Document:

Exhibit 10.44

 

NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE
FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144, RULE 144A, SECTION 4(A)(1), OR
OTHER APPLICABLE EXEMPTION UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

 

	Principal Amount: $260,000.00	Issue Date: November 30, 2020
	Purchase Price: $234,000.00	 
	Original Issue Discount: $26,000	 

 

8% CONVERTIBLE NOTE

 

FOR VALUE RECEIVED,
GROM SOCIAL ENTERPRISES, INC., a Florida corporation (“Borrower”
or “Company”) (Trading Symbol: GRMM), hereby promises to pay to the order of EMA FINANCIAL, LLC, a Delaware
limited liability company, or its registered assigns (the “Holder”), on August 25, 2021, (subject to extension as set
forth below, the “Maturity Date”), the sum of $260,000.00 as set forth herein, together with interest on the unpaid
principal balance hereof at the rate of eight percent (8%) per annum (the “Interest Rate”) from the date of issuance
hereof until this Note plus any and all amounts due hereunder are paid in full, and any additional amounts set forth herein, including
without limitation any Additional Principal (as defined herein). Interest shall be computed on the basis of a 365-day year and
the actual number of days elapsed. Any amount of principal or interest on this Note which is not paid when due shall bear interest
at the rate of twenty-four (24%) per annum from the due date thereof until the same is paid (“Default Interest”). All
payments due hereunder shall be made in lawful money of the United States of America. All payments shall be made at such address
as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Note. Whenever
any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead
be due on the next succeeding day which is a business day and, in the case of any interest payment date which is not the date on
which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining
the amount of interest due on such date. As used in this Note, the term “business day” shall mean any day other than
a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by law or executive
order to remain closed. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in
that certain Securities Purchase Agreement entered into by and between the Company and Holder dated on or about the date hereof,
pursuant to which this Note was originally issued (the “Purchase Agreement”). The Holder may, by written notice to
the Borrower at least five (5) days before the Maturity Date (as may have been previously extended), extend the Maturity Date to
up to one (1) year following the date of the original Maturity Date hereunder.

 

This
Note carries an original issue discount of $26,000 (the “OID”), to cover the Holder’s monitoring costs associated
with the purchase and sale of the Note, which is included in the principal balance of this Note. Thus, the purchase price of this
Note shall be $234,000.00, computed as follows: the Principal Amount minus the OID.

 

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

 

 

 

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The following terms
shall also apply to this Note:

 

ARTICLE
I. CONVERSION RIGHTS

 

1.1.              
Conversion Right. The Holder shall have the right, in its sole and absolute discretion, at any time from time to time following
the one hundred eighty (180) day anniversary of the date hereof, to convert all or any part of the outstanding amount due under
this Note (such outstanding amount includes but is not limited to the principal, interest and/or Default Interest accrued, plus
any and all other amounts owed pursuant to the terms of this Note) into fully paid and non-assessable shares of Common Stock, as
such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such
Common Stock shall hereafter be changed or reclassified at the conversion price (the “Conversion Price”) determined
as provided herein (a “Conversion”); provided, however, that in no event shall the Holder be
entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the
number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may
be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion
of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained
herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which
the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more
than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and Regulation 13D-G thereunder, except as otherwise provided in clause (1) of such proviso, provided, further, however,
that the limitations on conversion may be waived by the Holder upon, at the election of the Holder, not less than 61 days’
prior notice to the Borrower, and the provisions of the conversion limitation shall continue to apply until such 61st day (or such
later date, as determined by the Holder, as may be specified in such notice of waiver). The number of shares of Common Stock to
be issued upon each Conversion of this Note (“Conversion Shares”) shall be determined by dividing the Conversion Amount
(as defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the
form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower by the Holder in accordance
with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting
in, or reasonably expected to result in, notice) to the Borrower or Borrower’s transfer agent before 11:59 p.m., New York,
New York time on such conversion date (the “Conversion Date”). The term “Conversion Amount” means, with
respect to any Conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such Conversion, plus (2)
accrued and unpaid interest, if any, to be converted in such Conversion at the interest rates provided in this Note to the Conversion
Date, plus (3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately
preceding clauses (1) and/or (2), plus (4) any Additional Principal for such
Conversion, plus (5) at the Holder’s option, any amounts owed to the Holder pursuant to Sections 1.2(c) and 1.4(g)
hereof.

 

1.2.              
Conversion Price.

 

a)                 
Calculation of Conversion Price. The conversion price hereunder (the “Conversion Price”) per share shall
equal the lower of: (i) $0.06 per share of Common Stock or (ii) 70% of the lowest trading price for the Common Stock on the Principal
Market during the ten (10) consecutive Trading Days including and immediately preceding the Conversion Date. If an Event of Default
under Section 3.9 of the Note has occurred, Holder, in its sole discretion, may elect to use a Conversion Price equal to the lower
of: (i) the lowest traded price of the Common Stock on the Principal Market on the Trading Day immediately preceding the Issue
Date or (ii) 70% of either the lowest traded price or the closing bid price, whichever is lower for the Common Stock on the Principal
Market during any Trading Day in which the Event of Default has not been cured. If such Common Stock is not traded on the OTCQX,
OTCQB, OTC Pink, NASDAQ or NYSE, then such sale price shall be the sale price of such security on the principal securities exchange
or trading market where such security is listed or traded or, if no sale price of such security is available in any of the foregoing
manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets”
by the National Quotation Bureau, Inc. If such sale price cannot be calculated for such security on such date in the manner provided
above, such price shall be the fair market value as mutually determined by the Borrower and the Holder. If the Borrower’s
Common stock is chilled for deposit at DTC, becomes chilled at any point while this Note remains outstanding or deposit or other
additional fees are payable due to a Yield Sign, Stop Sign or other trading restrictions, or if the closing price at any time falls
below $0.01 (as appropriately and equitably adjusted for stock splits, stock dividends, stock contributions and similar events),
then an additional 15% discount will be attributed to the Conversion Price for any and all Conversions submitted thereafter. Additionally,
the Borrower acknowledges that it will take all reasonable steps necessary or appropriate, including providing a board of directors
resolution authorizing the issuance of common stock to Holder. So long as the requested sale may be made pursuant to Rule 144 as
promulgated by the SEC (“Rule 144”), Section 4(a)(1) of the Securities Act (“Section 4(a)(1)”), or other
applicable exemption, the Company agrees to accept an opinion of counsel to the Holder confirming the rights of the Holder to sell
shares of Common Stock issuable or issued to Holder on conversion of this Note, or at the Holder’s option, Company shall
immediately and without delay provide an opinion of counsel to the Holder confirming the rights of the Holder to sell shares of
Common Stock pursuant to Rule 144, Section 4(a)(1), or other applicable exemption, as applicable, which opinion will be issued
at the Company’s expense. In addition, the Holder shall be entitled to deduct $600.00 from the conversion amount in each
Notice of Conversion to cover Holder’s legal fees associated with each Notice of Conversion. “Trading Day” shall
mean any day on which the Common Stock is tradable for any period on the OTC Pink or on the principal securities exchange, market
place, or other securities market on which the Common Stock is then being traded. Additionally, if the Company ceases to be a reporting
company pursuant to the 1934 Act at any time after the Issue Date or if the Note cannot be converted into free trading shares after
181 days from the issuance date, an additional 15% discount will be attributed to the Conversion Price for any and all Conversions
submitted thereafter.

 

 

 

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b)                 
If at any time the Conversion Price as determined hereunder for any Conversion would be less than the par value of the Common Stock,
then the Conversion Price hereunder shall equal such par value for such Conversion and the Conversion Amount for such Conversion
shall be increased to include Additional Principal, where “Additional Principal” means such additional amount to be
added to the Conversion Amount to the extent necessary to cause the number of Conversion Shares issuable upon such Conversion to
equal the same number of Conversion Shares as would have been issued had the Conversion Price not been subject to the minimum price
set forth in this Section 1.2(b).

 

c)                 
Without in any way limiting the Holder’s right to pursue other remedies, including actual damages and/or equitable relief,
the parties agree that if delivery of the free trading shares of Common Stock issuable upon conversion of this Note is not delivered
by the Deadline (as defined below) the Borrower shall pay to the Holder $250.00 per day in cash, for each day beyond the Deadline
that the Borrower fails to deliver such Common Stock. Such cash amount shall be paid to Holder by the fifth day of the month following
the month in which it has accrued or, at the option of the Holder, shall be added to the principal amount of this Note, in which
event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible
into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert this Note is a valuable
right to the Holder. The damages resulting from a failure, attempt to frustrate, or interference with such conversion right are
difficult if not impossible to quantify. Accordingly, the parties acknowledge that the liquidated damages provision contained in
this Section are justified.

 

1.3.              
Authorized Shares. The Borrower covenants that the Borrower will at all times while this Note is outstanding reserve from
its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance
of Common Stock upon the full conversion or adjustment of this Note. The Borrower is required at all times to have authorized and
reserved five (5) times the number of shares that is actually issuable upon full conversion or adjustment of this Note (based on
the Conversion Price of the Notes in effect from time to time)(the “Reserved Amount”). Initially, the Company will
instruct the Transfer Agent to reserve 35,714,000 shares of common stock in the name of the Holder for issuance upon conversion
hereof. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable.
In addition, if the Borrower shall issue any securities or make any change to its capital structure which would change the number
of shares of Common Stock into which this Note shall be convertible at the then current Conversion Price, the Borrower shall at
the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized
and reserved, free from preemptive rights, for conversion of this Note in full. So long as this Note is outstanding the Borrower
shall instruct the Transfer Agent that upon Holder’s request it shall furnish to the Holder the then current number of common
shares issued and outstanding, the then current number of common shares authorized, the then current number of unrestricted shares,
and the then current number of shares reserved for third parties. The Borrower (i) acknowledges that it has irrevocably instructed
its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance
of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates
to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this
Note.

 

If, at any time the
Borrower does not maintain the Reserved Amount it will be considered an Event of Default under Section 3.2 of the Note.

 

1.4.              
Method of Conversion.

 

a)                 
Mechanics of Conversion. Subject to Section 1.1, this Note may be converted by the Holder in whole or in part at any time
and from time to time after the Issue Date, by submitting to the Borrower or Borrower’s transfer agent a Notice of Conversion
(by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 11:59 p.m., New York,
New York time).

 

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

 

 

 

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

 

d)                 
Delivery of Common Stock upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission
or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion as provided
in this Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder
certificates for the Common Stock issuable upon such conversion within three (3) business day after such receipt or such an event
(the “Deadline”) (and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of
this Note) in accordance with the terms hereof and the Purchase Agreement. The Holder shall be entitled to deduct $400.00 from
the conversion amount in each Notice of Conversion to cover Holder’s deposit fees associated with each Notice of Conversion.

 

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

 

f)                  
Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock
issuable upon conversion, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast Automated
Securities Transfer (“FAST”) program, upon request of the Holder and its compliance with the provisions contained in
Section 1.1 and in this Section 1.4, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit
the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through
its Deposit Withdrawal Agent Commission (“DWAC”) system. In the event that the shares of the Borrower’s Common
Stock are not deliverable via DWAC following the conversion of any amount hereunder, an additional 10% discount will be attributed
to the Conversion Price.

