Document:

Exhibit 10.6

 

GROM
SOCIAL ENTERPRISES, INC.

 

SUBSCRIPTION
AGREEMENT

 

This Subscription Agreement
(this “Agreement”) is being delivered by the purchaser identified on the signature page to this Agreement (the
“Subscriber”) in connection with its investment in Grom Social Enterprises, Inc., a Florida corporation
(the “Company”). The Company is conducting a private placement (the “Offering”) of 12% senior
secured convertible notes (each, a “Note”) and collectively, the “Notes”) of the Company.

 

1.       SUBSCRIPTION
AND PURCHASE PRICE

 

(a)       Subscription.
Subject to the conditions set forth in Section 3 hereof, the Company desires to issue and sell, and the Subscriber hereby subscribes
for and agrees to purchase, the Note in the principal amount indicated on the signature page hereto on the terms and conditions
described herein.

 

(b)       Purchase
of Note. The Subscriber understands and acknowledges that the purchase price to be remitted to the Company in exchange for
the Note is as indicated on the signature page hereto (the “Purchase Price”). The Subscriber’s delivery
of this Agreement to the Company shall be accompanied by payment of the Purchase Price, payable in United States Dollars, by wire
transfer, or check of immediately available funds delivered contemporaneously with the Subscriber’s delivery of this Agreement
to the Company in accordance with the wire instructions provided on Exhibit A. The Subscriber understands and agrees that,
subject to Section 2 and applicable laws, by executing this Agreement, it is entering into a binding agreement.

 

2.       grant
of common stock of the company

 

In connection with the Offering, the Company
shall issue to the Subscriber such number of shares (the “Incentive Shares”) of common stock of the Company,
par value $0.001, (the “Common Stock”) in an amount equal to twenty percent (20%) of the principal amount of
such holder’s Note divided by $0.10 as reflected on the signature page to this Agreement.

 

3.       Acceptance
and Closing Procedures

 

(a)       Closing.
The closing of the purchase and sale of the Notes in connection with the Offering (the “Closing”) shall take
place simultaneously with the execution and delivery of this Agreement by the Subscriber and delivery of the Purchase Price at
the offices of Grom Social Enterprises, Inc., 2060 NW Boca Raton Blvd. #6 Boca Raton, Florida 33431 or such other place as determined
by the Company and may take place in one of more closings as mutually agreed to between the parties.

 

(b)       Following
Acceptance or Rejection. The Subscriber acknowledges and agrees that this Agreement and any other documents delivered in connection
herewith will be held by the Company. In the event that this Agreement is not accepted by the Company for whatever reason, which
the Company expressly reserves the right to do, this Agreement, the Purchase Price received (without interest thereon) and any
other documents delivered in connection herewith will be returned to the Subscriber at the address of the Subscriber as set forth
in this Agreement. If this Agreement is accepted by the Company, the Company is entitled to treat the Purchase Price received as
an interest free loan to the Company until such time as the subscription is accepted.

 

 

 

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4.       THE
SUBSCRIBER’s Representations, Warranties AND cOVENANTS

 

The Subscriber hereby
acknowledges, agrees with and represents, warrants and covenants to the Company, as follows:

 

(a)       The
Subscriber has full power and authority to enter into this Agreement, the execution and delivery of which has been duly authorized,
if applicable, and this Agreement constitutes a valid and legally binding obligation of the Subscriber, except as may be limited
by bankruptcy, reorganization, insolvency, moratorium and similar laws of general application relating to or affecting the enforcement
of rights of creditors, and except as enforceability of the obligations hereunder are subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or law).

 

(b)       The
Subscriber acknowledges its understanding that the offering and sale of the Note, the issuance of shares of Common Stock upon conversion
of the Note (the “Note Shares”), and the grant of the Incentive Shares is intended to be exempt from registration
under the Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section 4 (a)(2) of the Securities
Act and the provisions of Regulation D promulgated thereunder (“Regulation D”). In furtherance thereof, the
Subscriber represents and warrants to the Company and its affiliates as follows:

 

(i)       The
Subscriber realizes that the basis for the exemption from registration may not be available if, notwithstanding the Subscriber’s
representations contained herein, the Subscriber is merely acquiring the Note (including the Note Shares) and the Incentive Shares
for a fixed or determinable period in the future, or for a market rise, or for sale if the market does not rise. The Subscriber
attests that it does not have any such intention.

 

(ii)       The
Subscriber realizes that the basis for exemption would not be available if the offering of the Note (including any issuance of
the Note Shares) and the acceptance of the Incentive Shares is part of a plan or scheme to evade registration provisions of the
Securities Act or any applicable state or federal securities laws.

 

(iii)       The
Subscriber is acquiring the Note (including any Note Shares) and the Incentive Shares solely for the Subscriber’s own beneficial
account, for investment purposes, and not with a view towards, or resale in connection with, any distribution of the Note.

 

(iv)       The
Subscriber has the financial ability to bear the economic risk of the Subscriber’s investment, has adequate means for providing
for its current needs and contingencies, and has no need for liquidity with respect to an investment in the Company.

