Exhibit 4.2

THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”), AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

GROM SOCIAL ENTERPRISES, INC.

SENIOR SECURED CONVERTIBLE NOTE

FOR VALUE RECEIVED, GROM SOCIAL ENTERPRISES, Inc., a Florida corporation (the “Company”), promises to pay to _______ (the “Holder”) in lawful money of the United States of America or Common Stock, or any combination thereof, the principal sum of $_____, or such lesser amount as shall equal the outstanding principal amount hereof, together with interest from the date of this Senior Secured Convertible Note (this “Note”) on the unpaid principal balance at a rate equal to 12% per annum computed on the basis of the actual number of days elapsed and a year of 365 days. All unpaid principal, together with any then unpaid and accrued interest and other amounts payable hereunder, shall be due and payable on March 16, 2024 (the “Maturity Date”) or such earlier date as this Note is permitted to be repaid as provided hereunder. This Note is one of the senior secured convertible notes issued in connection with that certain offering of notes of the Company (the “Offering”) and pursuant to that certain Subscription Agreement, dated the date hereof (the “Subscription Agreement”), by and between the Company and the Holder. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Subscription Agreement.

The following is a statement of the rights of Holder and the conditions to which this Note is subject, and to which Holder, by the acceptance of this Note, agrees:

1.                   Payments.

(a)                Principal and Interest. Interest shall accrue on the outstanding principal amount of this Note at an annual rate of twelve percent (12%). The Company shall pay monthly installments of principal and interest to the Holder, in accordance with the amortization schedule attached hereto as Annex A, commencing from ______, the date which is sixty (60) days from the Original Issuance Date, through the Maturity Date if not otherwise converted into shares of Common Stock pursuant to Section 2 hereof. Each date upon which a payment of principal and interest is due hereunder shall be referred to as a “Payment Date”. If any Payment Date is not a Trading Day, the applicable payment shall be due on the next succeeding Trading Day.

(b)                Voluntary Prepayment. Subject to the provisions of this Section 1(b), at any time after the Original Issuance Date, the Company may deliver a notice to the Holder (an “Optional Redemption Notice” and the date such notice is deemed delivered hereunder, the “Optional Redemption Notice Date”) of its irrevocable election to redeem some or all of the then outstanding principal amount of this Note (the “Optional Redemption Amount”) for cash on the fifth (5^th ) Trading Day following the Optional Redemption Notice Date (such date, the “Optional Redemption Date”, such five (5) Trading Day period, the “Optional Redemption Period ” and such redemption, the “Optional Redemption”). The Optional Redemption Amount is payable in full on the Optional Redemption Date. The Holder’s acceptance of any Optional Redemption Amount is subject to the Company’s payment on the Optional Redemption Date of a prepayment penalty (the “Optional Redemption Penalty”) in an amount equal to four (4%) of the Optional Redemption Amount.

2.                   Conversion.

(a)                Conversion; Calculation of Conversion Shares. The conversion price on any Conversion Date shall be equal to 75% of the average sales price of the Common Stock over the sixty (60) day trading period immediately preceding such Conversion Date per share of Common Stock (subject to adjustment as described herein (the “Conversion Price”), provided, however, that in no event shall the Conversion be less than $0.10 per share. The number of Conversion Shares issuable upon a conversion hereunder shall be determined by the quotient obtained by dividing (x) the aggregate amount of principal and interest outstanding under the Note by (y) the Conversion Price.

(b)                Holder Voluntary Conversion.

(i)                  At any time until this Note is no longer outstanding, this Note shall be convertible, in whole or in part, into shares of Common Stock at the option of the Holder, at any time and from time to time (subject to the conversion limitations set forth in Section 2(j) hereof). The Holder shall effect conversions by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex B (each, a “Notice of Conversion”), specifying therein the principal amount of this Note to be converted and the date on which such conversion shall be effected (such date, the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required. To effect conversions hereunder, the Holder shall not be required to physically surrender this Note to the Company unless the entire principal amount of this Note, plus all accrued and unpaid interest thereon, has been so converted in which case the Holder shall surrender this Note as promptly as is reasonably practicable after such conversion without delaying the Company’s obligation to deliver the Conversion Shares otherwise pursuant to the terms of this Note. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Note in an amount equal to the applicable conversion. The Holder and the Company shall maintain records showing the principal amount(s) converted and the date of such conversion(s). The Company may deliver an objection to any Notice of Conversion within one (1) Business Days of delivery of such Notice of Conversion. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. The Holder, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated on the face hereof.

(ii)               Mechanics of Conversion. Not later than two (2) Trading Days after each Conversion Date (the “Share Delivery Date”), the Company shall deliver, or cause to be delivered, to the Holder (A) the Conversion Shares which, on or after the earlier of (i) the six month anniversary of the date of this Note or (ii) the Effective Date, shall be free of restrictive legends and trading restrictions (other than those which may then be required by the Subscription Agreement) representing the number of Conversion Shares being acquired upon the conversion of this Note and (B) a bank check in the amount of accrued and unpaid interest.

(c)                Failure to Deliver Conversion Shares. If, in the case of any Notice of Conversion, such Conversion Shares are not delivered to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the Company at any time on or before its receipt of such Conversion Shares, to rescind such Conversion, in which event the Company shall promptly return to the Holder any original Note delivered to the Company and the Holder shall promptly return to the Company the Conversion Shares issued to such Holder pursuant to the rescinded Conversion Notice.

(d)                Obligation Absolute; Partial Liquidated Damages. The Company’s obligations to issue and deliver the Conversion Shares upon conversion of this Note in accordance with the terms hereof are absolute and unconditional. In addition to any other rights available to the Holder, if the Company fails for any reason to deliver to the Holder such Conversion Shares by the Share Delivery Date pursuant to Section 2(b)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase (in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the conversion relating to such Share Delivery Date (a “Buy-In”), then the Company shall (A) pay in cash to the Holder (in addition to any other remedies available to or elected by the Holder) the amount, if any, by which (x) the Holder’s total purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that the Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions) and (B) at the option of the Holder, either reissue (if surrendered) this Note in a principal amount equal to the principal amount of the attempted conversion (in which case such conversion shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued if the Company had timely complied with its delivery requirements under Section 2(b)(ii). For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of this Note with respect to which the actual sale price of the Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately preceding sentence, the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver Conversion Shares upon conversion of this Note as required pursuant to the terms hereof.

(e)                 Reservation of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of this Note and payment of interest on this Note, each as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Notes), not less than such aggregate number of shares of the Common Stock as shall (subject to the terms and conditions set forth in the Subscription Agreement) be issuable (taking into account the adjustments and restrictions of Section 5) upon the conversion of the then outstanding principal amount of this Note and payment of interest hereunder. The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.

(f)                Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Note. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Company shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion Price or round up to the next whole share.

(g)                Transfer Taxes and Expenses. The issuance of Conversion Shares on conversion of this Note shall be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such Conversion Shares, provided that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such Conversion Shares upon conversion in a name other than that of the Holder of this Note so converted and the Company shall not be required to issue or deliver such Conversion Shares unless or until the Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Conversion Shares.

(h)                  Stock Dividends and Stock Splits. If the Company, at any time while this Note is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon conversion of the Notes), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

(i)                  Notices of Record Date. In the event of:

(i)                  Any taking by the Company of a record of the holders of any class of securities of Company for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right; or

(ii)               Any capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company or any transfer of all or substantially all of the assets of the Company to any other Person or any consolidation or merger involving the Company; or

(iii)             Any voluntary or involuntary dissolution, liquidation or winding-up of the Company, or

(iv)              the Company shall deliver to Holder at least ten (10) days prior to the earliest date specified therein, a notice specifying (A) the date on which any such record is to be taken for the purpose of such dividend, distribution or right and the amount and character of such dividend, distribution or right; and (B) the date on which any such reorganization, reclassification, transfer, consolidation, merger, dissolution, liquidation or winding-up is expected to become effective and the record date for determining stockholders entitled to vote thereon.

