Document:

Exhibit 4.1

 

 

THIS INSTRUMENT CONTAINS AN AFFIDAVIT
OF CONFESSION OF JUDGMENT PROVISION WHICH CONSTITUTES A WAIVER OF IMPORTANT RIGHTS BORROWER MAY HAVE AND ALLOWS THE HOLDER TO OBTAIN
A JUDGMENT AGAINST BORROWER WITHOUT ANY FURTHER NOTICE.

 

NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH MAY BE THE LEGAL COUNSEL OPINION (AS DEFINED IN THE PURCHASE AGREEMENT)),
IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144, RULE
144A OR REGULATION S UNDER SAID ACT OR OTHER APPLICABLE EXEMPTION. 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: $500,000.00	Issue Date: February 9, 2021
	Purchase Price: $500,000.00	 

 

PROMISSORY NOTE

 

FOR VALUE RECEIVED,
GROM SOCIAL ENTERPRISES, INC., a Florida corporation (hereinafter called the “Borrower” or the “Company”)
(Trading Symbol: GRMM), hereby promises to pay to the order of AUCTUS FUND, LLC, a Delaware limited liability company, or
registered assigns (the “Holder”), in the form of lawful money of the United States of America, the principal sum of
$500,000.00 (subject to adjustment herein) (the “Principal Amount”) and to pay interest on the unpaid Principal Amount
hereof at the rate of twelve percent (12%) (the “Interest Rate”) per annum (with the understanding that the first twelve
months of interest (equal to $60,000.00) shall be guaranteed and earned in full as of the Issue Date) from the date hereof (the
“Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or
otherwise, as further provided herein. The maturity date shall be twelve (12) months from the Issue Date (the “Maturity Date”),
and is the date upon which the Principal Amount as well as any accrued and unpaid interest and other fees, shall be due and payable.

 

This Note may not be prepaid or repaid in whole or in part except
as otherwise explicitly set forth herein.

 

Any Principal Amount
or interest on this Note which is not paid when due shall bear interest at the rate of the lesser of (i) sixteen percent (16%)
per annum and (ii) the maximum amount permitted by law from the due date thereof until the same is paid (“Default Interest”).
Default Interest shall be computed on the basis of a 365-day year and the actual number of days elapsed.

 

All payments due hereunder
(to the extent not converted into shares of common stock, $0.001 par value per share, of the Borrower (the “Common Stock”)
in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall be made
at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of
this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the
same shall instead be due on the next succeeding day which is a business day and, in the case of any interest payment date which
is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account for purposes
of determining the amount of interest due on such date.

 

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

 

 

 

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

 

The following terms shall also apply to this Note:

 

ARTICLE I. CONVERSION RIGHTS

 

1.1 Conversion Right.
The Holder shall have the right, at any time on or following the Issue Date, to convert all or any portion of the then outstanding
and unpaid Principal Amount and interest (including any Default Interest) into fully paid and non-assessable shares of Common Stock,
as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such
Common Stock shall hereafter be changed or reclassified, at the Conversion Price (as defined below) determined as provided herein
(a “Conversion”); provided, however, that notwithstanding anything to the contrary contained herein, the a Holder
shall not have the right to convert any portion of this Note, pursuant to Section 1 or otherwise, to the extent that after giving
effect to such issuance after conversion as set forth on the applicable Notice of Conversion, the Holder (together with the Holder’s
affiliates (the “Affiliates”), and any other Persons (as defined below) acting as a group together with the Holder
or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of
the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common
Stock beneficially owned by the Holder and Attribution Parties shall include the number of shares of Common Stock issuable upon
conversion of this Note with respect to which such determination is being made, but shall exclude the number of shares of Common
Stock which would be issuable upon (i) conversion of the remaining, nonconverted portion of this Note beneficially owned by the
Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion
of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained
herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence,
for purposes of this Section 1.1, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act
and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Holder is solely responsible
for any schedules required to be filed in accordance therewith. In addition, a determination as to any group status as contemplated
above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
For purposes of this Section 1.1, in determining the number of outstanding shares of Common Stock, a Holder may rely on the number
of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with
the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by
the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request
of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Common
Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to
the conversion or exercise of securities of the Company, including this Note, by the Holder or its Affiliates or Attribution Parties
since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation”
shall be 4.99% of the number of shares of the Common Stock outstanding at the time of the respective calculation hereunder. “Person”
and “Persons” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust,
an unincorporated organization, any other entity and any governmental entity or any department or agency thereof. The limitations
contained in this paragraph shall apply to a successor holder of this Note. The number of Conversion Shares to be issued upon each
conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price
then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice
of Conversion”), delivered to the Borrower or Borrower’s transfer agent by the Holder in accordance with Section 1.4
below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably
expected to result in, notice) to the Borrower or Borrower’s transfer agent before 11:59 p.m., New York, New York time on
such conversion date (the “Conversion Date”). The term “Conversion Amount” means, with respect to any conversion
of this Note, the sum of (1) the Principal Amount of this Note to be converted in such conversion plus (2) at the Holder’s
option, accrued and unpaid interest, if any, on such Principal Amount at the Interest Rate to the Conversion Date, plus
(3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1)
and/or (2).

 

 

 

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		1.2	Conversion Price.

 

(a)              
Calculation of Conversion Price. The per share conversion price into which Principal Amount and interest (including
any Default Interest) under this Note shall be convertible into shares of Common Stock hereunder (the “Conversion Price”)
shall equal $0.06. If at any time the Conversion Price as determined hereunder for any conversion would be less than the par value
of the Common Stock, then at the sole discretion of the Holder, the Conversion Price hereunder may equal such par value for such
conversion and the Conversion Amount for such conversion may be increased to include Additional Principal, where “Additional
Principal” means such additional amount to be added to the Conversion Amount to the extent necessary to cause the number
of conversion shares issuable upon such conversion to equal the same number of conversion shares as would have been issued had
the Conversion Price not been adjusted by the Holder to the par value price. The Conversion Price is subject to equitable adjustments
for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower’s securities or the securities
of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar events.
Holder shall be entitled to deduct $1,750.00 from the conversion amount in each Notice of Conversion to cover Holder’s fees
associated with each Notice of Conversion.

 

1.3
Authorized and Reserved Shares. The Borrower covenants that at all times until the Note is satisfied in full, the
Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights,
to provide for the issuance of a number of Conversion Shares equal to the greater of: (a) 25,000,000 shares of Common Stock or
(b) the sum of (i) the number of Conversion Shares issuable upon the full conversion of this Note (assuming no payment of Principal
Amount or interest) as of any issue date (taking into consideration any adjustments to the Conversion Price pursuant to Section
2 hereof or otherwise) multiplied by (ii) three (3) (the “Reserved Amount”). The Borrower represents that upon
issuance, the Conversion Shares will be duly and validly issued, fully paid and non-assessable. The Borrower (i) acknowledges that
it has irrevocably instructed its transfer agent to issue certificates for the Conversion Shares or instructions to have the Conversion
Shares issued as contemplated by Section 1.4(f) hereof, and (ii) agrees that its issuance of this Note shall constitute full authority
to its officers and agents who are charged with the duty of executing stock certificates or cause the Company to electronically
issue shares of Common Stock to execute and issue the necessary certificates for the Conversion Shares or cause the Conversion
Shares to be issued as contemplated by Section 1.4(f) hereof in accordance with the terms and conditions of this Note.