 

g)                 
Failure to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder’s right to pursue other
remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon
conversion or adjustment of this Note is not delivered by the Deadline, the Borrower shall pay to the Holder $250.00 per day in
cash, for each day beyond the Deadline that the Borrower fails to deliver such Common Stock to the Holder. Such cash amount shall
be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder, shall
be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this
Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The
Borrower agrees that the right to convert and/or receive shares in the event of an adjustment is a valuable right to the Holder.
The damages resulting from a failure, attempt to frustrate, or interference with such conversion or adjustment right are difficult
if not impossible to qualify. Accordingly, the parties acknowledge that the liquidated damages provision contained in this Section
1.4(g) are justified.

 

 

 

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h)                 
The Borrower acknowledges that it will take all reasonable steps necessary or appropriate, including accepting an opinion of counsel
to Holder confirming the rights of Holder to sell shares of Common Stock issued to Holder on conversion or adjustment of the Note
pursuant to Rule 144, Section 4(a)(1), or other applicable exemption. So long as the requested sale may be made pursuant to Rule
144, Section 4(a)(1), or other applicable exemption, the Borrower agrees to accept an opinion of counsel to the Holder which opinion
will be issued at the Borrower’s expense.

 

i)                  
Charges and Expenses. Issuance of Common Stock to Holder, or any of its assignees, upon the conversion of this Note shall
be made without charge to the Holder for any issuance fee, transfer tax, legal opinion and related charges, postage/mailing charge
or any other expense with respect to the issuance of such Common Stock. Company shall pay all Transfer Agent fees incurred from
the reservation and issuance of the Common Stock to Holder, as well as any and all other fees and charges required by the Transfer
Agent as a condition to effectuate such issuance. That notwithstanding, the Holder may in the interest of securing issuance
and/or delivery of Common Stock before the Deadline, at any time from time to time, in its sole discretion elect to pay any such
fees or charges upfront, and Company agrees that any such fees or charges as noted in this Section that are paid by the Holder
(whether from the Company’s delays, outright refusal to pay, Holder’s interest in securing issuance and/or delivery
of Common Stock before the Deadline, or otherwise), will be at Company’s expense, and the conversion amount
will automatically be reduced by that dollar amount to cover the cost of the fees or charges as noted in this Section (for the
avoidance of doubt, the aforementioned reduction in the conversion amount shall not cause a reduction in the share amount to be
issued to the Holder pursuant to such conversion).

 

1.5.              
Restricted Securities. The shares of Common Stock issuable upon conversion or adjustment of this Note may not be sold or
transferred unless (i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Borrower
or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold
or transferred pursuant to an exemption from such registration or (iii) such shares are sold or transferred pursuant to Rule 144,
Section 4(a)(1), or other applicable exemption, or (iv) such shares are transferred to an “affiliate” (as defined in
Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who
is an Accredited Investor (as defined in the Purchase Agreement). Any legend set forth on any stock certificate evidencing any
Conversion Shares shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer
legend if (i) the Borrower or its transfer agent shall have received an opinion of counsel   form,  substance  and  scope  customary  for
opinions of counsel in  comparable transactions, to the effect that a  public sale or  transfer of
such Common Stock may be made without registration under the Act, which opinion shall be reasonably acceptable to the  Company,
or (ii) in the case of the Common Stock issued or issuable upon conversion of this Note, such security is registered for sale by
the Holder under an effective registration statement filed under the Act or otherwise may be sold pursuant to Rule 144, Section
4(a)(1), or other applicable exemption without any restriction as to the number of securities as of a particular date that can
then be immediately sold.

 

1.6.              
Effect of Certain Events.

 

a)                 
Effect of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially
all of the assets of the Borrower, the effectuation by the Borrower of a transaction or series of related transactions in which
more than 50% of the voting power of the Borrower is disposed of, or the consolidation, merger or other business combination of
the Borrower with or into any other Person (as defined below) or Persons when the Borrower is not the survivor shall either: (i)
be deemed to be an Event of Default (as defined in Article III) pursuant to which the Borrower shall be required to pay to the
Holder upon the consummation of and as a condition to such transaction an amount equal to the Default Amount (as defined in Article
III) or (ii) be treated pursuant to Section 1.6(b) hereof. “Person” shall mean any individual, corporation, limited
liability company, partnership, association, trust or other entity or organization.

 

 

 

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

 

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

 

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

 

e)                 
Stock Dividends and Stock Splits. If the Company, at any time while this Note is outstanding: (A) pays a stock dividend
or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any securities
convertible into or exercisable for Common Stock; (B) subdivides outstanding shares of Common Stock into a larger number of shares;
(C) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares; or
(D) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then
the Conversion Price (and each sale or bid price used in determining the Conversion Price) shall be subject to equitable adjustments
for such events.

 

f)                  
Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date
in the case of a subdivision, combination or re-classification.

 

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

 

 

 

    	 	6	 

     

    

 

1.7.              
Revocation. If any Conversion Shares are not received by the Deadline, the Holder may revoke the applicable Conversion pursuant
to which such Conversion Shares were issuable. This Note shall remain convertible after the Maturity Date hereof until this Note
is repaid or converted in full.

 

1.8.              
Prepayment. Notwithstanding anything to the contrary contained in this Note, subject to the terms of this Section, at any
time during the period beginning on the Issue Date and ending on the date which is one hundred eighty (180) calendar days following
the Issue Date (“Prepayment Termination Date”), Borrower shall have the right, exercisable on not less than five (5)
Trading Days prior written notice to the Holder of this Note, to prepay up to the outstanding balance on this Note (principal and
accrued interest), in full, in accordance with this Section. Any notice of prepayment hereunder (an “Optional Prepayment
Notice”) shall be delivered to the Holder of the Note at its registered addresses and shall state: (1) that the Borrower
is exercising its right to prepay the Note, and (2) the date of prepayment which shall be not more than fifteen (15) Trading Days
from the date of the Optional Prepayment Notice; and (3) the amount (in dollars) that the Borrower is paying. Notwithstanding Holder’s
receipt of the Optional Prepayment Notice the Holder may convert, or continue to convert the Note in whole or in part until the
Optional Prepayment Amount (as defined herein) is paid to the Holder. On the date fixed for prepayment (the “Optional Prepayment
Date”), the Borrower shall make payment of the Optional Prepayment Amount (as defined below) to or upon the order of the
Holder as specified by the Holder in writing to the Borrower at least one (1) business day prior to the Optional Prepayment Date. 
If the Borrower exercises its right to prepay the Note, the Borrower shall make payment to the Holder of an amount in cash (the
“Optional Prepayment Amount”) equal to the Prepayment Factor (as defined below), multiplied by the sum of: (w) the
then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount
of this Note to the Optional Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in
clauses (w) and (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof. 
If the Borrower delivers an Optional Prepayment Notice and fails to pay the Optional Prepayment Amount due to the Holder of the
Note within two (2) business days following the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay
the Note pursuant to this Section. After the Prepayment Termination Date, the Borrower shall have no right to prepay this Note.
For purposes hereof, the “Prepayment Factor” shall equal: one hundred five percent (105%) if the Optional Prepayment
Date occurs during one (1) through thirty (30) calendar days following the Issue Date one hundred fifteen percent (115%) if the
Optional Prepayment Date occurs during thirty one (31) through sixty (60) calendar days following the Issue Date; one hundred twenty
percent (120%) if the Optional Prepayment Date occurs sixty-one (61) through ninety (90) calendar days following the Issue Date;
one hundred twenty five percent (125%) if the Optional Prepayment Date occurs ninety-one (91) through one hundred twenty (120)
calendar days following the Issue Date; one hundred thirty percent (130%) if the Optional Prepayment Date occurs one hundred twenty-one
(121) through one hundred fifty (150) calendar days following the Issue Date; one hundred thirty five percent (135%) if the Optional
Prepayment Date occurs one hundred fifty-one (151) through one hundred eighty (180) calendar days following the Issue Date

 

1.9.              
[reserved].

ARTICLE
II. CERTAIN COVENANTS

 

2.1.              
Distributions on Capital Stock. So long as the Borrower shall have any obligation under this Note, the Borrower shall not
without the Holder’s written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether
in cash, property or other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the
form of additional shares of Common Stock or (b) directly or indirectly or through any subsidiary make any other payment or distribution
in respect of its capital stock except for distributions pursuant to any shareholders’ rights plan which is approved by a
majority of the Borrower’s disinterested directors.

 

2.2.              
Restriction on Stock Repurchases. So long as the Borrower shall have any obligation under this Note, the Borrower shall
not without the Holder’s written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property
or other securities or otherwise) in any one transaction or series of related transactions any shares of capital stock of the Borrower
or any warrants, rights or options to purchase or acquire any such shares.

 

2.3.              
Borrowings; Liens. Notwithstanding section 4(l) of the Purchase Agreement, so long as the Borrower shall have any obligation
under this Note, the Borrower shall not (i) create, incur, assume guarantee, endorse, contingently agree to purchase or otherwise
become liable upon the obligation of any person, firm, partnership, joint venture or corporation, except by the endorsement of
negotiable instruments for deposit or collection, or suffer to exist any liability for borrowed money, except (a) borrowings in
existence or committed on the date hereof and of which the Borrower has informed Holder in writing prior to the date hereof, or
(b) indebtedness to trade creditors or financial institutions incurred in the ordinary course of business, or (ii) enter into,
create or incur any liens, claims or encumbrances of any kind, on or with respect to any of its property or assets now owned or
hereafter acquired or any interest therein or any income or profits therefrom, securing any indebtedness occurring after the date
hereof

 

 

 

    	 	7	 

     

    

 

2.4.              
Sale of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s
written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business.
Any consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.

 

2.5.              
Advances and Loans. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the
Holder’s written consent, lend money, give credit or make advances to any person, firm, joint venture or corporation, including,
without limitation, officers, directors, employees, subsidiaries and affiliates of the Borrower, except loans, credits or advances
in existence or committed on the date hereof and which the Borrower has informed Holder in writing prior to the date hereof.

 

2.6.              
Charter. So long as the Borrower shall have any obligations under this Note, the Borrower shall not amend its charter documents,
including without limitation its certificate of incorporation and bylaws, in any manner that materially and adversely affects any
rights of the Holder.

 

2.7.              
Transfer Agent. The Borrower shall not change its transfer agent without the prior written consent of the Holder. Any replacement
of the transfer agent by the Borrower, or resignation by the transfer agent without a replacement transfer agent consented to by
the Holder prior to such replacement taking effect shall constitute an Event of Default hereunder.

 

2.8.              
Section 3(a)(9) or 3(a)(10) Transaction. So long as this Note is outstanding, the
Borrower shall not enter into any transaction or arrangement structured in accordance with, based upon, or related or pursuant
to, in whole or in part, either Section 3(a)(9) of the Securities Act (a “3(a)(9) Transaction”) or Section 3(a)(l0)
of the Securities Act (a “3(a)(l0) Transaction”). In the event that the Borrower does enter into, or makes any issuance
of Common Stock related to a 3(a)(9) Transaction or a 3(a)(10) Transaction while this Note is outstanding, a liquidated damages
charge of 25% of the outstanding principal balance of this Note, but not less than Fifteen Thousand Dollars $15,000, will be assessed
and will become immediately due and payable to the Holder at its election in the form of cash payment or addition to the balance
of this Note.

