Law Group, P.C.
	 	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	42Exhibit 10.3

 

SECURITY AGENT AGREEMENT

 

SECURITY AGENT AGREEMENT
(this "Agreement"), dated as of March 16, 2020, among Grom Social Enterprises, Inc., a Florida corporation (the
“Company”), the lenders reflected on the signature pages hereto (each individually, a "Lender"
and collectively, the "Lenders"), and The Crone Law Group, P.C. (the "Security Agent").

 

WHEREAS, the loans
made or to be made by the Lenders to the Company, which will be evidenced by secured convertible promissory notes (collectively
herein the “Notes"), are secured by the shares and certain assets of TD Holdings Limited, a Hong Kong corporation
(“TDH”), and the shares and certain assets of Top Draw Animation Hong Kong Limited, a Hong Kong corporation
(“TDAHK”); and

 

WHEREAS, since the
security of the Notes ranks equally with the security granted to the former owners of TDH and TDAHK, the relationship among the
parties is as provided in the Intercreditor Deed, dated the date hereof, a copy of which is attached hereto (the “Intercreditor
Deed”; capitalized terms used herein not otherwise defined shall have the respective meanings ascribed to such terms
in the Intercreditor Deed); and

 

WHEREAS, each Lender
has determined that it is desirable to provide for the orderly administration of the New Lender Security Document, the stock certificates
of TDH and TDAHK, each Seller Share Charge and such other documentation as provided to be delivered to the New Lender Security
Agent by appointing the Security Agent, and the Security Agent has agreed to accept such appointment, to receive, hold and deliver,
all such documentation (collectively referred to herein as the “Collateral”), all upon the terms and subject
to the conditions hereinafter set forth; and

 

WHEREAS, each Lender
desires to appoint the Security Agent to act on its behalf notwithstanding the role of the Security Agent as legal counsel to the
Company.

 

NOW THEREFORE, in
consideration of the foregoing, the mutual covenants and agreements herein contained and other good and valuable consideration,
the parties mutually covenant, warrant and agree as follows:

 

1.       Appointment
of Security Agent. Each of the Lenders hereby appoints the Security Agent (and the Security Agent hereby accepts such appointment)
to take any and all action including, without limitation, the maintenance of the Collateral, the exercise of voting rights upon
the occurrence and during the continuance of an Event of Default (as such term is defined in the Notes), the application of any
cash collateral received by the Security Agent, the making of any demand under the Notes, the exercise of any remedies given to
the Security Agent pursuant to the Note and the exercise of any authority pursuant to the appointment of the Security Agent as
an attorney-in-fact that the Security Agent deems necessary or proper for the administration of the Collateral pursuant to the
Security Documents. Upon disposition of the Collateral in accordance with the Security Documents, the Security Agent shall promptly
distribute any cash or Collateral in accordance with the terms hereof. The Security Agent will not be required to act hereunder
in connection with Notes or the Intercreditor Deed the issuance of which was not disclosed in writing to the Security Agent nor
will the Security Agent be required to act on behalf of any assignee of Notes without the written consent of Security Agent.

 

2.Power of Attorney.To
effectuate the terms and provisions hereof, each of the  Lenders hereby appoints the Security Agent as its attorney-in-fact
(and the Security Agent hereby accepts such appointment) for the purpose of carrying out the provisions of this Agreement, including,
without limitation, taking any action and executing any instrument (including the Intercreditor Deed) that the Security Agent may
deem necessary or advisable (and lawful) to accomplish the purposes hereof and pursuant to the Intercreditor Deed. All acts done
under the foregoing authorization are hereby ratified and approved and neither the Security Agent nor any designee nor agent thereof
shall be liable for any acts of commission or omission, for any error of judgment, for any mistake of fact or law except for acts
of gross negligence or willful misconduct. This power of attorney, being coupled with an interest, is irrevocable while this Agreement
remains in effect.

 

3.       Expenses
of the Security Agent. The Lenders shall pay any and all reasonable costs and expenses incurred by the Security Agent, including,
without limitation, reasonable costs and expenses relating to all waivers, releases, discharges, satisfactions, modifications and
amendments of this Agreement, the administration and holding of the Collateral, and the enforcement, protection and adjudication
of the parties' rights under the Intercreditor Deed and hereunder by the Security Agent, including, without limitation, the reasonable
disbursements, expenses and fees of the attorneys the Security Agent may retain, if any, each of the foregoing in proportion to
their holdings of the Notes.