 

(v)       The
Subscriber and the Subscriber’s attorney, accountant, purchaser representative and/or tax advisor, if any (collectively,
the “Advisors”) has such knowledge and experience in financial and business matters as to be capable of evaluating
the merits and risks of a prospective investment in the Note (including any Note Shares) and the Incentive Shares. If other than
an individual, the Subscriber also represents it has not been organized solely for the purpose of acquiring the Note (including
any Note Shares) and the Incentive Shares.

 

(vi)       The
Subscriber (together with its Advisors, if any) has received all documents requested by the Subscriber, if any, and has carefully
reviewed such documents and understands the information contained therein, prior to the execution of this Agreement.

 

(c)       The
Subscriber is not relying on the Company or any of its employees, agents, sub-agents or advisors with respect to the legal, tax,
economic and related considerations involved in this investment. The Subscriber has relied on the advice of, or has consulted with,
only its Advisors. Each Advisor, if any, has disclosed to the Subscriber in writing (a copy of which is annexed to this Agreement)
the specific details of any and all past, present or future relationships, actual or contemplated, between the Advisor and the
Company or any affiliate or sub-agent thereof.

 

 

 

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(d)       The
Subscriber has carefully considered the potential risks relating to the Company and a purchase of the Note (including the Note
Shares), and fully understands that the Note (including the Note Shares) and the Incentive Shares are a speculative investment
that involves a high degree of risk of loss of the Subscriber’s entire investment. Among other things, the Subscriber has
carefully considered each of the risks described under the heading “Risk Factors” in the Company’s SEC
Filings (as defined below), which risk factors are incorporated herein by reference.

 

(e)       The
Subscriber will not sell or otherwise transfer the Note, the Note Shares or the Incentive Shares without registration under the
Securities Act or an exemption therefrom, and fully understands and agrees that the Subscriber must bear the economic risk of its
purchase because, among other reasons, neither the Note, nor the Note Shares, nor the Incentive Shares have been registered under
the Securities Act or under the securities laws of any state and, therefore, cannot be resold, pledged, assigned or otherwise disposed
of unless they are subsequently registered under the Securities Act and under the applicable securities laws of such states, or
an exemption from such registration is available. In particular, the Subscriber is aware that the Note, the Note Shares and the
Incentive Shares are “restricted securities,” as such term is defined in Rule 144 promulgated under the Securities
Act (“Rule 144”), and they may not be sold pursuant to Rule 144 unless all of the conditions of Rule 144 are
met. The Subscriber also understands that the Company is under no obligation to register the Note, the Note Shares or the Incentive
Shares on behalf of the Subscriber or to assist the Subscriber in complying with any exemption from registration under the Securities
Act or applicable state securities laws. The Subscriber understands that any sales or transfers of the Note, the Note Shares and
the Incentive Shares are further restricted by state securities laws and the provisions of this Agreement. The Subscriber understands
that the Company may limit further the right to sell or transfer the Note, the Note Shares and the Incentive Shares by establishing
procedures for approval of any such transfer, limiting counsel authorized to review and approve Rule 144 transactions and approving
opinion fees, for transfers sought to be permitted under Rule 144, which may result in delays in desired sales or transfers by
Subscribers.

 

(f)       No
oral or written representations or warranties have been made, or information furnished, to the Subscriber or its Advisors, if any,
by the Company or any of its officers, employees, agents, sub-agents, affiliates, advisors or subsidiaries in connection with the
Offering, other than any representations of the Company contained herein, and in subscribing for the Note, the Subscriber is not
relying upon any representations other than those contained herein.

 

(g)       The
Subscriber’s overall commitment to investments that are not readily marketable is not disproportionate to the Subscriber’s
net worth, and an investment in the Note (or any Note Shares) will not cause such overall commitment to become excessive.

 

(h)       The
Subscriber understands and agrees that the certificates for the Note, the Note Shares and the Incentive Shares shall bear substantially
the following legend until (i) such Note, the Note Shares and the Incentive Shares shall have been registered under the Securities
Act and effectively disposed of in accordance with a registration statement that has been declared effective or (ii) in the opinion
of counsel for the Company, such Note, the Note Shares and the Incentive Shares may be sold without registration under the Securities
Act, as well as any applicable “blue sky” or state securities laws:

 

THESE SECURITIES
REPRESENTED HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE
STATE SECURITIES LAWS. SUCH SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES AND MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED
AFTER SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FILED BY THE ISSUER WITH
THE U.S. SECURITIES AND EXCHANGE COMMISSION COVERING SUCH SECURITIES UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL SATISFACTORY
TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.

 

(i)       Neither
the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved the Note,
the Note Shares or the Incentive Shares or passed upon or endorsed the merits of the Offering.

 

 

 

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(j)       The
Subscriber and its Advisors, if any, have had a reasonable opportunity to ask questions of and receive answers from a person or
persons acting on behalf of the Company concerning the Offering and the business, financial condition, results of operations and
prospects of the Company, and all such questions have been answered to the full satisfaction of the Subscriber and its Advisors,
if any.

 

(k)       The
Subscriber is unaware of, is in no way relying on, and did not become aware of, the Offering through or as a result of, any form
of general solicitation or general advertising, including, without limitation, any article, notice, advertisement or other communication
published in any newspaper, magazine or similar media or broadcast over television or radio, or electronic mail over the Internet,
in connection with the Offering and is not subscribing for Note and did not become aware of the Offering through or as a result
of any seminar or meeting to which the Subscriber was invited by, or any solicitation of a subscription by, a person not previously
known to the Subscriber in connection with investments in securities generally.

