Document:

Document

Exhibit 10.01
			
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	FHLB
	CINCINNATI

                

APPLICATION FOR ADVANCE
Email: CreditOperations@fhlbcin.com
Phone: 800-828-4191  Fax: 513-852-5747

D.D.A. # 389001 Date: 09/02/2020

Pursuant to the BLANKET SECURITY AGREEMENT ("Agreement") and the RESOLUTION FOR ADVANCES ("Resolution") currently on file with the Federal Home Loan Bank of Cincinnati (the "FHLB"), the undersigned, who by the authority of the Member's Board of Directors are authorized to borrow from time to time under the Agreement, hereby apply for an Advance for $21,500,000 under the following terms and conditions: PROVIDED,  however, that if the Member is in default under the terms of the Agreement or any other agreement with the FHLB, which default is not waived by the FHLB, such funds need not be made available by the FHLB hereunder. In addition, the FHLB will not be obligated to fund commitments for advances previously made to Members who become tangible capital insolvent or if the FHLB is notified by the Members primary regulator or insurer that the Member has been restricted from using Federal Home Loan Bank advances.

COMMITMENT OPTIONS

þ SAME DAY FUNDING  ̈ NEXT DAY FUNDING  ̈ SKIP DAY FUNDING
        No fee, guarantee rate, total amount of application to be disbursed.  (Mandatory takedown if next or skip business day.)

 ̈ GUARANTEE FUNDS ONLY, OPTIONAL TAKEDOWN
       365 day commitment, flat fee of 10 basis points.  Payable on date of commitment, non-refundable.

CALLABLE TERMS
						
	1	The maturity term of the callable advance is 10 years.

						
	2	The advance may be "called" (prepaid) by the association without a prepayment fee on the 5th anniversary date of the advance, and each of the succeeding six (6) months anniversary dates thereafter. THE MEMBER MUST GIVE THE FHLB NOTICE OF THE INTENT TO "CALL" (PREPAY) THE ADVANCE WITHOUT A PREPAYMENT FEE AT LEAST TWENTY (20) CALENDAR DAYS PRIOR TO ANY ANNIVERSARY DATE AS DESCRIBED ABOVE. If the anniversary date falls on a Saturday, Sunday, or holiday, the anniversary date will be considered to be the business day prior to the actual anniversary date.

						
	3	Callable advances are prepayable at any time. If a callable advance is prepaid on any date other than a "call" date as outlined above, the fee will be 100% of the lesser of the following two values:

						
	a.	The present value of the lost cash flow to the FHLB based on the difference between the contract rate on the advance and the current yield for a noncallable Federal Home Loan Bank security with the same final maturity as that of the original advance (the discount rate for calculating the present value will be the current yield for such a noncallable Federal Home Loan Bank security) or

						
	b.	The present value of the lost cash flow to the FHLB based on the difference between the contract rate on the advance and the current yield for a noncallable Federa1 Home Loan Bank security with a final maturity equal to the call date of the original advance (the discount rate for calculating the present value will be the current yield for such a noncallable Federal Home Loan Bank security).

						
	4	The interest on the advance is calculated on the opening balance on an actual/actual basis, using the effective rate at the time of disbursement.

						
	5.	The loan is subject to the FHLB's current Credit Policy, in effect at the time of issuance of the commitment, and the Member represents and warrants to the FHLB that the Member is fully familiar with, as well as any subsequent amendments, of such Credit Policy.

						
	State Auto Property & Casualty Insurance Company	Columbus, Ohio
	(FHLB Member)	(City, State)
	/s/ Michael E. LaRocco	/s/ Steven E. English
	(Authorized Signature)	(Authorized Signature)
	Michael E. LaRocco	Steven E. English
	(Typed Name of Authorized Signature)	(Typed Name of Authorized Signature)

APPLICATION REQUIRES TWO SIGNATURES OF INDIVIDUALS AUTHORIZED BY THE RESOLUTION FOR ADVANCES ON FILE WITH THE FHLB.
By signing above, the member certifies, (A) That this application has not been modified from its original terms as provided by the FHLB, and (B) This application complies with and is subject to the FHLB's Credit Policy terms in effect at the time of application.