 

ARTICLE
III. EVENTS OF DEFAULT

 

Any one or more of
the following events which shall occur and/or be continuing shall constitute an event of default (each, an “Event of Default”):

 

3.1.              
Failure to Pay Principal or Interest. The Borrower fails to pay the principal hereof or interest thereon when due on
this Note, whether at maturity, upon acceleration or otherwise.

 

3.2.              
Conversion and the Shares. The Borrower fails to reserve the Reserved Amount under this Note at all times for the Holder,
issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation to do so
at any time following the execution hereof or) upon exercise by the Holder of the conversion rights of the Holder in accordance
with the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated
form) any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as
and when required by this Note, the Borrower directs its transfer agent not to transfer or delays, impairs, and/or hinders its
transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for shares of Common Stock
to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, or fails to
remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive
legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued
to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement,
statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue
uncured (or any written announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for three
(3) business days after the Holder shall have delivered a Notice of Conversion. It is an obligation of the Borrower to remain current
in its obligations to its transfer agent. It shall be an event of default of this Note, if a conversion of this Note is delayed,
hindered or frustrated due to a balance owed by the Borrower to its transfer agent. If at the option of the Holder, the Holder
advances any funds to the Borrower’s transfer agent in order to process a conversion, such advanced funds shall be paid by
the Borrower to the Holder within forty eight (48) hours of a demand from the Holder.

 

 

 

    	 	8	 

     

    

 

3.3.              
Breach of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Note
and any collateral documents including but not limited to the Purchase Agreement and such breach continues for a period of three
(3) days after written notice (via email) thereof to the Borrower from the Holder.

 

3.4.              
Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement,
statement, certificate, or any other document given in writing pursuant hereto or in connection herewith (including, without limitation,
the Purchase Agreement, and/or the due diligence questionnaire provided by the Borrower to the Holder on or around the Issue Date),
shall be false or misleading in any material respect when made and/ or the breach of which has (or with the passage of time will
have) a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

 

3.5.              
Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors,
or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business,
or such a receiver or trustee shall otherwise be appointed.

 

3.6.              
Judgments. Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary
of the Borrower or any of its property or other assets for more than $50,000, and shall remain unvacated, unbonded or unstayed
for a period of twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.

 

3.7.              
Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary,
for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any
subsidiary of the Borrower.

 

3.8.              
Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of the OTCQX,
OTCQB, OTC Pink or an equivalent replacement marketplace or exchange, NASDAQ, the NYSE or AMEX.

 

3.9.              
Failure to Comply with the Exchange Act. The Borrower shall fail to comply in any material respect with the reporting requirements
of the Exchange Act; and/or the Borrower shall cease to be subject to the reporting requirements of the Exchange Act.

 

3.10.          
Liquidation.  Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

 

3.11.          
Cessation of Operations.  Any cessation of operations by Borrower or Borrower admits it is otherwise generally
unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue
as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they become due.

 

3.12.          
Maintenance of Assets.  The failure by Borrower, during the term of this Note, to maintain any material intellectual
property rights, personal, real property or other assets which are necessary to conduct its business (whether now or in the future).

 

3.13.          
Financial Statement Restatement.  The restatement of any financial statements filed by the Borrower with the SEC
for any date or period from two years prior to the Issue Date of this Note and until this Note is no longer outstanding, if the
result of such restatement would, by comparison to the unrestated financial statement, have constituted a material adverse effect
on the rights of the Holder with respect to this Note or the Purchase Agreement.

 

 

 

    	 	9	 

     

    

 

3.14.          
Reverse Splits. The Borrower effectuates a reverse split of its Common Stock without twenty (20) days prior written notice
to the Holder.

 

3.15.          
Replacement of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails
to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form
as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares
of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.

 

3.16.          
Cross-Default. Notwithstanding anything to the contrary contained in this Note or the other related or companion documents,
a breach or default by the Borrower of any covenant or other term or condition contained in any of the Other Agreements, after
the passage of all applicable notice and cure or grace periods, shall, at the option of the Holder, be considered a default under
this Note and the Other Agreements, in which event the Holder shall be entitled (but in no event required) to apply all rights
and remedies of the Holder under the terms of this Note and the Other Agreements by reason of a default under said Other Agreement
or hereunder. “Other Agreements” means, collectively, all agreements and instruments between, among or by: (1)
the Borrower, and, or for the benefit of, (2) the Holder and any affiliate of the Holder, including, without limitation, promissory
notes; provided, however, the term “Other Agreements” shall not include the related or companion documents to this
Note. Each of the loan transactions will be cross-defaulted with each other loan transaction and with all other existing and future
debt of Borrower to the Holder.

 

3.17.          
Inside Information. The Borrower or its officers, directors, and/or affiliates attempt to transmit, convey, disclose, or
any actual transmittal, conveyance, or disclosure by the Borrower or its officers, directors, and/or affiliates of, material non-public
information concerning the Borrower, to the Holder or its successors and assigns, which is not immediately cured by Borrower’s
filing of a Form 8-K pursuant to Regulation FD on that same date.

 

3.18.          
Bid Price. The Borrower shall lose the “bid” price for its Common Stock ($0.0001 on the “Ask”
with zero market makers on the “Bid” per Level 2) and/or a market (including the OTC Pink, OTCQB or an equivalent replacement
exchange).

 

3.19.          
Delisting or Suspension of Trading of Common Stock. If, at any time on or after the Issue Date, the Borrower’s Common
Stock (i) is suspended from trading, (ii) halted from trading, and/or (iii) fails to be quoted or listed (as applicable) on any
level of the OTC Markets, any tier of the NASDAQ Stock Market, the New York Stock Exchange, or the NYSE MKT.

 

3.20.          
Unavailability of Rule 144. If, at any time on or after the date which is six (6) months after the Issue Date, the Holder
is unable to (i) obtain a standard “144 legal opinion letter” from an attorney reasonably acceptable to the Holder,
the Holder’s brokerage firm (and respective clearing firm), and the Borrower’s transfer agent in order to facilitate
the Holder’s conversion of any portion of the Note into free trading shares of the Borrower’s Common Stock pursuant
to Rule 144, and/or (ii) thereupon deposit such shares into the Holder’s brokerage account.

 

Upon the occurrence
of any Event of Default specified in Article III of the Note, the Note shall become immediately and automatically due and payable
without demand, presentment or notice and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder,
an amount equal to the greater of (i) 125% times the sum of (w) the then outstanding principal amount
of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment
(the “Mandatory Repayment Date”) plus (y) Default Interest, if any, on the amounts referred to in
clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to Section and 1.4(g) hereof (the then
outstanding principal amount of this Note to the date of payment plus the amounts referred to in clauses (x),
(y) and (z) shall collectively be known as the “Default Sum”) or (ii) the “parity value” of the Default
Sum to be prepaid, where parity value means (a) the highest number of shares of Common Stock issuable upon conversion of or otherwise
pursuant to such Default Sum in accordance with Article I, treating the Trading Day immediately preceding the Mandatory Repayment
Date as the “Conversion Date” for purposes of determining the lowest applicable Conversion Price, unless the Default
Event arises as a result of a breach in respect of a specific Conversion Date in which case such Conversion Date shall be the Conversion
Date), multiplied by (b) the highest closing price for the Common Stock during the period beginning on the date
of first occurrence of the Event of Default and ending one day prior to the Mandatory Repayment Date (the “Default Amount”)
and all other amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all
of which hereby are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection,
and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity. If at any time while
this Note is outstanding the Borrower’s Common Stock trades below $0.01, the principal amount of the Note shall automatically
and without further action increase by ten thousand dollars ($10,000).

 

 

 

    	 	10	 

     

    

 

The Holder shall have the right at any
time after the occurrence of an Event of Default, to require the Borrower, to immediately issue, in lieu of the Default Amount
and/or Default Sum, the number of shares of Common Stock of the Borrower equal to the Default Amount and/or Default Sum divided
by the Conversion Price then in effect, subject to issuance in tranches due to the beneficial ownership limitations provided in
this Note.

 

ARTICLE
IV. MISCELLANEOUS

 

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

 

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

 

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

 

4.4.              
Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit
of the Holder and its successors and assigns. Each transferee of this Note must be an “accredited investor” (as defined
in Rule 501(a) of the 1933 Act). Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral
in connection with a bona fide margin account or other lending arrangement.

 

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

 

4.6.              
Governing Law. This Note shall be governed by and construed in accordance with the
laws of the State of Delaware without regard to conflicts of laws principles that would result in the application of the substantive
laws of another jurisdiction.  Any action brought by either party against the other concerning the transactions
contemplated by this Agreement must be brought only in the civil or state courts located in the State and county of New York or
in the federal courts located in the State and county of New York.  Both parties and the individual signing this Agreement
on behalf of the Borrower agree to submit to the jurisdiction of such courts.  The prevailing party shall be entitled
to recover from the other party its reasonable attorney’s fees and costs.  In the event that any provision of this
Note is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to
the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision
which may prove invalid or unenforceable under any law shall not affect the validity or unenforceability of any other provision
of this Note. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal
action against the Borrower in any other jurisdiction to collect on the Borrower’s obligations to Holder, to realize on any
collateral or any other security for such obligations, or to enforce a judgment or other decision in favor of the Holder.  This
Note shall be deemed an unconditional obligation of Borrower for the payment of money and, without limitation to any other remedies
of Holder, may be enforced against Borrower by summary proceeding pursuant to New York Civil Procedure Law and Rules Section 3213
or any similar rule or statute in the jurisdiction where enforcement is sought.  For purposes of such rule or statute,
any other document or agreement to which Holder and Borrower are parties or which Borrower delivered to Holder, which may be convenient
or necessary to determine Holder’s rights hereunder or Borrower’s obligations to Holder are deemed a part of this Note,
whether or not such other document or agreement was delivered together herewith or was executed apart from this Note.

 

 

 

    	 	11	 

     

    

 

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

 

4.8.              
Disclosure. Upon receipt or delivery by the Company of any notice in accordance with
the terms of this Note, unless the Company has in good faith determined that the matters relating to such notice do not constitute
material, non-public information relating to the Company or any of its Subsidiaries, the Company shall within one (1) Trading Day
after any such receipt or delivery, publicly disclose such material, non-public information on a Current Report on Form 8-K or
otherwise. In the event that the Company believes that a notice contains material, non-public information relating to the Company
or any of its Subsidiaries, the Company so shall indicate to such Holder contemporaneously with delivery of such notice, and in
the absence of any such indication, the Holder shall be allowed to presume that all matters relating to such notice do not constitute
material, non-public information relating to the Company or its Subsidiaries.

 

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

 

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

 

4.11.          
Usury. This Note shall be subject to the anti-usury limitations contained in the Purchase Agreement.

 

 

 

 

 

 

 

 

 

 

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    	 	12	 

     

    

 

 

IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer as of the Issue Date
first set forth above.