 

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

 

		1.4	Method of Conversion.

 

(a)               
Mechanics of Conversion. This Note may be converted by the Holder in whole or in part, on any Trading Day, at any
time on or following 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). Any Notice of Conversion submitted after 11:59 p.m., New York, New York time, shall be deemed to have been delivered
and received on the next Trading Day.

 

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

 

 

 

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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 Conversion Shares (or cause the electronic delivery of the Conversion Shares as contemplated by Section 1.4(f)
hereof) within one (1) Trading Day after such receipt (the “Deadline”) (and, solely in the case of conversion of the
entire unpaid Principal Amount and interest (including any Default Interest) under this Note, surrender of this Note). If the Company
shall fail for any reason or for no reason to issue to the Holder on or prior to the Deadline a certificate for the number of Conversion
Shares or to which the Holder is entitled hereunder and register such Conversion Shares on the Company’s share register or
to credit the Holder’s balance account with DTC (as defined below) for such number of Conversion Shares to which the Holder
is entitled upon the Holder’s conversion of this Note (a “Conversion Failure”), then, in addition to all other
remedies available to the Holder, (i) the Company shall pay in cash to the Holder on each day after the Deadline and during such
Conversion Failure an amount equal to 2.0% of the product of (A) the sum of the number of Conversion Shares not issued to the Holder
on or prior to the Deadline and to which the Holder is entitled and (B) the closing sale price of the Common Stock on the Trading
Day immediately preceding the last possible date which the Company could have issued such Conversion Shares to the Holder without
violating this Section 1.4(d); and (ii) the Holder, upon written notice to the Company, may void its Notice of Conversion with
respect to, and retain or have returned, as the case may be, any portion of this Note that has not been converted pursuant to such
Notice of Conversion; provided that the voiding of an Notice of Conversion shall not affect the Company’s obligations to
make any payments which have accrued prior to the date of such notice. In addition to the foregoing, if on or prior to the Deadline
the Company shall fail to issue and deliver a certificate to the Holder and register such Conversion Shares on the Company’s
share register or credit the Holder’s balance account with DTC for the number of Conversion Shares to which the Holder is
entitled upon the Holder’s exercise hereunder or pursuant to the Company’s obligation pursuant to clause (ii) below,
and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to
deliver in satisfaction of a sale by the Holder of shares of Common Stock issuable upon such exercise that the Holder anticipated
receiving from the Company, then the Company shall, within two (2) Trading Days after the Holder’s request and in the Holder’s
discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage
commissions and other reasonable and customary out-of-pocket expenses, if any) for the shares of Common Stock so purchased (the
“Buy-In Price”), at which point the Company’s obligation to deliver such certificate (and to issue such Conversion
Shares) or credit such Holder’s balance account with DTC for such Conversion Shares shall terminate, or (ii) promptly honor
its obligation to deliver to the Holder a certificate or certificates representing such Conversion Shares or credit such Holder’s
balance account with DTC and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product
of (A) such number of shares of Common Stock, times (B) the closing sales price of the Common Stock on the date of exercise. Nothing
shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including, without
limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver
certificates representing the Conversion Shares (or to electronically deliver such Conversion Shares) upon the conversion of this
Note as required pursuant to the terms hereof.

 

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

 

 

 

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

 

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

 

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

 

The legend set forth
above shall be removed and the Company shall issue to the Holder a certificate for the applicable Conversion Shares without such
legend upon which it is stamped or (as requested by the Holder) issue the applicable Conversion Shares by electronic delivery by
crediting the account of such holder’s broker with DTC, if, unless otherwise required by applicable state securities laws:
(a) such Conversion Shares are registered for sale under an effective registration statement filed under the 1933 Act or otherwise
may be sold pursuant to Rule 144, Rule 144A, Regulation S, or other applicable exemption without any restriction as to the number
of securities as of a particular date that can then be immediately sold, or (b) the Company or the Holder provides the Legal Counsel
Opinion (as contemplated by and in accordance with Section 4(m) of the Purchase Agreement) to the effect that a public sale or
transfer of such Conversion Shares may be made without registration under the 1933 Act, which opinion shall be accepted by the
Company so that the sale or transfer is effected. The Company shall be responsible for the fees of its transfer agent and all DTC
fees associated with any such issuance. The Holder agrees to sell all Conversion Shares, including those represented by a certificate(s)
from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any. In the event that
the Company does not accept the opinion of counsel provided by the Holder with respect to the transfer of Conversion Shares pursuant
to an exemption from registration, such as Rule 144, Rule 144A, Regulation S, or other applicable exemption, at the Deadline, notwithstanding
that the conditions of Rule 144, Rule 144A, Regulation S, or other applicable exemption, as applicable, have been met, it will
be considered an Event of Default under this Note.

 

		1.6	Effect of Certain Events.

 

(a)                 
Effect of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or
substantially all of the assets of the Borrower, or the consolidation, merger or other business combination of the Borrower with
or into any other Person (as defined below) or Persons when the Borrower is not the survivor shall either: (i) be deemed to be
an Event of Default pursuant to which the Borrower shall be required to pay to the Holder upon the consummation of and as a condition
to such transaction an amount equal to the Default Amount (defined in Section 3.20) 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 this Note, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization,
or other similar event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different
number of shares of another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or
conveyance of all or substantially all of the assets of the Borrower other than in connection with a plan of complete liquidation
of the Borrower, then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the
basis and 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 effectuate any transaction
described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, at least thirty (30) days prior written
notice (but in any event at least fifteen (15) days prior written notice) of the record date of the special meeting of shareholders
to approve, or if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization,
reorganization or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and
(b) the resulting successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Section
1.6(b). The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.

 

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

 

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

 