The FHLB reserves the right to suspend or modify the advance commitment options at any time. Immediate funding may be available if application is received prior to 3:00 P.M.,Eastern Time. [Revised July 2019)]NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN
A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY
BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

 

Principal
Amount: $82,500.00

Purchase Price: $75,000.00

Issue
Date: September 1, 2020

 

 

CONVERTIBLE
PROMISSORY NOTE

 

FOR
VALUE RECEIVED, AB International Group Corp., a Nevada corporation (hereinafter called the “Borrower”),
hereby promises to pay to the order of Jefferson Street Capital LLC, a New Jersey limited liability company, or registered
assigns (the “Holder”) the sum of $82,500.00 together with any interest as set forth herein, on September 1, 2021
(the “Maturity Date”), and to pay interest on the unpaid principal balance hereof at the rate of ten percent (10%)(the
“Interest Rate”) per annum from the date hereof (the “Issue Date”) until
the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. This Note may not be
prepaid in whole or in part except as otherwise explicitly set forth herein. Any amount of principal or interest on this Note
which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until
the same is paid (“Default Interest”). Interest shall be computed on the basis of a 360 day year and the actual number
of days elapsed. Interest shall commence accruing on the Issue Date but shall not be payable until the Note becomes payable (whether
at Maturity Date or upon acceleration or by prepayment). All payments due hereunder (to the extent not converted into common stock,
$0.001 par value per share (the “Common Stock”) in accordance with the terms hereof) shall be made in lawful money
of the United States of America. All payments shall be made at such address as the Holder shall hereafter give to the Borrower
by written notice made in accordance with the provisions of this Note. Each capitalized term used herein, and not otherwise defined,
shall have the meaning ascribed thereto in that certain Securities Purchase Agreement dated the date hereof, pursuant to which
this Note was originally issued (the “Purchase Agreement”).

 

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

 

The
following terms shall apply to this Note:

 

ARTICLE
I. CONVERSION RIGHTS

 

1.1              
Conversion Right. The Holder shall have the right
from time to time, and at any time following the date of this Note and ending on the later of: (i) the Maturity Date and (ii)
the date of payment of the Default Amount (as defined in Article III), each in respect of the remaining outstanding

 

    	 		 

    	 

    

 

amount
of this Note to convert all or any part of the outstanding and unpaid amount of this Note into fully paid and non-assessable shares
of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower
into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the “Conversion Price”)
determined as provided herein (a “Conversion”); provided, however, that in no event shall the Holder
be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1)
the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which
may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted
portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained
herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to
which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of
more than 4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence,
beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso. The
beneficial ownership limitations on conversion as set forth in the section may NOT be waived by the Holder. The number of
shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as
defined below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, in the form
attached hereto as Exhibit A (the “Notice of Conversion”), delivered to the Borrower by the Holder in accordance with
Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in,
or reasonably expected to result in, notice) to the Borrower before 6:00 p.m., New York, New York time on such conversion date
(the “Conversion Date”); however, if the Notice of Conversion is sent after 6:00pm, New York, New York time the Conversion
Date shall be the next business day. The term “Conversion Amount” means, with respect to any conversion of this Note,
the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) at the Holder’s option,
accrued and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date,
plus (3) at the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding
clauses (1) and/or (2) plus (4) at the Holder’s option, any amounts owed to the Holder pursuant to Sections 1.4 hereof.

 

1.2              
Conversion Price. The conversion price (the “Conversion
Price”) (subject to equitable adjustments by the Borrower relating to the Borrower’s securities or the securities
of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions and similar
events) shall equal the lesser of (i) 60% multiplied by the lowest Trading Price (as defined below) (representing a discount rate
of 40%) for the Common Stock during the previous twenty (20) Trading Day period before the Issue Date of this Note, or (ii) the
Variable Conversion Price (as defined herein). The “Variable Conversion Price” shall mean, 60% multiplied by the Market
Price (as defined herein) (representing a discount rate of 40%). “Market Price” means the lowest Trading Price for
the Common Stock during the twenty (20) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date.
“Trading Price” means, for any security as of any date, the lowest traded price of the Common Stock on the OTCQB,
OTCQX, Pink Sheets electronic quotation system or applicable trading market (the “OTC”) as reported by a reliable
reporting service (“Reporting Service”) designated by the Holder (i.e. Bloomberg) or, if the OTC is not the principal
trading market for such security, the lowest traded price of the such security on the principal securities exchange or trading
market where such security is listed or traded or, if no lowest traded price of such security is available in any of the foregoing
manners, the average of the lowest prices of any market makers for such security that are listed in the “pink sheets”.
If the Trading Price cannot be calculated for such security on such date in the manner