 (j)               Holder’s Conversion Limitations. The Company shall not affect any conversion of this Note, and the Holder shall not have the right to convert any portion of this Note, to the extent that after giving effect to the conversion set forth on the applicable Notice of Conversion, the Holder (together with the Holder’s Affiliates, and any Persons acting as a group together with the Holder or any of the Holder’s Affiliates) would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon conversion of this Note with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which are issuable upon (i) conversion of the remaining, unconverted principal amount of this Note beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein (including, without limitation, any other Notes or the Warrants) beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 2(j), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation contained in this Section 2(j) applies, the determination of whether this Note is convertible (in relation to other securities owned by the Holder together with any Affiliates) and of which principal amount of this Note is convertible shall be in the sole discretion of the Holder, and the submission of a Notice of Conversion shall be deemed to be the Holder’s determination of whether this Note may be converted (in relation to other securities owned by the Holder together with any Affiliates) and which principal amount of this Note is convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance with this restriction, the Holder will be deemed to represent to the Company each time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this paragraph and Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(j), in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following: (i) Company’s most recent periodic or annual report filed with the Commission, as the case may be, (ii) a more recent public announcement by the Company, or (iii) a more recent written notice by Company or Company’s transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within two (2) Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Note, by the Company or the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of this Note held by the Holder. The Holder may decrease the Beneficial Ownership Limitation at any time and the Holder, upon not less than 61 days’ prior notice to the Company, and may increase the Beneficial Ownership Limitation provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of this Note held by the Holder and the Beneficial Ownership Limitation provisions of this Section 2(j) shall continue to apply. Any such increase will not be effective until the 61 ^st day after such notice is delivered to the Company. The Beneficial Ownership Limitation provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(j) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Note.

3.                   Security Interest.

(a)                As collateral security for the Company’s obligations pursuant to this Note, the Company hereby pledges, assigns and transfers to the Holder a first priority security interest in and collateral assignment of the Company’s right, title and interest in and to all of the assets and tangible and intangible property of the Company, other than the shares of (i) Grom Holdings, Inc., a Delaware corporation(ii) the shares of TD Holdings Limited, a Hong Kong corporation and (iii) the shares of Top Draw Animation HongKong Limited (collectively, the “Collateral”).

 (b)             The Company authorizes the Holder to file or cause to be filed one or more financing statements, amendments to financing statements, continuations to financing statements, in lieu financing statements, and other similar filings with any filing or recording office for the purpose of perfecting or continuing the perfection of or otherwise establishing Holder’s security interest in the Collateral.

(c)                So long as this Note remains outstanding, the Company agrees to (i) do, observe and perform or cause to be done, observed and performed all of its obligations and all matters and things necessary to be done, observed and performed for the purpose of maintaining the Collateral in good condition, including complying with and maintaining in effect all licenses, approvals and permits and all contracts and contract rights related to the Collateral and (ii) upon the reasonable request of Holder, execute and deliver such further instruments and do or cause to be done such further acts as may be necessary or advisable to carry out the intent and purposes of this Note with respect to the Collateral.

4.                   Events of Default. The occurrence of any of the following shall constitute an “Event of Default” under this Note:

(a)                Failure to Pay. The Company shall fail to pay (i) when due any principal payment on the due date hereunder or (ii) any interest payment or other payment required under the terms of this Note on the date due and such payment shall not have been made within thirty (30) days of the Company’s receipt of written notice by the Required Holders of such failure to pay; or

(b)                Breaches of Covenants. The Company shall fail to observe or perform any other covenant, obligation, condition or agreement contained in this Note (other than those specified in Section 4(a) hereof) the failure of which would have a material adverse effect on the Company and such failure shall continue for thirty (30) days after the Company’s receipt of written notice by the Required Holders to the Company of such failure; or

(c)                Voluntary Bankruptcy or Insolvency Proceedings. The Company shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property, (ii) admit in writing its inability to pay its debts generally as they mature, (iii) make a general assignment for the benefit of its or any of its creditors, (iv) be dissolved or liquidated, (v) commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it, or (vi) take any action for the purpose of effecting any of the foregoing; or

(d)                Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for the appointment of a receiver, trustee, liquidator or custodian of the Company, or of all or a substantial part of the property thereof, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to the Company or any of its subsidiaries, if any, or the debts thereof under any bankruptcy, insolvency or other similar law now or hereafter in effect shall be commenced and an order for relief entered or such proceeding shall not be dismissed or discharged within forty-five (45) days of commencement.

5.                   Rights of Holder upon Default. Upon the occurrence of any Event of Default (other than an Event of Default described in Section 4(c) or Section 4(d) ) hereof and at any time thereafter during the continuance of such Event of Default, Holder may, with the written consent of the Required Holders, by written notice to the Company, declare all outstanding obligations payable by the Company hereunder to be immediately due and payable, and take possession of and exercise control over, to the fullest extent permitted by law, any Collateral, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived. Upon the occurrence of any Event of Default described in Section 4(c) and Section 4(d) hereof, immediately and without notice, all principal and accrued and unpaid interest hereunder shall automatically become immediately due and payable, and the Holder may take possession of and exercise control over, to the fullest extent permitted by law, any Collateral, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived. In addition to the foregoing remedies, upon the occurrence and during the continuance of any Event of Default, Holder may exercise any other right power or remedy permitted to it by law, either by suit in equity or by action at law, or both.

6.                   Definitions. As used in this Note, the following capitalized terms shall have the following meanings:

“Common Stock” means the Common stock of the Company, par value $0.001 per share.

“Conversion Shares” means the shares of Common Stock issuable upon conversion of this Note.

“Event of Default” has the meaning given in Section 4 hereof.

“Holders” means the Holder and the other holders of a Note issued in connection with this Offering.

“Maturity Date” has the meaning given in the preamble to this Note.

 “Note” has the meaning given in the preamble of this Note.

“Notes” means the notes issued by the Company to those investors in connection with this Offering.

“Optional Redemption” has the meaning given in Section 1(b) hereof.

“Optional Redemption Date” has the meaning given in Section 1(b) hereof.

“Optional Redemption Notice Date” has the meaning given in Section 1(b) hereof.

“Optional Redemption Period” has the meaning given in Section 1(b) hereof.

“Optional Redemption Penalty” has the meaning given in Section 1(b) hereof.

“Original Issuance Date” means the date of the first issuance of the Note, regardless of any transfers of such Note and regardless of the number of instruments which may be issued to evidence such Note.

“Payment Date” has the meaning given in Section 1(b) hereof.

“Required Holders” means the Holders holding more than sixty-six and two third percent (66 2/3)% of the aggregate outstanding principal due under the Notes.

“Subscription Agreement” has the meaning given in the preamble of this Note.

7.                   Miscellaneous.

(a)                Successors and Assigns; Transfer of this Note or Securities Issuable on Conversion Hereof.

(i)                Subject to the restrictions on transfer described in this Section 7(a), the rights and obligations of the Company and Holder shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the Company and Holder.

(ii)               With respect to any offer, sale or other disposition of this Note or securities into which such Note may be converted, Holder shall give advance written notice to the Company prior thereto, describing briefly the manner thereof, together with a written opinion of Holder’s counsel or other evidence reasonably satisfactory to the Company, to the effect that such offer, sale or other distribution may be effected without registration or qualification (under any federal or state law then in effect). Upon receiving such written notice and reasonably satisfactory opinion or other evidence if so requested, the Company, as promptly as practicable, shall notify Holder that Holder may sell or otherwise dispose of this Note or such securities, all in accordance with the terms of the notice delivered to the Company. If a determination has been made pursuant to this Section 7(a) that the opinion of counsel for Holder, or other evidence, is not reasonably satisfactory to the Company, the Company shall so notify Holder promptly after such determination has been made. Each Note thus transferred and each certificate representing the securities thus transferred shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in the opinion of counsel for the Company such legend is not required in order to ensure compliance with the Securities Act. The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions. Subject to the foregoing, transfers of this Note shall be registered upon registration books maintained for such purpose by or on behalf of the Company. Prior to presentation of this Note for registration of transfer, the Company shall treat the registered holder hereof as the owner and holder of this Note for the purpose of receiving all payments of principal and interest hereon and for all other purposes whatsoever, whether or not this Note shall be overdue and the Company shall not be affected by notice to the contrary.

(iii)             Neither this Note nor any of the rights, interests or obligations hereunder may be assigned, by operation of law or otherwise, in whole or in part, by the Company without the prior written consent of Holder.

(b)                Waiver and Amendment. Any provision of this Note may be amended, waived or modified only upon the written consent of the Company and the Required Holders.

(c)                Notices. All notices, requests, demands, consents, instructions or other communications required or permitted hereunder shall be made in accordance with:

(d)                Ranking. The Company and Holder acknowledge and agree that the Notes rank senior to all other securities of the Company. Payment of all or any portion of the outstanding principal amount of this Note and all interest hereon shall be senior in right of payment and in all other respects to all other securities of the Company. Payment of all or any portion of the outstanding principal amount of this Note and all interest hereon shall be senior in right of payment and in all other respects to all other indebtedness of the Company.

(e)                Payment. Unless converted into the Company’s equity securities pursuant to the terms hereof, payment shall be made in United States dollars.

(f)                 Usury. In the event any interest is paid on this Note which is deemed to be in excess of the then legal maximum rate, then that portion of the interest payment representing an amount in excess of the then legal maximum rate shall be deemed a payment of principal and applied against the principal of this Note.