(e)                 
Dilutive Issuance. If the Borrower, at any time while this Note or any amounts due hereunder are outstanding, issues,
sells or grants (or has issued, sold or granted as of the Issue Date, as the case may be) any option to purchase, or sells or grants
any right to reprice, or otherwise disposes of, or issues (or has sold or issued, as the case may be, or announces any sale, grant
or any option to purchase or other disposition), any Common Stock or other securities convertible into, exercisable for, or otherwise
entitle any person or entity the right to acquire, shares of Common Stock (including, without limitation, upon conversion of this
Note, and any convertible notes or warrants outstanding as of or following the Issue Date), in each or any case at an effective
price per share that is lower than the then Conversion Price (such lower price, the “Base Conversion Price” and such
issuances, collectively, a “Dilutive Issuance”) (it being agreed that if the holder of the Common Stock or other securities
so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise
or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance,
be entitled to receive shares of Common Stock at an effective price per share that is lower than the Conversion Price, such issuance
shall be deemed to have occurred for less than the Conversion Price on such date of the Dilutive Issuance), then the Conversion
Price shall be reduced, at the option of the Holder, to a price equal to the Base Conversion Price. Such adjustment shall be made
whenever such Common Stock or other securities are issued. By way of example, and for the avoidance of doubt, if the Company issues
a convertible promissory note (including but not limited to a Variable Rate Transaction), and the holder of such convertible promissory
note has the right to convert it into Common Stock at an effective price per share that is lower than the then Conversion Price
(including but not limited to a conversion price with a discount that varies with the trading prices of or quotations for the Common
Stock), then the Holder has the right to reduce the Conversion Price to such Base Conversion Price (including but not limited to
a conversion price with a discount that varies with the trading prices of or quotations for the Common Stock) in perpetuity regardless
of whether the holder of such convertible promissory note ever effectuated a conversion at the Base Conversion Price. Notwithstanding
the foregoing, no adjustment will be made under this Section 1.6(e) in respect of an Exempt Issuance. In the event of an issuance
of securities involving multiple tranches or closings, any adjustment pursuant to this Section 1.6(e) shall be calculated as if
all such securities were issued at the initial closing.

 

 

 

    	 	6	 

     

    

 

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

 

(f)                 
Notice of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result
of the events described in this Section 1.6, the Borrower, at its expense, shall promptly compute such adjustment or readjustment
and prepare and furnish to the Holder, within three (3) calendar days of the occurrence of each respective adjustment or readjustment,
a notice 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.
For the avoidance of doubt, each adjustment or readjustment of the Conversion Price as a result of the events described in this
Section 1.6 shall occur without any action by the Holder and regardless of whether the Borrower complied with the notification
provisions of this Section 1.6.

 

1.7  [Intentionally
Omitted].

 

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

 

1.9
 Prepayment. At any
time on or prior to the 180th calendar day after the Issue Date (the “Prepayment Period”), and so long
as an Event of Default (as defined in this Note) under this Note has not occurred, the Borrower shall have the right,
exercisable on three (3) Trading Days prior written notice to the Holder of the Note, to prepay the outstanding Principal
Amount and interest then due under this Note in accordance with this Section 1.9. 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 three
(3) Trading Days from the date of the Optional Prepayment Notice (the “Optional Prepayment Date”) (for the
avoidance of doubt, the Optional Prepayment Date must be on or prior to the 180th calendar day after the Issue
Date). The Holder shall have the right, at all times prior to the receipt of the full prepayment amount on the Optional
Prepayment Date, to convert all or any portion of the Note pursuant to the terms of this Note, including the amount of this
Note to be prepaid by the Borrower in accordance with this Section 1.9. On the Optional Prepayment Date, the Borrower shall
make payment of the amounts designated below to or upon the order of the Holder as specified by the Holder in writing to the
Borrower. If the Borrower exercises its right to prepay the Note in accordance with this Section 1.9, the Borrower shall make
payment to the Holder of an amount in cash equal to the sum of: (w) 110% multiplied by the sum of the (i) Principal Amount
then outstanding plus (ii) accrued and unpaid interest on the Principal Amount to the Optional Prepayment Date.

 

 

 

    	 	7	 

     

    

 

If the Borrower delivers an Optional Prepayment
Notice and fails to pay the applicable prepayment amount due to the Holder of the Note as provided in this Section 1.9, then the
Borrower shall forever forfeit its right to prepay any part of the Note pursuant to this Section 1.9.

 

1.10 Repayment from
Proceeds. If, at any time prior to the full repayment or full conversion of all amounts owed under this Note, 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 Borrower, the issuance of securities
pursuant to an equity line of credit of the Borrower or the sale of assets, the Borrower shall, within one (1) business day of
Borrower’s receipt of such proceeds, inform the Holder of or publicly disclose such receipt, following which the Holder
shall have the right in its sole discretion to require the Borrower to immediately apply all or any portion of such proceeds to
repay all or any portion of the outstanding Principal Amount and interest (including any Default Interest) then due under this
Note.

 

ARTICLE II. RANKING AND CERTAIN COVENANTS

 

2.1 Ranking and Security.
The obligations of the Borrower under this Note shall rank senior with respect to any and all unsecured Indebtedness incurred
following the Issue Date.

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

 

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

 

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

 

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

 

2.6 Advances and
Loans; Affiliate Transactions. So long as the Borrower shall have any obligation under this Note, the Borrower shall not,
without the Holder’s written consent, lend money, give credit, make advances to or enter into any transaction with any person,
firm, joint venture or corporation, including, without limitation, officers, directors, employees, subsidiaries and affiliates
of the Borrower, except loans, credits or advances (a) in existence or committed on the Issue Date and which the Borrower has
informed Holder in writing prior to the Issue Date, (b) in regard to transactions with unaffiliated third parties, made in the
ordinary course of business or (c) in regard to transactions with unaffiliated third parties, not in excess of $100,000. So long
as the Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder’s written consent,
repay any affiliate (as defined in Rule 144) of the Borrower in connection with any indebtedness or accrued amounts owed to any
such party.

 

 

 

    	 	8	 

     

    

 

2.7 Section
3(a)(9) or 3(a)(10) Transaction. So long as this Note is outstanding, the Borrower shall not enter into any transaction
or arrangement structured in accordance with, based upon, or related or pursuant to, in whole or in part, either Section
3(a)(9) of the Securities Act (a “3(a)(9) Transaction”) or Section 3(a)(10) of the Securities Act (a
“3(a)(10) 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 $25,000, will be assessed and will become immediately
due and payable to the Holder at its election in the form of a cash payment or added to the balance of this Note (under
Holder's and Borrower's expectation that this amount will tack back to the Issue Date).

 

2.8 Preservation
of Business and Existence, etc. So long as the Borrower shall have any obligation under this Note, the Borrower shall not,
without the Holder’s written consent, (a) change the nature of its business; (b) sell, divest, change the structure of any
material assets other than in the ordinary course of business; (c) enter into any Variable Rate Transaction; or (d) enter into
any merchant cash advance transactions. In addition, so long as the Borrower shall have any obligation under this Note, the Borrower
shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, its existence, rights and privileges,
and become or remain, and cause each of its Subsidiaries (other than dormant Subsidiaries that have no or minimum assets) to become
or remain, duly qualified and in good standing in each jurisdiction in which the character of the properties owned or leased by
it or in which the transaction of its business makes such qualification necessary.

 

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

 

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

 

ARTICLE III. EVENTS OF DEFAULT

 

It shall be considered an event of default
if any of the following events listed in this Article III (each, an “Event of Default”) shall occur:

 

3.1 Failure
to Pay Principal or Interest. The Borrower fails to pay the Principal Amount hereof or interest thereon when due on this
Note, whether at maturity, upon acceleration or otherwise, or fails to fully comply with Section 1.10 of this Note.

