Document:

Exhibit 10.19

 

PLEDGE AND SECURITY AGREEMENT

 

PLEDGE AND
SECURITY AGREEMENT (this “Agreement”), dated September __, 2018, made by and among of GROM SOCIAL
ENTERPRISES, INC. (the “Company”) and the holders of Company’s common stock signatory hereto
(collectively, the “Pledgors”) in favor of each of the holders of the Company’s 12% Secured Notes
set forth on Schedule A hereto (as may be amended from time to time to reflect additional closings and
assignments, each a Pledgee and collectively, the “Pledgees”) and Corporate Stock Transfer, Inc., as
pledge holder of the Pledged Shares for the Pledgees (the “Agent”).

 

W I T N E S S
E T H:

 

WHEREAS, the
Pledgees have acquired an aggregate of $______ of 12% Secured Notes of the Company (the “Notes”) in one or more
closings pursuant to a Subscription Agreements entered into between the Pledgees and the Company (the “Purchase Agreement”
and, all capitalized terms not otherwise defined herein shall be as defined in the Purchase Agreement);

 

WHEREAS, the
Pledgors, as principals, employees and shareholders of the Company who will each personally directly benefit from the loan by the
Pledgees to the Company, have agreed to make the pledge contemplated by this Agreement in order to induce Pledgees to perform their
respective obligations under the Purchase Agreement and the Notes;

 

WHEREAS, Pledgors
have agreed to pledge an aggregate of 10,000,000 shares of common stock, par value $.001 per share, of the Company (the “Common
Stock”), set forth opposite the Pledgors’ names on Schedule A attached hereto;

 

WHEREAS, terms
used but not otherwise defined in this Agreement that are defined in Article 9 of the Uniform Commercial Code in effect in the
State of New York at that time (whether or not the UCC applies to the affected Pledged Collateral) (the “UCC”)
shall have the meanings ascribed to them in the UCC; and

 

NOW, THEREFORE,
in consideration of the premises, covenants and promises contained herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

SECTION
1.Pledge and Security Interest. Each Pledgor hereby pledges, assigns and grants to the Pledgees, a continuing
lien and security interest in favor of Pledgees (the “Security Interest”), to secure the complete and timely
payment, performance and discharge in full, as the case may be, of all of the obligations pursuant to the Notes, the following
(collectively, the “Pledged Collateral”):

 

(a)       the
shares of Common Stock owned by such Pledgor and set forth on Schedule B attached hereto (the “Pledged Shares”)
and all dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of the Pledged Shares; and

 

(b)       all
proceeds of any and all of the foregoing Pledged Collateral, in whatever form (including, without limitation, proceeds that constitute
property of the types described above).

 

SECTION
2.Security for Obligations. This Agreement secures the payment and performance of the following obligations (collectively,
the “Obligations”): all present and future indebtedness, obligations, covenants, duties and liabilities of the
Company to the Pledgees now existing or hereafter arising under or in connection with this Agreement, the Notes, the Purchase Agreement
and all agreements and documents executed and delivered in connection therewith (collectively, the “Transaction Documents”).

 

SECTION
3.Delivery of Pledged Collateral . On or prior to the date hereof, each Pledgor shall deliver to the Agent the
Pledged Shares, together with duly executed instruments of transfer and stock powers endorsed in blank. Agent shall hold the Pledged
Shares, together with undated stock powers executed in blank, signature guaranteed suitable for transfer, for its benefit and Pledgor
further agrees to execute such other documents and to take such other actions as Pledgee deems necessary or desirable to create
and perfect the security interests intended to be created hereunder, to effect the foregoing and to permit Pledgee to exercise
any of its rights and remedies hereunder.

 

 

 

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SECTION
4.Representations and Warranties. Each Pledgor, severally and not jointly, represents and warrants as follows:

 

(a)       The
execution, delivery and performance by the Pledgor of this Agreement and the exercise by the Pledgees of any of their rights and
remedies in accordance with the terms of this Agreement and applicable securities law will not contravene any law or any contractual
restriction binding on or affecting the Pledgor or any of their properties

 

(b)       Such
Pledgor is the legal, record and beneficial owner of the Pledged Collateral owned by such Pledgor, free and clear of any lien,
security interest, restriction, option or other charge or encumbrance (collectively, “Liens”).

 

(c)       The
pledge of the Pledged Collateral and the grant of the Security Interest pursuant to this Agreement create a valid and perfected
first priority security interest in the Pledged Collateral, securing payment and performance of the Obligations.

 

(d)       No
consent of any other person or entity and no authorization, approval, or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required (i) for the pledge by the Pledgor of the Pledged Collateral pursuant to this
Agreement or for the execution, delivery or performance of this Agreement by the Pledgor, (ii) for the perfection or maintenance
of the security interest created hereby, or (iii) for the exercise by the Agent of the voting or other rights provided for in this
Agreement or the remedies in respect of the Pledged Collateral pursuant to this Agreement (except as may be required in connection
with any disposition of any portion of the Pledged Collateral by laws affecting the offering and sale of securities generally).

 

(e)       There
are no conditions precedent to the effectiveness of this Agreement that have not been satisfied or waived.

 

(f)       Except
for the filing of financing statements pursuant to the UCC with the proper filing and recording agencies in the relevant jurisdictions,
no authorization or approval of or filing with or notice to any governmental authority or regulatory body is required either (i)
for the grant by such Pledgor of, or the effectiveness of, the Security Interest granted hereby or for the execution, delivery
and performance of this Agreement by such Pledgor or (ii) for the perfection of or exercise by the Pledgees of their rights and
remedies hereunder.

 

(g)       Effective
on the date of execution of this Agreement, such Pledgor hereby authorizes the Agent to file one or more financing statements under
the UCC with respect to the Security Interest with the proper filing and recording agencies in the relevant jurisdictions, and
in such other jurisdictions as may be requested by the Pledgees.

 

(h)       Such
Pledgor will not transfer, pledge, hypothecate, sell or otherwise dispose of any of the Pledged Collateral without the prior written
consent of the Pledgees.

 

(i)       Such
Pledgor shall promptly execute and deliver to the Pledgees such further assignments, security agreements, financing statements
or other instruments, documents, certificates and assurances and take such further action as the Pledgees may from time to time
request and may in its sole discretion deem necessary to perfect, protect or enforce its security interest in the Pledged Collateral.

 

(j)       Such
Pledgor shall promptly notify the Pledgees, in sufficient detail, upon becoming aware of any attachment, garnishment, execution
or other legal process levied against any Pledged Collateral and of any other information received by such Pledgor that may materially
affect the Security Interest or the rights and remedies of the Pledgees hereunder.

 

(k)       All
information heretofore, herein or hereafter supplied to the Pledgees by or on behalf of such Pledgor with respect to the Pledged
Collateral is accurate and complete in all material respects as of the date furnished.

 

 

 

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SECTION
5.Further Assurances. Each Pledgor agrees that at any time and from time to time, at the expense of such Pledgor,
the Pledgor shall promptly execute and deliver all further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Agent and/or the Pledgees may reasonably request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable the Agent and/or Pledgee to exercise and enforce their rights and
remedies hereunder with respect to any Pledged Collateral. The Company agrees that at any time and from time to time, at the expense
of the Company, the Company shall promptly execute and deliver all further instruments and documents, and take all further action,
that may be necessary or desirable, or that the Agent and/or the Pledgees may reasonably request in order to perfect and protect
any security interest granted or purported to be granted hereby or to enable the Agent and/or Pledgee to exercise and enforce their
rights and remedies hereunder with respect to any Pledged Collateral. The Company shall not issue any additional securities to
any Pledgor, unless the contemporaneous with such issuance, such securities are delivered to the Agent and pledged hereunder. Upon
any such issuance, any such new securities shall be “Pledged Collateral” hereunder.

 

SECTION
6.Dividends and Voting Rights

 

(a)       The
Pledgees agree that unless an Event of Default, as defined in the Notes, shall have occurred and be continuing, the Pledgor may,
to the extent the Pledgor has such right as a holder of the Pledged Collateral, vote and give consents, ratifications and waivers
with respect thereto, and from time to time, upon request from the Pledgor, the Agent shall deliver to the Pledgor suitable proxies
so that the Pledgor may cast such votes, consents, ratifications and waivers.

 

(b)       The
Pledgee agrees that the Pledgor may, unless an Event of Default shall have occurred and be continuing, receive and retain all cash
dividends and other distributions with respect to the Pledged Shares.