(g)                Headings. The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be deemed to limit or affect any of the provisions hereof.

(h)                Governing Law. This Note and all actions arising out of or in connection with this Note shall be governed by and construed in accordance with the laws of the State of Florida, without regard to its internal rules governing the conflict of laws.

[Remainder of page intentionally left blank.]

The Company has caused this Note to be issued as of the date first written above.

ANNEX A

[Amortization Schedule]

ANNEX B

NOTICE OF CONVERSION

The undersigned hereby elects to convert principal under the Senior Secured Convertible Note due [●], 2020 of Grom Social Enterprises, Inc., a Florida corporation (the “Company”), into shares of common stock (the “ Common Stock ”), of the Company according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes, if any.

By the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common Stock does not exceed the amounts specified under Section 2 of this Note, as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended.

The undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer of the aforesaid shares of Common Stock.

Conversion calculations:

Exhibit 10.1

GROM SOCIAL ENTERPRISES, INC.

SUBSCRIPTION AGREEMENT

This Subscription Agreement (this “Agreement”) is being delivered by the purchaser identified on the signature page to this Agreement (the “Subscriber”) in connection with an offering conducted by Grom Social Enterprises, Inc., a Florida corporation (the “Company”). The Company is conducting a private placement (the “Offering”) of 12% senior secured convertible notes (each, a “Note”) and collectively, the “Notes”). As collateral security for the Company’s obligations pursuant to this Note, the Company shall cause Grom Holdings, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“Grom Holdings”), to pledge, assign and transfer to the Subscriber a first priority security interest in and collateral assignment of (i) Grom Holdings right, title and interest in and to all of the shares of stock of TD Holdings Limited, a corporation organized under the laws of Hong Kong (“TDH”) and (ii) TDH’s right, title and interest in and to all of the shares of Top Draw Animation HongKong Limited, a Hong Kong corporation. In connection with the Offering, the Company agrees to sell, and the purchasers thereunder, severally and not jointly, agree to purchase, a minimum of $3,000,000 and up to a maximum of $5,000,000 in aggregate principal amount of the Notes.

1.       SUBSCRIPTION AND PURCHASE PRICE

(a)       Subscription. Subject to the conditions set forth in Section 3 hereof, the Company desires to issue and sell, and the Subscriber hereby subscribes for and agrees to purchase, the Note in the principal amount of $[●] on the terms and conditions described herein.

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

2.       grant of common stock of the company

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

3.       Acceptance and Closing Procedures

(a)       Closing. The closing of the purchase and sale of the Notes in connection with the Offering (the “Closing”) shall take place at the offices of Grom Social Enterprises, Inc., 2060 NW Boca Raton Blvd. #6 Boca Raton, Florida 33431 or such other place as determined by the Company and may take place in one of more closings as mutually agreed to between the parties. As a condition to the Closing, the Company shall sell a minimum of $3,000,000 of Notes in connection with the Offering.

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

4.       THE SUBSCRIBER’s Representations, Warranties AND cOVENANTS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

5.       The Company’s Representations, Warranties and Covenants

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

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

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

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

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

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

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

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

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

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

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

6.       MISCELLANEOUS PROVISIONS

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

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

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

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

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

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

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

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

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

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

[Signature Pages Follow]

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

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR SUBSCRIBER FOLLOWS]

[Subscriber SIGNATURE PAGE TO Grom SOCial Enterprises, INC.

SUBSCRIPTION AGREEMENT]

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

Name of Subscriber:

Signature of Authorized Signatory of Subscriber: __________________________________

Name of Authorized Signatory:

Email Address of Authorized Signatory: __________________________________________

Facsimile Number of Authorized Signatory: _______________________________________

Address for Notice to Subscriber: ___________________________________

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

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

Purchase Price: $[●]

Principal Amount of Note: $[●]

Incentive Shares: [●] shares of Common Stock

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

[SIGNATURE PAGES CONTINUE]

INVESTOR QUESTIONNAIRE

Instructions: Check all boxes below which correctly describe you.

Check all boxes below which correctly describe you.

With respect to this investment in the Note, your:

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

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

____   ____  I/We understand that this investment is not guaranteed.

____   ____  I/We are sophisticated in financial and business affairs and are able to evaluate the risks and merits of an investment in this offering.

____   ____  I/We confirm that this investment is considered “high risk.” (This type of investment is considered high risk due to the inherent risks including lack of liquidity and lack of diversification.  Success or failure of private placements such as this is dependent on the corporate issuer of these securities and is outside the control of the investors. While potential loss is limited to the amount invested, such loss is possible.)

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

Exhibit A

Wire Instructions

Exhibit 10.2

Level 32 Wu Chung House 213 Queen's Road East Hong Kong T +852 2841 6888 F +852 2810 0235 minterellison.com

Intercreditor deed

Details

Background

Agreed terms

In this Deed:

Account Bank means the bank with which The Crone Law Group, P.C. has established the Company Account which it maintains funds on behalf of GSE.

Approval means any approval, clearance, license, authorisation, release, order, or consent required to be obtained from, or any registration, qualification, permit, designation, declaration, filing, notice, statement or other communication required to be filed with or delivered to, any Governmental Authority or any other Person, or any waiver of any of the foregoing or from any Governmental Authority or any other Person.

Authorised Representative means:

Avoidance has the meaning given to it in Clause 14.4 (Reinstating avoided transaction).

Business Day means a day on which commercial banks in Hong Kong are generally open for business (other than a Saturday, Sunday, public holiday or a day on which commercial banks do not open for business owing to a tropical cyclone warning signal number 8 or above or a "black" rainstorm warning signal being in force in Hong Kong).

Buyer Notes has the meaning given to it in the SPA.

Closing Date means the date of completion of the issue and subscription of the Convertible Notes.

Companies Ordinance means the Companies Ordinance (Chapter 622 of the Laws of Hong Kong).

Company Account means the bank account designated by GSE for receiving the proceeds from the issue of the Convertible Notes.

Confirmation has the meaning given to it in Clause 4.1(c) (Escrow Documents).

Convertible Notes means certain convertible notes in the aggregate principal amount of US$3,000,000 of GSE issued in favour of the New Lenders.

Convertible Notes Subscription Agreements means collectively the subscription agreements dated on or around the date of this Deed and entered into between GSE and each New Lender in relation to, among other things, the subscription of the Convertible Notes.

Encumbrance means any interest or equity of any Person (including any right to acquire, option or right of pre-emption or first offer or first refusal) or any mortgage, charge, pledge, lien, assignment, hypothecation, security interest, title retention or other security agreement or arrangement or any restriction on use, voting, transfer, receipt of income or exercise of any other attribute of ownership.

Escrow Agent means The Crone Law Group, P.C. in its capacity as escrow agent for the benefit of the Security Providers and the Security Holders.

Escrow Documents means collectively (a) the documents to be delivered to the Escrow Agent by the Security Providers pursuant to Clause 3.1(b)(i) and 3.1(b)(iii); (b) the documents to be delivered to the Escrow Agent by the New Lender Security Agent pursuant to Clause 3.2; and (c) the documents to be delivered to the Escrow Agent by the Seller Security Agent pursuant to Clause 3.3(a), and each an Escrow Document.

Event of Default means an event of default (however described) under any of the Seller Security and the New Lender Security.

Governmental Authority means any nation or government or any federation, province or state or any other political subdivision thereof; any entity, authority or body exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any government authority, agency, department, board, commission, instrumentality, securities exchange, supervisory or regulatory body of any country, or any political subdivision thereof, any court, tribunal or arbitrator, and any self-regulatory organisation.

Governmental Order means any applicable order, ruling, decision, verdict, decree, writ, subpoena, mandate, precept, command, directive, consent, approval, award, judgment, injunction or other similar determination or finding by, before or under the supervision of any Governmental Authority.

Guarantees means collectively the guarantees provided by TDH and TDAHK, respectively, in favour of the Seller Security Agent pursuant to the Seller Debentures.

Hong Kong means the Hong Kong Special Administrative Region of the People's Republic of China.

Law or Laws means any constitutional provision, statute or other law, rule, regulation, guidance, decisions, published official policy or published official interpretation of any Governmental Authority and any injunction, judgment, order, ruling, assessment or writ issued by any Governmental Authority.

Loss means a loss, claim, action, damage, liability, cost, charge, expense, penalty, fine or any other outgoing suffered, paid or incurred.

New Lender Security Agent Agreement means the security agent agreement dated on or around the date of this Deed and entered into between the New Lender Security Agent and each New Lender.

New Lender Debentures means collectively the New Lender TDH Debenture and the New Lender TDAHK Debenture.

New Lender Indebtedness means all outstanding indebtedness incurred by the Security Providers under the New Lender Transaction Documents as at the date of this Deed.