 

3.2 Conversion
and the Shares. The Borrower (i) fails to issue Conversion Shares to the Holder (or announces or threatens in writing
that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in
accordance with the terms of this Note, (ii) fails to transfer or cause its transfer agent to transfer (issue)
(electronically or in certificated form) any certificate for the Conversion Shares issuable to the Holder upon conversion of
or otherwise pursuant to this Note as and when required by this Note, (iii) fails to reserve the Reserved Amount at all
times, or (iii) 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 the Conversion Shares issuable to
the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, or fails to remove (or
directs its transfer agent not to remove or impairs, delays, 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 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 two (2) Trading Days after the Holder shall have delivered a Notice of Conversion. It is an
obligation of the Borrower to remain current in its obligations to its transfer agent. It shall be an Event of Default of
this Note, if a conversion of this Note is delayed, hindered or frustrated due to a balance owed by the Borrower to its
transfer agent. If at the option of the Holder, the Holder advances any funds to the Borrower’s transfer agent in order
to process a conversion, such advanced funds shall be paid by the Borrower to the Holder within forty eight (48) hours of a
demand from the Holder.

 

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

 

 

 

    	 	9	 

     

    

 

3.4 Breach of
Representations and Warranties. Any representation or warranty of the Borrower made in the Purchase Agreement, this Note,
the Warrant, the Irrevocable Transfer Agent Instructions or in any agreement, statement or certificate given in writing
pursuant hereto or in connection herewith or therewith shall be false or misleading in any material respect when made.

 

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 $100,000, 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 Failure to Comply
with the 1934 Act. At any time after the Issue Date, the Borrower shall fail to comply with the reporting requirements of
the 1934 Act and/or the Borrower shall cease to be subject to the reporting requirements of the 1934 Act.

 

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

 

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

 

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

 

3.12 Financial Statement
Restatement. The restatement of any financial statements filed by the Borrower with the SEC for any date or period from two
years prior to the Issue Date of this Note and until this Note is no longer outstanding.

 

3.13 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.

 

3.14 Cross-Default.
The declaration of an event of default by any lender or other extender of credit to the Company under any notes, loans, agreements
or other instruments of the Company evidencing any Indebtedness of the Company (including those filed as exhibits to or described
in the Company’s filings with the SEC), after the passage of all applicable notice and cure or grace periods.

 

3.15
Variable Rate Transactions. The Borrower consummates a Variable Rate Transaction at any time on or after the Issue Date.

 

3.16 Inside Information.
Any attempt by the Borrower or its officers, directors, and/or affiliates 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.

 

 

 

    	 	10	 

     

    

 

3.17 Unavailability of Rule
144. If, at any time on or after the date that is six (6) calendar 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.

 

3.18 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 American.

 

3.19 Penny Stock.
The Borrower’s Common Stock is deemed to be a “penny stock” as defined in SEC Rule 240.3a51-1 at any time
after the Issue Date.

 

3.20 Rights and Remedies
Upon an Event of Default. Upon the occurrence of any Event of Default specified in this Article III, this Note shall become
immediately due and payable, and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount
equal to the Principal Amount then outstanding plus accrued interest (including any Default Interest) through the date of full
repayment multiplied by 125% (collectively the “Default Amount”), as well as all costs, including, without limitation,
legal fees and expenses, of collection, all without demand, presentment or notice, all of which hereby are expressly waived by
the Borrower. Holder may, in its sole discretion, determine to accept payment part in Common Stock and part in cash. For purposes
of payments in Common Stock, the conversion formula set forth in Section 1.2 shall apply as well as all other provisions of this
Note. The Holder shall be entitled to exercise all other rights and remedies available at law or in equity.

 

Upon the occurrence of any Event of Default,
and in addition to any other right or remedy of the Holder hereunder, under the related transaction documents, or otherwise at
law or in equity, the Borrower hereby irrevocably authorizes and empowers Holder or its legal counsel, each as the Borrower’s
attorney-in-fact, to appear ex parte and with notice to the Borrower to confess judgment against the Borrower for the unpaid amount
of this Note. The judgment shall set forth the amount then due hereunder, plus attorney’s fees and cost of suit, and to release
all errors, and waive all rights of appeal. The Borrower waives the right to contest Holder’s rights under this section,
including without limitation the right to any stay of execution and the benefit of all exemption laws now or hereafter in effect.
No single exercise of the foregoing right and power to confess judgment will be deemed to exhaust such power, whether or not any
such exercise shall be held by any court to be invalid, voidable, or void, and such power shall continue undiminished and may be
exercised from time to time as the Holder may elect until all amounts owing on this Note have been paid in full. The Borrower shall
provide a signed and notarized copy of the affidavit of confession of judgment attached hereto as Exhibit “B” on or
before the Closing Date.

 

ARTICLE IV. MISCELLANEOUS

 

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

 

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

 

 

 

    	 	11	 

     

    

 

If to the Borrower, to:

 

GROM SOCIAL ENTERPRISES, INC.

2060 NW Boca Raton Blvd. #6

Boca Raton, Florida 33431

Attention: Darren Marks

e-mail: mel@gromsocial.com

 

If to the Holder:

 

AUCTUS FUND, LLC

545 Boylston Street, 2nd Floor

Boston, MA 02116

 

 

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

 

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

 

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

 

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

 

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.

 

 

 

    	 	12	 

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

 

 

    	 	13	 

     

    

 

4.14 Terms of
Future Financings. So long as this Note is outstanding, upon any issuance by the Borrower or any of its subsidiaries of
any security, or amendment to a security that was originally issued before the Issue Date, with any term that the Holder
reasonably believes is more favorable to the holder of such security or with a term in favor of the holder of such security
that the Holder reasonably believes was not similarly provided to the Holder in this Note, then (i) the Borrower shall notify
the Holder of such additional or more favorable term within one (1) business day of the issuance and/or amendment (as
applicable) of the respective security, and (ii) such term, at Holder’s option, shall become a part of the transaction
documents with the Holder (regardless of whether the Borrower complied with the notification provision of this Section 4.14).
The types of terms contained in another security that may be more favorable to the holder of such security include, but are
not limited to, terms addressing conversion discounts, prepayment rate, conversion lookback periods, interest rates, and
original issue discounts.

 

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

 

4.16 Right of First
Refusal. If at any time while this Note is outstanding, the Borrower has a bona fide offer of capital or financing from any
3rd party (except with respect to an underwritten offering conducted by the Placement Agent (as defined in the Purchase Agreement)),
that the Borrower intends to act upon, then the Borrower must first offer such opportunity to the Holder to provide such capital
or financing to the Borrower on the same terms as each respective 3rd party’s terms. Should the Holder be unwilling or unable
to provide such capital or financing to the Borrower within 5 trading days from Holder’s receipt of written notice of the
offer (the “Offer Notice”) from the Borrower, then the Borrower may obtain such capital or financing from that respective
3rd party upon the exact same terms and conditions offered by the Borrower to the Holder, which transaction must be completed
within 30 days after the date of the Offer Notice. If the Borrower does not receive the capital or financing from the respective
3rd party within 30 days after the date of the respective Offer Notice, then the Borrower must again offer the capital or financing
opportunity to the Holder as described above, and the process detailed above shall be repeated.

 

 

 

[signature page follows]

 

 

 

 

 

    	 	14	 

     

    

 

IN WITNESS WHEREOF, Borrower has
caused this Note to be signed in its name by its duly authorized officer on February 9, 2021.