 

GROM SOCIAL ENTERPRISES, INC.

 

 

	By:	 /s/ Darren Marks	 
	Name:	Darren Marks	 
	Title:	Chief Executive Officer	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	13	 

     

    

 

EXHIBIT A

NOTICE OF CONVERSION

 

The undersigned hereby elects to convert
principal under the 10% convertible note of Grom Social Enterprises, Inc., a Florida corporation (the Company”), into shares
of common stock (the “Common Stock”), of the Company according to the conditions hereof, as of the date written below.
If shares of Common Stock are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer
taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company
in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes, if any. By the
delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common Stock
does not exceed the amounts specified under Section 1.1 of this Note, as determined in accordance with Section 13(d) of the Exchange
Act. The undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection
with any transfer of the aforesaid shares of Common Stock pursuant to any prospectus.

 

	

Conversion calculations:

	Issue Date of Note: ___________________________________________
	 	Date to Effect Conversion: _____________________________________
	 	 
	 	Conversion Price: ____________________________________________
	 	Principal Amount of Note to be Converted: ________________________
	 	Less applicable fees under the Note: ______________________________
	 	Amount of Note to be Converted: ________________________________
	 	 
	 	Interest Amount to be Converted: ________________________________
	 	Less applicable fees under the Note: ______________________________
	 	Amount of Note to be Converted: ________________________________
	 	 
	 	Additional Principal on Account of Conversion
	 	Pursuant to Section 1.2(b) of the Note: ____________________________
	 	 
	 	Number of shares of Common Stock to be issued: ___________________
	 	Remaining Principal Balance of Note: ____________________________
	 	 
	 	Signature: __________________________________________________
	 	 
	 	Name: _____________________________________________________
	 	 
	 	Address for Delivery of Common Stock Certificates: ________________
	 	__________________________________________________________
	 	__________________________________________________________
	 	 
	 	Or
	 	 
	 	DWAC Instructions:
	 	DTC No: _______________
	 	Account No: _________________

 

 

 

    	 	14Exhibit 10.45

 

NOTE PURCHASE
AGREEMENT

 

THIS NOTE PURCHASE
AGREEMENT (this “Agreement”), dated as of December 17, 2020, (the “Execution Date”),
is entered into by and between GROM SOCIAL ENTERPRISES, INC., a Florida corporation
(the “Company”), and QUICK CAPITAL, LLC, a Wyoming limited liability company (the “Buyer”).
Each capitalized term used herein shall have the meaning ascribed thereto in Section 10 below, or as otherwise defined herein.

 

WHEREAS, the
Company and the Buyer are executing and delivering this Agreement in reliance upon an exemption from securities registration afforded
by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”)
under the Securities Act of 1933, as amended (the “Securities Act”); and

 

WHEREAS, the
Buyer desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement
(i) a convertible promissory note of the Company, in the form attached hereto as Exhibit A, in the aggregate principal amount
of $113,587.00 (together with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto
in accordance with the terms thereof, the “Note”), convertible into shares (the “Conversion Shares”)
of common stock, $0.001 par value per share, of the Company (the “Common Stock”) pursuant to the terms of the
Note; and (ii) warrants to acquire up to 1,183,197 shares (the “Warrant Shares”) of Common Stock in the form
attached hereto as Exhibit B (the “Warrant”).

 

NOW THEREFORE,
in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the Company and the Buyer hereby agree as follows:

 

		1.	PURCHASE AND SALE OF SECURITIES.

 

		(a)	Issuance of Securities. On the Closing Date (as defined below), the Company shall sell and
issue to the Buyer and the Buyer shall purchase and fund the Note (the “Investment”). On the Closing Date, the
Company shall issue to the Buyer, as a commitment fee, a Warrant to purchase the Warrant Shares.

 

		(b)	Closing Date. Subject to the satisfaction (or written waiver) of the conditions set forth
in Section 7 and Section 8 below, the date of the sale and issuance of the Note and the Warrant constituting the
Investment pursuant to this Agreement (the “Closing Date”) shall be the Execution Date. The closing of the transactions
contemplated by this Agreement (the “Closing”) shall occur on the Closing Date at such location as may be agreed
to by the parties.

 

		(c)	Form of Payment. On the Closing Date, by wire transfer of immediately available funds, in
accordance with the Company’s written wiring instructions against delivery of the Note, the Buyer shall pay the purchase
price of $100,000.00 (the “Purchase Price”) for the Investment of $113,587.00 (which amount includes an original
issuance discount of 8%, and a $4,500.00 credit for the Buyer’s transaction expenses) evidenced by the Note. At the request
of the Company, the Buyer shall deliver $8,360.00 of the Purchase Price directly to the broker at the Closing to satisfy the Company’s
obligation to its broker as set forth on Schedule 3(b)(iv).

 

		2.	REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer represents and warrants to the Company
that:

 

		(a)	Investment Purpose. As of the Execution Date, the Buyer is purchasing the Securities for
its own account for investment only and not with a view towards the public sale or distribution thereof, except pursuant to sales
registered or exempted from registration under the Securities Act; provided, however, that by making the foregoing
representation and warranty, the Buyer does not agree to hold any of the Securities for any minimum or other specific term and
reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption
under the Securities Act.

 

 

 

    	 	1	 

     

    

 

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

 

		(c)	Information. The Buyer and its advisors, if any, have been furnished with all materials
relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities
which have been requested by the Buyer or its advisors. The Buyer and its advisors, if any, have been afforded the opportunity
to ask questions of the Company. Notwithstanding the foregoing, the Company has not disclosed to the Buyer any material non-public
information and will not disclose such information unless such information is disclosed to the public prior to or promptly following
such disclosure to the Buyer. Neither such inquiries nor any other due diligence investigation conducted by Buyer or any of its
advisors or representatives shall modify, amend or affect Buyer’s right to rely on the Company’s representations and
warranties contained in Section 3 below.

 

		(d)	Authorization; Enforcement; Organization. This Agreement has been duly and validly authorized
by the Buyer. This Agreement has been duly executed and delivered on behalf of the Buyer, and this Agreement constitutes a valid
and binding agreement of the Buyer enforceable in accordance with its terms. The Buyer is a limited liability company organized
under the laws of the State of Wyoming.

 

		(e)	Accredited Investor Status. The Buyer is (i) an “accredited investor” as that
term is defined in Rule 501 of the General Rules and Regulations under the Securities Act by reason of Rule 501(a)(3) (an “Accredited
Investor”), (ii) experienced in making investments of the kind described in this Agreement and the related documents,
(iii) able, by reason of the business and financial experience of its officers (if an entity) and professional advisors (who are
not affiliated with or compensated in any way by the Company or any of its Affiliates or selling agents), to protect its own interests
in connection with the transactions described in this Agreement, and the related documents, and (iv) able to afford the entire
loss of its investment in the Securities.

 

		(f)	General Solicitation. The Buyer is not purchasing the Securities as a result of any advertisement,
article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast
over television or radio or presented at any seminar or any other general solicitation or general advertisement.

 

		3.	REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and warrants to the
Buyer that as of the Execution Date (or as of such other time expressly specified below):

 

		(a)	Corporate Governance Compliance:

 

		(i)	Issuance of Note and Conversion Shares and Warrant and Warrant Shares. The Note has been
duly authorized and is being validly issued to the Buyer. The Conversion Shares have been duly authorized and fully reserved for
issuance and, upon conversion of the Note in accordance with its terms, will be validly issued, fully paid and non-assessable,
and free from all taxes, liens, claims and encumbrances with respect to the issue thereof, with the holders being entitled to all
rights accorded to a holder of Common Stock. The Conversion Shares shall not be subject to pre-emptive rights or other similar
rights of stockholders of the Company (except to the extent already waived) and will not impose personal liability upon the holder
thereof, other than restrictions on transfer provided for in the Transaction Documents and under the Securities Act. The Warrant
has been duly authorized and is being validly issued to the Buyer. The Warrant Shares have been duly authorized and fully reserved
for issuance and, upon exercise of the Warrant in accordance with its terms, will be validly issued, fully paid and non-assessable,
and free from all taxes, liens, claims and encumbrances with respect to the issue thereof, with the holders being entitled to all
rights accorded to a holder of Common Stock. The Warrant Shares shall not be subject to pre-emptive rights or other similar rights
of stockholders of the Company (except to the extent already waived) and will not impose personal liability upon the holder thereof,
other than restrictions on transfer provided for in the Transaction Documents and under the Securities Act.

 

 

 

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		(ii)	Organization and Qualification. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Florida, with the requisite corporate power and authority to own and
use its properties and assets and to carry on its business as currently conducted. Each of the Subsidiaries is an entity duly incorporated
or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization,
with the requisite corporate power and authority to own and use its properties and assets and to carry on its business as currently
conducted. Each of the Company and the Subsidiaries is not in violation or default of any of the provisions of its respective certificate
or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is
duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which
the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be
so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in a Material Adverse
Effect and no proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit
or curtail such power and authority or qualification.

 

		(iii)	Authorization; Enforcement. The Company has the requisite corporate power and authority
to enter into and perform its obligations under this Agreement and the other Transaction Documents. The execution and delivery
of this Agreement and the other Transaction Documents by the Company and the consummation by it of the transactions contemplated
hereby and thereby have been duly authorized by all necessary corporate action, and no further consent or authorization of the
Company or its Board of Directors or stockholders is required. Each of this Agreement and the other Transaction Documents has been
duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, or similar
laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles
of general application.

 

		(iv)	Capitalization. As of the Execution Date, the authorized capital stock of the Company is
as set forth in the SEC Documents (as defined below). Except as set forth on Schedule 3(a)(iv), the Company has not issued
any capital stock since its most recently filed SEC Document, other than pursuant to the exercise of employee stock options under
the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee
stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the
most recently filed SEC Document. Except as disclosed in the SEC Documents, no shares are reserved for issuance pursuant to the
Company’s stock option plans, no shares are reserved for issuance pursuant to the terms of any Common Stock Equivalents (other
than the Note and the Warrant) exercisable for, or convertible into or exchangeable for shares of Common Stock and sufficient shares
are reserved for issuance upon conversion of the Note and upon exercise of the Warrant (as required by the Note, the Warrant and
Transfer Agent Instruction Letter). All of such outstanding shares of capital stock are, or upon issuance will be, duly authorized,
validly issued, fully paid and non-assessable. No shares of capital stock of the Company are subject to preemptive rights or any
other similar rights of the stockholders of the Company or any liens or encumbrances imposed through the actions or failure to
act of the Company. Except as disclosed in the SEC Documents, as of the Execution Date, (i) there are no outstanding options, warrants,
scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or
rights of any character whatsoever relating to, or securities or rights convertible into or exchangeable for any shares of capital
stock of the Company or any of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become
bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or arrangements
under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the
Securities Act and (iii) there are no anti-dilution or price adjustment provisions contained in any security issued by the Company
(or in any agreement providing rights to security holders) that will be triggered by the issuance of the Securities. The Company
has filed in its SEC Documents true and correct copies of the Company’s Certificate of Incorporation as in effect on the
Execution Date, the Company’s bylaws, as in effect on the Execution Date, and the terms of all securities convertible into
or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall
provide the Buyer a certification of this representation signed by the Company’s Chief Executive Officer on behalf of the
Company as of the Closing Date.