New Lender Secured Assets means all property and assets being the subject of the New Lender Security.

New Lender Security means any Encumbrance granted, created or expressed to be created under the New Lender Security Documents.

New Lender Security Documents means collectively:

New Lender Share Charges means collectively the New Lender TDH Share Charge and the New Lender TDAHK Share Charge.

New Lender Subscription Amount means the aggregate subscription amount payable by the New Lenders for their respective subscription of the Convertible Notes, which shall be an amount no less than US$3,000,000.

New Lender TDAHK Debenture means the debenture to be entered into between TDAHK as chargor and the New Lender Security Agent (on behalf of the New Lenders).

New Lender TDAHK Share Charge means the share charge to be entered into between TDH as chargor and the New Security Agent (on behalf of the New Lenders), which creates a security interest over all shares held by TDH in the issued share capital of TDAHK.

New Lender TDH Debenture means the debenture to be entered into between TDH as chargor and the New Lender Security Agent (on behalf of the New Lenders).

New Lender TDH Share Charge means the share charge to be entered into between Grom as chargor and the New Security Agent (on behalf of the New Lenders), which creates a security interest over the entire issued share capital of TDH.

New Lender Transaction Documents means collectively:

Party means each party to this Deed, and Parties shall be construed accordingly.

Payment Instruction has the meaning given to it in Clause 3.1(a) (Closing deliverables of GSE and the Security Providers).

Person shall include an individual, corporation, company, partnership, firm, trustee, trust, executor, administrator or other legal personal representative; unincorporated association, joint venture, syndicate or other business enterprise; any governmental, administrative or regulatory authority or agency; and their respective successors, legal personal representatives and assigns, as the case may be; and pronouns shall have a similarly extended meaning.

Power means, in respect of a Security Holder, any right, power, discretion or remedy of that Security Holder under any of its Security or applicable law.

Receiver means any receiver, manager, receiver and manager or other similar officer appointed by a Security Holder pursuant to a Security.

Repayment Amount has the meaning given to it in Clause 2(a) (Repayment of the Seller Notes).

Repayment Date means the date on which the Repayment Amount is transferred to the Seller Account and received by the Seller, which shall be a date no later than one (1) Business Day after the Closing Date.

Secured Assets means collectively the Seller Secured Assets and the New Lender Secured Assets.

Secured Obligations means:

but shall not include any obligation or liability to the extent that if it were so included in any Security Document or any part thereof would give rise to financial assistance within the meaning of sections 274 and 275 of the Companies Ordinance unless such financial assistance is not prohibited by virtue of section 275 and sections 277 to 289 of the Companies Ordinance.

Security means collectively the Seller Security and the New Lender Security.

Security Holder means each of Security Holder A and Security Holder B, and collectively the Security Holders.

Security Holder A means collectively the Sellers and the Seller Security Agent (for himself and on behalf of the Sellers).

Security Holder B means collectively the New Lenders and the New Lender Security Agent (on behalf of the New Lenders).

Security Provider means each of Grom, TDH and TDAHK, and collectively the Security Providers.

Seller Account means the bank account designated by the Sellers for receiving the Repayment Amount.

Seller Debentures means collectively the Seller TDH Debenture and the Seller TDAHK Debenture.

Seller Indebtedness means all outstanding indebtedness incurred by the Security Providers under the Seller Transaction Documents as at the date of this Deed.

Seller Notes means collectively the Short Term Note and the Buyer Notes.

Seller Secured Assets means all property and assets being the subject of the Seller Security.

Seller Security means any Encumbrance granted, created or expressed to be created under the Seller Security Documents.

Seller Security Documents means collectively:

Seller Security Trust Deed means the security trust deed dated 11 July 2016 and entered into between the Seller Security Agent and each Seller.

Seller Share Charges means collectively the Seller TDH Share Charge and the Seller TDAHK Share Charge.

Seller TDAHK Debenture the guarantee and debenture dated 11 July 2016 and entered into between TDAHK as guarantor and chargor and the Seller Security Agent (for himself and on behalf of the Sellers).

Seller TDAHK Share Charge means the share charge to be entered into between TDH as chargor and the Seller Security Agent (for himself and on behalf of the Sellers), which creates a security interest over all shares held by TDH in the issued share capital of TDAHK.

Seller TDH Debenture means the guarantee and debenture dated 11 July 2016 and entered into between TDH as guarantor and chargor and the Seller Security Agent (for himself and on behalf of the Sellers).

Seller TDH Share Charge means the share charge to be entered into between Grom as chargor and the Seller Security Agent (for himself and on behalf of the Sellers), which creates a security interest over the entire issued share capital of TDH.

Seller Transaction Documents means collectively:

Short Term Note means the short term buyer notes dated 1 July 2016 and entered into between Grom and each of the Sellers.

SPA has the meaning given to it in the Background.

Tax or Taxes means all applicable forms of taxation, duties, levies imposts and social security charges, whether direct or indirect, including but not limited to corporate income tax, wage withholding tax, national social security contributions and employee social security contributions, value added tax, business tax, customs and excise duties, capital tax and other legal transaction taxes, dividend withholding tax, dividend distribution tax, land taxes, environmental taxes and duties and any other type of taxes or duties payable by virtue of any applicable national, regional or local Law and which may be due directly or by virtue of joint and several liability in any relevant jurisdiction; together with any interest, penalties, surcharges or fines relating to them, due, payable, levied, imposed upon or claimed to be owed in any relevant jurisdiction.

US means the United States of America.

US Dollar or USD or US$ means United States Dollars, the lawful currency of the US.

The expressions "Seller", "Seller Security Agent", "New Lender", "New Lender Security Agent" and "Party" shall where the context permits include their respective successors and permitted assigns and permitted transferees and any Persons deriving title under them.

The headings and subtitles used in this Deed are used for convenience only and are not to be considered in construing or interpreting this Deed.

In this Deed, unless the context requires otherwise:

The Parties intend that this Deed shall take effect as a deed notwithstanding the fact that a Party may only execute this Deed under hand.

Notwithstanding any terms of this Deed:

On the Closing Date, the New Lender Security Agent shall deliver or cause to be delivered by way of electronic means to the Escrow Agent (to be held in escrow for the benefit of the Security Providers, the New Lenders and the New Lender Security Agent):

On the Closing Date, the Seller Security Agent shall:

If the Seller Security Agent notifies the Escrow Agent in writing that the conditions precedent under Clause 5.1 (Conditions precedent) have not been fulfilled, the Escrow Agent shall, within three (3) Business Days of such notice:

The granting of the consent under Clause 5.2 (Consent) is subject to the fulfilment of each of the following conditions:

Subject to the fulfilment of the conditions precedent under Clause 5.1 (Conditions precedent), each of the Sellers and the Seller Security Agent consents to the creation of the New Lender Security and agrees that the creation and existence of the New Lender Security is not a breach of, or default under, the Seller Security, any Seller Transaction Document or this Deed.

Upon the granting of consent under Clause 5.2 (Consent), (i) the Escrow Agent shall date and deliver the Seller Share Charges and the New Lender Security Documents in accordance with Clause 4.2 (Authorisations), and the Seller Share Charges and the New Lender Security Documents shall take effect on the Repayment Date; and (ii) the Seller Security and the New Lender Security shall be subject to the provisions of Clause 6 (Securities and distributions) and Clause 7 (Dealings between Security Holders). For the purposes of this Clause 5.3, the e-mailed copies of the documents referred to in Clause 3 (Closing Obligations) shall be deemed to be originals for the purposes of the effectiveness of the Seller Share Charges and the New Lender Security Documents.

The application of this Clause 6 is subject to the granting of consent under Clause 5 (Consent).

In respect of all Secured Assets, the Seller Security ranks equally with the New Lender Security for all Secured Obligations under the respective Securities, without priority of one over the other.

All money and proceeds received or recovered from the disposal of, or other dealing with, the Secured Assets (whether or not arising from the enforcement of any Security including any insurance or compensation proceeds for loss or damage to the Secured Assets payable to a Security Holder), must be applied and distributed:

or as otherwise agreed by the Security Holders in writing.

If a Security secures a contingent liability owed to a Security Holder, until that Security Holder is satisfied that the contingent liability has been extinguished, that Security Holder may retain from the proceeds of the exercise of any Power an amount consistent with the arrangements established under Clause 6.2 (Equal ranking) and Clause 6.3 (Application of money and proceeds) which it reasonably estimates to be the amount of the contingent liability.

This Deed and the arrangements in it apply despite anything which might otherwise affect them, including:

Subject to Clause 14.4 (Reinstating avoided transaction), the priority arrangements in this Deed will continue until:

Nothing in this Deed affects the operation of a Security to the extent it secures property or assets other than the Secured Assets.

The application of this Clause 7 is subject to the granting of consent under Clause 5 (Consent).