 

(l)       The
Subscriber has taken no action that would give rise to any claim by any person for brokerage commissions, finders’ fees or
the like relating to this Agreement or the transactions contemplated hereby.

 

(m)       The
Subscriber is not relying on the Company or any of its employees, agents, or advisors with respect to the legal, tax, economic
and related considerations of an investment in the Note, and the Subscriber has relied on the advice of, or has consulted with,
only its own Advisors.

 

(n)        The
Subscriber acknowledges that any estimates or forward-looking statements or projections furnished by the Company to the Subscriber
were prepared by the management of the Company in good faith, but that the attainment of any such projections, estimates or forward-looking
statements cannot be guaranteed by the Company or its management and should not be relied upon.

 

(o)       No
oral or written representations have been made, or oral or written information furnished, to the Subscriber or its Advisors, if
any, in connection with the Offering that are in any way inconsistent with the information contained herein.

 

(p)       (For
ERISA plans only) The fiduciary of the ERISA plan (the “Plan”) represents that such fiduciary has been informed
of and understands the Company’s investment objectives, policies and strategies, and that the decision to invest “plan
assets” (as such term is defined in ERISA) in the Company is consistent with the provisions of ERISA that require diversification
of plan assets and impose other fiduciary responsibilities. The Subscriber or Plan fiduciary (i) is responsible for the decision
to invest in the Company; (ii) is independent of the Company and any of its affiliates; (iii) is qualified to make such investment
decision; and (iv) in making such decision, the Subscriber or Plan fiduciary has not relied primarily on any advice or recommendation
of the Company or any of its affiliates.

 

(q)       This
Agreement is not enforceable by the Subscriber unless it has been accepted by the Company, and the Subscriber acknowledges and
agrees that the Company reserves the right to reject any subscription for any reason.

 

(r)       The
Subscriber will indemnify and hold harmless the Company and, where applicable, its directors, officers, employees, agents, advisors,
affiliates and shareholders, and each other person, if any, who controls any of the foregoing from and against any and all loss,
liability, claim, damage and expense whatsoever (including, but not limited to, any and all fees, costs and expenses whatsoever
reasonably incurred in investigating, preparing or defending against any claim, lawsuit, administrative proceeding or investigation
whether commenced or threatened) (a “Loss”) arising out of or based upon any representation or warranty of the
Subscriber contained herein or in any document furnished by the Subscriber to the Company in connection herewith being untrue in
any material respect or any breach or failure by the Subscriber to comply with any covenant or agreement made by the Subscriber
herein or therein; provided, however, that the Subscriber shall not be liable for any Loss that in the aggregate
exceeds the Subscriber’s Purchase Price tendered hereunder.

 

 

 

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(s)       The
Subscriber is, and on each date on which the Subscriber continues to own the restricted Note from the Offering will be, an “Accredited
Investor” as defined in Rule 501(a) under the Securities Act. In general, an “Accredited Investor” is deemed
to be an institution with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 (excluding such
person’s residence) or annual income exceeding $200,000 or $300,000 jointly with his or her spouse.

 

(t)       The
Subscriber, either alone or together with its representatives, has such knowledge, sophistication and experience in business and
financial matters so as to be capable of evaluating the merits and risks of the Offering, and has so evaluated the merits and risks
of such investment. The Subscriber has not authorized any person or entity to act as its Purchaser Representative (as that term
is defined in Regulation D of the General Rules and Regulations under the Securities Act) in connection with the Offering. The
Subscriber is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete
loss of such investment.

 

(u)       The
Subscriber has reviewed, or had an opportunity to review, all of the SEC Filings, and all “Risk Factors” and “Forward
Looking Statements” disclaimers contained therein. In addition, the Subscriber has reviewed and acknowledges it has such
knowledge, sophistication, and experience in securities matters, and understands the following additional Risk Factor related to
the Company:

 

5.       The
Company’s Representations, Warranties and Covenants

 

The Company hereby
acknowledges, agrees with and represents, warrants and covenants to the Subscriber, as follows:

 

(a)       Organization
and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the
state of Florida. The Company is duly qualified to do business, and is in good standing in the states required due to (a) the ownership
or lease of real or personal property for use in the operation of the Company's business or (b) the nature of the business conducted
by the Company, except where the failure to do so would not result in a material adverse effect to the Company. The Company has
all requisite power, right and authority to own, operate and lease its properties and assets, to carry on its business as now conducted,
to execute, deliver and perform its obligations under this Agreement to which it is a party, and to carry out the transactions
contemplated hereby and thereby. All actions on the part of the Company and its officers and directors necessary for the authorization,
execution, delivery and performance of this Agreement, the consummation of the transactions contemplated hereby and thereby, and
the performance of all of the Company's obligations under this Agreement have been taken or will be taken prior to the Closing.
This Agreement has been duly executed and delivered by the Company, and this Agreement is a legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms.

 

(b)       Issuance
of Securities. The Note, any Note Shares and the Incentive Shares to be issued to the Subscriber pursuant to this Agreement,
when issued and delivered in accordance with the terms of this Agreement, will be duly and validly issued and will be fully paid
and non-assessable.