 

 

 

    	 	3	 

     

    

 

		(v)	No Conflicts. The execution, delivery and performance of this Agreement and the other Transaction
Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without
limitation, the issuance and reservation for issuance of the Conversion Shares and the Warrant Shares) will not (a) result in a
violation of the Company’s or any Subsidiary’s certificate or articles of incorporation, by-laws or other organizational
or charter documents, (b) conflict with, or constitute a material default (or an event that with notice or lapse of time or both
would become a material default) under, result in the creation of any Lien upon any of the properties or assets of the Company
or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture,
instrument or any “lock-up” or similar provision of any underwriting or similar agreement to which the Company or any
Subsidiary is a party, or (c) result in a violation of any federal, state or local law, rule, regulation, order, judgment or decree
(including federal and state securities laws and regulations) applicable to the Company or any Subsidiary or by which any property
or asset of the Company or any Subsidiary is bound or affected (except for such conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect), nor
is the Company otherwise in violation of, conflict with or in default under any of the foregoing. The business of the Company is
not being conducted in violation of any law, ordinance or regulation of any governmental entity, except for possible violations
that either singly or in the aggregate do not and will not have a Material Adverse Effect. The Company is not required under federal,
state or local law, rule or regulation to obtain any consent, authorization or order of, or make any filing or registration with,
any court or governmental agency in order for it to issue the Conversion Shares or the Warrant Shares or to execute, deliver or
perform any of its obligations under this Agreement or the other Transaction Documents (other than any SEC, FINRA or state securities
filings that may be required to be made by the Company subsequent to Closing).

 

		(b)	SEC and Offering Compliance:

 

		(i)	SEC Documents; Financial Statements. The Company has filed all reports, schedules, forms,
statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant
to Section 13(a) or 15(d) thereof, for the one (1) year preceding the Execution Date (or such shorter period as the Company was
required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated
by reference therein, being collectively referred to herein as the “SEC Documents”) on a timely basis or has
received a valid extension of such time of filing and has filed any such SEC Documents prior to the expiration of any such extension.
As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Securities Act and
the Exchange Act, as applicable, and other federal laws, rules and regulations applicable to such SEC Documents, and none of the
SEC Documents when filed contained any untrue statement of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
The financial statements of the Company included in the SEC Documents (the “Financial Statements”) comply as
to form and substance in all material respects with applicable accounting requirements and the published rules and regulations
of the SEC or other applicable rules and regulations with respect thereto. Such Financial Statements have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis during the periods involved (except (a) as may be otherwise
indicated in such Financial Statements or the notes thereto or (b) in the case of unaudited interim statements, to the extent they
may not include footnotes or may be condensed or summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of operations and cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal, immaterial, year-end audit adjustments). The Company maintains a system of internal
accounting controls appropriate for its size. There is no transaction, arrangement, or other relationship between the Company and
an unconsolidated or other off balance sheet entity that is not disclosed by the Company in its Financial Statements or otherwise
that would be reasonably likely to have a Material Adverse Effect. Except with respect to the material terms and conditions of
the transactions contemplated by the Transaction Documents, the Company confirms that neither it nor any other Person acting on
its behalf has provided the Buyer or its agents or counsel with any information that it believes constitutes or might constitute
material, non-public information. The Company understands and confirms that the Buyer will rely on the foregoing representation
in effecting transactions in securities of the Company.

 

 

 

    	 	4	 

     

    

 

		(ii)	Acknowledgment Regarding Buyer’s Purchase of Securities. The Company acknowledges
and agrees that the Buyer is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents
and the transactions contemplated hereby and thereby and that the Buyer is neither (i) an officer or director of the Company or
any of its Subsidiaries, nor (ii) an “affiliate” (as defined in Rule 144) of the Company or any of its Subsidiaries.
The Company further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company or any of its
Subsidiaries (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and
thereby, and any advice given by a Buyer or any of its representatives or agents in connection with the Transaction Documents and
the transactions contemplated hereby and thereby is merely incidental to the Buyer’s purchase of the Securities. The Company
further represents to the Buyer that the Company’s decision to enter into the Transaction Documents has been based solely
on the independent evaluation by the Company and its representatives.

 

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

 

		(iv)	No Brokers. Except as set forth on Schedule 3(b)(iv), no broker is entitled to a
commission payable by the Company in connection with the transactions contemplated by this transaction and the Company has taken
no action which would give rise to any claim by any person for brokerage commissions, transaction fees or similar payments relating
to this Agreement or the transactions contemplated hereby. Any all fees due to any brokers shall be paid and satisfied by the Company
at the Closing.

 

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

 

		(vi)	Shell Company Status. The Company is not currently an issuer identified in Rule 144(i)(1)(i)
under the Securities Act, and, if it was at any time previously been such an issuer, then the Company is subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, has filed all reports and other materials required to be filed by Section
13 or 15(d) of the Exchange Act, as applicable during the preceding 12 months, and, as of a date at least one year prior to the
Execution Date, has filed current “Form 10 information” with the SEC (as defined in Rule 144(i)(3) of the Securities
Act) reflecting its status as an entity that is no longer an issuer described in Rule 144(i)(1)(i) of the Securities Act.

 

		(vii)	No Disqualification Events. With respect to Securities to be offered and sold hereunder
in reliance on Rule 506 under the Securities Act (“Regulation D Securities”), none of the Company, any of its
predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating in the offering
hereunder, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis
of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in
any capacity at the time of sale (each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”)
is subject to any of the “bad actor” disqualifying events described in Rule 506(d)(1)(i)(viii) under the Securities
Act (each, a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3).
The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event.
The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the
Buyers a copy of any disclosures provided thereunder.

 

 

 

    	 	5	 

     

    

 

		(viii)	Other Covered Persons. The Company is not aware of any Person (other than any Issuer Covered
Person) that has been or will be paid (directly or indirectly) remuneration for solicitation of buyers or potential purchasers
in connection with the sale of any Regulation D Securities.

 

		(ix)	No General Solicitation; Placement Agent. Neither the Company, nor any of its Subsidiaries
or Affiliates, nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with the offer or sale of the Securities. Neither the Company nor any of its
Subsidiaries has engaged any placement agent in connection with the sale of the Securities. In the event that a broker-dealer or
other agent or advisory is engaged by the Company subsequent to the initial Closing, the Company shall be responsible for the payment
of any placement agent’s fees, financial advisory fees, or brokers’ commissions (other than for persons engaged by
any Buyer or its investment advisor) relating to or arising out of the transactions contemplated hereby in connection with the
sale of the Securities. The Company shall pay, and hold the Buyer harmless against, any liability, loss or expense (including,
without limitation, attorney’s fees and out-of-pocket expenses) arising in connection with any such claim.

 

		(x)	Investment Company Status. The Company is not, and upon consummation of the sale of the
Securities will not be, an “investment company,” a company controlled by an “investment company” or an
“affiliated person” of, or “promoter” or “principal underwriter” for, an “investment
company” as such terms are defined in the Investment Company Act of 1940, as amended.

 

		(xi)	Transfer Taxes. On the Closing Date, all stock transfer or other taxes (other than income
or similar taxes) which are required to be paid in connection with the sale and transfer of the Securities to be sold to the Buyer
hereunder will be, or will have been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will
have been complied with.

 

		(c)	Operations Related:

 

		(i)	Absence of Certain Changes. No event has occurred that would have a Material Adverse Effect
on the Company or any Subsidiary that has not been disclosed in the SEC Documents. Without limiting the generality of the foregoing,
except as disclosed in the SEC Documents, neither the Company nor any of its Subsidiaries has taken any of the actions set forth
on Schedule 3(c)(i).

 

		(ii)	Absence of Litigation. Except as disclosed in the SEC Documents, there are no actions, suits,
investigations, inquiries or proceedings pending or, to the Knowledge of the Company, threatened against or affecting the Company,
any Subsidiary or any of their respective properties, nor has the Company received any written or oral notice of any such action,
suit, proceeding, inquiry or investigation, which would have a Material Adverse Effect or would require disclosure under the Securities
Act or the Exchange Act. No judgment, order, writ, injunction or decree or award has been issued by or, to the Knowledge of the
Company, requested of any court, arbitrator or governmental agency which would have a Material Adverse Effect. Except as disclosed
in the SEC Documents or as set forth on Schedule 3(c)(ii) there has not been, and to the Knowledge of the Company, there
is not pending or contemplated, any investigation by the SEC involving the Company, any Subsidiary or any current or former director
or officer of the Company or any Subsidiary.

 

		(iii)	Patents, Copyrights, etc. The Company and the Subsidiaries own or possess
adequate rights or licenses to use all material trademarks, trade names, service marks, service mark registrations, service names,
patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and rights necessary
to conduct their respective businesses as now conducted (“Intellectual Property”). None of the Company’s
nor any Subsidiary’s Intellectual Property rights have expired or terminated, or, by the terms and conditions thereof, could
expire or terminate within two years from the Execution Date. The Company does not have any Knowledge of any infringement by the
Company and/or any Subsidiary of any material trademark, trade name rights, patents, patent rights, copyrights, inventions, licenses,
service names, service marks, service mark registrations, trade secret or other similar rights of others, or of any such development
of similar or identical trade secrets or technical information by others, and there is no claim, action or proceeding being made
or brought against, or to the Company’s Knowledge, being threatened against, the Company and/or any Subsidiary regarding
trademark, trade name, patents, patent rights, invention, copyright, license, service names, service marks, service mark registrations,
trade secret or other infringement, which could reasonably be expected to have a Material Adverse Effect.

 

 

 

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

 

		(v)	Certain Transactions. Except as set forth in the SEC Documents, none of the officers or
directors of the Company or any Subsidiary, and to the Knowledge of the Company, none of the employees of the Company or any Subsidiary
is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing
for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee
or, to the Knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest
or is an officer, director, trustee or partner, in each case in excess of the lesser of (i) $120,000 or (ii) one percent of the
average of the Company’s total assets at year end for the last two completed fiscal years, other than for (i) payment of
salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company or any Subsidiary
and (iii) other employee benefits, including stock option agreements under any stock option plan of the Company.

 

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

 

		(vii)	Environmental Matters. The Company is in compliance with all applicable Environmental Laws
in all respects except where the failure to comply does not have and could not reasonably be expected to have a Material Adverse
Effect. For purposes of the foregoing: “Environmental Laws” means, collectively, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, the Superfund Amendments and Reauthorization Act of 1986, the Resource
Conservation and Recovery Act, the Toxic Substances Control Act, as amended, the Clean Air Act, as amended, the Clean Water Act,
as amended, any other “Superfund” or “Superlien” law or any other applicable federal, state or local statute,
law, ordinance, code, rule, regulation, order or decree regulating, relating to, or imposing liability or standards of conduct
concerning, the environment or any Hazardous Material.