 

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provided
above, the Trading Price shall be the fair market value as reasonably determined by the Borrower. “Trading Day” shall
mean any day on which the Common Stock is tradable for any period on the OTC, or on the principal securities exchange or other
securities market on which the Common Stock is then being traded. The Borrower shall be responsible for the fees of its transfer
agent and all DTC fees associated with any such issuance. Holder shall be entitled to deduct $500.00 from the conversion amount
in each Notice of Conversion to cover Holder’s deposit fees associated with each Notice of Conversion.

 

1.3              
Authorized Shares. The Borrower covenants that during
the period the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number
of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of this Note issued
pursuant to the Purchase Agreement. The Borrower is required at all times to have authorized and reserved six times the number
of shares that would be issuable upon full conversion of the Note (assuming that the 4.99% limitation set forth in Section 1.1
is not in effect)(based on the respective Conversion Price of the Note (as defined in Section 1.2) in effect from time to time,
initially 40,000,000) (the “Reserved Amount”). The Reserved Amount shall be increased (or decreased with the written
consent of the Holder) from time to time in accordance with the Borrower’s obligations hereunder. The Borrower represents
that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. In addition, if the Borrower shall
issue any securities or make any change to its capital structure which would change the number of shares of Common Stock into
which the Notes shall be convertible at the then current Conversion Price, the Borrower shall at the same time make proper provision
so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive
rights, for conversion of the outstanding Note. The Borrower (i) acknowledges that it has irrevocably instructed its transfer
agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this
Note shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates
to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this
Note.

 

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

 

		1.4	Method
                                         of Conversion.

 

(a)               
Mechanics of Conversion. As set forth in Section
1.1 hereof, from time to time, and at any time during the period beginning on the date which is one hundred eighty (180) days
following the date of this Note and ending on the later of: (i) the Maturity Date and (ii) the date of payment of the Default
Amount, this Note may be converted by the Holder in whole or in part at any time from time to time after the Issue Date, by (A)
submitting to the Borrower a Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched
on the Conversion Date prior to 6:00 p.m., New York, New York time) and (B) subject to Section 1.4(b), surrendering this Note
at the principal office of the Borrower (upon payment in full of any amounts owed hereunder).

 

(b)              
Surrender of Note Upon Conversion. Notwithstanding
anything to the contrary set forth herein, upon conversion of this Note in accordance with the terms hereof, the Holder shall
not be required to physically surrender this Note to the Borrower unless the entire unpaid principal amount of this Note is so
converted. The Holder and the Borrower shall maintain records showing the principal amount so converted and the dates of such
conversions or shall use such other method, reasonably
satisfactory to the Holder and the Borrower, so as not to require physical surrender of this Note upon each such conversion.

 

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(c)               
Delivery of Common Stock Upon Conversion. Upon receipt
by the Borrower from the Holder of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice
of Conversion meeting the requirements for conversion as provided in this Section 1.4, the Borrower shall issue and deliver or
cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock issuable upon such conversion
within two (2) business days after such receipt (the “Deadline”) (and, solely in the case of conversion of the entire
unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Purchase Agreement. Upon receipt
by the Borrower of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common Stock issuable
upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note shall be reduced
to reflect such conversion, and, unless the Borrower defaults on its obligations hereunder, all rights with respect to the portion
of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or other securities, cash
or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion as provided herein,
the Borrower’s obligation to issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective
of the absence of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the
recovery of any judgment against any person or any action to enforce the same, any failure or delay in the enforcement of any
other obligation of the Borrower to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination,
or any breach or alleged breach by the Holder of any obligation to the Borrower, and irrespective of any other circumstance which
might otherwise limit such obligation of the Borrower to the Holder in connection with such conversion.