Unless otherwise agreed between the Security Holders:

If a Security Holder (Recipient) receives or recovers an amount pursuant to its Security which the other Security Holder (Claimant) has a right to receive pursuant to this Deed, the Recipient must:

On the Claimant's receipt of the Recipient's payment under Clause 7.3(b) (Distribution), each Security Provider acknowledges that the Recipient will be taken to not have received the relevant amount, and the Security Provider's liability to the Recipient will not be reduced or discharged by that amount.

This Clause 7.3 (other than Clause 7.3(a)) (Distribution) applies to any amount received by the Recipient from the Claimant which the Claimant subsequently claims because of Clause 14.4 (Reinstating avoided transaction).

A Security Holder must not transfer, assign or otherwise deal with any of its Security except:

Each Security Holder agrees not to increase the amount of, or grant additional, financial accommodation comprising Secured Obligations without the other Security Holder's prior written consent.

Each Security Holder must notify the other Security Holder at least three (3) Business Days in advance of any decision or wish on its part to enforce its Security, together with:

On the sale of any Secured Assets pursuant to an enforcement by a Security Holder of its Security, the other Security Holder must provide to the enforcing Security Holder duly executed releases of the other Security Holder's Security concerning that Secured Assets in registrable form (if applicable), together with any other necessary documents to enable registration of, the releases.

Each Party represents and warrants to each other Party that:

have been duly obtained and/or effected and are in full force and effect.

Each Security Provider:

Each Party giving a representation and warranty in this Clause 8 (Representations and warranties) acknowledges that:

Each Security Provider acknowledges that:

Each Security Provider undertakes to each Security Holder to co-operate and do everything necessary for the effective implementation of this Deed.

Each Security Provider agrees that, irrespective of the terms of any Security, if an Event of Default occurs under a Security Holder's Security, an Event of Default is taken to have occurred under the other Security Holder's Security.

Each Security Provider irrevocably and unconditionally waives its rights to, and must not, claim or exercise a right of subrogation or contribution in respect of, request a transfer or assignment of, or otherwise directly or indirectly claim the benefit of, a Security Holder's Power or a Security, unless:

Each Security Provider must provide to each Security Holder a certified true copy of:

All payments by a Security Provider or a Security Holder under this Deed must be made in immediately available funds, in US Dollars and in full without set-off, counterclaim or, unless prohibited by law, deduction or withholding.

If for any reason a Security Holder receives or recovers any amount (Paid Amount) under or in relation to this Deed in a currency other than US Dollars, the amount which the Security Holder will be taken to have received or recovered for the purposes of this Deed will be the US Dollar amount to which the Security Holder could have converted the Paid Amount, in accordance with its normal procedures, at the time of the receipt or recovery less the costs of the conversion.

If the due date for payment of any amount under this Deed is not a Business Day, the due date for that payment shall instead be the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).

Each Security Provider will pay its own costs and expenses in connection with this Deed.

If a Security Provider requests an amendment, waiver or consent under this Deed, the Security Provider shall on demand reimburse the relevant Security Holder all costs and expenses (including legal fees) reasonably incurred by such Security Holder in responding to, evaluating, negotiating or complying with that request or requirement.

Each Security Provider shall on demand pay to each Security Holder the amount of all costs and expenses (including legal fees) reasonably incurred by such Security Holder in connection with the exercise, enforcement or protection of, or the attempt to exercise, enforce or protect, a Power under this Deed.

Each Security Provider must pay all:

Each Security Provider must pay or reimburse each Security Holder on demand for all such amounts which are payable or which the Security Holder determines in good faith to be payable.

A notice, demand, consent, approval, service of proceedings or other communication under this Deed (Notice) must be:

A Notice given in accordance with Clause 12.1 (Service of notices) takes effect when received (or at a later time specified in it), and is taken to be received:

but if the delivery, receipt or transmission is not on a Business Day or is after 5.00pm on a Business Day, the Notice is taken to be received at 9.00am on the next Business Day.

A Security Holder may not assign, transfer or dispose of its Security to or in favour of any Person unless that Person enters into a deed with the other Parties by which it undertakes that it is bound by all of the terms of this Deed as a Security Holder the rights and obligations of the Security Holder are transferred by novation to that Person. In addition to any rights a Security Holder may have under this Clause 13.1 (By Security Holder), each Party agrees with each Security Holder that is a security trustee that:

A Security Provider may not assign, transfer or otherwise deal with its rights, interests or obligations under this Deed without the prior written consent of all Security Holders.

To the extent permitted by Law, a Security Holder will not be liable to anyone for any Loss in relation to an exercise or attempted exercise of a Power, or a failure or delay in doing so.

A Security Holder need not:

A Security Holder need not incur an expense or make a payment before enforcing an indemnity or reimbursement obligation in this Deed. Unless otherwise stated, each such indemnity or reimbursement obligation is separate and independent of each other obligation of the Party giving it, is absolute, irrevocable, unconditional and payable on demand and continues despite any settlement of account, termination of this Deed or any Security or anything else.

If a payment or other transaction relating to this Deed or a Security is void, voidable, unenforceable or defective for any reason or a related claim is upheld, conceded or settled (each an Avoidance), then even though any Party knew or should have known of the Avoidance:

This Clause 14.4 (Reinstating avoided transaction) survives any termination or full or partial discharge or release of any Security.

Each Security Provider:

Each Party acknowledges entering into this Deed for valuable consideration received from the other Parties.

If a time is not specified for the performance of an obligation under this Deed, it must be performed promptly.

Powers under this Deed are cumulative and do not limit or exclude Powers under Law. Full or partial exercise of a Power does not prevent a further exercise of that or any other Power. No failure or delay in exercising a Power operates as a waiver or representation. Unless expressly provided in this Deed, no Power nor any Security merges in, limits, adversely affects or is adversely affected by any other Power, Security or judgment which a Security Holder (or anyone claiming through it) may have or obtain.

A consent or waiver by a Security Holder in relation to this Deed is effective only if in writing. If given subject to conditions, the consent or waiver only takes effect subject to compliance with those conditions to the Security Holder's satisfaction.

A notice or certificate from or demand by a Security Holder stating that a default or Event of Default has occurred under its Security, or that a specified sum of money is owing or payable under its Security, is taken to be correct unless proved incorrect.

If, at any time, any provision of this Deed is or becomes illegal, invalid or unenforceable in any respect under the Law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions of this Deed under the Law of that jurisdiction nor the legality, validity or enforceability of that or any other provision of this Deed under the Law of any other jurisdiction shall in any way be affected or impaired thereby.

Any amendment or waiver of any provision of this Deed and any waiver of any default (in whole or in part) under this Deed shall only be effective if and to the extent that it is made in writing and signed by the Parties. Any amendment or waiver effected in accordance with this Clause 15.7 (Amendments) shall be binding upon each of the Parties.

Without prejudice to the termination of this Deed under any applicable Laws, this Deed shall terminate upon the payment and discharge in full of the Secured Obligations owed to either (i) the Sellers, to the satisfaction of the Seller Security Agent; or (ii) the New Lenders, to the satisfaction of the New Lender Security Agent.

This Deed and any non-contractual obligations arising out of or in connection with it are governed by and shall be construed in accordance with the Laws of Hong Kong.

The courts of Hong Kong have exclusive jurisdiction to settle any dispute arising out of or in connection with this Deed (including a dispute regarding the existence, validity or termination of this Deed) and any non-contractual obligations arising out of or in connection with it (a Dispute). The Parties agree that the courts of Hong Kong are the most appropriate and convenient courts to settle any Dispute and accordingly no Party will argue to the contrary. This Clause 15.10 (Jurisdiction) is for the benefit of the Security Holders and the Receiver(s) only. As a result, none of the Security Holders and/or the Receiver(s) shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, each Security Holder or Receiver may take concurrent proceedings in any number of jurisdictions.

Each Party acknowledges that any applicable Law that would require interpretation of any claimed ambiguities in this Deed against the Party that drafted it has no application and is expressly waived. If any claim is made by a Party relating to any conflict, omission or ambiguity in the provisions of this Deed, no presumption or burden of proof or persuasion will be implied because this Deed was prepared by or at the request of any Party or its counsel.

This Deed may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimiled or e-mailed copies of signatures shall be deemed to be originals for purposes of the effectiveness of this Deed.

This Deed is executed as a deed and delivered on the date stated at the beginning of this Deed.

Signing page

EXECUTED as a deed.