 

SECTION
7.Agent Appointed Attorney-in-Fact. The Pledgors hereby appoints the Agent the Pledgor's attorney-in-fact,
with full authority in the place and stead of the Pledgors and in the name of the Pledgors or otherwise, from time to time during
the continuance of an Event of Default in the Agent's discretion to take any action and to execute any instrument which the Agent
may deem necessary or advisable to accomplish the purposes of this Agreement, including, without limitation, to receive, endorse
and collect all instruments made payable to the Pledgors representing any dividend, interest payment or other distribution in respect
of the Pledges Shares or any part thereof and to give full discharge for the same (but the Agent shall not be obligated to and
shall have no liability to the Pledgor or any third party for failure to do so or take action). Such appointment, being coupled
with an interest, shall be irrevocable. The Pledgor hereby ratifies all that said attorneys shall lawfully do or cause to be done
by virtue hereof.

 

SECTION
8.Pledgee May Perform. If any Pledgor fails to perform any agreement contained herein, the Agent and/or Pledgees
may itself perform, or cause performance of, such agreement, and the expenses of the Agent and/or Pledgees incurred in connection
therewith shall be payable by such Pledgor.

 

SECTION
9.The Agent's Duties. The duties and rights of the Agent are as set forth on Annex A attached hereto and
incorporated herein by reference. Any fees of the Agent for its services hereunder shall be paid by the Company. The powers conferred
on the Agent hereunder are solely to protect the interests of the Pledgees in the Pledged Collateral and shall not impose any duty
upon the Agent to exercise any such powers. Except for the safe custody of any Pledged Collateral in its possession and the accounting
for moneys it actually received hereunder, neither the Agent nor Pledgees shall have any duty as to any Pledged Collateral, as
to ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to
any Pledged Collateral, whether or not such party has or is to have knowledge of such matters, or as to the taking of any necessary
steps to preserve rights against any parties or any other rights pertaining to any Pledged Collateral. The Agent and Pledgees shall
be deemed to have exercised reasonable care in the custody and preservation of any Pledged Collateral in its possession if such
Pledged Collateral are accorded treatment substantially equal to that which such party accords its own property.

 

 

 

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SECTION
10.Remedies upon Event of Default. Upon and after the occurrence of any Event of Default:

 

(a)       The
Agent may exercise in respect of the Pledged Collateral, in addition to other rights and remedies provided for herein or otherwise
available to the Agent, all the rights and remedies of Agent on default under the UCC, and may also sell the Pledged Collateral
or any part thereof at public or private sale, at any exchange, broker's board or at any of the Agent's offices or elsewhere, for
cash, on credit or for future delivery, and upon such other terms as the Agent may deem commercially reasonable upon at least ten
(10) days’ notice to such Pledgor of the time and place of any public sale or the time after which any private sale is to
be made. The Agent shall not be obligated to make any sale of Pledged Collateral regardless of notice of sale having been given.
The Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it was so adjourned. Each Pledgor acknowledges and agrees
that the Pledged Collateral consisting of the Pledged Shares, and/or any other shares of common stock of the Company, is of a type
customarily sold on a recognized market, and accordingly that no notice of the sale thereof need be given. In addition, Agent may
transfer all of the Pledged Collateral to Pledgees, who may hold all of such Pledged Collateral as payment in full of the Obligations.

 

(b)       Any
cash held by the Agent or the Pledgees as Pledged Collateral and all cash proceeds received by the Agent or the Pledgees in respect
of any sale of, collection from, or other realization upon all or any part of the Pledged Collateral may, in the discretion of
the Agent or the Pledgees, be held as collateral for, and/or then or at any time thereafter be applied (after payment of any amounts
payable pursuant to Section 11) in whole or in part against, all or any part of the Obligations. Any surplus of such cash or cash
proceeds held by the Agent or the Pledgees and remaining after payment in full of all the Obligations shall be paid over to the
Pledgors, pro-rata, or to whomsoever may be lawfully entitled to receive such surplus, within five business days after such determination
has been made that a surplus exists.

 

SECTION
11.Expenses. The Company shall upon demand pay to the Agent and/or the Pledgees the amount of any and all reasonable
expenses, including reasonable attorneys’ fees and expenses and the reasonable fees and expenses of any experts and agents,
which the Agent and/or Pledgee may incur in connection with (a) the administration of this Agreement, (b) the custody or preservation
of, or the sale of, collection from, or other realization upon, any of the Pledged Collateral, (c) the exercise or enforcement
of any of the rights of the Agent and/or Pledgee hereunder or (d) the failure by any Pledgor to perform or observe any of the provisions
hereof.

 

SECTION
12.Continuing Security Interest; Termination. This Agreement shall create a continuing security interest in the
Pledged Collateral and shall remain in full force and effect until the indefeasible payment in full of the Obligations (the “Termination
Date”). On the Termination Date (i) the security interest granted hereby shall terminate and all rights to the Pledged
Collateral shall revert to the Pledgors and (ii) the Agent shall deliver to each Pledgor their respective Pledged Shares and any
and all necessary stock powers required to assign the Pledged Shares back into the name of each Pledgor. Upon any such termination,
the Agent shall, at the Pledgors’ expense, return, pro-rata, to the Pledgors such of the Pledged Collateral as shall not
have been sold or otherwise applied pursuant to the terms hereof and execute and deliver to the Pledgors such documents as the
Pledgors shall reasonably request to evidence such termination.

 

SECTION
13.Governing Law; Terms. For the convenience of the Agent, this Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, without regard to principles of conflict of laws. Each Pledgor agrees to
submit to the in personam jurisdiction of the state and federal courts situated within the City of New York, State of New
York with regard to any controversy arising out of or relating to this Agreement. Unless otherwise defined herein, terms defined
in Article 9 of the UCC are used herein as therein defined.

 

SECTION
14.Notice. All notices and other communications hereunder shall be in writing and shall be deemed to have been
received when delivered personally (which shall include, without limitation, via express overnight courier) or if mailed, three
(3) business days after having been mailed by registered or certified mail, return receipt requested, postage prepaid, to the addresses
of the parties as set forth herein.

 

SECTION
15.Indemnity. Each Pledgor, jointly and severally, agrees to indemnify and hold harmless the Agent, the Pledgees
and their respective heirs, successors and assigns against and from all liabilities, losses and costs (including, without limitation,
reasonable attorneys' fees) arising out of or relating to the taking or the failure to take action in respect of any transaction
effected under this Agreement or in connection with the lien provided for herein, including, without limitation, any and all excise,
sales or other taxes which may be payable or determined to be payable with respect to any of the Pledged Collateral, except to
the extent resulting from their gross negligence or intentional misconduct. The liabilities of the Pledgors under this Section
shall survive the termination of this Agreement.

 

 

 

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SECTION
16.Severability. The provisions of this Agreement are severable. If any provision of this Agreement is held invalid
or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall affect only such provision,
or part thereof, in such jurisdiction, and shall not in any manner affect such provision or part thereof in any other jurisdiction,
or any other provision of this Agreement in any jurisdiction.

 

SECTION
17.Counterparts. This Agreement may be executed in several counterparts, each of which shall be considered an
original, but all of which together shall constitute one and the same instrument.

 

SECTION
18.Amendments; Entire Agreement. This Agreement is subject to modification only by a writing signed by the parties.
To the extent any provision of this Agreement conflicts with any provision of the Notes, the provision giving Pledgees greater
rights or remedies shall govern, it being understood that the purpose of this Agreement is to add to, and not detract from, the
rights granted to Pledgees under the Notes. This Agreement and the other Transaction Documents constitute the entire agreement
of the parties with respect to the subject matter of this Agreement.

 

SECTION
19.Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, executors, legal representatives, successors and assigns; provided, however, that no
Pledgor may, without the prior written consent of the Pledgees, assign or delegate any rights, powers, duties or obligations hereunder,
and any such purported assignment or delegation without such consent shall be null and void.

 

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LEFT BLANK]

 

 

 

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IN WITNESS WHEREOF,
the parties hereto have duly executed and delivered this Agreement as of the date first above written.

 

	 	PLEDGORS:
	 	 
	 	__________________________
	 	Print Name:  Darren Marks
	 	Address for Notice: 
	 	5200 Town Center Circle, Tower One, Suite 306
	 	Boca Raton, FL 33486
	 	 
	 	 
	 	__________________________
	 	Print Name:  Melvin Leiner
	 	Address for Notice:
	 	5200 Town Center Circle, Tower One, Suite 306
	 	Boca Raton, FL 33486
	 	 
	 	THE COMPANY:
	 	 
	 	Grom Social Enterprises, Inc.  
	 	 