 

(c)       Authorization;
Enforcement. The execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated
hereby will not (a) constitute a violation (with or without the giving of notice or lapse of time, or both) of any provision of
any law or any judgment, decree, order, regulation or rule of any court, agency or other governmental authority applicable to the
Company, (b) require any consent, approval or authorization of, or declaration, filing or registration with, any person, (c) result
in a default (with or without the giving of notice or lapse of time, or both) under, acceleration or termination of, or the creation
in any party of the right to accelerate, terminate, modify or cancel, any agreement, lease, note or other restriction, encumbrance,
obligation or liability to which the Company is a party or by which it is bound or to which any assets of the Company are subject,
(d) result in the creation of any lien or encumbrance upon the assets of the Company, or upon any Notes or other securities of
the Company, (e) conflict with or result in a breach of or constitute a default under any provision of those certain articles of
incorporation (“Articles of Incorporation”) those certain bylaws (“Bylaws”) of the Company,
or (f) invalidate or adversely affect any permit, license, authorization or status used in the conduct of the business of the Company.

 

 

 

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(d)       SEC
Filings. The Company is subject to, and in full compliance with, the reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). The Company has made available to each Subscriber through
the EDGAR system true and complete copies of each of the Company’s Quarterly Reports on Form 10-Q, Annual Reports on Form
10-K and Current Reports on Form 8-K (collectively, the “SEC Filings”), and all such SEC Filings are incorporated
herein by reference.

 

(e)       No
Financial Advisor. The Company acknowledges and agrees that the Subscriber is acting solely in the capacity of an arm’s
length purchaser with respect to the Note and the transactions contemplated hereby. The Company further acknowledges that the Subscriber
is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and
the transactions contemplated hereby and any advice given by the Subscriber or any of its representatives or agents in connection
with this Agreement and the transactions contemplated hereby is merely incidental to the Subscriber’s purchase of the Note
(including any Note Shares) and acceptance of the Incentive Shares. The Company further represents to the Subscriber that the Company’s
decision to enter into this Agreement has been based solely on the independent evaluation of the transactions contemplated hereby
by the Company and its representatives.

 

(f)       Indemnification.
The Company will indemnify and hold harmless the Subscriber and, where applicable, its directors, officers, employees, agents,
advisors and shareholders, from and against any and all Loss arising out of or based upon any representation or warranty of the
Company contained herein or in any document furnished by the Company to the Subscriber in connection herewith being untrue in any
material respect or any breach or failure by the Company to comply with any covenant or agreement made by the Company to the Subscriber
in connection therewith; provided, however, that the Company’s liability shall not exceed the Subscriber’s
Purchase Price tendered hereunder.

 

(g)       Capitalization
and Additional Issuances. The authorized, issued and outstanding capital stock of the Company is as set forth in the SEC Filings
and all issued and outstanding Notes of the Company are validly issued, fully paid and non-assessable. Except as set forth in the
SEC Filings and as otherwise required by law, there are no restrictions upon the voting or transfer of any of the Notes of capital
stock of the Company pursuant to the Articles of Incorporation, the Bylaws or other governing documents or any agreement or other
instruments to which the Company is a party or by which the Company is bound.

 

(h)       Private
Placements. Assuming the accuracy of the Subscriber’s representations and warranties set forth in Section 3, no registration
under the Securities Act is required for the offer and sale of the Notes by the Company to the Subscribers as contemplated hereby.

 

(i)       Investment
Company. The Company is not, and is not an affiliate of, and immediately after receipt of payment for the Notes will not be
or be an affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
The Company shall conduct its business in a manner so that it will not become subject to the Investment Company Act.

 

(j)       Reservation
of Shares. The Company has reserved such adequate number of Note Shares as issuable upon conversion of the Note. Such Note
Shares, when issued in accordance with the terms of the Note, will be duly authorized, validly issued and outstanding, fully paid
and non-assessable.

 

6.       MISCELLANEOUS
PROVISIONS

 

(a)       All
parties hereto have been represented by counsel, and no inference shall be drawn in favor of or against any party by virtue of
the fact that such party’s counsel was or was not the principal draftsman of this Agreement.

 

(b)       Each
of the parties hereto shall be responsible to pay the costs and expenses of its own legal counsel in connection with the preparation
and review of this Agreement and related documentation.

 

 

 

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(c)       Neither
this Agreement, nor any provisions hereof, shall be waived, modified, discharged or terminated except by an instrument in writing
signed by the party against whom any waiver, modification, discharge or termination is sought.

 

(d)       The
representations, warranties and agreement of the Subscriber and the Company made in this Agreement shall survive the execution
and delivery of this Agreement and the delivery of the Note.

 

(e)       Any
party may send any notice, request, demand, claim or other communication hereunder to the Subscriber at the address set forth on
the signature page of this Agreement or to the Company at its primary office (including personal delivery, expedited courier, messenger
service, fax, ordinary mail or electronic mail), but no such notice, request, demand, claim or other communication will be deemed
to have been duly given unless and until it actually is received by the intended recipient. Any party may change the address to
which notices, requests, demands, claims and other communications hereunder are to be delivered by giving the other parties written
notice in the manner herein set forth.