Sellers

SIGNED, SEALED AND DELIVERED by WAYNE EDWARD DEARING

SIGNED, SEALED AND DELIVERED by DAVID ARDEN PEABODY

SIGNED, SEALED AND DELIVERED by MICHAEL ALLARDICE GORDON HISCOCK

Seller Security Agent

New Lenders

New Lender Security Agent

GSE

Security Provider

Security Provider

Security Provider

Escrow Agent

Exhibit 10.3

SECURITY AGENT AGREEMENT

SECURITY AGENT AGREEMENT (this "Agreement"), dated as of March 16, 2020, among Grom Social Enterprises, Inc., a Florida corporation (the “Company”), the lenders reflected on the signature pages hereto (each individually, a "Lender" and collectively, the "Lenders"), and The Crone Law Group, P.C. (the "Security Agent").

WHEREAS, the loans made or to be made by the Lenders to the Company, which will be evidenced by secured convertible promissory notes (collectively herein the “Notes"), are secured by the shares and certain assets of TD Holdings Limited, a Hong Kong corporation (“TDH”), and the shares and certain assets of Top Draw Animation Hong Kong Limited, a Hong Kong corporation (“TDAHK”); and

WHEREAS, since the security of the Notes ranks equally with the security granted to the former owners of TDH and TDAHK, the relationship among the parties is as provided in the Intercreditor Deed, dated the date hereof, a copy of which is attached hereto (the “Intercreditor Deed”; capitalized terms used herein not otherwise defined shall have the respective meanings ascribed to such terms in the Intercreditor Deed); and

WHEREAS, each Lender has determined that it is desirable to provide for the orderly administration of the New Lender Security Document, the stock certificates of TDH and TDAHK, each Seller Share Charge and such other documentation as provided to be delivered to the New Lender Security Agent by appointing the Security Agent, and the Security Agent has agreed to accept such appointment, to receive, hold and deliver, all such documentation (collectively referred to herein as the “Collateral”), all upon the terms and subject to the conditions hereinafter set forth; and

WHEREAS, each Lender desires to appoint the Security Agent to act on its behalf notwithstanding the role of the Security Agent as legal counsel to the Company.

NOW THEREFORE, in consideration of the foregoing, the mutual covenants and agreements herein contained and other good and valuable consideration, the parties mutually covenant, warrant and agree as follows:

1.       Appointment of Security Agent. Each of the Lenders hereby appoints the Security Agent (and the Security Agent hereby accepts such appointment) to take any and all action including, without limitation, the maintenance of the Collateral, the exercise of voting rights upon the occurrence and during the continuance of an Event of Default (as such term is defined in the Notes), the application of any cash collateral received by the Security Agent, the making of any demand under the Notes, the exercise of any remedies given to the Security Agent pursuant to the Note and the exercise of any authority pursuant to the appointment of the Security Agent as an attorney-in-fact that the Security Agent deems necessary or proper for the administration of the Collateral pursuant to the Security Documents. Upon disposition of the Collateral in accordance with the Security Documents, the Security Agent shall promptly distribute any cash or Collateral in accordance with the terms hereof. The Security Agent will not be required to act hereunder in connection with Notes or the Intercreditor Deed the issuance of which was not disclosed in writing to the Security Agent nor will the Security Agent be required to act on behalf of any assignee of Notes without the written consent of Security Agent.

2. Power of Attorney. To effectuate the terms and provisions hereof, each of the Lenders hereby appoints the Security Agent as its attorney-in-fact (and the Security Agent hereby accepts such appointment) for the purpose of carrying out the provisions of this Agreement, including, without limitation, taking any action and executing any instrument (including the Intercreditor Deed) that the Security Agent may deem necessary or advisable (and lawful) to accomplish the purposes hereof and pursuant to the Intercreditor Deed. All acts done under the foregoing authorization are hereby ratified and approved and neither the Security Agent nor any designee nor agent thereof shall be liable for any acts of commission or omission, for any error of judgment, for any mistake of fact or law except for acts of gross negligence or willful misconduct. This power of attorney, being coupled with an interest, is irrevocable while this Agreement remains in effect.

3.       Expenses of the Security Agent. The Lenders shall pay any and all reasonable costs and expenses incurred by the Security Agent, including, without limitation, reasonable costs and expenses relating to all waivers, releases, discharges, satisfactions, modifications and amendments of this Agreement, the administration and holding of the Collateral, and the enforcement, protection and adjudication of the parties' rights under the Intercreditor Deed and hereunder by the Security Agent, including, without limitation, the reasonable disbursements, expenses and fees of the attorneys the Security Agent may retain, if any, each of the foregoing in proportion to their holdings of the Notes.

4.       Waiver of Conflict of Interest. Each Lender expressly agrees and acknowledges that the Security Agent is acting as legal counsel for the Company in connection with the Intercreditor Deed, the Notes, this Agreement and the transactions contemplated hereby, has acted as counsel to the Company in the past and will continue to act as legal counsel for the Company and such other interested parties from time to time, relating to the Notes as well as other related or unrelated corporate or dispute related matters. Notwithstanding the foregoing, each of the Company and the Lenders consents to the appointment of the Security Agent hereby and further consents to the continued representation by Crone Law Group, P.C.  as legal counsel for the Company on various matters (including and without limitation, the within transaction) from time to time and waives any claim that such representation represents a conflict of interest on the part of the Security Agent. The Company and each Lender understands and acknowledges that the Security Agent is relying explicitly on the foregoing provision in entering into this Agreement and to the continuing representation of the Company as counsel.   Notwithstanding the forgoing consent and waiver of conflicts of interest, nothing herein shall be deemed to create a waiver of the pre-existing and ongoing attorney-client privilege between the Company and the Security Agent. The Security Agent further reserves the right to resign at any time from any legal matter or in its capacity as security agent hereunder.

5.       Duties of the Security Agent; Standard of Care.

(a)       The Security Agent's only duties are those expressly set forth in this Agreement, and the Security Agent hereby is authorized to perform those duties in accordance with commercially reasonable practices. The Security Agent may exercise or otherwise enforce any of its rights, powers, privileges, remedies and interests under this Agreement and applicable law or perform any of its duties under this Agreement by or through its officers, employees, attorneys, or agents.

(b)       The Security Agent shall act in good faith and with that degree of care that an ordinarily prudent person in a like position would use under similar circumstances.

(c)       Any funds held by the Security Agent hereunder need not be segregated from other funds except to the extent required by law. The Security Agent shall be under no liability for interest on any funds received by it hereunder.

(d)       The Security Agent shall be entitled to rely upon any notice, consent, certificate, affidavit, statement, paper, document, writing or communication (which may be by email, telegram, cable, telex, telecopier, or telephone) reasonably believed by it to be genuine and to have been signed, sent or made by the proper person or persons, and upon opinions and advice of its own legal counsel, independent public accountants and other experts selected by the Security Agent.

6.       Resignation. The Security Agent may resign and be discharged of its duties hereunder at any time by giving written notice of such resignation to the other parties hereto, stating the date such resignation is to take effect. Within five (5) business days of the giving of such notice, a successor collateral agent shall be appointed by a majority in interest of the holders of the Notes; provided, however, that if the Lenders are unable so to agree upon a successor within such time period, and notify the Security Agent during such period of the identity of the successor collateral agent, the successor collateral agent may be a person designated by the Security Agent, and any and all fees of such successor collateral agent shall be the joint and several obligation of the Lenders. The Security Agent shall continue to serve until the effective date of the resignation or until its successor accepts the appointment and receives the Collateral held by the Security Agent but shall not be obligated to take any action hereunder. The Security Agent may deposit any Collateral with the Supreme Court of the State of New York for New York County or any such other court in New York State that accepts such Collateral.

7.       Exculpation. The Security Agent and its officers, employees, attorneys and agents, shall not incur any liability whatsoever for the holding or delivery of documents or the taking of any other action in accordance with the terms and provisions of this Agreement, for any mistake or error in judgment, for compliance with any applicable law or any attachment, order or other directive of any court or other authority (irrespective of any conflicting term or provision of this Agreement), or for any act or omission of any other person engaged by the Security Agent in connection with this Agreement, unless occasioned by the exculpated person's own gross negligence or willful misconduct; and each party hereto hereby waives any and all claims and actions whatsoever against the Security Agent and its officers, employees, attorneys and agents, arising out of or related directly or indirectly to any or all of the foregoing acts, omissions and circumstances.

8.       Indemnification. The Lenders hereby agree to indemnify, reimburse and hold harmless the Security Agent and its directors, officers, employees, attorneys and agents, jointly and severally, from and against any and all claims, liabilities, losses and expenses that may be imposed upon, incurred by, or asserted against any of them, arising out of or related directly or indirectly to this Agreement or the Collateral, except such as are occasioned by the indemnified person's own gross negligence or willful misconduct.

9.       Miscellaneous.

(a)       Rights and Remedies Not Waived. No act, omission or delay by the Security Agent shall constitute a waiver of the Security Agent's rights and remedies hereunder or otherwise. No single or partial waiver by the Security Agent of any default hereunder or right or remedy that it may have shall operate as a waiver of any other default, right or remedy or of the same default, right or remedy on a future occasion.