	 	By: _________________________
	 	Name:  Darren Marks
	 	Title:  Chairman / CEO
	 	 
	THE AGENT:	 
	Corporate Stock Transfer, Inc.	 
	 	 
	By: ______________________________	 
	Name:  Carylyn Bell	 
	Title: President	 

 

 

 

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SCHEDULE A

 

	Name of Pledgee	Principal Amount of Note

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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SCHEDULE B

 

Pledged
Shares

 

	Pledgor:	Number of Shares:	Certificate Number:

 

 

 

 

 

 

 

 

 

 

 

 

    	 	8	 

     

    

 

ANNEX A

 

to

 

PLEDGE

 

AGREEMENT

 

THE AGENT

 

1. Appointment.
The Pledgees (all capitalized terms used herein and not otherwise defined shall have the respective meanings provided in the Pledge
Agreement to which this Annex A is attached (the "Agreement")), by their acceptance of the benefits of the Agreement,
hereby designate Corporate Stock Transfer Inc. located in Denver, Colorado (the “Agent”) as the Agent to act
as specified herein and in the Agreement. The Pledgee shall be deemed irrevocably to authorize the Agent to take such action on
its behalf under the provisions of the Agreement and any other Transaction Document (as such term is defined in the Purchase Agreement)
and to exercise such powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of
the Agent by the terms hereof and thereof and such other powers as are reasonably incidental thereto. The Agent may perform any
of its duties hereunder by or through its agents or employees.

 

2. Nature of Duties.
The Agent shall have no duties or responsibilities except those expressly set forth in the Agreement. Neither the Agent nor any
of its partners, members, shareholders, officers, directors, employees or agents shall be liable for any action taken or omitted
by it as such under the Agreement or hereunder or in connection herewith or therewith, be responsible for the consequence of any
oversight or error of judgment or answerable for any loss, unless caused solely by its or their gross negligence or willful misconduct
as determined by a final judgment (not subject to further appeal) of a court of competent jurisdiction. The duties of the Agent
shall be mechanical and administrative in nature; the Agent shall not have by reason of the Agreement or any other Transaction
Document a fiduciary relationship in respect of any Pledgor or any Pledgee; and nothing in the Agreement or any other Transaction
Document, expressed or implied, is intended to or shall be so construed as to impose upon the Agent any obligations in respect
of the Agreement or any other Transaction Document except as expressly set forth herein and therein.

 

3. Lack of Reliance
on the Agent. Independently and without reliance upon the Agent, each Pledgee, to the extent it deems appropriate, has made
and shall continue to make (i) its own independent investigation of the financial condition and affairs of the Company and its
subsidiaries in connection with the Pledgee’s investment in the Company, the creation and continuance of the Obligations,
the transactions contemplated by the Transaction Documents, and the taking or not taking of any action in connection therewith,
and (ii) its own appraisal of the creditworthiness of the Company and its subsidiaries, and of the value of the Pledged Collateral
from time to time, and the Agent shall have no duty or responsibility, either initially or on a continuing basis, to provide any
Pledgee with any credit, market or other information with respect thereto, whether coming into its possession before any Obligations
are incurred or at any time or times thereafter. The Agent shall not be responsible to the Pledgors or any Pledgee for any recitals,
statements, information, representations or warranties herein or in any document, certificate or other writing delivered in connection
herewith, or for the execution, effectiveness, genuineness, validity, enforceability, perfection, collectibility, priority or sufficiency
of the Agreement or any other Transaction Document, or for the financial condition of the Company or the value of any of the Pledged
Collateral, or be required to make any inquiry concerning either the performance or observance of any of the terms, provisions
or conditions of the Agreement or any other Transaction Document, or the financial condition of the Company, or the value of any
of the Pledged Collateral, or the existence or possible existence of any default or Event of Default under the Agreement, the Note
or any of the other Transaction Documents.

 

4. Certain Rights
of the Agent. The Agent shall have the right to take any action with respect to the Pledged Collateral, on behalf of the Pledgees.
To the extent practical, the Agent shall request instructions from the Pledgees with respect to any material act or action (including
failure to act) in connection with the Agreement or any other Transaction Document, and shall be entitled to act or refrain from
acting in accordance with the instructions of a Majority in Interest; if such instructions are not provided despite the Agent’s
request therefor, the Agent shall be entitled to refrain from such act or taking such action, and if such action is taken, shall
be entitled to appropriate indemnification from the Pledgees in respect of actions to be taken by the Agent; and the Agent shall
not incur liability to any person or entity by reason of so refraining. Without limiting the foregoing, (a) no Pledgee shall have
any right of action whatsoever against the Agent as a result of the Agent acting or refraining from acting hereunder in accordance
with the terms of the Agreement or any other Transaction Document, and the Company or Pledgors shall have no right to question
or challenge the authority of, or the instructions given to, the Agent pursuant to the foregoing and (b) the Agent shall not be
required to take any action which the Agent believes (i) could reasonably be expected to expose it to personal liability or (ii)
is contrary to this Agreement, the Transaction Documents or applicable law.

 

 

 

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5. Reliance. The
Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, statement, certificate,
telex, teletype or telecopier message, cablegram, radiogram, order or other document or telephone message signed, sent or made
by the proper person or entity, and, with respect to all legal matters pertaining to the Agreement and the other Transaction Documents
and its duties thereunder, upon advice of counsel selected by it and upon all other matters pertaining to this Agreement and the
other Transaction Documents and its duties thereunder, upon advice of other experts selected by it. Anything to the contrary notwithstanding,
the Agent shall have no obligation whatsoever to any Pledgee to assure that the Pledged Collateral exists or is owned by the Pledgors
or is cared for, protected or insured or that the liens granted pursuant to the Agreement have been properly or sufficiently or
lawfully created, perfected, or enforced or are entitled to any particular priority.

 

6. Indemnification.
To the extent that the Agent is not reimbursed and indemnified by the Company or the Pledgors, the Pledgees will jointly and severally
reimburse and indemnify the Agent from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against
the Agent in performing its duties hereunder or under the Agreement or any other Transaction Document, or in any way relating to
or arising out of the Agreement or any other Transaction Document except for those determined by a final judgment (not subject
to further appeal) of a court of competent jurisdiction to have resulted solely from the Agent's own gross negligence or willful
misconduct. Prior to taking any action hereunder as Agent, the Agent may require each Pledgee to deposit with it sufficient sums
as it determines in good faith is necessary to protect the Agent for costs and expenses associated with taking such action.

 

7. Resignation by
the Agent.

 

(a) The Agent
may resign from the performance of all its functions and duties under the Agreement and the other Transaction Documents at any
time by giving 30 days' prior written notice (as provided in the Agreement) to the Pledgors and the Pledgees. Such resignation
shall take effect upon the appointment of a successor Agent pursuant to clauses (b) and (c) below.

 

(b) Upon
any such notice of resignation, the Pledgees shall appoint a successor Agent hereunder.

 

(c) If a
successor Agent shall not have been so appointed within said 30-day period, the Agent shall then appoint a successor Agent who
shall serve as Agent until such time, if any, as the Pledgees appoint a successor Agent as provided above. If a successor Agent
has not been appointed within such 30-day period, the Agent may petition any court of competent jurisdiction or may interplead
the Pledgors and the Pledgees in a proceeding for the appointment of a successor Agent, and all fees, including, but not limited
to, extraordinary fees associated with the filing of interpleader and expenses associated therewith, shall be payable by the Pledgors
on demand.

 

8. Rights with respect
to Pledged Collateral. Each Pledgee agrees with all other Pledgees and the Agent (i) that it shall not, and shall not
attempt to, exercise any rights with respect to its security interest in the Pledged Collateral, whether pursuant to any other
agreement or otherwise (other than pursuant to this Agreement), or take or institute any action against the Agent or any of the
other Pledgees in respect of the Pledged Collateral or its rights hereunder (other than any such action arising from the breach
of this Agreement) and (ii) that such Pledgee has no other rights with respect to the Pledged Collateral other than as set forth
in this Agreement and the other Transaction Documents. Upon the acceptance of any appointment as Agent hereunder by a successor
Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of
the retiring Agent and the retiring Agent shall be discharged from its duties and obligations under the Agreement.  After
any retiring Agent’s resignation or removal hereunder as Agent, the provisions of the Agreement including this Annex A shall
inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent.