 

 

 

    	 	1	 

     

    

4.       Waiver
of Conflict of Interest. Each Lender expressly agrees and acknowledges that the Security Agent is acting as legal
counsel for the Company in connection with the Intercreditor Deed, the Notes, this Agreement and the transactions
contemplated hereby, has acted as counsel to the Company in the past and will continue to act as legal counsel for the
Company and such other interested parties from time to time, relating to the Notes as well as other related or unrelated
corporate or dispute related matters. Notwithstanding the foregoing, each of the Company and the Lenders consents to the
appointment of the Security Agent hereby and further consents to the continued representation by Crone Law Group, P.C.
 as legal counsel for the Company on various matters (including and without limitation, the within transaction) from
time to time and waives any claim that such representation represents a conflict of interest on the part of the Security
Agent. The Company and each Lender understands and acknowledges that the Security Agent is relying explicitly on the
foregoing provision in entering into this Agreement and to the continuing representation of the Company as
counsel.   Notwithstanding the forgoing consent and waiver of conflicts of interest, nothing herein shall be deemed
to create a waiver of the pre-existing and ongoing attorney-client privilege between the Company and the Security Agent. The
Security Agent further reserves the right to resign at any time from any legal matter or in its capacity as security agent
hereunder.

 

5.       Duties
of the Security Agent; Standard of Care.

 

(a)       The
Security Agent's only duties are those expressly set forth in this Agreement, and the Security Agent hereby is authorized to perform
those duties in accordance with commercially reasonable practices. The Security Agent may exercise or otherwise enforce any of
its rights, powers, privileges, remedies and interests under this Agreement and applicable law or perform any of its duties under
this Agreement by or through its officers, employees, attorneys, or agents.

 

(b)       The
Security Agent shall act in good faith and with that degree of care that an ordinarily prudent person in a like position would
use under similar circumstances.

 

(c)       Any
funds held by the Security Agent hereunder need not be segregated from other funds except to the extent required by law. The Security
Agent shall be under no liability for interest on any funds received by it hereunder.

 

(d)       The
Security Agent shall be entitled to rely upon any notice, consent, certificate, affidavit, statement, paper, document, writing
or communication (which may be by email, telegram, cable, telex, telecopier, or telephone) reasonably believed by it to be genuine
and to have been signed, sent or made by the proper person or persons, and upon opinions and advice of its own legal counsel, independent
public accountants and other experts selected by the Security Agent.

 

6.       Resignation.
The Security Agent may resign and be discharged of its duties hereunder at any time by giving written notice of such resignation
to the other parties hereto, stating the date such resignation is to take effect. Within five (5) business days of the giving of
such notice, a successor collateral agent shall be appointed by a majority in interest of the holders of the Notes; provided,
however, that if the Lenders are unable so to agree upon a successor within such time period, and notify the Security Agent
during such period of the identity of the successor collateral agent, the successor collateral agent may be a person designated
by the Security Agent, and any and all fees of such successor collateral agent shall be the joint and several obligation of the
Lenders. The Security Agent shall continue to serve until the effective date of the resignation or until its successor accepts
the appointment and receives the Collateral held by the Security Agent but shall not be obligated to take any action hereunder.
The Security Agent may deposit any Collateral with the Supreme Court of the State of New York for New York County or any such other
court in New York State that accepts such Collateral.

 

7.       Exculpation.
The Security Agent and its officers, employees, attorneys and agents, shall not incur any liability whatsoever for the holding
or delivery of documents or the taking of any other action in accordance with the terms and provisions of this Agreement, for any
mistake or error in judgment, for compliance with any applicable law or any attachment, order or other directive of any court or
other authority (irrespective of any conflicting term or provision of this Agreement), or for any act or omission of any other
person engaged by the Security Agent in connection with this Agreement, unless occasioned by the exculpated person's own gross
negligence or willful misconduct; and each party hereto hereby waives any and all claims and actions whatsoever against the Security
Agent and its officers, employees, attorneys and agents, arising out of or related directly or indirectly to any or all of the
foregoing acts, omissions and circumstances.

 

 

 

    	 	2	 

     

    

 

8.       Indemnification.
The Lenders hereby agree to indemnify, reimburse and hold harmless the Security Agent and its directors, officers, employees, attorneys
and agents, jointly and severally, from and against any and all claims, liabilities, losses and expenses that may be imposed upon,
incurred by, or asserted against any of them, arising out of or related directly or indirectly to this Agreement or the Collateral,
except such as are occasioned by the indemnified person's own gross negligence or willful misconduct.

 

9.       Miscellaneous.

 

(a)       Rights
and Remedies Not Waived. No act, omission or delay by the Security Agent shall constitute a waiver of the Security Agent's
rights and remedies hereunder or otherwise. No single or partial waiver by the Security Agent of any default hereunder or right
or remedy that it may have shall operate as a waiver of any other default, right or remedy or of the same default, right or remedy
on a future occasion.

 

(b)       Governing
Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York without regard
to conflicts of laws that would result in the application of the substantive laws of another jurisdiction.

 

(c)       Waiver
of Jury Trial and Setoff; Consent to Jurisdiction; Etc.