 

GROM SOCIAL ENTERPRISES, INC.

 

 

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

 

 

 

 

 

 

 

 

 

 

 

    	 	15	 

     

    

EXHIBIT A -- NOTICE OF CONVERSION

 

The undersigned
hereby elects to convert $__________ principal amount of the Note (defined below) into that number of shares of Common Stock
to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of GROM SOCIAL
ENTERPRISES, INC., a Florida corporation (the “Borrower”), according to the conditions of the promissory note
of the Borrower dated as of February 9, 2021 (the “Note”), as of the date written below. No fee will be charged
to the Holder for any conversion, except for transfer taxes, if any.

 

Box Checked as to applicable instructions:

 

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

 

	☐	
        The undersigned hereby requests that the Borrower issue a certificate
        or certificates for the number of shares of Common Stock set forth below (which numbers are based on the Holder’s calculation

        attached hereto) in the name(s) specified immediately below
        or, if additional space is necessary, on an attachment hereto:

 

 

 

	Date of Conversion:	 
	Applicable Conversion Price:	$
	
        Number of Shares of Common Stock to be Issued Pursuant
to Conversion of the Note:
	
         

         

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

         

 

	By:__________________
	Name:________________
	Title:_________________
	Date:__________________

 

 

    	 	16	 

     

    

EXHIBIT B – CONFESSION OF JUDGMENT

 

(see attached)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	17	 

     

    

 

Affidavit of Confession of Judgment

 

 

	COMMONWEALTH OF MASSACHUSETTS	 
	-----------------------------------------------------------------------------------X	 
	AUCTUS FUND, LLC,	 
	 	Index No.
	Plaintiff,	 
	 	AFFIDAVIT OF CONFESSION OF
	 	JUDGMENT
	 	 
	GROM SOCIAL ENTERPRISES, INC.,	 
	Defendant.	 
	 	 

 

 

 

	COMMONWEALTH OF MASSACHUSETTS	)
	 	)       ss.:
	 	 
	 	 
	 	 

 

 

 

Darren Marks, being duly sworn, hereby deposes and says:

 

1.       
I am the Chief Executive Officer of defendant GROM SOCIAL ENTERPRISES, INC., a Florida corporation (“Borrower”). As
such, I am fully familiar with all the facts and circumstances recited herein on personal knowledge. Borrower has its principal
place of business at 2060 NW Boca Raton Blvd, Ste #6, Boca Raton, FL 33431. On behalf of the Borrower, I hereby confess judgment
in favor of Auctus Fund, LLC (“Auctus Fund”), residing at 545 Boylston Street, 2nd Floor, Boston, MA 02116,
in the amount of $500,000.00, less any payments made on or after the date of this affidavit of confession of judgment, plus Default
Interest (as defined in the Note (as defined herein)) on said amount and all other applicable penalties under the Note. In no event
shall interest payable hereunder exceed the maximum permissible under applicable law.

 

2.       I
hereby authorize the federal courts and/or state courts located in the Commonwealth of Massachusetts to enter judgment against
Borrower in the amount of in the amount of $500,000.00, less any payments made on or after the date of this affidavit of confession
of judgment, plus Default Interest on said amount and all other applicable penalties under the Note, plus the costs and attorneys’
fees that are set forth below, less any payments made on or after the date of this affidavit of confession of judgment, upon Borrower’s
failure for any reason to timely make any payment to Auctus Fund called for by the promissory note between of the parties, dated
February 9, 2021 (the “Note”), due to the occurrence of an Event of Default (as defined in the Note) under the Note.

 

3.       In
order to secure these obligations, Borrower agreed to simultaneously deliver with the execution of the Note this Affidavit of Confession
of Judgment.

 

4.       The
sums confessed pursuant to this affidavit of confession of judgment are justly due and owing to Auctus Fund under the following
circumstances: Borrower entered into the Note pursuant to which Borrower promised to pay to the order of Auctus Fund the principal
sum of $500,000.00 plus interest as provided for therein. The amounts confessed by this affidavit represent a promissory note investment
by Auctus Fund in Borrower and arise out of Borrower’s breach of its obligations under the Note.

 

5.       Borrower
agrees to pay any and all costs and expenses incurred by Auctus Fund in enforcing the terms of this affidavit of confession of
judgment, including reasonable attorneys’ fees and expenses at the rate of $475.00 per hour that Auctus Fund incurs or is
billed for in connection with enforcing the terms of the affidavit of confession of judgment, entering any Judgment, collecting
upon said Judgment, and defending or prosecuting any appeals.

 

 

[signature page to follow]

 

 

 

 

 

    	 	18	 

     

    

 

 

 

	 	GROM SOCIAL ENTERPRISES, INC.

 

 

By: _________________________________

Name: Darren Marks

Title: Chief Executive Officer

 

 

 

STATE OF ______________ )

ss.:

COUNTY OF ______________ )

 

ACKNOWLEDGMENT

 

On __________, 2021 before me personally
came ________________________________________, to me known, who, by me duly sworn, did depose and say that deponent is an officer
of GROM SOCIAL ENTERPRISES, INC., the corporation described in, and which executed the foregoing affidavit of confession of judgment,
that deponent knows the seal of the corporation, that the seal affixed to the affidavit of confession of judgment is the corporation’s
seal, that it was affixed by order of the board of directors of the corporation and that deponent signed deponent’s name
by like order.

 

 

 

_____________________________

Notary Public

 

SEAL:

 

 

[Signature Page to Affidavit of Confession
of Judgment]

 

 

 

 

 

    	 	19Exhibit 4.2

 

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

 

 

COMMON
STOCK PURCHASE WARRANT

GROM SOCIAL ENTERPRISES, INC.

 

Warrant Shares: 6,250,000

Date of Issuance: February 9, 2021
(“Issuance Date”)

 

This
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received (in connection with the issuance
of the promissory note in the principal amount of $500,000.00 to the Holder (as defined below) of even date) (the “Note”),
Auctus Fund, LLC, a Delaware limited liability company (including any permitted and registered assigns, the “Holder”),
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on
or after the date of issuance hereof, to purchase from GROM SOCIAL ENTERPRISES, INC., a Florida corporation (the “Company”),
6,250,000 shares of Common Stock (the “Warrant Shares”) (whereby such number may be adjusted from time to time
pursuant to the terms and conditions of this Warrant) at the Exercise Price per share then in effect. This Warrant is issued by
the Company as of the date hereof in connection with that certain securities purchase agreement dated February 9, 2021, by and
among the Company and the Holder (the “Purchase Agreement”).

 

Capitalized
terms used in this Warrant shall have the meanings set forth in the Purchase Agreement unless otherwise defined in the body of
this Warrant or in Section 12 below. For purposes of this Warrant, the term “Exercise Price” shall mean $0.06, subject
to adjustment as provided herein (including but not limited to cashless exercise), and the term “Exercise Period” shall
mean the period commencing on the Issuance Date and ending on 5:00 p.m. eastern standard time on the five-year anniversary thereof.