 

 

 

 

 

    	 	10Exhibit 10.21

 

PURCHASE AND SALE AGREEMENT

 

This Agreement is made
as of the 12th of January 2017, nunc pro tunc January 1, 2017 (the "Effective Date") by and between Grom Holdings,
Inc., a Delaware corporation, together with a to be formed wholly owned subsidiary ("Newco") (Newco and Grom Holdings,
Inc. hereinafter jointly referred to as the "Buyer" or "Grom"), 2060 NW Boca Raton, Boulevard, Suite #6, Boca
Raton, Fl. 33431 and TeleMate.Net Software, LLC, together with its to be formed subsidiary, NetSpective
WebFilter LLC, a Georgia Limited Liability Company jointly referred to as the "Seller", 5555 Triangle Parkway, Suite
150, Norcross, GA 30092, who hereby agree as follows:

 

RECITALS

 

WHEREAS, the
Seller owns good and marketable title to certain tangible and intangible assets including software and intellectual property of
Seller's NetSpective Webfilter, its Net Auditor Reporter ("NetSpective"), its on-line services, related goodwill, patents,
applications, domain names, trademarks, source codes, website, hardware appliances (inventory) and all other documentation, process,
equipment, and know how necessary to operate the Seller's NetSpective Division in a manner consistent with its current operations.
(the "Assets"), which are more fully described in Exhibit A" and attached hereto and incorporated herein as if set
forth; and

 

WHEREAS, Buyer
desires to purchase from Seller and Seller desires to sell the Assets to Buyer pursuant to the terms and conditions contained herein;
and

 

NOW, THEREFORE,
THIS INDENTURE WITNESSETH, that in consideration of the premises and the covenants, agreements, representations, warranties
and payments hereinafter contained, the parties hereto covenant and agree as follows:

 

1.       PURCHASE AND
SALE OF ASSETS.

 

1.01. Purchase.
Upon the terms and subject to the conditions hereof, the Seller agrees to sell, assign and transfer to the Buyer and the
Buyer agrees to purchase from the Seller, all of the Seller's right, title and interest in the Assets. The form of Bill of Sale
is attached hereto and incorporated herein as Exhibit "B". Additionally, and simultaneously with the execution of this
agreement, the Seller and the Buyer shall enter into a Master Services Agreement ("MSA") and incorporated herein as Exhibit
"G," enumerating the required services that the Seller shall provide to Newco post-closing.

 

1.02. Excluded
Assets. Other than the sale and purchase of the Assets, Seller shall not sell or transfer to Buyer, and Buyer shall
not purchase nor be entitled to receive, any other asset of Seller, including but not limited to: (a) all cash, cash
equivalents, deposit accounts, bank accounts, accounts receivables, and notes receivables; (b) all licenses, permits,
approvals, authorizations, consents, orders, or filings with any governmental authority, to the extent not transferable; (c)
all insurance policies, and (d) Assets for Telemate and Predictive UC Analytics product lines included patents, applications,
domain names, trademarks, source codes, website, hardware appliances, On-line service and all other documentation, process,
equipment.

 

1.03 Assignment
of Tradename. Upon execution hereof, Seller shall also execute and deliver to Buyer that certain Assignment of Tradename,
attached hereto and incorporated herein as if set forth as Exhibit "C", in which Seller shall grant to Buyer an assignment
of all of Seller's rights, title and interest in and to the tradename "NetSpective", whether filed or otherwise, in the
State of Georgia, along with the applicable logo, a copy of which is attached hereto and incorporated herein as if set forth as
Exhibit "D".

 

2.       PURCHASE
PRICE AND PAYMENT.

 

2.01. Purchase Price.The purchase price for
the Assets shall be $1,000,000 (One Million US dollars) (the "Purchase Price"), subject to additional earn outs provided
to Seller as more fully described in Section 2.02, below herein.

 

 

 

    	 	1	 

     

    

 

2.02 Payment. Buyer shall tender the Purchase
Price to Seller as follows:

 

a.   
Upon execution hereof, Buyer shall execute and deliver in favor of Seller that certain Convertible Promissory Note in the
principal amount of One Million US Dollars ($1,000,000 USD) (the "Convertible Note"). The Convertible Note shall be convertible
at the election of the Seller into shares of Grom's Common Stock (the "Common Stock") at a conversion rate of $3.25 per
share, shall accrue interest at the rate of 0.68% per annum and all principal and accrued interest shall be due and payable three
(3) years from the Effective Date as defined herein. A copy of the Convertible Note is attached hereto as Exhibit "E".
In the event of any inconsistency between the terms described herein and the terms included in the Convertible Note, the terms
included in Convertible Note shall prevail.

 

b.  
In addition to (a) above, the Convertible Note, if not previously converted by Seller, may also be converted at the election
of the Buyer at a conversion rate of $2.00 per share, into shares of Grom's Common Stock commencing beginning on the 34th
month anniversary of the Convertible Note, through the due date of the Convertible Note.

 

c.   
In addition to the Purchase Price described above, Seller shall be entitled to receive a contingent Earnout of up to $362,500,
payable in shares of Grom Common Stock at a value of $3.25 per share if Newco achieves the following performance goals within the
first twelve months of operations following the Effective Date:

 

(i)       Attaining
$300,000 in Net Cash Flow for the twelve-month period from January 1, 2017 through December 31, 2017. "Net Cash
Flow" is defined as all cash received by the NetSpective Division; less expenses related to the MSA and all other
customary NetSpective expenses calculated in accordance with Generally Accepted Accounting Principles ("GAAP"). In
the event this threshold is attained, the Seller shall receive 61,539 shares of Grom Common Stock valued at $200,000.

 

(ii)       In the event Net
Cash Flow exceeds $375,000 during the twelve-month period from January 1, 2017 through December 31, 2017, the Seller shall receive
an additional 50,000 shares of Grom Common Stock valued at $162,500.

 

The payment of any Earnout in c(i) or c(ii)
above is also expressly contingent on TeleMate providing to Grom monthly financial statements for the NetSpective Division in accordance
with GAAP within twenty (20) days following the end of each month, as well providing the services in the MSA for the twelve-month
period from January 1, 2017 through December 31, 2017. With respect to making the NetSpective Division's financial statements auditable,
the Buyer agrees to provide their accounting expertise to the extent needed to assist the Seller to achieve GAAP financials. Additionally,
the Buyer and Seller agree to split on a 50/50 basis any out of pocket costs incurred, if necessary, to hire any outside accounting
assistance during this process capped at a maximum cost of $12,500 each to the Buyer and the Seller. The payment of these shares
if earned will be made on a date concurrent with the issuance of audited Newco financial statements expected to be received on
or about March 31, 2018.

 

If there is any dispute regarding the amount
or payment of the Earnout, the dispute shall be referred to and definitively resolved by mandatory binding arbitration as set forth
in Section 6.03(c) below.

 

3.        ASSUMED LIABILITIES AND CONTRACT TRANSFERS

 

3.01. ASSUMPTION
OF LIABILITIES. The Buyer will not assume any liabilities of the Seller whatsoever with the exception that Buyer shall assume
all of the liabilities under the contracts and agreements listed on Exhibit F.

 

3.02       CONTRACT
TRANSFERS. The Seller will transfer the current contract with RULESSPACE for the Internet Content services necessary for the
Buyer to operate NetSpective post-closing.

 

4.       REPRESENTATIONS AND WARRANTIES OF THE SELLER.

 

The Seller represents
and warrants to the Buyer as follows, with the intent that the Buyer shall rely thereon in entering into this Agreement and in
concluding the purchase and sale contemplated herein.

 

 

 

    	 	2	 

     

    

 

4.01. Corporate
Status. The Seller is a Limited Liability Company duly filed, validly existing and in good standing under the laws of the
State of Georgia and has the power and capacity to own and dispose of the Assets and to carry on the Seller's Business as now being
conducted by it and to enter into this Agreement and to carry out its terms to the full extent.

 

4.02. Authority
to Sell. The execution and delivery of this Agreement and the completion of the transaction contemplated hereby has been
duly and validly authorized by all necessary action on the part of the Seller and this Agreement constitutes a legal, valid and
binding obligation of the Seller, enforceable against the Seller in accordance with its terms except as may be limited by laws
of general application affecting the rights of creditors.

 

4.03. Sale Will
Not Cause Default. To the best of Seller's information, knowledge and belief, neither the execution and delivery of this
Agreement, nor the completion of the purchase and sale contemplated herein, will:

 

(a)        violate any of the terms and provisions of the Articles of Organization or Operating Agreement of the Seller, or any order,
decree, statute, bylaw, regulation, covenant, or restriction applicable to the Seller or any of the Assets;

 

(b)       result
in any fees, duties, taxes, assessments or other amounts relating to any of the Assets becoming due or payable other than sales
tax payable by Buyer in connection with the purchase and sale.