 

		(viii)	Title to Property. Except as disclosed in the SEC Documents, the Company and each Subsidiary
has good and marketable title in fee simple to all real property owned by it and good and marketable title in all personal property
owned by it that is material to the business of the Company and each Subsidiary, in each case free and clear of all Liens and,
except for Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed
to be made of such property by the Company or any Subsidiary and Liens for the payment of federal, state or other taxes, the payment
of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company or any
Subsidiary is held under valid, subsisting and enforceable leases with which the Company is in compliance with such exceptions
as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company
or any Subsidiary.

 

 

 

    	 	7	 

     

    

 

		(ix)	Internal Accounting Controls. Except as disclosed in the SEC Documents the Company and each
of its Subsidiaries maintain a system of internal accounting controls sufficient, in the judgment of the Company’s board
of directors, to provide reasonable assurance that (i) transactions are executed in accordance with management’s general
or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in
accordance with management’s general or specific authorization and (iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company is
in compliance with all provisions of the Sarbanes-Oxley Act of 2002, as amended, which are applicable to it.

 

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

 

		(xi)	Solvency. The Company (after giving effect to the transactions contemplated by this Agreement)
is solvent (i.e., its assets have a fair market value in excess of the amount required to pay its probable liabilities on its existing
debts as they become absolute and matured) and currently the Company has no information that would lead it to reasonably conclude
that the Company would not, after giving effect to the transaction contemplated by this Agreement, have the ability to, nor does
it intend to take any action that would impair its ability to, pay its debts from time to time incurred in connection therewith
as such debts mature. Except as disclosed in the SEC Documents or on Schedule 3(c)(xi), the Company did not receive a qualified
opinion from its auditors with respect to its most recent fiscal year end and, after giving effect to the transactions contemplated
by this Agreement, does not anticipate or know of any basis upon which its auditors might issue a qualified opinion in respect
of its current fiscal year. For the avoidance of doubt any qualification of the auditors’ opinion relating to the Company’s
ability to continue as a “going concern” shall not, by itself, be a violation of this Section 3(c)(xi).

 

		(xii)	Insurance. The Company and each Subsidiary is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary
in the businesses in which the Company and each Subsidiary is engaged. Neither the Company, nor any Subsidiary has been refused
any insurance coverage sought or applied for, and the Company has no reason to believe that it or any Subsidiary will not be able
to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not materially and adversely affect the condition, financial
or otherwise, or the earnings, business or operations of the Company, taken as a whole.

 

		(xiii)	No Undisclosed Events, Liabilities, Developments or Circumstances. Except as set forth in
the SEC Documents, the Company and its Subsidiaries have no liabilities or obligations of any nature (whether accrued, absolute,
contingent, unasserted or otherwise and whether due or to become due) other than those liabilities or obligations that are disclosed
in the Financial Statements or which do not exceed, individually in excess of $50,000 and in the aggregate in excess of $200,000.
The reserves, if any, established by the Company or the lack of reserves, if applicable, are reasonable based upon facts and circumstances
known by the Company on the Execution Date and there are no loss contingencies that are required to be accrued by the Statement
of Financial Accounting Standard No. 5 of the Financial Accounting Standards Board which are not provided for in the Financial
Statements.

 

		(xiv)	Management. During the past five year period, no current or former officer or director or,
to the Knowledge of the Company, stockholder of the Company or any of its Subsidiaries has been the subject of any matter that
would require disclosure under Paragraph (f) of Rule 401 of Regulation S-K that has not been publicly disclosed.

 

 

 

    	 	8	 

     

    

 

		(xv)	Assets; Title. Except as disclosed on Schedule 3(c)(xv), each of the Company and
its Subsidiaries has good and valid title to, or a valid leasehold interest in, as applicable, all of its properties and assets,
free and clear of all Liens except (i) any Lien for taxes not yet due or delinquent or being contested in good faith by appropriate
proceedings for which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising in the ordinary
course of business by operation of law with respect to a liability that is not yet due or delinquent, (iii) any Lien created by
operation of law, such as materialmen’s liens, mechanics’ liens and other similar liens, arising in the ordinary course
of business with respect to a liability that is not yet due or delinquent or that are being contested in good faith by appropriate
proceedings, and (iv) such as have been disposed of in the ordinary course of business. To the Company’s Knowledge, all tangible
personal property owned by the Company and its Subsidiaries has been maintained in good operating condition and repair, except
(x) for ordinary wear and tear, and (y) where such failure would not have a Material Adverse Effect. To the Company’s Knowledge,
all assets leased by the Company or any of its Subsidiaries are in the condition required by the terms of the lease applicable
thereto during the term of such lease and upon the expiration thereof. To the Company’s Knowledge, the Company and its Subsidiaries
have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned
by them which is material to the business of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances
and defects. Any real property and facilities held under lease by the Company or any of its Subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed
to be made of such property and buildings by the Company and its Subsidiaries.

 

		(xvi)	Subsidiary Rights. The Company or one of its Subsidiaries has the unrestricted right to
vote, and to receive dividends and distributions on, all equity securities of its Subsidiaries as owned by the Company or such
Subsidiary.

 

		(xvii)	Books and Records. To the Company’s Knowledge, the books of account, ledgers, order
books, records and documents of the Company and its Subsidiaries accurately and completely reflect all information relating to
the respective businesses of the Company and its Subsidiaries, the nature, acquisition, maintenance, location and collection of
each of their respective assets, and the nature of all transactions giving rise to material obligations or accounts receivable
of the Company or its Subsidiaries, as the case may be, except where the failure to so reflect such information would not have
a Material Adverse Effect. To the Company’s Knowledge, the minute books of the Company and its Subsidiaries contain accurate
records in all material respects of all meetings and accurately reflect all other actions taken by the stockholders, boards of
directors and all committees of the boards of directors, and other governing Persons of the Company and its Subsidiaries, respectively.

 

		(xviii)	Money Laundering. The Company and its Subsidiaries are in compliance with, and have not
previously violated, the USA PATRIOT ACT of 2001 and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations,
including, but not limited to, the laws, regulations and Executive Orders and sanctions programs administered by the U.S. Office
of Foreign Assets Control, including, but not limited, to (i) Executive Order 13224 of September 23, 2001 entitled, “Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079
(2001)); and (ii) any regulations contained in 31 CFR, Subtitle B, Chapter V.

 

		(d)	General

 

		(i)	Acknowledgment of Dilution. The Company understands and acknowledges the potentially dilutive
effect to the Common Stock upon the issuance of the Conversion Shares upon conversion of the Note. The Company further acknowledges
that its obligation to issue Conversion Shares upon conversion of the Note is absolute and unconditional regardless of the dilutive
effect that such issuances may have on the ownership interests of other stockholders of the Company. The Company understands and
acknowledges the potentially dilutive effect to the Common Stock upon the issuance of the Warrant Shares upon exercise of the Warrant.
The Company further acknowledges that its obligation to issue Warrant Shares upon exercise of the Warrant is absolute and unconditional
regardless of the dilutive effect that such issuances may have on the ownership interests of other stockholders of the Company.

 

 

 

    	 	9	 

     

    

 

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

 

		(iii)	Absence of Schedules. In the event that at the Closing Date, the Company does not deliver
and attach hereto any disclosure schedule contemplated by this Agreement, the Company hereby acknowledges and agrees that (i) each
such undelivered disclosure schedule shall be deemed to read as follows: “Nothing to Disclose”, and (ii) the Buyer
has not otherwise waived delivery of such disclosure schedule.

 

		4.	GENERAL COVENANTS.

 

		(a)	Best Efforts. The parties shall use their commercially reasonable best efforts to satisfy
timely each of the conditions described in Section 7 and 8 of this Agreement.

 

		(b)	Use of Proceeds. The Company shall use the proceeds from the sale of the Note to underwrite
its expenses related to the uplisting of its Common Stock to a national securities exchange (either NASDAQ or NYSE), and thereafter
for working capital and other general corporate purposes and shall not, directly or indirectly, use such proceeds for any loan
to or investment in any other corporation, partnership, enterprise or other person.

 

		(c)	Financial Information. The Company agrees to send or make available the following reports
to the Buyer until the Buyer transfers, assigns, or sells all of the Securities: (i) within ten (10) days after the filing with
the SEC, a copy of its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K; (ii)
within one (1) day after release, copies of all press releases issued by the Company or any of its Subsidiaries relating to the
transactions contemplated hereby; and (iii) contemporaneously with the making available or giving to the stockholders of the Company,
copies of any notices or other information the Company makes available or gives to such stockholders. For the avoidance of doubt,
filing the documents required in (i) above via EDGAR or releasing any documents set forth in (ii) above via a recognized wire service
shall satisfy the delivery requirements of this Section 4(c).

 

		(d)	Listing. The Company shall work in good faith to secure the listing of the Conversion Shares
and the Warrant Shares upon each national securities exchange or automated quotation system, if any, upon which shares of Common
Stock are then listed (subject to official notice of issuance) and, so long as the Buyer owns any of the Securities, shall maintain,
so long as any other shares of Common Stock shall be so listed, such listing of all Conversion Shares and all Warrant Shares from
time to time issuable upon exercise of the Note and the Warrant, respectively. The Company will obtain and, so long as the Buyer
owns any of the Securities, maintain the listing and trading of its Common Stock on the Trading Market and will comply in all respects
with the Company’s reporting, filing and other obligations under the bylaws or rules of the Financial Industry Regulatory
Authority (“FINRA”) and such exchanges, as applicable.

 

		(e)	Corporate Existence. So long as the Buyer beneficially owns any of the Securities, the Company
shall maintain its corporate existence and shall not sell all or substantially all of the Company’s assets, except in the
event of a merger or consolidation or sale of all or substantially all of the Company’s assets, where the surviving or successor
entity in such transaction (i) assumes the Company’s obligations hereunder and under the agreements and instruments entered
into in connection herewith and (ii) is a publicly traded corporation whose Common Stock is listed or quoted for trading on the
Trading Market.

 

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

 

		(g)	Failure to Comply with the Exchange Act. So long as the Buyer beneficially owns any of the
Securities, the Company shall comply with the reporting requirements of the Exchange Act; and the Company shall continue to be
subject to the reporting requirements of the Exchange Act.

 

 

 

    	 	10	 

     

    

 

		(h)	Breach of Covenants. If the Company breaches any of the covenants set forth in this Section
4, then in addition to any other remedies available to the Buyer pursuant to this Agreement, each such breach will be considered
an “Event of Default” under the Note.

 

		(i)	Reservation of Shares. The Company covenants that while the Note and/or Warrant remain outstanding,
the Company will reserve from its authorized and unissued Common Stock, three times (300%) of the number of shares of Common Stock,
free from pre-emptive rights, that would be issuable upon full, unconditioned conversion of the Note and exercise of the Warrant
calculated on the basis of the conversion price and exercise price, respectively, in effect as the Closing Date, which such reserved
amounts shall be increased by the Company from time to time in accordance with its obligations under such Securities. In addition
to all other rights in this Agreement and the Note, in the event that on any date (the “Reserve Depletion Date”)
the Company does not have available enough authorized shares of Common Stock to satisfy any conversion request regarding the Note,
or exercise of the Warrant, the Company shall repay all outstanding amounts owed under the Note in full within sixty (60) days
of the Reserve Depletion Date.