 

(d)              
Delivery of Common Stock by Electronic Transfer.
In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Borrower is participating
in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program, upon request
of the Holder and its compliance with the provisions set forth herein, the Borrower shall use its best efforts to cause its transfer
agent to electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s
Prime Broker with DTC through its Deposit and Withdrawal at Custodian (“DWAC”) system.

 

(e)              
Failure to Deliver Common Stock Prior to Deadline.
Without in any way limiting the Holder’s right to pursue other remedies, including actual damages and/or equitable relief,
the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is not delivered by the Deadline
due to action and/or inaction of the Borrower, the Borrower shall pay to the Holder $2,000 per day in cash, for each day beyond
the Deadline that the Borrower fails to deliver such Common Stock (the “Fail to Deliver Fee”); provided; however that
the Fail to Deliver Fee shall not be due if the failure is a result of a third party (i.e., transfer agent; and not the result
of any failure to pay such transfer agent) despite the best efforts of the Borrower to effect delivery of such Common Stock. Such
cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option
of the Holder (by written notice to the Borrower by the first day of the month following the month in which it has accrued), shall
be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this
Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note. The
Borrower agrees that the right to convert is a valuable right to the Holder. The damages resulting from a failure, attempt to
frustrate, interference with such conversion right are difficult if not impossible
to qualify.

 

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Accordingly,
the parties acknowledge that the liquidated damages provision contained in this Section 1.4(e) are justified.

 

1.5              
Concerning the Shares. The shares of Common Stock
issuable upon conversion of this Note may not be sold or transferred unless: (i) such shares are sold pursuant to an effective
registration statement under the Act or (ii) the Borrower or its transfer agent shall have been furnished with an opinion of counsel
(which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect
that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration (such as
Rule 144 or a successor rule) (“Rule 144”); or (iii) such shares are transferred to an “affiliate” (as
defined in Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section
1.5 and who is an Accredited Investor (as defined in the Purchase Agreement).

 

Any
restrictive legend on certificates representing shares of Common Stock issuable upon conversion of this Note shall be removed
and the Borrower shall issue to the Holder a new certificate therefore free of any transfer legend if the Borrower or its transfer
agent shall have received an opinion of counsel from Holder’s counsel, in form, substance and scope customary for opinions
of counsel in comparable transactions, to the effect that (i) a public sale or transfer of such Common Stock may be made without
registration under the Act, which opinion shall be accepted by the Company so that the sale or transfer is effected; or (ii) in
the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder under an
effective registration statement filed under the Act; or otherwise may be sold pursuant to an exemption from registration. In
the event that the Company does not reasonably accept the opinion of counsel provided by the Holder with respect to the transfer
of Securities pursuant to an exemption from registration (such as Rule 144), at the Deadline, it will be considered an Event of
Default pursuant to Section 3.2 of the Note.

 

		1.6	Effect
                                         of Certain Events.

 

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

 

(b)              
Adjustment Due to Merger, Consolidation, Etc. If,
at any time when this Note is issued and outstanding and prior to conversion of all of the Note, there shall be any merger, consolidation,
exchange of shares, recapitalization, reorganization, or other similar event, as a result of which shares of Common Stock of the
Borrower shall be changed into the same or a different number of shares of another class or classes of stock or securities of
the Borrower or another entity, or in case of any sale or conveyance of all or substantially all of the assets of the Borrower
other than in connection with a plan of complete liquidation of the Borrower, then the Holder of this Note shall thereafter have
the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified herein and in lieu
of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which the Holder
would have been entitled to receive in such transaction had

 

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this
Note been converted in full immediately prior to such transaction (without regard to any limitations on conversion set forth herein),
and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note
to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and of
the number of shares issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in
relation to any securities or assets thereafter deliverable upon the conversion hereof. The Borrower shall not affect any transaction
described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, ten (10) days prior written notice (but
in any event at least five (5) days prior written notice) of the record date of the special meeting of shareholders to approve,
or if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization
or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting
successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Note. The above provisions
shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.