 

(f)       Except
as otherwise provided herein, this Agreement shall be binding upon, and inure to the benefit of, the parties to this Agreement
and their heirs, executors, administrators, successors, legal representatives and assigns. If the Subscriber is more than one person
or entity, the obligation of the Subscriber shall be joint and several and the agreements, representations, warranties and acknowledgments
contained herein shall be deemed to be made by, and be binding upon, each such person or entity and its heirs, executors, administrators,
successors, legal representatives and assigns. This Agreement sets forth the entire agreement and understanding between the parties
as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every
nature among them.

 

(g)       This
Agreement is not transferable or assignable by the Subscriber.

 

(h)       This
Agreement shall be governed by and construed in accordance with the laws of the State of Florida, without giving effect to its
conflicts of law principles. Any action brought by either party against the other concerning the transactions contemplated by this
Note shall be brought only in the state and/or federal courts of Florida located in Palm Beach County, Florida. The parties hereby
irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based
on lack of jurisdiction or venue or based upon forum non conveniens. The prevailing party shall be entitled to recover from
the other party its reasonable attorney’s fees and costs.

 

(i)       WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES
EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY
AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

 

(j)       This
Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

 

[Signature Pages Follow]

 

 

 

 

 

 

 

 

 

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IN
WITNESS WHEREOF, the parties hereto have caused this Subscription Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.

 

	
        Grom
Social Enterprises, Inc. 

         

         
	
        Address for Notices:

        2060 NW Boca Raton Blvd., Suite #6

        Boca Raton, FL 33431

	
        By:                               

        Name: Melvin Leiner

        Title: Executive Vice
        President

         

         
	 
	
        With a copy to (which shall not constitute
        notice):

         

        The Crone Legal Group, P.C.

        500 Fifth Avenue, Suite 938

        New York, NY 10110

        Attn: Mark Crone

        
	 

 

 

 

 

 

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR SUBSCRIBER FOLLOWS]

 

 

 

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[Subscriber
SIGNATURE PAGE TO Grom SOCial Enterprises, INC. 

SUBSCRIPTION
AGREEMENT]

 

IN WITNESS WHEREOF,
the undersigned have caused this Subscription Agreement to be duly executed by their respective authorized signatories as of the
16th day of March, 2020.

 

Name of
Subscriber: __________________________

 

Signature of Authorized Signatory of
Subscriber: __________________________________

Name of Authorized Signatory: 

 

Email Address of Authorized Signatory

 

 

 

 

Facsimile Number of Authorized Signatory:
_______________________________________

 

Address for Notice to Subscriber: ___________________________________

 

 

 

Address for Delivery of Securities to Subscriber
(if not same as address for notice):

 

______________________________________________________________________________

 

______________________________________________________________________________

 

______________________________________________________________________________

 

 

Purchase Price: $

 

Principal Amount of Note: $

 

Incentive Shares: shares of Common Stock

 

 

EIN Number, if applicable, will be provided
under separate cover:

 

 

 

[SIGNATURE PAGES CONTINUE]

 

 

 

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INVESTOR QUESTIONNAIRE

 

Instructions: Check all boxes below
which correctly describe you.

 

		☐	You are (i) a bank, as defined in Section 3(a)(2) of the Securities Act of 1933, as amended
(the “Securities Act”), (ii) a savings and loan association or other institution, as defined in Section
3(a)(5)(A) of the Securities Act, whether acting in an individual or fiduciary capacity, (iii) a broker or dealer registered
pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (iv)
an insurance company as defined in Section 2(13) of the Securities Act, (v) an investment company registered under the Investment
Company Act of 1940, as amended (the “Investment Company Act”), (vi) a business development company as
defined in Section 2(a)(48) of the Investment Company Act, (vii) a Small Business Investment Company licensed by the U.S.
Small Business Administration under Section 301 (c) or (d) of the Small Business Investment Act of 1958, as amended, (viii)
a plan established and maintained by a state, its political subdivisions, or an agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees and you have total assets in excess of $5,000,000, or (ix) an employee benefit
plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and (1)
the decision that you shall subscribe for and purchase Notes and shares of common stock (the “Units”), is made
by a plan fiduciary, as defined in Section 3(21) of ERISA, which is either a bank, savings and loan association, insurance company,
or registered investment adviser, or (2) you have total assets in excess of $5,000,000 and the decision that you shall subscribe
for and purchase the Units is made solely by persons or entities that are accredited investors, as defined in Rule 501 of Regulation
D promulgated under the Securities Act (“Regulation D”) or (3) you are a self-directed plan and the decision
that you shall subscribe for and purchase the Units is made solely by persons or entities that are accredited investors.

 

	☐		You are a private business development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940, as amended.

 

		☐	You are an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended (the “Code”), a corporation, Massachusetts or similar business trust or a partnership, in each case
not formed for the specific purpose of making an investment in the Units and its underlying securities in excess of $5,000,000.

 

		☐	You are a director or executive officer of the Company.

 

		☐	You are a natural person whose individual net worth, or joint net worth with your spouse, exceeds
$1,000,000 (excluding residence) at the time of your subscription for and purchase of the Units.

 

		☐	You are a natural person who had an individual income in excess of $200,000 in each of the two
most recent years or joint income with your spouse in excess of $300,000 in each of the two most recent years, and who has a reasonable
expectation of reaching the same income level in the current year.