 

		1.	EXERCISE OF WARRANT.

 

(a)             
Mechanics of Exercise. Subject to the terms and conditions hereof, the rights represented by this Warrant may be
exercised in whole or in part at any time or times during the Exercise Period by delivery of a written notice, in the form attached
hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant.
The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Partial exercises of
this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect
of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant
Shares purchased. On or before the second Trading Day (the “Warrant Share Delivery Date”) following the date
on which the Holder sent the Exercise Notice to the Company or the Company’s transfer agent, and upon receipt by the Company
of payment to the Company of an amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as to
which all or a portion of this Warrant is being exercised (the “Aggregate Exercise Price” and together with
the Exercise Notice, the “Exercise Delivery Documents”) in cash or by wire transfer of immediately available
funds (or by cashless exercise, in which case there shall be no Aggregate Exercise Price provided), the Company shall (or direct
its transfer agent to) issue and dispatch by overnight courier to the address as specified in the Exercise Notice, a certificate,
registered in the Company’s share register in the name of the Holder or its designee, for the number of shares of Common
Stock to which the Holder is entitled pursuant to such exercise (or deliver such shares of Common Stock in electronic format if
requested by the Holder). Upon delivery of the Exercise Delivery Documents, the Holder shall be deemed for all corporate purposes
to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of
the date of delivery of the certificates evidencing such Warrant Shares. If this Warrant is submitted in connection with any exercise
and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares
being acquired upon an exercise, then the Company shall as soon as practicable and in no event later than three Business Days after
any exercise and at its own expense, issue a new Warrant (in accordance with Section 6) representing the right to purchase the
number of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with
respect to which this Warrant is exercised.

 

 

 

    	 	1	 

     

    

 

If the
Company fails to cause its transfer agent to transmit to the Holder the respective shares of Common Stock by the respective Warrant
Share Delivery Date, then the Holder will have the right to rescind such exercise in Holder’s sole discretion in addition
to all other rights and remedies at law, under this Warrant, or otherwise, and such failure shall also be deemed an event of default
under the Note.

 

If
the Market Price of one share of Common Stock is greater than the Exercise Price, then, unless there is an effective non-stale
registration statement of the Company covering the Holder’s immediate resale of the Warrant Shares at prevailing market prices
(and not fixed prices) without any limitation, the Holder may elect to receive Warrant Shares pursuant to a cashless exercise,
in lieu of a cash exercise, equal to the value of this Warrant determined in the manner described below (or of any portion thereof
remaining unexercised) by surrender of this Warrant and a Notice of Exercise, in which event the Company shall issue to Holder
a number of Common Stock computed using the following formula:

 

X = Y (A-B)

 

A

 

Where X =     the number of Shares to be issued to
Holder.

 

		Y =	the number of Warrant Shares that the Holder elects to purchase under this Warrant (at the date
of such calculation).

 

A =       the
Market Price (at the date of such calculation).

 

B =       Exercise
Price (as adjusted to the date of such calculation).

 

(b)            
No Fractional Shares. No fractional shares shall be issued upon the exercise of this Warrant as a consequence of
any adjustment pursuant hereto. All Warrant Shares (including fractions) issuable upon exercise of this Warrant may be aggregated
for purposes of determining whether the exercise would result in the issuance of any fractional share. If, after aggregation, the
exercise would result in the issuance of a fractional share, the Company shall, in lieu of issuance of any fractional share, pay
the Holder otherwise entitled to such fraction a sum in cash equal to the product resulting from multiplying the then-current fair
market value of a Warrant Share by such fraction.

 

(c)             
Holder’s Exercise Limitations. Notwithstanding anything to the contrary contained herein, the Company shall
not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant
to Section 1 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable
Notice of Exercise, the Holder (together with the Holder’s affiliates (the “Affiliates”), and any other Persons
acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)),
would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence,
the number of shares of Common Stock beneficially owned by the Holder and Attribution Parties shall include the number of shares
of Common Stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude
the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised
or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock Equivalents)
subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder
or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 1(c),
beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder, it being acknowledged by the Holder that the Holder is solely responsible for any schedules required to be filed in
accordance therewith. In addition, a determination as to any group status as contemplated above shall be determined in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 1(c),
in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common
Stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may
be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Company’s
transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the
Company shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding.
In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise
of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as
of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall
be 4.99% of the number of shares of the Common Stock outstanding at the time of the respective calculation hereunder. The limitations
contained in this paragraph shall apply to a successor holder of this Warrant.

 

 

 

    	 	2	 

     

    

 

(d)            
Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights
available to the Holder, if the Company fails to cause the Company’s transfer agent to transmit to the Holder the Warrant
Shares in accordance with the provisions of this Warrant (including but not limited to Section 2(a) above pursuant to an exercise
on or before the respective Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase
(in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to
deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise
(a “Buy-In”), then the Company shall (A) pay in cash to the Holder, within one (1) business day of Holder’s request,
the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares
of Common Stock so purchased exceeds (y) the product of (1) the number of Warrant Shares that the Company was required to deliver
to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase
obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number
of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to
the Holder within one (1) business day of Holder’s request the number of shares of Common Stock that would have been issued
had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases, or
effectuates a cashless exercise hereunder for, Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect
to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000,
under clause (A) of the immediately preceding sentence, the Company shall be required to pay the Holder $1,000. The Holder shall
provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the
Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available
to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with
respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant
to the terms hereof.

 

2.               
ADJUSTMENTS. The Exercise Price and the number of Warrant Shares shall be adjusted from time to time as follows:

 

(a)             
Distribution of Assets. If the Company shall declare or make any dividend or other distribution of its assets (or
rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including without
limitation any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification,
corporate rearrangement or other similar transaction) (a “Distribution”), at any time after the issuance of
this Warrant, then, in each such case:

 

(i)              
any Exercise Price in effect immediately prior to the close of business on the record date fixed for the determination of
holders of shares of Common Stock entitled to receive the Distribution shall be reduced, effective as of the close of business
on such record date, to a price determined by multiplying such Exercise Price by a fraction (i) the numerator of which shall be
the Closing Sale Price of the shares of Common Stock on the Trading Day immediately preceding such record date minus the value
of the Distribution (as determined in good faith by the Company’s Board of Directors) applicable to one share of Common Stock,
and (ii) the denominator of which shall be the Closing Sale Price of the shares of Common Stock on the Trading Day immediately
preceding such record date; and

 

(ii)            
the number of Warrant Shares shall be increased to a number of shares equal to the number of shares of Common Stock obtainable
immediately prior to the close of business on the record date fixed for the determination of holders of shares of Common Stock
entitled to receive the Distribution multiplied by the reciprocal of the fraction set forth in the immediately preceding clause
(i); provided, however, that in the event that the Distribution is of shares of common stock of a company (other than the Company)
whose common stock is traded on a national securities exchange or a national automated quotation system (“Other Shares
of Common Stock”), then the Holder may elect to receive a warrant to purchase Other Shares of Common Stock in lieu of
an increase in the number of Warrant Shares, the terms of which shall be identical to those of this Warrant, except that such warrant
shall be exercisable into the number of shares of Other Shares of Common Stock that would have been payable to the Holder pursuant
to the Distribution had the Holder exercised this Warrant immediately prior to such record date and with an aggregate exercise
price equal to the product of the amount by which the exercise price of this Warrant was decreased with respect to the Distribution
pursuant to the terms of the immediately preceding clause (i) and the number of Warrant Shares calculated in accordance with the
first part of this clause (ii).