 

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

 

1.7              
Prepayment. Notwithstanding anything to the contrary
contained in this Note, at any time during the periods set forth on the table immediately following this paragraph (the “Prepayment
Periods”), the Borrower shall have the right, exercisable on not more than three (3) Trading Days prior written notice to
the Holder of the Note to prepay the outstanding Note (principal and accrued interest), in full, in accordance with this Section
1.7. Any notice of prepayment hereunder (an “Optional Prepayment Notice”) shall be delivered to the Holder of the
Note at its registered addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the
date of prepayment which shall be not more than three (3) Trading Days from the date of the Optional Prepayment Notice. On the
date fixed for prepayment (the “Optional Prepayment Date”), the Borrower shall make payment of the Optional Prepayment
Amount (as defined below) to Holder, or upon the direction of the Holder as specified by the Holder in a writing to the Borrower
(which direction shall to be sent to Borrower by the Holder at least one (1) business day prior to the Optional Prepayment Date).
If the Borrower exercises its right to prepay the Note, the Borrower shall make payment to the Holder of an amount in cash equal
to the percentage (“Prepayment Percentage”) as set forth in the table immediately following this paragraph opposite
the applicable Prepayment Period, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus
(x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional Prepayment Date plus (y) Default
Interest, if any, on the amounts referred to in clauses (w) and (x) plus (z) any amounts owed to the Holder pursuant to
Section 1.4 hereof (the “Optional Prepayment Amount”). If the Borrower delivers an Optional Prepayment Notice and
fails to pay the Optional Prepayment Amount due to the Holder of the Note within two (2) business days following the Optional
Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant to this Section 1.7.

 

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	Prepayment
    Period	Prepayment
    Percentage

	1.       The
                                                    period beginning on the Issue Date and ending on the date which is one hundred eighty (180) calendar days following the Issue
                                                    Date.
	135%

 

 

 

After
the expiration of one hundred eighty (180) days following the Issue Date, the Borrower shall have no right of prepayment.

 

ARTICLE
II. CERTAIN COVENANTS

 

2.1
Sale of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without the
Holder’s written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary
course of business. Any consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.

 

ARTICLE
III. EVENTS OF DEFAULT

 

If
any of the following events of default (each, an “Event of Default”) shall occur:

 

3.1              
Failure to Pay Principal and Interest. The Borrower
fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity or upon acceleration and such
breach continues for a period of five (5) days after written notice from the Holder.

 

3.2              
Conversion and the Shares. The Borrower fails to
issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation to do so)
upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Note, fails to transfer
or cause its transfer agent to transfer (issue) (electronically or in certificated form) any certificate for shares of Common
Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, the Borrower
directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing)
(electronically or in certificated form) any certificate for shares of Common Stock to be issued to the Holder upon conversion
of or otherwise pursuant to this Note as and when required by this Note, or fails to remove (or directs its transfer agent not
to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop
transfer instructions in respect thereof) on any certificate for any shares of Common Stock issued to the Holder upon conversion
of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement, statement or threat
that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue uncured (or
any written announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for two (2) business
days after the Holder shall have delivered a Notice of Conversion. It is an obligation of the Borrower to remain current in its
obligations to its transfer agent. It shall be an event of default of this Note, if a conversion of this Note is delayed, hindered
or frustrated due to a balance owed by the Borrower to its transfer agent. If at the option of the Holder, the Holder advances
any funds to the Borrower’s transfer agent in order to process a conversion, such advanced funds shall be paid by the Borrower
to the Holder within forty-eight (48) hours of a demand from the Holder.

 

3.3              
Breach of Covenants. The Borrower breaches any material
covenant or other material term or condition contained in this Note and any collateral documents including but not limited to
the Purchase Agreement.

 

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

 

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

 

3.6              
Bankruptcy. Bankruptcy, insolvency, reorganization
or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for
the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the Borrower.

 

3.7              
Delisting of Common Stock. The Borrower shall fail
to maintain the listing of the Common Stock on at least one of the OTC (which specifically includes the quotation platforms maintained
by the OTC Markets Group) or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New
York Stock Exchange, or the American Stock Exchange.

 

3.8              
Failure to Comply with the Exchange Act. The Borrower
shall fail to comply with the reporting requirements of the Exchange Act; and/or the Borrower shall cease to be subject to the
reporting requirements of the Exchange Act.

 

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

 

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

 

3.11           
Financial Statement Restatement. The restatement
of any financial statements filed by the Borrower with the SEC at any time after 180 days after the Issuance Date for any date
or period until this Note is no longer outstanding, if the result of such restatement would, by comparison to the un-restated
financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this Note or the Purchase
Agreement.