 

		☐	You are a trust, with total assets in excess of $5,000,000, not formed for the specific purpose
of acquiring the Units and whose subscription for and purchase of the Units is directed by a sophisticated person as described
in Rule 506(b)(2)(ii) of Regulation D.

 

		☐	You are an entity in which all of the equity owners are persons or entities described in one of
the preceding paragraphs.

 

 

 

    	 	10	 

     

    

 

Check all boxes below which correctly describe you.

 

With respect to this investment in the Note, your:

 

	Investment Objectives:	☐ Aggressive Growth	☐ Speculation	 
	 	 	 	 
	Risk Tolerance:	☐ Low Risk	☐ Moderate Risk	☐ High Risk

 

Are you associated with a FINRA Member Firm? ☐Yes     ☐
No

 

Your initials (subscriber
and co-subscriber, if applicable) are required for each item below:

 

	____	____	 I/We understand that this investment is not guaranteed.
	 	 	 
	____	____	I/We are sophisticated in financial and business affairs and are able to evaluate the risks and merits of
an investment in this offering.
	 	 	 
	____	____	I/We
confirm that this investment is considered “high risk.” (This type of investment is considered high risk due to the
inherent risks including lack of liquidity and lack of diversification. Success or failure of private placements such as this
is dependent on the corporate issuer of these securities and is outside the control of the investors. While potential loss is
limited to the amount invested, such loss is possible.)

 

The Subscriber hereby
represents and warrants that all of its answers to this Investor Questionnaire are true as of the date of its execution of the
Subscription Agreement pursuant to which it purchased the Note.

___________________________________
 Name of Subscriber [please print]

 

 

___________________________________

Signature of Subscriber (Entities please

provide signature of Subscriber’s duly

authorized signatory.)

 

 

 

___________________________________
 Name of Co-Subscriber [please print]

 

 

___________________________________

Signature of Co-Subscriber

 

 

 

 

 

___________________________________

Name of Signatory (Entities only)

 

 

___________________________________

Title of Signatory (Entities only)

 

 

 

    	 	11	 

     

    

 

Exhibit A

 

Wire Instructions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	12Document

EXECUTION VERSION

SATISFACTION AND DISCHARGE OF INDENTURE
THIS SATISFACTION AND DISCHARGE OF INDENTURE (this “Satisfaction and Discharge”) is made and entered into to be effective as of March 19, 2020 (the “Effective Date”) by and among UNISYS CORPORATION, a Delaware corporation, as issuer (the “Company”), having its principal place of business at Unisys Way, Blue Bell, PA 19424, the Guarantors signatory hereto, and WELLS FARGO BANK, NATIONAL ASSOCIATION, in its capacity as trustee (the “Trustee”), and in its capacity as collateral trustee (the “Collateral Trustee”), having a corporate trust office at 150 East 42nd Street, 40th Floor, New York, NY 10017.  Capitalized terms used and not otherwise defined in this Satisfaction and Discharge shall have the respective meanings ascribed to such terms in the Indenture (as defined below).
WITNESSETH:
WHEREAS, the Company, the Trustee and the Collateral Trustee, are parties to that certain Indenture, dated as of April 17, 2017, among the Company, the Guarantors from time to time party thereto, the Trustee and the Collateral Trustee (the “Indenture”);
WHEREAS, the Indenture provided for the issuance by the Company of $440,000,000 in original aggregate principal amount of its 10.750% Senior Secured Notes Due 2022 (as further defined in the Indenture, the “Notes”);
WHEREAS, on March 13, 2020, the Company issued a Notice of Full Redemption (the “Redemption Notice”) to redeem all of its outstanding Notes ($440,000,000 aggregate principal amount of Notes is currently outstanding) on April 15, 2020 (the “Redemption Date”) pursuant to Section 3.07(a) of the Indenture and Section 5 of the Notes at a redemption price equal to 105.375% of the principal amount of the Notes redeemed, amounting to $1,053.75 per $1,000 principal amount of Notes, plus accrued and unpaid interest, if any, to, but not including, the Redemption Date (subject to the right of Holders of the Notes of record on April 1, 2020 to receive interest due on April 15, 2020).  On the Redemption Date, there will be approximately $53.75 of accrued and unpaid interest to, but not including, the Redemption Date, per $1,000 principal amount of Notes, which will be paid to Holders of the Notes of record at the close of business on April 1, 2020, the record date for the April 15, 2020 interest payment date, regardless of whether such Persons are Holders of record on the Redemption Date;
WHEREAS, on the date hereof, the Company irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of Holders of the Notes, $487,300,000 of cash in U.S. dollars, such amount being sufficient without consideration of any reinvestment of interest, to pay and discharge the entire indebtedness on the Notes not theretofore delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to, but not including, the Redemption Date as provided in the Redemption Notice (such funds, the “Redemption Funds”) in accordance and in compliance with Sections 12.01(2)(A) and 12.01(2)(C) of the Indenture;
WHEREAS, as of the date hereof, no Default has occurred and is continuing or will occur as a result of such deposit of the Redemption Funds and such deposit of the Redemption Funds will not result in a breach or violation of, or constitute a default under, the ABL Credit Agreement or any other material agreement or instruction to which the Company or any Guarantor is a party or by which the Company or any Guarantor is bound as provided in Section 12.01(2)(B) of the Indenture;