 

(i)       In
any litigation in any court with respect to, in connection with, or arising out of this Agreement or any instrument or document
delivered pursuant to this Agreement, or the validity, protection, interpretation, collection or enforcement hereof or thereof,
or any other claim or dispute howsoever arising, between the Security Agent and the Lenders or any Lender, then each Lender, to
the fullest extent it may legally do so, (A) waives the right to interpose any setoff, recoupment, counterclaim or cross-claim
in connection with any such litigation, irrespective of the nature of such setoff, recoupment, counterclaim or cross-claim, unless
such setoff, recoupment, counterclaim or cross-claim could not, by reason of any applicable federal or state procedural laws, be
interposed, pleaded or alleged in any other action; and (B) WAIVES TRIAL BY JURY IN CONNECTION WITH ANY SUCH LITIGATION AND
ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH LENDER AGREES THAT THIS SECTION 9(c) IS A SPECIFIC AND MATERIAL ASPECT
OF THIS AGREEMENT AND ACKNOWLEDGE THAT THE SECURITY AGENT WOULD NOT ENTER THIS AGREEMENT IF THIS SECTION 9(c) WERE NOT PART OF
THIS AGREEMENT.

 

(ii)       Each
Lender irrevocably consents to the exclusive jurisdiction of any State or Federal Court located within the County of New York,
State of New York, in connection with any action or proceeding arising out of or relating to this Agreement or any document or
instrument delivered pursuant to this Agreement or otherwise. 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 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. Each
Lender hereby waives, to the fullest extent it may effectively do so, the defenses of forum non conveniens and improper venue.

 

(d)       Admissibility
of this Agreement. Each of the Lenders agrees that any copy of this Agreement signed by it and transmitted by email or telecopier
for delivery to the Security Agent shall be admissible in evidence as the original itself in any judicial or administrative proceeding,
whether or not the original is in existence.

 

(e)       Address
for Notices. Any notice or other communication under the provisions of this Agreement shall be given in writing and delivered
in person, by reputable overnight courier or delivery service, by facsimile machine (receipt confirmed) with a copy sent by first
class mail on the date of transmissions, or by registered or certified mail, return receipt requested, directed to such party’s
addresses set forth on the signature page hereto (or to any new address of which any party hereto shall have informed the others
by the giving of notice in the manner provided herein).

 

(f)       Fee.
Upon the execution and delivery of this Agreement, the Company shall pay the Security Agent the sum of $5,000 for its services
hereunder.

 

(g)       Amendments
and Modification; Additional Lender. No provision hereof shall be modified, altered, waived or limited except by written instrument
expressly referring to this Agreement and to such provision, and executed by the parties hereto. Any transferee of a Note who acquires
a note after the date hereof will become a party hereto by signing the signature page and sending an executed copy of this Agreement
to the Security Agent and receiving a signed acknowledgement from the Security Agent.

 

 

 

    	 	3	 

     

    

 

(h)       Counterparts/Execution.
This Agreement may be executed in any number of counterparts and by the different signatories hereto on separate counterparts,
each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument.
The delivery of an executed counterpart of this Agreement by electronic means, including by facsimile or by "pdf" attachment
to email, shall be deemed to be valid delivery thereof binding upon all the parties hereto.

 

(i)       Successors
and Assigns. Whenever in this Agreement reference is made to any party, such reference shall be deemed to include the successors,
assigns, heirs and legal representatives of such party. No party hereto may transfer any rights under this Agreement, unless the
transferee agrees to be bound by, and comply with all of the terms and provisions of this Agreement, as if an original signatory
hereto on the date hereof.

 

(j)       Independent
Counsel; Captions. This Agreement shall be construed to effectuate the mutual intent of the parties. The parties and their
counsel have cooperated in the drafting and preparation of this Agreement, and this Agreement therefore shall not be construed
against any party by virtue of its role as the drafter thereof. No drafts of this Agreement shall be offered by any party, nor
shall any draft be admissible in any proceeding, to explain or construe this Agreement. Each party hereto acknowledges and agrees
that it has received or has had the opportunity to receive independent legal counsel of its own choice and that it has been sufficiently
apprised of its rights and responsibilities with regard to the substance of this Agreement. The headings contained in this Agreement
are intended for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation
of this Agreement.     

 

(k)       Severability.
In the event that any term or provision of this Agreement shall be finally determined to be superseded, invalid, illegal or otherwise
unenforceable pursuant to applicable law by an authority having jurisdiction and venue, that determination shall not impair or
otherwise affect the validity, legality or enforceability (i) by or before that authority of the remaining terms and provisions
of this Agreement, which shall be enforced as if the unenforceable term or provision were deleted, or (ii) by or before any other
authority of any of the terms and provisions of this Agreement.

 

 

 

[Remainder of Page Intentionally
Omitted; Signature Pages to Follow]

 

IN WITNESS WHEREOF,
the undersigned parties have executed this Security Agent Agreement as of the day and year first written above.

 

	 	 

GROM SOCIAL ENTERPRISES, INC.

 

 

 

By: ______________________ 

Name: Melvin Leiner

Title: Executive Vice President

 

 

 

THE CRONE LAW GROUP, P.C.

 

 

 

By: _____________________

Name: Mark E. Crone

Title: Principal

	 	 
	 	LENDERS
	 	 

 

 

 

 

    	 	4

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