 

4.04. Assets.
The Seller owns and possesses and has a good and marketable title to the Assets, free and clear of all mortgages, liens,
charges, pledges, security interests, encumbrances or other claims whatsoever, whether secured or unsecured and whether arising
by reason of statute or otherwise howsoever.

 

4.05. Conformity
with Laws. Seller has not sought and obtained any governmental licenses and permits required for the conduct in the ordinary
course of the operations of the Seller's Business and the uses to which the Assets have been put.

 

4.06 Representations
Relating to the Grom Common Stock to be Issued. The Seller hereby represents, warrants, covenants and agrees as follows relative
to the Common Stock to be issued upon conversion of the Convertible Notes:

 

(a)       The Common Stock
to be acquired herein are solely for Seller's account and for investment and Seller has no plan, intention, contract, understanding,
agreement or arrangement with any person to sell, assign, pledge, hypothecate or otherwise transfer to any person the Shares, or
any portion thereof;

 

(b).        Management of Seller has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating
the merits and risks of investments generally and of the investment in the Common Stock in particular and Seller is able to bear
the economic risk of this investment with the full understanding that it can lose its entire investment;

 

(c).        Seller
understands that the Common Stock to be issued upon conversion of the Convertible Note has not been registered under the
Securities Act of 1933, as amended (the "1933 Act"), or under any state securities laws. Seller further
understand that no registration statement has been filed with the United States Securities and Exchange Commission nor with
any other regulatory authority and that, as a result, any benefit which might normally accrue to Seller by an impartial
review of such a registration statement by the Securities and Exchange Commission or other regulatory authority will not be
forthcoming. Seller understands that it cannot sell the Common Stock unless such sale is registered under the 1933 Act and
applicable state securities laws or exemptions from such registration become available. In this connection Seller understands
that the shares of Common Stock are "restricted securities" under the 1933 Act and that they may not be transferred
by me to any person without the prior consent of the Company, which consent of the Company will require an opinion of counsel
to the effect that, in the event the shares of Common Stock are not registered under the 1933 Act, any transfer as may be
proposed by Seller must be entitled to an exemption from the registration provisions of the 1933 Act. To this end, Seller
acknowledges that a legend to the following effect will be placed upon the Convertible Note and if applicable, the
certificate representing the Shares of Common Stock:

 

 

 

 

    	 	3	 

     

    

THESE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED PURSUANT TO THE PROVISIONS OF THE
ACT OR IF AN EXEMPTION FROM REGISTRATION THEREUNDER IS AVAILABLE, THE AVAILABILITY OF WHICH MUST BE ESTABLISHED TO THE SATISFACTION
OF THE COMPANY.

 

4.07. Accuracy
of Representations. No certificate furnished by or on behalf of the Seller to the Buyer at the time of closing in respect
of the representations, warranties or covenants of the Seller herein will contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements contained therein not misleading and all of the representations and warranties
of the Seller shall be true as at and as if made at the time of closing.

 

5.       COVENANTS
OF THE SELLER.

 

5.01. Conduct
of the Business. Until the time of closing, the Seller shall conduct the Seller's Business only in the ordinary course
and will use commercially reasonable efforts to preserve the Assets intact and to preserve for the Buyer its relationship with
its lessors, suppliers, customers and others having business relations with it.

 

5.02. Access
by Buyer. The Seller will give to the Buyer and Buyer's counsel, accountants and other representatives full access, during
normal business hours throughout the period prior to the time of closing, to all of the properties, books, contracts, commitments
and records of the Seller relating to all aspects of the Seller's business relevant to the Assets acquired herein and will furnish
to the Buyer during such period all such information as the Buyer may reasonably request.

 

5.03. Covenants of Indemnity.

 

(a)       For
a period of twenty-four months after the Effective Date (the "Indemnity Period"), Seller, its successors and
assigns, will indemnify and hold harmless the Buyer from and against: any and all of Seller's liabilities, whether related to
the Assets or otherwise, whether accrued, absolute, contingent or otherwise, existing at the time of closing hereof, except
those liabilities applicable to the assignments referenced in Section 1.01 and the assumptions referenced in Section 3.01,
hereinabove;

 

(ii)         any and all damage or deficiencies resulting from any misrepresentation, breach of warranty, non-fulfillment of any covenant
on the part of the Seller under this Agreement or from any misrepresentation in or omission from any certificate or other instrument
furnished or to be furnished to the Buyer hereunder; and

 

(iii)        any and all actions, suits, proceedings, demands, assessments, judgments, costs and legal and other expenses incidental
to any of the foregoing.

 

(b)       If
Buyer ("Indemnified Party") believes that it has suffered or incurred or will suffer or incur any damages
for which it is entitled to indemnification under this section, such Indemnified Party shall so notify the Seller during the Indemnity
Period with reasonable promptness and reasonable particularity in light of the circumstances then existing (any such notice, an
"Indemnification Claim Notice"). If any claim is instituted by or against a third party during the Indemnity
Period with respect to which the Indemnified Party intends to claim any damages, the Indemnified Party additionally shall notify
the Seller of such claim with reasonable promptness. Any Indemnification Claim Notice provided by an Indemnified Party to Seller
shall describe each claim or the damages related thereto (each, an "Asserted Liability") in reasonable
detail and shall indicate the amount (estimated, if necessary, and to the extent feasible) of the damages that have been or that
the Indemnified Party reasonably believes at the time may be suffered by the Indemnified Party. If the Seller objects to indemnification
of the Indemnified Party with respect to any Asserted Liability, the Seller must, within ten (10) days of receiving an Indemnification
Claim Notice deliver to each Indemnified Party, a written notice to such effect in reasonable detail (an "Indemnification
Claim Dispute Notice") and the Indemnified Party and Indemnifying Party then shall, within the thirty (30)-day period
commencing on the date of receipt by the Seller of such Indemnification Claim Dispute Notice, attempt in good faith to agree upon
the rights of the respective parties with respect to each Asserted Liability to which the Indemnifying Party has objected in the
Indemnification Claim Dispute Notice. If the Indemnified Party and the Seller succeed in reaching agreement on their respective
rights with respect to any Asserted Liabilities, then the applicable parties shall promptly prepare and execute a memorandum setting
forth such agreement with respect to each such Asserted Liability.

 

 

 

    	 	4	 

     

    

 

(c)       If the
Indemnified Party and the Seller do not succeed in reaching agreement on their respective rights with respect to any Asserted
Liabilities, any dispute arising out of Asserted Liabilities shall be referred to and definitively resolved by mandatory
binding arbitration administered by the American Arbitration Association (AAA) or J.A.M.S. in accordance with their
respective Commercial Arbitration Rules. The place of arbitration shall be an agreed upon location in Florida. The names of
at least three possible arbitrators shall be promptly provided by AAA or JAMS to the parties soon after the demand for
arbitration by either party. The parties shall agree on an arbitrator from the list provided, or either party may request
that three additional names be provided from which they may select an arbitrator. If they are unable to reach agreement as to
an arbitrator from the names provided, then AAA or JAMS may select an arbitrator from other impartials at AAA or JAMS. The
arbitrator(s) shall comply with the laws of Florida. The judgment of the arbitrator(s) shall be accompanied by a written
statement of the basis for such judgment and may be entered and enforced by any court having proper jurisdiction. The award
of the arbitrator(s) shall be final and binding and shall not be subject to de novo judicial review. It is the express intent
and understanding of the parties that each shall be entitled to enforce its respective rights under any provision hereof
through specific performance, in addition to recovering damages caused by a breach of any provision hereof, and to obtain any
and all other equitable remedies as may be awarded by the arbitrator. Notwithstanding the above, each party shall have the
right to seek provisional remedies from a court of competent jurisdiction. The provisions of this Section shall survive the
termination of this Agreement. Under no circumstances shall the arbitrator be empowered to award punitive damages.

 

(d)       All
Buyer indemnification claims for damages this Agreement shall be subject to indemnification by Seller under this Agreement only
to the extent that the cumulative amount of such claims for damages by the Indemnified Party exceeds the sum of $5,000. Buyer's
aggregate liability for claims under this Section 6.03 and other liabilities under or related to this Agreement shall not exceed
the sum of the Purchase Price and earn out paid to Seller, except for claims based on actual fraud.

 

6.       REPRESENTATIONS
AND WARRANTIES OF THE BUYER. The Buyer represents and warrants to the Seller as follows, with the intent that the Seller shall
rely thereon in entering into this Agreement and in concluding the purchase and sale contemplated herein.