WHEREAS, the Company has delivered to the Trustee on the date hereof (a) an Officers’ Certificate in accordance and in compliance with Sections 10.06, 11.04 (a), 11.04(b), 11.04(d), 11.10, 12.01, 13.02 and 13.03 of the Indenture and Sections 4.1(a)(1), 4.1(d)(1) and 4.4 of the Collateral Trust Agreement (the “Officers’ Certificate”) and (b) an Opinion of Counsel in accordance and in compliance with Sections 10.06, 11.04(d), 11.10, 12.01, 13.02 and 13.03;
WHEREAS, in the Officers’ Certificate the Company delivered irrevocable instructions to the Trustee to apply the Redemption Funds toward the payment of the Notes at the Redemption Date in accordance and in compliance with Section 12.01(2)(C) of the Indenture;
WHEREAS, the Company has paid or cause to be paid all other sums payable by it under the Indenture as provided in Section 12.01(3) of the Indenture;
WHEREAS, the Company has requested, in each case at the expense of the Company (a) that the Trustee deliver a notice to the Company and the Collateral Trustee stating that the Trustee, on behalf of the Holders, disclaims and gives up any and all rights it has in or to the Collateral (other than with respect to funds held by the Trustee pursuant to Article 12 of the Indenture), and any rights it has under the Security Documents pursuant to Sections 11.04 and 11.10 of the Indenture and Sections 4.1 and 4.4 of the Collateral Trust Agreement; (b) that the Trustee and the Collateral Agent acknowledge (i) the satisfaction of the Company’s and the Guarantor’s obligations under the Indenture, the Notes, the Note Guarantees and the Security Documents, (ii) the cancellation of the Indenture, the Notes and the Note Guarantees, (iii) the discharge of the Indenture pursuant to Section 12.01 of the Indenture, (iv) the automatic and unconditional release and discharge of the Guarantees by each Guarantor without any further action by any Guarantor, the Issuer or the Trustee pursuant to Section 12.02 of the Indenture, and (v) that the Collateral Trustee does not hold a Lien in the Collateral on behalf of the Trustee pursuant to Sections 11.04 and 11.10 of the Indenture and Sections 4.1 and 4.4 of the Collateral Trust Agreement, and, in each case, agree that the same has occurred (such clauses (b)(i), (ii), (iii), (iv) and (v), collectively, the “Satisfaction, Discharge and Release”); (c) that the Trustee and the Collateral Agent agree to do or cause to be done all acts reasonably requested by the Company to release the Lien on the Collateral as soon as is reasonably practicable pursuant to Section 11.10 of the Indenture and execute and deliver to or at the instruction of the Company, proper instruments acknowledging the Satisfaction, Discharge and Release, including, without limitation, (i) this Satisfaction and Discharge, (ii) the Intellectual Property Releases listed on Exhibit A hereto (the “IP Releases”), and (iii) such other instruments, releases and other documents necessary or desirable to effectuate the release of all security interest and/or liens granted to the Trustee and/or the Collateral Trustee in the personal property or real property of the Company and the Guarantors, and reassignments of all assignments in favor of the Trustee and/or the Collateral Trustee, in any case securing amounts evidenced by the Notes and the Note Guarantees as may be from time to time requested by the Company (the “Other Releases”); (d) that the Trustee and the Collateral Trustee authorize the Company (and/or its designees) to prepare and file the UCC-3 termination statements listed on Exhibit B hereto and other UCC-3 termination statements and other filings with respect to the Collateral evidencing the Satisfaction, Discharge and Release contemplated hereby (the “UCC Termination Statements” and, collectively with this Satisfaction and Discharge, the IP Releases and the Other Releases, the “Discharge Documents”); and (e) that the Trustee and the Collateral Trustee deliver to the Company or its designee, the following (to the extent either the Trustee and/or the Collateral Trustee has any such items in its possession or under its control) (the “Possessory Collateral”): (i) all certificates delivered to the Trustee or the Collateral Trustee representing stock pledged by the Company, any Guarantor or any of their Subsidiaries or Affiliates in favor of the Trustee or the Collateral Trustee under the Indenture, the Notes, the Note Guarantees or the Security Documents, together with related stock powers delivered to the Trustee or the Collateral Trustee (including, without limitation, the certificates and stock powers listed on Exhibit C hereto), (ii) all intercompany notes issued by the Company, any Guarantor or any of their Subsidiaries or Affiliates to the Company and pledged to and in 