 

 

 

    	 	3	 

     

    

 

(b)       
Anti-Dilution Adjustments to Exercise Price. If the Company or any Subsidiary thereof, as applicable, at any time
while this Warrant is outstanding, shall sell or grant any option to purchase, or sell or grant any right to reprice, or otherwise
dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Common Stock or securities
entitling any person or entity (for purposes of clarification, including but not limited to the Holder pursuant to (i) any other
security of the Company issued to Holder on or after the Issuance Date (including the Note) or (ii) any other agreement entered
into between the Company and Holder) to acquire shares of Common Stock (upon conversion, exercise or otherwise), at an effective
price per share less than the then Exercise Price (such lower price, the “Base Share Price” and such issuances collectively,
a “Dilutive Issuance”) (if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time,
whether by operation of purchase price adjustments, elimination of an applicable floor price for any reason in the future (including
but not limited to the passage of time or satisfaction of certain condition(s)), reset provisions, floating conversion, exercise
or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance,
be entitled or potentially entitled to receive shares of Common Stock at an effective price per share which is less than the Exercise
Price at any time while such Common Stock or Common Stock Equivalents are in existence, such issuance shall be deemed to have occurred
for less than the Exercise Price on such date of the Dilutive Issuance (regardless of whether the Common Stock or Common Stock
Equivalents are (i) subsequently redeemed or retired by the Company after the date of the Dilutive Issuance or (ii) actually converted
or exercised at such Base Share Price), then the Exercise Price shall be reduced at the option of the Holder and only reduced to
equal the Base Share Price, and the number of Warrant Shares issuable hereunder shall be increased such that the aggregate Exercise
Price payable hereunder, after taking into account the decrease in the Exercise Price, shall be equal to the aggregate Exercise
Price prior to such adjustment (for the avoidance of doubt, the aggregate Exercise Price prior to such adjustment is calculated
as follows: the total number of Warrant Shares issuable upon exercise of this Warrant immediately prior to such adjustment (without
regard to the Beneficial Ownership Limitation) multiplied by the Exercise Price in effect immediately prior to such adjustment).
By way of example, if E is the total number of Warrant Shares issuable upon exercise of this Warrant immediately prior to such
adjustment (without regard to the Beneficial Ownership Limitation), F is the Exercise Price in effect immediately prior to such
adjustment, and G is the Base Share Price, the adjustment to the number of Warrant Shares can be expressed in the following formula:
Total number of Warrant Shares after such Dilutive Issuance = the number obtained from dividing [E x F] by G. Such adjustment shall
be made whenever such Common Stock or Common Stock Equivalents are issued, regardless of whether the Common Stock or Common Stock
Equivalents are (i) subsequently redeemed or retired by the Company after the date of the Dilutive Issuance or (ii) actually converted
or exercised at such Base Share Price by the holder thereof (for the avoidance of doubt, the Holder may utilize the Base Share
Price even if the Company did not actually issue shares of its common stock at the Base Share Price under the respective Common
stock Equivalents). The Company shall notify the Holder in writing, no later than the Trading Day following the issuance of any
Common Stock or Common Stock Equivalents subject to this Section 2(b), indicating therein the applicable issuance price, or applicable
reset price, exchange price, conversion price and other pricing terms (such notice the “Dilutive Issuance Notice”).
For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 2(b), upon
the occurrence of any Dilutive Issuance, after the date of such Dilutive Issuance the Holder is entitled to receive a number of
Warrant Shares based upon the Base Share Price regardless of whether the Holder accurately refers to the Base Share Price in the
Notice of Exercise.

 

(c)             
Subdivision or Combination of Common Stock. If the Company at any time on or after the Issuance Date subdivides (by
any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into
a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced
and the number of Warrant Shares will be proportionately increased. If the Company at any time on or after the Issuance Date combines
(by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller
number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased and the
number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 2(c) shall become effective at the
close of business on the date the subdivision or combination becomes effective. Each such adjustment of the Exercise Price shall
be calculated to the nearest one-hundredth of a cent. Such adjustment shall be made successively whenever any event covered by
this Section 2(c) shall occur.

 

 

 

    	 	4	 

     

    

 

3.               
FUNDAMENTAL TRANSACTIONS. If, at any time while this Warrant is outstanding, (i) the Company effects any merger of
the Company with or into another entity and the Company is not the surviving entity (such surviving entity, the “Successor
Entity”), (ii) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions,
(iii) any tender offer or exchange offer (whether by the Company or by another individual or entity, and approved by the Company)
is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares of Common Stock for other
securities, cash or property and the holders of at least 50% of the Common Stock accept such offer, or (iv) the Company effects
any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted
into or exchanged for other securities, cash or property (other than as a result of a subdivision or combination of shares of Common
Stock) (in any such case, a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant,
the Holder shall have the right to receive the number of shares of Common Stock of the Successor Entity or of the Company and any
additional consideration (the “Alternate Consideration”) receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a holder of the number of shares of Common Stock for which
this Warrant is exercisable immediately prior to such event (disregarding any limitation on exercise contained herein solely for
the purpose of such determination). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately
adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share
of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration
in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of
Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the
Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following
such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any Successor Entity in such Fundamental
Transaction shall issue to the Holder a new warrant consistent with the foregoing provisions and evidencing the Holder’s
right to exercise such warrant into Alternate Consideration.

 

4.               
NON-CIRCUMVENTION. The Company covenants and agrees that it will not, by amendment of its certificate of incorporation,
bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale
of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all action as may be required
to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par
value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii)
shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid
and non-assessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, for so long as this Warrant is outstanding,
have authorized and reserved, free from preemptive rights, three (3) times the number of shares of Common Stock into which the
Warrants are then exercisable into to provide for the exercise of the rights represented by this Warrant (without regard to any
limitations on exercise).

 

5.               
WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, this Warrant, in and of
itself, shall not entitle the Holder to any voting rights or other rights as a stockholder of the Company. In addition, nothing
contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise
of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors
of the Company.

 

		6.	REISSUANCE.

 

(a)             
Lost, Stolen or Mutilated Warrant. If this Warrant is lost, stolen, mutilated or destroyed, the Company will, on
such terms as to indemnity or otherwise as it may reasonably impose (which shall, in the case of a mutilated Warrant, include the
surrender thereof), issue a new Warrant of like denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed.

 

(b)            
Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant,
such new Warrant shall be of like tenor with this Warrant, and shall have an issuance date, as indicated on the face of such new
Warrant which is the same as the Issuance Date.