 

6.01. Status
of Buyers. Grom is a corporation duly incorporated, validly existing and in good standing under the laws of the State of
Delaware and has the power and capacity to enter into this Agreement and carry out its terms. Newco is a to-be-formed wholly owned
subsidiary of Grom.

 

6.02. Authority
to Purchase. The execution and delivery of this Agreement and the completion of the transaction contemplated hereby has
been duly and validly authorized by all necessary corporate action on the part of the Buyer and this Agreement constitutes a legal,
valid and binding obligation of the Buyer, enforceable against the Buyer in accordance with its terms except as limited by laws
of general application affecting the rights of creditors.

 

6.03. Sale
Will Not Cause Default. Neither the execution and delivery of this Agreement, nor the completion of the purchase and sale
contemplated herein, will:

 

(a)        violate any of the terms and provisions of the articles of Incorporation or bylaws of the Buyer, or any order, decree, statute,
bylaw, regulation, covenant, or restriction applicable to the Buyer;

 

(b)       
result in any fees, duties, taxes, assessments or other amounts relating to any of the Assets becoming due or payable other
than sales tax payable by Buyer in connection with the purchase and sale.

 

6.04. Accuracy
of Representations. No certificate furnished by or on behalf of the Buyer to the Seller at the time of closing in respect
of the representations, warranties or covenants of the Buyer herein will contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements contained therein not misleading and all of the representations and warranties
of the Buyer shall be true as at and as if made at the time of closing.

 

6.05 Buyer's
Indemnification of Seller. The Buyer, its successors and assigns, will indemnify and hold harmless the Seller and its shareholders
(in the case of Seller's voluntary dissolution or liquidation), from and against any and all damage or deficiencies resulting from
any misrepresentation, breach of warranty, non-fulfillment of any covenant on the part of Buyer under this Agreement or from any
misrepresentation in or omission from any certificate or other instrument furnished or to be furnished to the Seller hereunder.

 

 

 

    	 	5	 

     

    

 

6.06 Authority
to Issue Common Shares. The Buyer has taken all corporate actions necessary to duly and validly issue all Common Stock
issuable under the Convertible Promissory Note and under Section 2.02 c. of this Agreement.

 

6.07 Valid Issuance.
The Common Stock to be issued in connection with this Agreement will, when issued in accordance with the provisions of
this Agreement, be validly issued, fully paid and non-assessable. If and when an exemption from registration becomes available
the Buyer will, at its sole cost and one time only, arrange for the removal of any restrictive legend from any Grom stock certificate
issued to the Seller relevant herein.

 

7.       SURVIVAL OF REPRESENTATIONS,
WARRANTIES AND COVENANTS.

 

7.01. Seller's
Representations, Warranties and Covenants. All statements contained in any certificate or other instrument delivered by
or on behalf of the Seller pursuant hereto or in connection with the transactions contemplated hereby shall be deemed to be representations
and warranties by the Seller. All representations, warranties, covenants and agreements made by the Seller in this Agreement or
pursuant hereto shall, unless otherwise expressly stated, survive the time of closing and any investigation at any time made by
or on behalf of the Buyer and shall continue in full force and effect for the benefit of the Buyer for a period of twenty-four
months after the Effective Date.

 

7.02. Buyer's
Representations, Warranties and Covenants. All statements contained in any certificate or other instrument delivered by
or on behalf of the Buyer pursuant hereto or in connection with the transactions contemplated hereby shall be deemed to be representations
and warranties by the Buyer. All representations, warranties, covenants and agreements made by the Buyer in this Agreement or pursuant
hereto shall, unless otherwise expressly stated, survive the time of closing and any investigation at any time made by or on behalf
of the Seller and shall continue in full force and effect for the benefit of the Seller.

 

8.       CONDITIONS
PRECEDENT TO THE OBLIGATIONS OF THE BUYER. All obligations of the Buyer under this Agreement are subject to the fulfillment
at or prior to the time of closing of the conditions hereinafter enumerated.

 

8.01. Seller's
Representations and Warranties. The Seller's representations and warranties contained in this Agreement and in any certificate
or document delivered pursuant to the provisions hereof or in connection with the transactions contemplated hereby shall be true
at and as at the time of closing as if such representations and warranties were made at and as of such time.

 

8.02. Seller's
Covenants. The Seller shall have performed and complied with all agreements, covenants and conditions required by this
Agreement to be performed or complied with by it prior to or at the time of closing. Grom shall ensure that its certificate of
incorporation and all amendments to such certificate of incorporation authorizes sufficient shares of Common Stock that is unissued
to cover the maximum amount of shares into which the Convertible Note may be converted.

 

The foregoing conditions
are for the exclusive benefit of the Buyer and any such condition may be waived in whole or in part by the Buyer at or prior to
the time of closing by delivering to the Seller a written waiver to that effect signed by the Buyer.

 

9.       CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SELLER. All obligations of the Seller under this Agreement are subject
to the fulfillment, prior to the time of closing, of the conditions hereinafter enumerated.

 

9.01. Buyer's
Representations and Warranties. The Buyer's representations and warranties contained in this Agreement and in any certificate
or document delivered pursuant to the provisions hereof or in connection with the transactions contemplated hereby shall be true
at and as at the time of closing as if such representations and warranties were made at and as of such time. Each of the foregoing
conditions are for the exclusive benefit of the Seller and any such condition may be waived in whole or in part by the Seller at
or prior to the time of closing by delivering to the Buyer a waiver to that effect signed by the Seller.

 

9.02. Buyer's
Covenants. The Buyer shall have performed and complied with all covenants, agreement and conditions required by this Agreement
to be performed or complied with by it at or prior to the time of closing.

 

 

 

    	 	6	 

     

    

 

9.03. Closing Date. The Agreement shall
have closed on or by January 15, 2017.

 

9.04. Buyer Approval.
The transactions contemplated by this Agreement shall have been duly and validly approved by Grom's Board of Directors
and this Agreement shall have been duly and validly adopted as required by Delaware Law.

 

9.05. Illegality.
No temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction
or other legal or regulatory restraint or prohibition preventing the consummation of the transactions contemplated by this Agreement
shall be in effect, nor shall any action have been taken by any governmental entity or authority seeking any of the foregoing and
no statute, rule, regulation or order shall have been enacted, entered, enforced or deemed applicable to the transactions contemplated
by this Agreement, that makes the consummation of the transactions contemplated by this Agreement illegal.

 

9.06. Governmental
Approvals. Grom and Newco shall have timely obtained from each governmental entity or authority all approvals, waivers
and consents, if any, necessary for consummation of, or in connection with, the transactions contemplated by this Agreement.

 

9.07. Certificates.
Grom and Newco shall have delivered to Seller certificates, dated as of the Closing Date, executed on behalf of Grom and
Newco by duly authorized officers of Grom and Newco to the effect that each of the conditions set forth in this Section 10.
has been satisfied.

 

9.08. Resolutions.
Grom and Newco shall have delivered to Seller certificates, dated as of the Closing Date and executed on behalf of Grom
and Newco by their Secretaries, certifying Grom's and Newco's (A) certificates of incorporation, (B) bylaws, (C) board resolutions
approving this Agreement and declaring the advisability thereof, and (D) other matters in the Seller's reasonable discretion.

 

10.       CLOSING.

 

10.01. Time of
Closing. Subject to the terms and conditions hereof, the purchase and sale of the Assets shall be completed at a closing
to be held on January 13th, 2017

 

10.02. Place
of Closing. The closing shall take place at the offices of Telemate.Net Software, 5555
Triangle Pkwy, Suite 150, Norcross, GA 30092.

 

10.03. For Delivery by the Seller. Seller shall
deliver to Buyer the following at Closing:

 

a.        a duly executed Bill of Sale;

 

b.       a duly executed Assignment of Tradename

 

10.04 For Delivery by the Buyer. Buyer shall deliver
to Seller the following at Closing:

 

a.       a duly executed Convertible Promissory Note.

 

b.        Delivery of the Master Services Agreement

 

c.       the Certificates described in Sections 10.07 and 10.08.

 

11.       POST-CLOSING COVENANTS.

 

11.01 Notices
of Certain Events. From and after the Closing Date, Grom and Newco shall promptly notify Seller of: (a) any notice or other
communication from any Person challenging the transactions contemplated by this Agreement or making any claims in connection therewith
or related thereto; (b) any notice or other oral or written communication from any governmental authority in connection with or
relating to the transactions contemplated by this Agreement; or(c) any event, condition or circumstance that constitutes, or could
be deemed to have constituted as of the Closing Date, a breach or violation of any representation, warranty, or covenant of a party
under this Agreement. (d).