the possession of the Trustee and/or the Collateral Trustee (including, without limitation, the intercompany notes listed on Exhibit D hereto), (iii) all chattel paper and other instruments or documents delivered to the Trustee and/or the Collateral Trustee pursuant to the Indenture, the Notes, the Note Guarantees or the Security Documents, and (iv) all other Collateral in the actual physical possession of the Trustee or the Collateral Trustee; and
WHEREAS, in furtherance of the foregoing, pursuant to Sections 10.06, 11.04, 11.10 and 12.01 of the Indenture and Sections 4.1 and 4.4 of the Collateral Trust Agreement, the Trustee and the Collateral Trustee desire and agree to (i) effectuate, acknowledge and evidence the Satisfaction, Discharge and Release, (ii) cause the execution, delivery, preparation and filing of the Discharge Documents and (iii) deliver the Possessory Collateral to the Company or its designee;
NOW, THEREFORE, in consideration of the mutual promises herein contained, the receipt and adequacy of which are hereby acknowledged, it is mutually covenanted and agreed, for the equal and proportionate benefit of all holders of Notes as follows:
ARTICLE I
SATISFACTION AND DISCHARGE
1.1 The Trustee hereby acknowledges receipt of the Redemption Funds in accordance and in compliance with Section 12.01(2)(A) of the Indenture and hereby agrees to apply the Redemption Funds in accordance and in compliance with the Company’s instructions pursuant to Section 12.01(2)(C) of the Indenture toward the redemption of the Notes on the Redemption Date.
1.2 The Trustee and the Collateral Trustee, pursuant to the provisions of Sections 10.06, 11.04, 11.10 and 12.01 of the Indenture and Sections 4.1 and 4.4 of the Collateral Trust Agreement, hereby acknowledge the Satisfaction, Discharge and Release and acknowledge and agree that the Company’s and that the Guarantor’s obligations under the Indenture, the Notes, the Note Guarantees and the Security Documents have been satisfied, the Indenture, the Notes and the Note Guarantees are hereby cancelled, the Indenture is hereby discharged, the Guarantees by each Guarantor have been automatically and unconditional released and discharged without any further action by any Guarantor, the Issuer or the Trustee and the Indenture, the Note Guarantees and the Security Documents hereby cease to be of further force or effect except with respect to those obligations that the Indenture provides shall survive the satisfaction and discharge thereof.
1.3 Pursuant to Section 2.11 of the Indenture, the Trustee hereby agrees to cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation from and after the date hereof and to dispose of cancelled Notes in accordance with its customary procedures (subject to the record retention requirements of the Exchange Act and the Trustee), the Company hereby requests and orders the Trustee to confirm the cancellation of all cancelled Notes, and the Trustee hereby confirms the cancellation of all Notes received by it as of the date hereof and will confirm any and all cancellation of cancelled Notes received by it in the future.
1.4 The Trustee, in accordance with the Company’s instructions herein, hereby instructs the Collateral Trustee, and the Trustee and the Collateral Trustee hereby agree, to do or cause to be done all acts reasonably requested by the Company to release the Lien on the Collateral as soon as is reasonably practicable and execute and deliver to or at the instruction of the Company, proper instruments acknowledging the Satisfaction, Discharge and Release, including, without limitation (i) execute and deliver or authorize the preparation and filing of the Discharge Documents on the Effective Date and (ii) deliver the Possessory Collateral to the Company or its designee promptly after the Effective Date.

1.5 The Trustee hereby instructs the Collateral Trustee, and the Trustee and the Collateral Trustee hereby agree, to execute and deliver or authorize the preparation and filing of such other instruments, releases and other documents as may be necessary or desirable to effectuate the release of all security interests and/or liens granted to the Trustee and/or the Collateral Agent in the personal property or real property of the Company and the Guarantors securing amounts evidenced by the Notes and the Satisfaction, Discharge and Release as may be from time to time requested by the Company.
ARTICLE II
MISCELLANEOUS PROVISIONS
2.1 This Satisfaction and Discharge shall be governed by, and construed in accordance with, the laws of the State of New York.
2.2 This Satisfaction and Discharge may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all of which shall together constitute but one and the same instrument.
2.3 The Company hereby acknowledges and agrees that the Trustee and the Collateral Trustee shall be entitled to all of their rights, protections, indemnities and immunities in connection with their execution of this Satisfaction and Discharge and the performance of any obligations hereunder or in connection herewith.
[Remainder of page intentionally left blank]

IN WITNESS WHEREOF, the parties hereto have caused this Satisfaction and Discharge of Indenture to be effective as of the Effective Date.
												
			TRUSTEE:	
				
			WELLS FARGO BANK, NATIONAL ASSOCIATION, in its capacity as Trustee	
				
				
			By:	/s/ Raymond Delli Colli
				Name:  Raymond Delli Colli
				Title:    Vice President
				
			COLLATERAL TRUSTEE:	
				
			WELLS FARGO BANK, NATIONAL	
			ASSOCIATION, in its capacity as Collateral Trustee	
				
				
			By:	/s/ Raymond Delli Colli
				Name:  Raymond Delli Colli
				Title:    Vice President
				
			COMPANY:	
				
			UNISYS CORPORATION	
				
			By:	/s/ Shalabh Gupta
				Name:  Shalabh Gupta
				Title:    Vice President and Treasurer

[Signature Pages Continue on Following Page]

[Signature page to Satisfaction and Discharge of Indenture]

												
			GUARANTORS:	
				
			UNISYS NPL, INC.	
				
				
			By:	/s/ John M. Armbruster
			Name:	John M. Armbruster
			Title:	Vice President and Assistant Secretary
				
			UNISYS HOLDING CORPORATION	
				
				
			By:	/s/ John M. Armbruster
			Name:	John M. Armbruster
			Title:	Vice President and Assistant Secretary
				
			UNISYS AP INVESTMENT COMPANY I	
				
			By:	/s/ John M. Armbruster
			Name:	John M. Armbruster
			Title:	Vice President and Assistant Secretary

[Signature page to Satisfaction and Discharge of Indenture]

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