(b)       Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York without regard to conflicts of laws that would result in the application of the substantive laws of another jurisdiction.

(c)       Waiver of Jury Trial and Setoff; Consent to Jurisdiction; Etc.

(i)       In any litigation in any court with respect to, in connection with, or arising out of this Agreement or any instrument or document delivered pursuant to this Agreement, or the validity, protection, interpretation, collection or enforcement hereof or thereof, or any other claim or dispute howsoever arising, between the Security Agent and the Lenders or any Lender, then each Lender, to the fullest extent it may legally do so, (A) waives the right to interpose any setoff, recoupment, counterclaim or cross-claim in connection with any such litigation, irrespective of the nature of such setoff, recoupment, counterclaim or cross-claim, unless such setoff, recoupment, counterclaim or cross-claim could not, by reason of any applicable federal or state procedural laws, be interposed, pleaded or alleged in any other action; and (B) WAIVES TRIAL BY JURY IN CONNECTION WITH ANY SUCH LITIGATION AND ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH LENDER AGREES THAT THIS SECTION 9(c) IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND ACKNOWLEDGE THAT THE SECURITY AGENT WOULD NOT ENTER THIS AGREEMENT IF THIS SECTION 9(c) WERE NOT PART OF THIS AGREEMENT.

(ii)       Each Lender irrevocably consents to the exclusive jurisdiction of any State or Federal Court located within the County of New York, State of New York, in connection with any action or proceeding arising out of or relating to this Agreement or any document or instrument delivered pursuant to this Agreement or otherwise. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. Each Lender hereby waives, to the fullest extent it may effectively do so, the defenses of forum non conveniens and improper venue.

(d)       Admissibility of this Agreement. Each of the Lenders agrees that any copy of this Agreement signed by it and transmitted by email or telecopier for delivery to the Security Agent shall be admissible in evidence as the original itself in any judicial or administrative proceeding, whether or not the original is in existence.

(e)       Address for Notices. Any notice or other communication under the provisions of this Agreement shall be given in writing and delivered in person, by reputable overnight courier or delivery service, by facsimile machine (receipt confirmed) with a copy sent by first class mail on the date of transmissions, or by registered or certified mail, return receipt requested, directed to such party’s addresses set forth on the signature page hereto (or to any new address of which any party hereto shall have informed the others by the giving of notice in the manner provided herein).

(f)       Fee. Upon the execution and delivery of this Agreement, the Company shall pay the Security Agent the sum of $5,000 for its services hereunder.

(g)       Amendments and Modification; Additional Lender. No provision hereof shall be modified, altered, waived or limited except by written instrument expressly referring to this Agreement and to such provision, and executed by the parties hereto. Any transferee of a Note who acquires a note after the date hereof will become a party hereto by signing the signature page and sending an executed copy of this Agreement to the Security Agent and receiving a signed acknowledgement from the Security Agent.

(h)       Counterparts/Execution. This Agreement may be executed in any number of counterparts and by the different signatories hereto on separate counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument. The delivery of an executed counterpart of this Agreement by electronic means, including by facsimile or by "pdf" attachment to email, shall be deemed to be valid delivery thereof binding upon all the parties hereto.

(i)       Successors and Assigns. Whenever in this Agreement reference is made to any party, such reference shall be deemed to include the successors, assigns, heirs and legal representatives of such party. No party hereto may transfer any rights under this Agreement, unless the transferee agrees to be bound by, and comply with all of the terms and provisions of this Agreement, as if an original signatory hereto on the date hereof.

(j)       Independent Counsel; Captions. This Agreement shall be construed to effectuate the mutual intent of the parties. The parties and their counsel have cooperated in the drafting and preparation of this Agreement, and this Agreement therefore shall not be construed against any party by virtue of its role as the drafter thereof. No drafts of this Agreement shall be offered by any party, nor shall any draft be admissible in any proceeding, to explain or construe this Agreement. Each party hereto acknowledges and agrees that it has received or has had the opportunity to receive independent legal counsel of its own choice and that it has been sufficiently apprised of its rights and responsibilities with regard to the substance of this Agreement. The headings contained in this Agreement are intended for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.     

(k)       Severability. In the event that any term or provision of this Agreement shall be finally determined to be superseded, invalid, illegal or otherwise unenforceable pursuant to applicable law by an authority having jurisdiction and venue, that determination shall not impair or otherwise affect the validity, legality or enforceability (i) by or before that authority of the remaining terms and provisions of this Agreement, which shall be enforced as if the unenforceable term or provision were deleted, or (ii) by or before any other authority of any of the terms and provisions of this Agreement.

[Remainder of Page Intentionally Omitted; Signature Pages to Follow]

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

Exhibit 10.4

DATED 16 MARCH 2020

AMENDING AGREEMENT TO

THE SHARE SALE AGREEMENT FOR THE ENTIRE ISSUED SHARE CAPITAL OF TD HOLDINGS LIMITED

TD Holdings Limited

Suite 601, 6^th Floor, West Tower, Philippine Stock Exchange Center

Exchange Road, Ortigas Center, Pasig City, Philippines

THIS AGREEMENT is made on 16 March 2020

BETWEEN

WHEREAS

IT IS AGREED as follows:

Agreement means this Agreement (including any Schedule to it which shall have the same force and effect as if set out in the body of this Agreement).

Secured Promissory Note means the loan note created by the Sellers and the Buyer dated 16 June 2016 to give effect to the Buyer Notes referred to in the Original Agreement.

Each party shall execute or procure that any necessary third party shall execute all such documents and/or do or procure the taking of such steps as the other party shall after Closing reasonably require in order to give effect to this Agreement (and any document entered into pursuant to it) and to give each party the full benefit of the provisions of such documents.

Each party shall bear their own costs in relation to this Agreement.

This Agreement may be entered into in two or more counterparts, and by the parties to it on separate counterparts, but shall not be effective until each party has executed at least one counterpart, and each counterpart, when executed and delivered shall be an original, and all counterparts shall together constitute one and the same document.

Each of the provisions of this Agreement shall be read and construed independently of the other provisions as entirely separate and is severable. If any provision (or part thereof) is found by any court or competent authority to be illegal, invalid or unenforceable in any jurisdiction, that provision (or part thereof) shall be deemed not to be part of this Agreement and shall not affect the continuation in force of the remainder of this Agreement.

This Agreement and the documents referred to in it are made for the benefit of the parties to them and their successors and permitted assigns, and are not intended to benefit, or be enforceable by, anyone else.

IN WITNESS WHEREOF THIS AGREEMENT has been executed by the parties

Exhibit 10.5

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (this “Agreement”) is made and entered into as of March 16, 2020, by and among Grom Social Enterprises, Inc., a Florida corporation (the “Grantor”), and The Crone Law Group, P.C., solely in its capacity as collateral agent (in such capacity, the “Collateral Agent”) for the Holders (as defined below).

WITNESSETH:

WHEREAS, pursuant to that certain Subscription Agreement, dated as of the date hereof, between the Grantor and each party listed as a “Holder” on the Schedule of Holders attached thereto (the “Subscription Agreement”), as the same may be amended, the Grantor shall sell, and the Holders shall purchase, the “Notes” (as defined in the Subscription Agreement); and

WHEREAS, it is a condition precedent to the Holders purchasing the Notes that the Grantor have granted a security interest in and to the Collateral (as defined in this Agreement) to the Collateral Agent for the benefit of the Holders (as defined below) to secure all of the Grantor’s obligations under the Subscription Agreement and the Notes issued pursuant thereto (as the same may be amended, restated, replaced or otherwise modified from time to time in accordance with the terms thereof, the “Note Documents”), on the terms and conditions set forth in this Agreement.

NOW, THEREFORE, for and in consideration of the Subscription Agreement and the Notes, the other premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, the parties covenant and agree as follows:

1.                  Definitions. Capitalized terms used herein without definition shall have the meanings ascribed to them in the Subscription Agreement. In addition to the words and terms defined elsewhere in this Agreement, the following words and terms shall have the following meanings, unless the context otherwise clearly requires:

“Accounts” shall have the meaning given to that term in the Code and shall include without limitation all rights of the Grantor, whenever acquired, to payment for goods sold or leased or for services rendered, whether or not earned by performance.

“Chattel Paper” shall have the meaning given to that term in the Code and shall include without limitation all writings owned by the Grantor, whenever acquired, which evidence both a monetary obligation and a security interest in or a lease of specific goods.

“Code” shall mean the Uniform Commercial Code as in effect on the date of this Agreement and as amended from time to time, of the state or states having jurisdiction with respect to all or any portion of the Collateral from time to time.