 

3.12           
Replacement of Transfer Agent. In the event that
the Borrower proposes to replace its transfer agent, the Borrower fails to provide, prior to the effective date of such replacement,
a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including
but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor
transfer agent to Borrower and the Borrower.

 

3.13           
Cross-Default. Notwithstanding anything to the contrary
contained in this Note or the other related or companion documents, a breach or default by the Borrower of any covenant or other
term or condition contained in any of the Other Agreements, after the passage of all applicable notice and cure or grace periods,
shall, at the option of the Holder, be considered a default under this

 

    	 	8	 

    	 

    

 

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

 

3.14           
Unavailability of Rule 144. If, at any time on or
after the date which is six (6) months after the Issue Date, the Holder is unable to (i) obtain a standard “144 legal opinion
letter” from an attorney reasonably acceptable to the Holder, the Holder’s brokerage firm (and respective clearing
firm), and the Borrower’s transfer agent in order to facilitate the Holder’s conversion of any portion of the Note
into free trading shares of the Borrower’s Common Stock pursuant to Rule 144, and (ii) thereupon deposit such shares into
the Holder’s brokerage account.

 

Upon
the occurrence and during the continuation of any Event of Default specified in Section 3.1 (solely with respect to failure
to pay the principal hereof or interest thereon when due at the Maturity Date), the Note shall become immediately due and
payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the
Default Amount (as defined herein). UPON THE OCCURRENCE AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN
SECTION 3.2, OR SECTION 3.14, THE NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE AND THE BORROWER SHALL PAY TO THE HOLDER, IN
FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE DEFAULT AMOUNT (AS DEFINED HEREIN); MULTIPLIED BY (Z)
TWO (2). Upon the occurrence and during the continuation of any Event of Default specified in Sections 3.1
(solely with respect to failure to pay the principal hereof or interest thereon when due on this Note or upon acceleration),
3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, and/or 3.13, exercisable through the delivery of written notice to the
Borrower by such Holders (the “Default Notice”), and upon the occurrence of an Event of Default specified the
remaining sections of Articles III (other than failure to pay the principal hereof or interest thereon at the Maturity Date
specified in Section 3,1 hereof), the Note shall become immediately due and payable and the Borrower shall pay to the Holder,
in full satisfaction of its obligations hereunder, an amount equal to the greater of (i) 150% times the sum of
(w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal
amount of this Note to the date of payment (the “Mandatory Prepayment Date”) plus (y) Default Interest, if
any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder pursuant to Section
1.4(e) hereof (the then outstanding principal amount of this Note to the date of payment plus the amounts referred to
in clauses (x), (y) and (z) shall collectively be known as the “Default Amount”) and all other amounts payable
hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are
expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the
Holder shall be entitled to exercise all other rights and remedies available at law or in equity.

 

If
the Borrower fails to pay the Default Amount within five (5) business days of written notice that such amount is due and payable,
then the Holder shall have the right at any time, so long as the Borrower remains in default (and so long and to the extent that
there are sufficient authorized shares), to require the Borrower, upon written notice, to immediately issue, in lieu of the Default
Amount, the number of shares of Common Stock of the Borrower equal to the Default Amount divided by the Conversion Price then
in effect.

 

    	 	9	 

    	 

    

 

ARTICLE
IV. MISCELLANEOUS

 

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

 

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

 

If
to the Borrower, to:

 

AB
International Group Corp.

48 Wall Street, Suite 1009

New York, NY 10005

Attn:
Chiyuan Deng, Chief Executive Officer

If to the Holder:

 

Jefferson
Street Capital LLC

720 Monroe Street, Suite 401B Hoboken, New Jersey 07030

 

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

 

4.4              
Most Favored Nation. During the period where any
monies are owed to the Holder pursuant to this Note, if the Borrower engages in any future financing transactions with a third
party investor, the Borrower will provide the Holder with written notice (the “MFN Notice”) thereof promptly but in
no event less than 10 days prior to closing any financing transactions. Included with the MFN Notice shall be a copy of all documentation
relating to such financing transaction and shall include, upon written request of the Holder, any additional information related
to such subsequent investment as may be reasonably requested by the Holder. In the event the Holder determines that the terms
of the