 

 

 

    	 	7	 

     

    

 

11.02 Post Closing Items.

 

(a)       Grom and Newco shall pay all sales and/or use taxes imposed on the sale of assets under this Agreement and all documentary
state, county and local transfer taxes and recording taxes relating to the transactions and documents contemplated herein.

 

(b)       All covenants, representations and warranties given by Grom and/or Newco under this Agreement shall survive the execution
and delivery of this Agreement and the Closing until the later of the date which is (x) six (6) years from the Closing Date or
(y) ninety (90) days after the respective applicable statute of limitations has expired.

 

(c)       Within sixty (60) days after the Closing, Seller shall deliver to Buyer a schedule that allocates the value of the consideration
among the assets sold to Newco (the "Purchase Price Allocation") in accordance with the principles of Section 1060 of
the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder ("Section 1060"). Any subsequent
adjustments to the amount of the consideration for the assets shall be reflected in the Purchase Price Allocation in a manner consistent
with Section 1060 as determined by Seller. Grom, Newco and Seller shall file the Asset Acquisition Statement prepared by Seller,
and the parties hereby agree that no party shall take a position that is inconsistent with the Purchase Price Allocation in any
filings, declarations or reports with the Internal Revenue Service, and such parties hereby agree to make consistent use of such
allocation for all tax purposes.

 

12.       NOTICES.
All notices required or permitted to be given hereunder shall be in writing and personally delivered to the address of the
intended recipient set forth on the first page hereof, or at such other address as may from time to time be notified by any of
the parties hereto in the manner herein provided.

 

13.       ENTIRE AGREEMENT. This Agreement constitutes the entire Agreement between the parties and there are no representations
or warranties, express or implied, statutory or otherwise and no agreements collateral hereto other than as expressly set forth
or referred to herein.

 

14.       TIME
OF THE ESSENCE. Time shall be of the essence of this Agreement.

 

15.       APPLICABLE
LAW. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Delaware.

 

16.       SUCCESSORS
AND ASSIGNS. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective
successors and assigns.

 

17.       CAPTIONS.The captions appearing in this Agreement are inserted for convenience of reference only and shall not affect
the interpretation of this Agreement.

 

18.       ATTORNEY
FEES. If a dispute arises between the parties hereto and such dispute can only be resolved by litigation then, in such case,
the prevailing party in such litigation shall be entitled to recover all costs of such action, including but not limited to, reasonable
attorney's fees.

 

19.      COUNTERPARTS
FACSIMILE EXECUTION. For purposes of this Agreement, a document (or signature page thereto) signed and transmitted
electronically or by facsimile machine or telecopier is to be treated as an original document. The signature of any party thereon,
for purposes hereof, is to be considered as an original signature, and the document transmitted is to be considered to have the
same binding effect as an original signature on an original document. At the request of any party, a facsimile or telecopy document
is to be re-executed in original form by the parties who executed the facsimile or telecopy document. No party may raise the use
of a facsimile machine or telecopier machine as a defense to the enforcement of the Agreement or any amendment or other document
executed in compliance with this Section.

 

[Remainder of Page intentionally left blank

 

 

    	 	8	 

     

    

 

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

 

 

GROM HOLDINGS, INC.

 

 

By: /s/ Melvin Leiner         Date        

Melvin
Leiner, Executive Vice President

 

TELEMATE.NET SOFTWARE, LLC.

 

 

By: /s/ Steven Tabaska       Date
 1/12/17

Its Steven Tabaska, Manager LLC & CEO

 

 

 

NetSpective WebFilter, LLC

 

 

By: /s/ Steven Tabaska       Date
1/12/17

Its Steven Tabaska, Manager LLC & CEO

 

 

 

 

    	 	9	 

     

    

 

EXHIBIT A1

ASSETS - INVENTORY

 

NetSpective Appliance
Inventory at Unicomm Engineering - NEI

 

	Description/Issued
    Serial Number	Model	Qty	Dollar
    Value
	Finished
    Goods (NNG00162910261)	15H1	1	$5,338.31
	Inland
    (NNG00142410127, NNG00142410128)	12H	2	$4,964.40
	(NNG00144810025.26,28,29,30,NGG00
    143210001)	12Q	5	$5,318.05
	 	Total
    Value	$15,620.75

 

NetSpective Appliance
Inventory - Evaluation Stock

 

	Serial
    Number	Model	Qty	Dollar
    Value
	NNG00121610180	15R-
    Engineering	1	$1,278.11
	NING00115210233	15H1-
    Engineering	1	$5,338.31
	NNG00163010204	15R
    EVAL - Riverside	1	$1.278.11
	NNG00162910092	15R
    EVAL- Riverside	1	$1,278.11
	NNG00162710095	15R
    EVAL - Golden West Technologies	1	$1.278.11
	NNG00151910018	15R
    EVAL - Ednetics Inc	1	$1.278.11
	NNG00163010205	15R
    EVAL - Webb City Schools	1	$1,278.11
	NNG00163010203	15R
    EVAL - Webb City Schools	1	$1,278.11
	NNG001161210413	15R
    EVAL - PT Nusargara Utama	1	$1,278.11
	NNG001613113008	15R
    EVAL - Mukilteo School District	1	$1278.11
	 	Total
    Value	$16,141.30

 

 

 

 

    	 	10	 

     

    

Netpective Appliance
Inventory - Equipment in Quality Assurance

 

	Serial
    Number	Model	Qty	Dollar
    Value
	NNG00152710242	15R
    - QA	1	$1,278.11
	NNG00134910375	12D
    - QA	1	$976.20
	NNG00144810071	12D
    - QA	1	$976.20
	 	Total
    Value	$3,230.51

 

Netspective Legacy
Appliance Inventory - Evaluation Stock

 

	Serial
    Number	Model	Oty	Dollar
    Value
	NNG00121610180	6D	1	$866.78
	NNG000115210233	6Q

        
	1	$966.72
	NNG00142410098	12D	1	$976.20
	NNG001334101540	12D	1	$976.20
	NNG00123410332D	6D	1	$866.78
	NNG00121610182	6D	1	$866.28
	NNG00122210296	6Q	1	$966.72
	 	Total
    Value	$3,230.51

 

Ordered Inventory
(not yet built, shipped, Invoiced or paid for) at Unicomm Engineering - NEI

 

	Description/Issued
    Serial Number	Model	Qty	Dollar
    Value
	Work
    in Progress	15R	5	$6,390.55
	Pending
    First Article	16HI	1	$4,650.00
	Finished
    Goods (NNG00165210206, NNG00165210207)	16HI	2	$9,300.00
	 	Total
    Value	$20,340.55

 

 

	SUMMARY	 
	Inventory
    at the Manufacturer Facility	 	$15,680.76
	Inventory
    at Customer Prospect - Evaluation	 	$16,840.30
	Legacy
    Inventory for Repair/Return	 	$3,230.51
	 	 	 	$6,486.18
	 	Total
    Inventory	$42,178.78
	 	 	 
	Ordered/Committed
    Inventory / not Invoiced	 	$20,340.55

 

 

    	 	11	 

     

    

 

EXHIBIT A2

ASSETS - All Other Assets Excluding Inventory

 

	1)	Software for the NetSpective WebFilter

	2) 	Software for the NetAuditor

	3)	Software for On-Line Services (OLS) supporting NetSpective

	4)	Hardware Servers in the OLS supporting NetSpective

	a)	DELL PowerEdge R710, ESXi Server — ATLO2ESX04

	b)	DELL PowerEdge R720xd, ESXi Server — ATLO2ESX05

 

 

 

 

 

 

 

 

 

    	 	12	 

     

    

 

EXHIBIT "B"

FORM OF BILL OF SALE

 

BILL OF SALE dated
January 12, 2017 from TeleMate.Net Software, LLC, a Georgia Limited Liability Company (the "Seller")
to Grom Holdings, Inc., its successors and assigns, a Delaware corporation (the "Buyer").

 

WITNESSETH, that in
exchange for good and valuable consideration, the receipt of which is hereby acknowledged by Seller, Seller hereby sells, conveys,
transfers, assigns and delivers to Buyer, its successors and assigns, to have and hold forever the following personal property
in which Seller has good and marketable title, free and clear of all liens and encumbrances.

 

See Exhibit "A" attached hereto

 

IN WITNESS WHEREOF,
the parties hereto have caused this Bill of Sale to be signed the day and year first above written.

 

	 	 

SELLER: TeleMate.Net
Software, LLC

 

 

By: /s/ Steven Tabaska

Steven Tabaska, Manager of LLC & CEO

 

 

BUYER: GROM HOLDINGS, INC.