 

 

 

    	 	5	 

     

    

 

7.               
TRANSFER. This Warrant shall be binding upon the Company and its successors and assigns, and shall inure to be the
benefit of the Holder and its successors and assigns. Notwithstanding anything to the contrary herein, the rights, interests or
obligations of the Company hereunder may not be assigned, by operation of law or otherwise, in whole or in part, by the Company
without the prior signed written consent of the Holder, which consent may be withheld at the sole discretion of the Holder (any
such assignment or transfer shall be null and void if the Company does not obtain the prior signed written consent of the Holder).
This Warrant or any of the severable rights and obligations inuring to the benefit of or to be performed by Holder hereunder may
be assigned by Holder to a third party, in whole or in part, without the need to obtain the Company’s consent thereto.

 

8.               
NOTICES. Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice
shall be given in accordance with the notice provisions contained in the Purchase Agreement. The Company shall provide the Holder
with prompt written notice (i) immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail, the calculation
of such adjustment and (ii) at least 20 days prior to the date on which the Company closes its books or takes a record (A) with
respect to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of
any stock or other securities directly or indirectly convertible into or exercisable or exchangeable for shares of Common Stock
or other property, pro rata to the holders of shares of Common Stock or (C) for determining rights to vote with respect to any
Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public
prior to or in conjunction with such notice being provided to the Holder.

 

9.               
AMENDMENT AND WAIVER. The terms of this Warrant may be amended or waived (either generally or in a particular instance
and either retroactively or prospectively) only with the written consent of the Company and the Holder.

 

10.            
GOVERNING LAW AND VENUE. This Warrant shall be governed by and construed in accordance with the laws of the State
of Nevada without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the
transactions contemplated by this Warrant shall be brought only in the state courts located in the Commonwealth of Massachusetts
or federal courts located in Commonwealth of Massachusetts. The parties to this Warrant hereby irrevocably waive any objection
to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or
venue or based upon forum non conveniens. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT
TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT ENTERED INTO IN
CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.
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 Warrant 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.

 

11.            
ACCEPTANCE.Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms
and conditions contained herein.

 

12.            
CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:

 

		(a)	“Nasdaq” means www.Nasdaq.com.

 

(b)            
“Closing Sale Price” means, for any security as of any date, (i) the last closing trade price for such
security on the Principal Market, as reported by Nasdaq, or, if the Principal Market begins to operate on an extended hours basis
and does not designate the closing trade price, then the last trade price of such security prior to 4:00 p.m., New York time, as
reported by Nasdaq, or (ii) if the foregoing does not apply, the last trade price of such security in the over-the-counter market
for such security as reported by Nasdaq, or (iii) if no last trade price is reported for such security by Nasdaq, the average of
the bid and ask prices of any market makers for such security as reported by the OTC Markets. If the Closing Sale Price cannot
be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price of such security on such
date shall be the fair market value as mutually determined by the Company and the Holder. All such determinations to be appropriately
adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation
period.

 

 

 

    	 	6	 

     

    

 

(c)             
“Common Stock” means the Company’s common stock, par value $0.001, and any other class of securities
into which such securities may hereafter be reclassified or changed.

 

(d)            
“Common Stock Equivalents” means any securities of the Company that would entitle the holder thereof
to acquire at any time Common Stock, including without limitation any debt, preferred stock, rights, options, warrants 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.

 

 (e)               [Intentionally Omitted].

 

(f)              
“Person” and “Persons” means an individual, a limited liability company, a partnership,
a joint venture, a corporation, a trust, an unincorporated organization, any other entity and any governmental entity or any department
or agency thereof.

 

(g)            
“Principal Market” means the primary national securities exchange on which the Common Stock is then traded.

 

(h)            
“Market Price” means the highest traded price of the Common Stock during the one hundred and fifty Trading
Days prior to the date of the respective Exercise Notice.

 

(i)              
“Trading Day” means (i) any day on which the Common Stock is listed or quoted and traded on its Principal
Market, (ii) if the Common Stock is not then listed or quoted and traded on any national securities exchange, then a day on which
trading occurs on any over-the-counter markets, or (iii) if trading does not occur on the over-the-counter markets, any Business
Day.

 

* * * * * * *

 

 

 

 

 

 

 

    	 	7	 

     

    

 

IN WITNESS WHEREOF, the Company
has caused this Warrant to be duly executed as of the Issuance Date set forth above.

 

	 	GROM SOCIAL ENTERPRISES, INC.
	 	 
	 	 
	 	 
	 	/s/ Darren Marks
	 	Name: Darren Marks
	 	Title: Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

    	 	8	 

     

    

EXHIBIT A

 

EXERCISE NOTICE

 

(To be executed by the registered
holder to exercise this Common Stock Purchase Warrant)

 

 

THE UNDERSIGNED holder
hereby exercises the right to purchase __________ of the shares of Common Stock (“Warrant Shares”) of GROM
SOCIAL ENTERPRISES, INC., a Florida corporation (the “Company”), evidenced by the attached copy of the Common
Stock Purchase Warrant (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the
respective meanings set forth in the Warrant.

 

		1.	Form of Exercise Price. The Holder intends that payment of the Exercise Price shall be made
as (check one):

 

		☐	a
cash exercise with respect to ___________ Warrant Shares; or
		☐	by cashless exercise pursuant to the Warrant.

 

 

		2.	Payment of
Exercise Price. If cash exercise is selected above, the holder shall pay the applicable Aggregate Exercise Price in the sum
of $____________ to the Company in accordance with the terms of the Warrant.

 

		3.	Delivery of Warrant
                                         Shares. The Company shall deliver to the holder __________ Warrant Shares in accordance
                                         with the terms of the Warrant.

 

 

Date: _______________________000000000

 

 

	 	(Print Name of Registered Holder)
	 	 
	 	By:_____________________
	 	Name:___________________
	 	Title:____________________

 

 

 

 

    	 	9	 

     

    

EXHIBIT B

 

ASSIGNMENT OF WARRANT

 

(To be signed only upon
authorized transfer of the Warrant)

 

 

FOR VALUE
RECEIVED, the undersigned hereby sells, assigns, and transfers unto ____________________

the right to purchase
______________ shares of common stock of GROM SOCIAL ENTERPRISES, INC., to which the within Common Stock Purchase Warrant relates
and appoints ___________________________, as attorney-in-fact, to transfer said right on the books of GROM SOCIAL ENTERPRISES, INC. with full power of substitution
and re-substitution in the premises. By accepting such transfer, the transferee has agreed to be bound in all respects by the
terms and conditions of the within Warrant.

 

 

Dated: ________________________

 

 

	 	 
	 	(Signature) *
	 	 
	 	 
	 	(Name)
	 	 
	 	 
	 	(Address)
	 	 
	 	 
	 	(Social Security or Tax Identification No.)

 

 

 

* The signature on this Assignment
of Warrant must correspond to the name as written upon the face of the Common Stock Purchase Warrant in every particular without
alteration or enlargement or any change whatsoever. When signing on behalf of a corporation, partnership, trust or other entity,
please indicate your position(s) and title(s) with such entity.

 

 

    	 	10

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