 

    	 	10	 

    	 

    

 

subsequent
investment are preferable to the terms of the securities of the Borrower issued to the Holder pursuant to the terms of the Purchase
Agreement, the Holder will notify the Borrower in writing. Promptly after receipt of such written notice from the Holder, the
Borrower agrees to amend and restate the Securities (which may include the conversion terms of this Note), to be identical to
the instruments evidencing the subsequent investment. Notwithstanding the foregoing, this Section 4.4 shall not apply in respect
of (i) an Exempt Issuance, or (ii) an underwritten public offering of Common Stock. “Exempt Issuance” means
the issuance of: (a) shares of Common Stock or options to employees, officers, consultants, advisors or directors of the Borrower
pursuant to any stock or option plan duly adopted for such purpose by a majority of the members of the Board of Directors or a
majority of the members of a committee of directors established for such purpose, (b) securities upon the exercise or exchange
of or conversion of this Note and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock
issued and outstanding on the date hereof, and (c) securities issued pursuant to acquisitions or strategic transactions approved
by a majority of the disinterested directors of the Borrower, provided that any such issuance shall only be to a Person which
is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Borrower and in
which the Borrower receives benefits in addition to the investment of funds, but shall not include a transaction in which the
Borrower is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing
in securities.

 

4.5              
Assignability. This Note shall be binding upon the
Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Each
transferee of this Note must be an “accredited investor” (as defined in Rule 501(a) of the Securities and Exchange
Commission). Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in connection with
a bona fide margin account or other lending arrangement; and may be assigned by the Holder without the consent of the Borrower.

 

4.6              
Cost of Collection. If default is made in the payment
of this Note, the Borrower shall pay the Holder hereof costs of collection, including reasonable attorneys’ fees.

 

4.7              
Governing Law. This Note shall be governed by and
construed in accordance with the laws of the State of Nevada without regard to principles of conflicts of laws. Any action brought
by either party against the other concerning the transactions contemplated by this Note shall be brought only in the state courts
of New York or in the federal courts located in the Eastern District of New York. The parties to this Note 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 Borrower and Holder waive trial by jury. The prevailing
party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision
of this Note or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute
or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives
personal service of process and consents to process being served in any suit, action or proceeding in connection with this Note,
any agreement or any other document delivered in connection with this Note by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note
and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

    	 	11	 

    	 

    

 

4.8              
Purchase Agreement. By its acceptance of this Note,
each party agrees to be bound by the applicable terms of the Purchase Agreement.

 

4.9              
Remedies. The Borrower acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the transaction
contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for a breach of its obligations under this
Note will be inadequate and agrees, in the event of a breach or threatened breach by the Borrower of the provisions of this Note,
that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties
assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Note and to enforce specifically
the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being
required.

 

IN
WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer this on September 1, 2020

 

AB
INTERNATIONAL GROUP CORP.

 

By:
Chiyuan Deng 

Name: Chiyuan Deng

Title:
Chief Executive Officer

 

    	 	12	 

    	 

    

 

EXHIBIT
A -- NOTICE OF CONVERSION

 

 

The
undersigned hereby elects to convert $ principal amount of the Note (defined below) into that number of shares of Common
Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of AB International
Group Corp., a Nevada corporation (the “Borrower”) according to the conditions of the convertible note of the Borrower
dated as of September 1, 2020 (the “Note”), as of the date written below. No fee will be charged to the Holder for
any conversion, except for transfer taxes, if any.

 

Box
Checked as to applicable instructions:

 

[
]The Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account
of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).

 

Name
of DTC Prime Broker:

Account
Number:

 

[
] The undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock
set forth below (which numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately
below or, if additional space is necessary, on an attachment hereto:

 

[Insert
Name and Address of Holder Here]

 

Date
of conversion: __________________

Applicable
Conversion Price: $ __________________

Number
of shares of common stock to be issued

pursuant
to conversion of the Notes:_________________

Amount of Principal Balance due remaining

under
the Note after this conversion:__________________

 

JEFFERSON
STREET CAPITAL LLC

 

 

By: _____________________

Name:

Title:

Date:

 

    	 	13

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