 

By: /s/ Melvin Leiner

 

Melvin Leiner, Executive Vice President

 

 

 

 

 

    	 	13	 

     

    

 

EXHIBIT "C"

ASSIGNMENT OF REGISTRATION
TRADE NAME

This Agreement is made as
of the 1st of January 2017 ("Effective Date") by and between Grom Holdings, Inc., a Delaware corporation, together
with a to be formed wholly owned subsidiary ("Newco") (Newco and Grom Holdings, Inc. hereinafter jointly referred
to as the "Assignee" or "Grom"), 2060 NW Boca Raton, Boulevard, Suite #6, Boca Raton, Fl. 33431 and TeleMate.Net Software,
LLC, together with its duly formed subsidiary NetSpective WebFilter, a Georgia Limited Liability Company jointly referred to
as the "Assignor", 5555 Triangle Parkway, Suite 150, Norcross, GA 30092, who hereby agree as follows:

Trade name to be assigned: NetSpective WebFilter

RECITALS

 

Whereas,  TeleMate.Net
Software LLC, 5555 Triangle Pkwy. Suite 150 Norcross GA 30092 has adopted, used and is using the trade name, which is registered
with the Georgia Secretary of State, and whereas: Grom Holding Inc, 2060 NW Boca Raton, Boulevard, Suite #6, Boca Raton, Fl.
33431 desires to acquire said trade name and registration thereto; and

 

Whereas, TeleMate.Net
Software LLC  is the sole member of NetSpective WebFilter LLC and has the rights, title and interest in the trade name to
be assigned; and

 

Now, therefore, for good
and valuable consideration, receipt of which is hereby acknowledged, the Assignor does hereby assign to the Assignee
all right, title and interest in and to said trade name.

 

Assignor:

 

/s/ Steven Tabaska       1/12/17

Steven Tabaska, manager of LLC and CEO

 

Assignee:

 

______________________________

Melvin Leiner, Executive Vice President

 

1) TRADEMARK

 

The Seller
has not registered the Trademark. The name NetSpective has been in uses by another company, unrelated to the Seller, since the
product launch in 2001. The Seller has used "NetSpective Webfilter" as the product name and the only protection has been
a copyright ©. The Seller assigns all rights to the copyright © to the Buyer. Seller agrees to execute all papers and
to perform such other proper acts as Buyer may deem necessary to secure for Buyer or her successors and assigns the rights herein
assigned.

 

 

 

 

 

 

 

 

    	 	14	 

     

    

 

EXHIBIT "D"

 

ASSIGNMENT OF LOGO

 

This Copyright Assignment agreement
is made between Telemate.Net Software LLC ("Seller") and Grom Holding Inc. ("Buyer").
Seller represents and warrants that they are the sole creator and owner of the logos and or website graphic elements designed and
created for NetSpective WebFilter product line and attached hereto as an exhibit (the "Works") and Seller holds the complete
and undivided copyright interest in and to the Works. For valuable consideration, receipt and sufficiency of which are hereby acknowledged,
Buyer and Seller agree as follows:

 

1.  
Seller does hereby assign and agree to assign and transfer to Buyer, its successors and assigns, the entire right, title
and interest in and to the copyright in the Works and any registrations and copyright applications relating thereto and any renewals
and extensions thereof, and in and to all works based upon, derived from, or incorporating the Works, and in and to all income,
royalties, damages, claims and payments now or hereafter due or payable with respect thereto, and in and to all causes of action,
either in law or in equity for past, present, or future infringement based on the copyrights, and in and to all rights corresponding
to the foregoing throughout the world.

 

2.  
Seller agrees to execute all papers and to perform such other proper acts as Buyer may deem necessary to secure for Buyer
or her successors and assigns the rights herein assigned.

 

3.  
No other rights are granted to or retained by the Seller.

 

4.  
This Agreement may be executed in two counterparts, each of which shall be deemed an original, both of which together shall
constitute one and the same instrument. A pdf copy of a signature shall be deemed an original.

 

In witness whereof, the parties have executed this
Agreement.

SELLER: TeleMate.Net Software, LLC

 

By: /s/ Steven Tabaska
      Date: 1/12/17

Steven Tabaska, Manager of LLC & CEO

 

 

 

BUYER: GROM HOLDINGS, INC.

 

By: /s/ Melvin Leiner     Date        

Melvin
Leiner, Executive Vice President

 

 

 

 

 

 

 

 

    	 	15	 

     

    

 

EXHIBIT "E"

CONVERTIBLE NOTE

 

The Convertible Promissory Note is a separate
document.

 

 

 

 

 

 

 

 

 

 

 

 

    	 	16	 

     

    

 

EXHIBIT "F"

ASSUMED LIABILITIES

 

The Total Assumed Liabilities from customer contracts prior
to January 1st 2017 are $78,104.87.

 

Assumed Liabilities for 2017 are $51,015.44

Assumed Liabilities for 2018 and beyond are $27,089.43

 

Assumed Liabilities list will be delivered
in a PDF format and will be included as part of this contract. Assumed liabilities for customer contracts are calculated by separating
profit and liabilities to service contracts from total deferred revenues. The liabilities to service contracts is at a rate of
15%.

 

In witness whereof, the parties have acknowledged
the receipt of the Assumed Liabilities PDF.

 

SELLER: TeleMate.Net Software, LLC

 

 

By: /s/ Steven Tabaska       /s/ Steven Tabaska

Steven Tabaska, Manager
of LLC & CEO

 

BUYER: GROM HOLDINGS, INC.

 

By: /s/ Melvin Leiner     Date        

Melvin Leiner, Executive Vice President

 

 

    	 	17	 

     

    

 

EXHIBIT "G"

MASTER SERVICES AGREEMENT ("MSA")

 

Post-closing and for a period of twelve
months through the period ended December 31, 2017 Seller agrees to provide the following services to the Buyer as well as assume
100% of the cash risk in operating the NetSpective division in its customary fashion. Capitalized terms not defined in this MSA
shall be defined as provided in the Purchase and Sale Agreement entered into by Seller and Buyer effective January 1, 2017 (the
"Agreement").

 

	1.	Seller shall provide five (5) NetSpective team members encompassing customer service, software, accounting, support, office space
and all other items needed to run the service (OLS, Co-lo space, backup, antivirus, Rulespase, Office Space) . The five team members
are

 

a. 
Mark Newton — Vice President

b. 
Rene Campbell — Director, Engineering

c. 
Mark Ivester — Software Engineer

d. 
Dan-in Patterson — QA Engineer

e. 
William (Bill) Babij — Sales Engineer

 

If any of these team members leave the
employment of Seller during the term of this MSA, Seller will as promptly as reasonably possible replace the person with another
person capable of providing the same service.

 

The price of these services and office
facilities shall be fixed at $25,000 per month until December 31, 2017.

 

	2.	The Seller shall work with the Buyer to develop a monthly reporting system detailing all cash received and all expenses incurred.
("Monthly Report")

 

		(ii)	In the event that cash received by Newco is less than its expenses for any monthly, quarterly or
annual period on a monthly or cumulative basis, any cash shortfall shall be assumed by the Seller. The Buyer will have no commitment
to invest or lend any cash whatsoever, to support Newco operations through the period ended December 31, 2017.

		(iii)	In the event that the cash received by Newco is greater than its expenses, the excess cash calculated
on a monthly and quarterly basis, will enure to the Seller until December 31, 2017 at which time the Seller and the Buyer shall
calculate an annual report aggregating all Monthly Reports ("Annual Report")

		(iv)	If the cumulative cash received on the Annual Report exceeds expenses, the first $265,000 in cash
shall belong to Seller, any excess above that amount shall belong to the Buyer

 

	3.	Sales Commission shall be paid at the rate of:

 

		a.	Sales to customers with renewal date after the Effective Date but invoiced prior to the Effective
Date have a commission rate of 15%

		b.	Sales to customers after the Effective Date have a commission rate of 10%

 

	4.	In addition to operating NetSpective division in its customary fashion, they may be optional projects requested. These optional
projects will need to be defined by the Buyer in a Statement Of Work (SOW) and scoped by Seller. If these optional projects are
outside the customary operation of the NetSpective business and is approved by the Buyer, any expenses associated with these projects
shall not be included in the calculation collected collimated cash in 2 (iii) above or in the Earnout provisions.

 

	5.	Buyer shall not take any action nor fail to take any action that materially adversely affects
    Seller's ability to perform under this MSA, including without limitation, selling, transferring or encumbering any of the
    Assets.

 

 

 

 

 

 

    	 	18

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