 

		(j)	Indemnification. Each party hereto (an “Indemnifying Party”) agrees to
indemnify and hold harmless the other party along with its officers, directors, employees, and authorized agents, and each Person
or entity, if any, who controls such party within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act or the rules and regulations thereunder (an “Indemnified Party”) from and against any Damages, joint or
several, and any action in respect thereof to which the Indemnified Party becomes subject to, resulting from, arising out of or
relating to any misrepresentation, breach of warranty or nonfulfillment of or failure to perform any covenant or agreement on the
part of the Indemnifying Party contained in this Agreement.

 

		(k)	Certain Expenses and Fees. The Company shall pay all stamp taxes and other taxes and duties
levied in connection with the delivery of the Note to the Buyer. In addition, the Buyer shall receive a $4,500.00 credit for the
Buyer’s transaction expenses which shall be evidenced in the face value of the Note.

 

		5.	SPECIAL COVENANTS

 

		(a)	Piggyback Registration Rights. The Company shall include on any registration statement filed
with the SEC, all Conversion Shares and all Warrant Shares. In addition to all other remedies at law or in equity or otherwise
under this Agreement, failure to do so will result in liquidated damages of $25,000.00, being immediately due and payable to the
Buyer at its election in the form of cash payment.

 

		(b)	Variable Rate Transactions. The Company covenants and agrees that it will not, without the
prior written consent of the Buyer, enter into any equity line of credit agreement with any other party or enter into any transaction
resulting in, or with, any Variable Security Holders, excluding the Buyer, in an aggregate amount exceeding $500,000.00, without
the Buyer’s prior written consent, which consent may be granted or withheld in the Buyer’s sole and absolute discretion
unless the proceeds of such transaction are used first and primarily to repay the Note in full; provided that such arrangements
evidenced by written agreements that exist as of the Execution Date shall not be subject to the provisions of this Section 5(b).
“Variable Security Holder” means any holder of any securities of the Company that (A) have or may have conversion
rights of any kind, contingent, conditional or otherwise, in which the number of shares that may be issued pursuant to such conversion
right varies with the market price of the Common Stock, and/or (B) are or may become convertible into Common Stock (including without
limitation convertible debt, warrants or convertible preferred stock), with a conversion price that varies with the market price
of the Common Stock, even if such security only becomes convertible following an event of default, the passage of time, or another
trigger event or condition.

 

		(c)	Uplisting to National Exchange. The Company agrees to take all necessary actions, and use
its best efforts to successfully “uplist” the Common Stock to either the NYSE or NASDAQ for trading prior to the 90th
day following the Execution Date. The Company’s compliance with this covenant shall be as determined by the Buyer in its
sole discretion.

 

 

 

    	 	11	 

     

    

 

		(d)	Right of First Refusal. During the twelve (12) months immediately following the Closing,
in the event that the Company receives a Bona Fide Offer of capital or financing from any third party consisting of any securities
offering, including but not limited to any debt or equity securities, then the Company must, and irrevocably agrees to, first offer
such opportunity to the Buyer to provide such capital or financing to the Company on the same or similar terms as each respective
third party’s terms, and the Buyer may in its sole discretion determine whether the Buyer will provide such capital or financing.
Upon receipt of the third party offer, the Company shall promptly provide notice thereof to the Buyer (the “Offer Notice”)
and provide copies of the pending transaction documents. Should the Buyer be unwilling or unable to provide such capital or financing
to the Company within five (5) Trading Days from the Buyer’s receipt of the Offer Notice from the Company, then the Company
may obtain such capital or financing from the respective third party upon the exact same terms and conditions offered by the Company
to the Buyer, which transaction must be completed within 7 Trading Days after the date of the Offer Notice. If the Company does
not receive the capital or financing from the respective third party within 7 Trading Days after the date of the respective Offer
Notice, then the Company must again offer the capital or financing opportunity to the Buyer as described above, and the process
detailed above shall be repeated. A “Bona Fide Offer” is one in which the purchaser is irrevocably and contractually
bound to purchase the subject securities from the Company, subject to the Buyer’s right of first refusal.

 

		(e)	Repayment from Proceeds. While any portion of the Note is outstanding, if the Company receives
cash proceeds from any source or series of related or unrelated sources, including but not limited to, from payments from customers,
the issuance of equity or debt, the conversion of outstanding warrants of the Company, the issuance of securities pursuant to an
equity line of credit of the Company or the sale of assets, the Company shall, within one (1) business day of Borrower’s
receipt of such proceeds, inform the Buyer of such receipt, following which the Holder shall have the right in its sole discretion
to require the Borrower to immediately apply all or any portion of such proceeds to repay all or any portion of the outstanding
amounts owed under the Note. In the event that such proceeds are received by the Holder prior to the Maturity Date (as defined
in the Note), the required prepayment shall be subject to the terms of Section 1.9 of the Note.

 

		(f)	Prohibition on Certain Transactions. The Buyer covenants and agrees that neither it, nor
any affiliate acting on its behalf or pursuant to any understanding with it will execute any “short sales” of the Common
Stock as defined in Rule 200 of Regulation SHO under the Exchange Act.

 

		(g)	Breach of Covenants. If the Company breaches any of the covenants set forth in this Section
5, then in addition to any other remedies available to the Buyer pursuant to this Agreement, each such breach will be considered
an “Event of Default” under the Note.

 

		6.	Transfer Agent Instructions. Prior to registration
of the Conversion Shares and the Warrant Shares under the Securities Act or the date on which the Conversion Shares or the Warrant
Shares may be sold pursuant to Rule 144 without any restriction as to the number of Securities as of a particular date that can
then be immediately sold, all such certificates shall bear the restrictive legend specified in the Note or Warrants as applicable.
The Company warrants that: (i) no stop transfer instructions will be given by the Company to its Transfer Agent and that the Securities
shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement
and the Note; (ii) it will not direct its Transfer Agent not to transfer or delay, impair, and/or hinder its Transfer Agent in
transferring (or issuing) (electronically or in certificated form) any certificate for Conversion Shares or Warrant Shares to be
issued to the Buyer upon conversion/exercise of or otherwise pursuant to the Note or the Warrant, respectively, as and when required
by the Note, the Warrant or this Agreement; and (iii) it will not fail to remove (or direct its Transfer Agent not to remove or
impairs, delays, and/or hinders its Transfer Agent from removing) any restrictive legend (or to withdraw any stop transfer instructions
in respect thereof) on any certificate for any Conversion Shares or any Warrant Shares as contemplated by the terms of this Agreement,
the Note and the Warrant, as applicable. Nothing in this Section shall affect in any way the Buyer’s obligations and agreement
to comply with all applicable prospectus delivery requirements, if any, upon re-sale of the Securities. If the Buyer provides the
Company (which shall be at the cost of the Company), with (i) an opinion of counsel in form, substance and scope customary for
opinions in comparable transactions, to the effect that a public sale or transfer of such Securities may be made without registration
under the Securities Act and such sale or transfer is effected or (ii) the Buyer provides reasonable assurances that the Securities
can be sold pursuant to Rule 144, the Company shall permit the transfer, and, in the case of the Conversion Shares and the Warrant
Shares, promptly instruct its Transfer Agent to issue one or more certificates, free from restrictive legend, in such name and
in such denominations as specified by the Buyer. The Company acknowledges that a breach by it of its obligations hereunder will
cause irreparable harm to the Buyer, by vitiating the intent and purpose of the transactions contemplated hereby. Accordingly,
the Company acknowledges that the remedy at law for a breach of its obligations under this Section may be inadequate and agrees,
in the event of a breach or threatened breach by the Company of the provisions of this Section, that the Buyer shall be entitled,
in addition to all other available remedies, to an injunction restraining any breach and requiring immediate transfer, without
the necessity of showing economic loss and without any bond or other security being required.

 

 

 

    	 	12	 

     

    

 

		7.	CONDITIONS PRECEDENT TO THE COMPANY’S OBLIGATIONS TO SELL. The obligation of the Company
hereunder to issue and sell the Note and the Warrant to the Buyer at the Closing is subject to the satisfaction, at or before the
Closing Date of each of the following conditions thereto, provided that these conditions are for the Company’s sole benefit
and may be waived by the Company at any time in its sole discretion:

 

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

 

		(b)	The Buyer shall have delivered the Purchase Price in accordance with Section 1 above.

 

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

 

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

 

		8.	CONDITIONS PRECEDENT TO THE BUYER’S OBLIGATION TO PURCHASE. The obligation of the
Buyer hereunder to purchase the Note and fund the Investment of the Note at the Closing is subject to the satisfaction, at or before
the Closing Date of each of the following conditions, provided that these conditions are for the Buyer’s sole benefit and
may be waived by the Buyer at any time in its sole discretion:

 

		(a)	The Company shall have executed this Agreement and delivered the same to the Buyer on the Closing
Date.

 

		(b)	The Company shall have delivered to the Buyer the duly executed Note in accordance with Section
1 above on the Closing Date.

 

		(c)	The Company shall have delivered to the Buyer the duly executed Warrant on the Closing Date.

 

		(d)	The Company shall have delivered to the Buyer the duly executed Transfer Agent Instruction Letter
on the Closing Date.

 

		(e)	The Company shall have delivered a copy of its Directors’ resolutions relating to the transactions
contemplated hereby, the form of which is attached hereto as Exhibit D, on the Closing Date.

 

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

 

		(g)	No event shall have occurred which could reasonably be expected to have a Material Adverse Effect
on the Company including but not limited to a change in the Exchange Act reporting status of the Company or the failure of the
Company to be timely in its Exchange Act reporting obligations, as of the Closing Date.

 

		(h)	The Company shall have delivered to the Buyer a copy of its certificate of good standing with the
State of Florida dated within five (5) days of the Closing.

 

 

 

    	 	13	 

     

    

 

		(i)	The Company shall have delivered a legal opinion to the Buyer regarding the enforceability of the
Transaction Documents in form and substance acceptable to the Buyer.

 

		(j)	The representations and warranties of the Company shall be true and correct in all material respects
as of the date when made and as of the Closing Date as though made at such time (except for representations and warranties that
speak as of a specific date, which shall be true and correct in all material respects as of such specific date) and the Company
shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by
this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date. The Buyer shall have
received a certificate or certificates, executed by the chief executive officer of the Company, dated as of the Closing Date, to
the foregoing effect and as to such other matters as may be reasonably requested by the Buyer, in the form prescribed by the Buyer.

 

		9.	GOVERNING LAW; MISCELLANEOUS.

 

		(a)	Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of Wyoming without regard to principles of conflicts of laws. Any action brought by either party against the
other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of Miami, Florida, or
in the federal courts located in the Southern District of Florida. The parties to this Agreement hereby irrevocably waive any objection
to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or
venue or based upon forum non conveniens. The prevailing party shall be entitled to recover from the other party its reasonable
attorney’s fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection
herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative
to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision
of any agreement. 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 or any other Transaction Document 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.

 

		(b)	JURY TRIAL WAIVER. THE COMPANY AND THE BUYER HEREBY WAIVE A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER IN RESPECT OF ANY MATTER ARISING OUT OF OR
IN CONNECTION WITH THE TRANSACTION DOCUMENTS.

 

		(c)	Counterparts; Signatures by Electronic Mail. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement and shall
become effective when counterparts have been signed by each party and delivered to the other party. This Agreement, once executed
by a party, may be delivered to the other party hereto by electronic mail transmission of a copy of this Agreement bearing the
signature of the party so delivering this Agreement.

 

		(d)	Headings. The headings of this Agreement are for convenience of reference only and shall
not form part of, or affect the interpretation of, this Agreement.

 

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

 

 

 

    	 	14	 

     

    

 

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

 

		(g)	Notices. All notices, demands, requests, consents, approvals, and other communications required
or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (a) personally served, (b) deposited
in the mail, registered or certified, return receipt requested, postage prepaid, (c) delivered by reputable air courier service
with charges prepaid, or (d) transmitted by hand delivery, or e-mail as a PDF (with read receipt), addressed as set forth below
or to such other address as such party shall have specified most recently by written notice given in accordance herewith. Any notice
or other communication required or permitted to be given hereunder shall be deemed effective (i) upon hand delivery or delivery
by e-mail (with read receipt) at the address designated below (if delivered on a business day during normal business hours where
such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during
normal business hours where such notice is to be received) or (ii) on the second business day following the date of mailing by
express courier service or on the fifth business day after deposited in the mail, in each case, fully prepaid, addressed to such
address, or upon actual receipt of such mailing, whichever shall first occur.

 

If to the Company, to:

 

GROM SOCIAL ENTERPRISES, INC. 

2060 NW Boca Raton Blvd

Suite #6

Boca Raton, FL 33431

Attn: Melvin Leiner

E-mail: Executive Vice President

 

If to the Buyer, to:

 

QUICK CAPITAL, LLC

12000 Biscayne Blvd

Suite 408

Miami, FL 33181

Attn: Eilon D. Natan, Manager

E-mail: eilon@quick-cap.com

 

Either party hereto
may from time to time change its address or e-mail for notices under this Section 9(g) by giving at least ten (10) days’
prior written notice of such changed address to the other party hereto.

 

		(h)	Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of
the parties and their successors and assigns. Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations
hereunder without the prior written consent of the other. Notwithstanding the foregoing, subject to Section 2(e), the Buyer
may assign its rights hereunder to any person that purchases Securities in a private transaction from the Buyer or to any of its
“affiliates,” as that term is defined under the Exchange Act, without the consent of the Company.

 

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

 

 

 

    	 	15	 

     

    

 

		(j)	Survival. The representations and warranties of the Company and the agreements and covenants
set forth in this Agreement shall survive the Closings hereunder as well as the termination/satisfaction of the Note for the longest
period allowable under applicable law. The Company agrees to indemnify and hold harmless the Buyer and all their officers, directors,
employees and agents for loss or damage arising as a result of or related to any breach by the Company of any of its representations,
warranties and covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement
of expenses as they are incurred.

 

		(k)	Further Assurances. Each party shall do and perform, or cause to be done and performed,
all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents,
as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.

 

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

 

		(m)	Remedies.

 

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

 

		(ii)	In addition to any other remedy provided herein or in any document executed in connection herewith,
the Company shall pay the Buyer for all costs, fees and expenses in connection with any arbitration, litigation, contest, dispute,
suit or any other action to enforce any rights of the Buyer against the Company in connection herewith, including, but not limited
to, costs and expenses and attorneys’ fees, and costs and time charges of counsel to the Buyer.

 

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

 

		10.	DEFINED TERMS. As used in this Agreement, the following terms shall have the following meanings
specified or indicated (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

 

“Affiliate”
means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls,
or is controlled by, or is under common control with, such Person, and the term “control” (including the terms “controlled
by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or
cause the direction of the management policies of such Person, whether through ownership of voting securities, by contract or otherwise.

 

 

 

    	 	16	 

     

    

 

“Common Stock
Equivalents” means any securities of the Company or the Subsidiaries that would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument
that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.

 

“Damages”
shall mean any loss, claim, damage, liability, cost and expense (including, without limitation, reasonable attorneys’ fees
and disbursements and costs and expenses of expert witnesses and investigation).

 

“Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Hazardous
Material” means and includes any hazardous, toxic or dangerous waste, substance or material, the generation, handling,
storage, disposal, treatment or emission of which is subject to any Environmental Law.

 

“Knowledge”
including the phrase “to the Company’s Knowledge” shall mean the actual knowledge after reasonable investigation
of the Company’s officers and directors.

 

“Lien”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, pre-emptive right or any other restriction.

 

“Material
Adverse Effect” means any effect on the business, operations, properties, or financial condition of the Company and/or
the Subsidiaries that is material and adverse to the Company and/or the Subsidiaries and/or any condition, circumstance, or situation
that prohibits or otherwise materially interferes with the ability of the Company and/or the Subsidiaries to enter into and/or
perform its obligations under any Transaction Document.

 

“Person”
means an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.

 

“Securities”
means, collectively, the Note, the Conversion Shares, the Warrant, the Warrant Shares, and any other securities of the Company
issued in connection with or in exchange for any of the foregoing.

 

“Subsidiary”
or “Subsidiaries” means any Person the Company wholly-owns or controls, or in which the Company, directly or
indirectly, owns a majority of the voting stock or similar voting interest, in each case that would be disclosable pursuant to
Item 601(b)(21) of Regulation S-K promulgated under the Securities Act.

 

“Trading Day”
shall mean a day on which the NASDAQ stock market shall be open for business.

 

“Trading Market”
means the OTCQB market of the OTC-Markets.

 

“Transaction
Documents” shall mean this Agreement, the Note, the Warrant, the Transfer Agent Instruction Letter and all schedules
and exhibits hereto and thereto.

 

“Transfer
Agent” shall mean EQ Shareowner Services, the current transfer agent of the Company, and any successor transfer agent
of the Company.

 

“Transfer
Agent Instruction Letter” means the letter from the Company to the Transfer Agent in the form of Exhibit C attached
hereto.

 

 

 

 

 

** signature page follows **

 

 

 

    	 	17	 

     

    

 

IN WITNESS WHEREOF,
the Buyer and the Company have caused their respective signature page to this Note Purchase Agreement to be duly executed as of
the Execution Date.

 

 

 

 

 

	 	
        COMPANY:

         

        GROM SOCIAL ENTERPRISES, INC. 

         

        By: /s/ Melvin Leiner

        Name: Melvin Leiner

        Title: Executive VP

         

         

        BUYER:

         

	 	
        QUICK CAPITAL, LLC

         

         

        By: /s/ Eilon D. Natan

        Name: Eilon D. Natan

        Title: Manager

         

         

         

 

 

 

 

 

 

 

 

 

 

 

 

**
Signature Page to Note Purchase Agreement **

 

 

    	 	18	 

     

    

 

DISCLOSURE SCHEDULES

 

 

Schedule 3(b)(iv)

 

The Company’s broker, Kingswood Capital
Markets, is entitled to a payment of $8,360 for its services in connection with the transactions contemplated by the Agreement.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	19	 

     

    

 

Schedule 3(c)(i)

 

Except
as disclosed in the SEC Documents, neither the Company nor any of its Subsidiaries has:

 

(1)               
declared, set aside or paid any dividend or other distribution with respect to any shares of capital stock of the Company
or any of its Subsidiaries or any direct or indirect redemption, purchase or other acquisition of any such shares;

 

(2)               
sold, assigned, pledged, encumbered, transferred or otherwise disposed of any tangible asset of the Company or any of its
Subsidiaries (other than sales or the licensing of its products to customers in the ordinary course of business consistent with
past practice), or sold, assigned, pledged, encumbered, transferred or otherwise disposed of any Intellectual Property (as defined
below), other than licensing of products of the Company or its Subsidiaries in the ordinary course of business and on a non-exclusive
basis;

 

(3)               
entered into any licensing or other agreement with regard to the acquisition or disposition of any Intellectual Property
other than licenses in the ordinary course of business consistent with past practice or any amendment or consent with respect to
any licensing agreement filed or required to be filed with respect to any governmental authority;

 

(4)               
made capital expenditures, individually or in the aggregate, in excess of $100,000;

 

(5)               
incurred any obligation or liability (whether absolute, accrued, contingent or otherwise, and whether due or to become due)
on the Company’s behalf or any of its Subsidiaries, in excess of $100,000 individually, other than obligations under customer
contracts, current obligations and liabilities, in each case incurred in the ordinary course of business and consistent with past
practice;

 

(6)               
had any Lien on any property of the Company or any of its Subsidiaries except as disclosed in the SEC Documents;

 

(7)               
made any payment, discharge, satisfaction or settlement of any suit, action, claim, arbitration, proceeding or obligation
of the Company or any of its Subsidiaries, except in the ordinary course of business and consistent with past practice;

 

(8)               
effected any split, combination or reclassification of any equity securities;

 

(9)               
sustained any material loss, destruction or damage to any property of the Company or any Subsidiary, whether or not insured;

 

(10)           
effected any acceleration or prepayment of any indebtedness for borrowed money or the refunding of any such indebtedness;

 

(11)           
experienced any labor trouble involving the Company or any Subsidiary or any material change in their personnel or the terms
and conditions of employment;

 

(12)           
made any waiver of any valuable right, whether by contract or otherwise;

 

 

 

    	 	20	 

     

    

 

(13)           
made any loan or extension of credit to any officer or employee of the Company;

 

(14)           
made any change in the independent public accountants of the Company or its Subsidiaries or any material change in the accounting
methods or accounting practices followed by the Company or its Subsidiaries, as applicable, or any material change in depreciation
or amortization policies or rates;

 

(15)           
experienced any resignation or termination of any officer, key employee or group of employees of the Company or any of its
Subsidiaries;

 

(16)           
effected any change in any compensation arrangement or agreement with any employee, officer, director or stockholder that
would result in the aggregate compensation to such Person in such year to exceed $100,000;

 

(17)           
effected any material increase in the compensation of employees of the Company or its Subsidiaries (including any increase
pursuant to any written bonus, pension, profit sharing or other benefit or compensation plan, policy or arrangement or commitment),
or any increase in any such compensation or bonus payable to any officer, stockholder, director, consultant or agent of the Company
or any of its Subsidiaries having an annual salary or remuneration in excess of $100,000;

 

(18)           
made any revaluation of any of their respective assets, including, without limitation, writing down the value of capitalized
inventory or writing off notes or accounts receivable or any sale of assets other than in the ordinary course of business;

 

(19)           
made any acquisition or disposition of any material assets (or any contract or arrangement therefor), or any other material
transaction by the Company or any Subsidiary otherwise than for fair value in the ordinary course of business;

 

(20)           
written-down the value of any asset of the Company or its Subsidiaries or written-off as uncollectible of any accounts or
notes receivable or any portion thereof except in the ordinary course of business and in a magnitude consistent with historical
practice;

 

(21)           
cancelled any debts or claims or any material amendment, termination or waiver of any rights of the Company or its Subsidiaries;
or

 

(22)           
entered into any agreement, whether in writing or otherwise, to take any of the actions specified in the foregoing items
(1) through (21).

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	21	 

     

    

 

EXHIBITS

 

A - NOTE

 

B - WARRANT

 

C - TRANSFER AGENT INSTRUCTIONS

 

D - BOARD RESOLUTIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	22

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