“Collateral” shall mean (i) all tangible and intangible assets of the Grantor, including, without limitation, collectively the Accounts, Chattel Paper, Deposit Accounts, Documents, Equipment, Fixtures, General Intangibles, Instruments, Intellectual Property, Inventory and Investment Property of the Grantor, and (ii) Proceeds of each of them.

“Copyright License” means any written agreement, now or hereafter in effect, granting any right to any third party under any Copyright now or hereafter owned by the Grantor or that such Grantor otherwise has the right to license, or granting any right to the Grantor under any Copyright now or hereafter owned by any third party, and all rights of such Grantor under any such agreement.

“Copyrights” means all of the following now owned or hereafter acquired by the Grantor: (a) all copyright rights in any work subject to the copyright laws of the United States, whether as author, assignee, transferee or otherwise, and (b) all registrations and applications for registration of any such copyright in the United States, including registrations, recordings, supplemental registrations and pending applications for registration in the USCO.

“Deposit Accounts” shall have the meaning given to that term in the Code and shall include a demand, time, savings, passbook or similar account maintained with a bank, savings bank, savings and loan association, credit union, trust company or other organization that is engaged in the business of banking.

“Documents” shall have the meaning given to that term in the Code and shall include without limitation all warehouse receipts (as defined by the Code) and other documents of title (as defined by the Code) owned by the Grantor, whenever acquired.

“Equipment” shall have the meaning given to that term in the Code and shall include without limitation all goods owned by the Grantor, whenever acquired and wherever located, used or brought for use primarily in the business or for the benefit of the Grantor, and not included in Inventory of the Grantor, together with all attachments, accessories and parts used or intended to be used with any of those goods or Fixtures, whether now or in the future installed therein or thereon or affixed thereto, as well as all substitutes and replacements thereof in whole or in part.

“Equity Interests” shall mean (i) any and all shares of stock or other equity interests owned by the Grantor in any entity, (ii) 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 such interests and (iii) all Proceeds of the foregoing, provided, however, that (y) the shares of stock owned by the Grantor in Grom Holdings, Inc., a Delaware corporation (“GH”), and (z) the shares of stock held by GH in its Hong Kong subsidiary shall not be included in the Collateral granted hereunder and shall not constitute the security interest being granted to the Holders hereunder.

“Event of Default” shall mean (i) any of the Events of Default described in the Notes or in the Note Documents, or (ii) any default by Grantor in the performance of its obligations under this Agreement.

“Fixtures” shall have the meaning given to that term in the Code, and shall include without limitation leasehold improvements.

“General Intangibles” shall have the meaning given to that term in the Code and shall include, without limitation, all leases under which the Grantor, now or in the future leases and or obtains a right to occupy or use real or personal property, or both, all of the other contract rights of the Grantor, whenever acquired, and customer lists, choses in action, claims (including claims for indemnification), books, records, patents, copyrights, trademarks, blueprints, drawings, designs and plans, trade secrets, methods, processes, contracts, licenses, license agreements, formulae, tax and any other types of refunds, returned and unearned insurance premiums, rights and claims under insurance policies, and computer information, software, records and data, and oil, gas, or other minerals before extraction now owned or acquired after the date of this Agreement by each Grantor.

“Instruments” shall have the meaning given to that term in the Code and shall include, without limitation, all negotiable instruments (as defined in the Code), all certificated securities (as defined in the Code) and all other writings which evidence a right to the payment of money now or after the date of this Agreement owned by the Grantor.

“Intellectual Property” shall mean all intellectual and similar property of every kind and nature now owned or hereafter acquired by the Grantor, including inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade secrets, confidential or proprietary technical and business information, know-how, show-how or other data or information, the intellectual property rights in software and databases and related documentation and all additions, improvements and accessions to, and books and records describing any of the foregoing.

“Inventory” shall have the meaning given to that term in the Code and shall include without limitation all goods owned by the Grantor, whenever acquired and wherever located, held for sale or lease or furnished or to be furnished under contracts of service, and all raw materials, work in process and materials owned by the Grantor, and used or consumed in the Grantor’s business, whenever acquired and wherever located.

“Investment Property,” “Securities Intermediary” and “Commodities Intermediary” each shall have the meaning set forth in the Code.

“License” means any Patent License, Trademark License, Copyright License or other Intellectual Property license or sublicense agreement to which the Grantor is or will become a party, together with any and all (i) renewals, extensions, supplements and continuations thereof, (ii) income, fees, royalties, damages, claims and payments now and hereafter due and/or payable thereunder or with respect thereto including damages and payments for past, present or future infringements or violations thereof, and (iii) rights to sue for past, present and future violations thereof.

“Patent License” means any written agreement, now or hereafter in effect, granting to any third party any right to make, use or sell any invention on which a Patent, now or hereafter owned by the Grantor or that the Grantor otherwise has the right to license, is in existence, or granting to the Grantor any right to make, use or sell any invention on which a Patent, now or hereafter owned by any third party, is in existence, and all rights of the Grantor under any such agreement.

“Patents” means all of the following now owned or hereafter acquired by the Grantor: (a) all letters Patent of the United States in or to which the Grantor now or hereafter has any right, title or interest therein, all registrations and recordings thereof, and all applications for letters Patent of the United States, including registrations, recordings and pending applications in the USPTO, and (b) all reissues, continuations, divisions, continuations-in-part, renewals, improvements or extensions thereof, and the inventions disclosed or claimed therein, including the right to make, use and/or sell the inventions disclosed or claimed therein.

“Permitted Liens” shall mean all (i) all existing liens on the assets of the Grantor and (ii) all purchase money security interests hereinafter incurred by a Grantor in the ordinary course of business.

“Proceeds” shall have the meaning given to that term in the Code and shall include without limitation whatever is received when Collateral or Proceeds are sold, exchanged, collected or otherwise disposed of, whether cash or non-cash, and includes without limitation proceeds of insurance payable by reason of loss of or damage to Collateral.

“Trademark License” means any written agreement, now or hereafter in effect, granting to any third party any right to use any trademark now or hereafter owned by the Grantor or that any Grantor otherwise has the right to license, or granting to the Grantor any right to use any trademark now or hereafter owned by any third party, and all rights of the Grantor under any such agreement.

“Trademarks” means all of the following now owned or hereafter acquired by the Grantor: (a) all trademarks, service marks, trade names, corporate names, trade dress, logos, designs, fictitious business names other source or business identifiers, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all registration and recording applications filed in connection therewith, including registrations and registration applications in the USPTO or any similar offices in any State of the United States or any political subdivision thereof, and all extensions or renewals thereof, as well as any unregistered trademarks and service marks used by a Grantor and (b) all goodwill connected with the use of and symbolized thereby.

“USCO” means the United States Copyright Office.

“USPTO” means the United States Patent and Trademark Office.

Capitalized terms not otherwise defined in this Agreement or the Subscription Agreement shall have the meanings attributed to such terms in the Code.

2.                  Security Interest.

(a)       As security for the full and timely payment of the Notes in accordance with the terms of the Notes and the Subscription Agreement and the performance of the obligations of the Company under the Subscription Agreement, the Notes and the other Note Documents, the Grantor agrees that the Holders shall have, and the Grantor hereby grants and conveys to and creates in favor of the Holders, a security interest under the Code in and to (i) any and all of its Collateral, whether now owned or existing or hereafter acquired or arising and regardless of where located, and (ii) any and all Equity Interests held by it and any other Equity Interests obtained in the future by the Grantor and, to the extent certificated, the certificates representing all such Equity Interests (the “Pledged Equity”). The security interest granted to the Holders in this Agreement shall be a first priority security interest, prior and superior to the rights of all third parties existing on or arising after the date of this Agreement, subject to the Permitted Liens.

(b)       All of the Equipment, Inventory and Goods owned by the Grantor is located in the states as specified on Schedule I attached hereto (except to the extent any such Equipment, Inventory or Goods is in transit or located at such Grantor’s job site in the ordinary course of business). Except as disclosed on Schedule I, none of the Collateral is in the possession of any bailee, warehousemen, processor or consignee. Schedule I discloses the Grantor’s name as of the date hereof as it appears in official filings in the state or province, as applicable, of its incorporation, formation or organization, the type of entity of Grantor (including corporation, partnership, limited partnership or limited liability company), the organizational identification number issued by Grantor’s state of incorporation, formation or organization (or a statement that no such number has been issued), and the chief place of business, chief executive officer and the office where Grantor keeps its books and records. The Grantor has only one state or province, as applicable, of incorporation, formation or organization. The Grantor does not do business and have not done business during the past five (5) years under any trade name or fictitious business name except as disclosed on Schedule I attached hereto.

3.                  Provisions Applicable to the Collateral. The parties agree that the following provisions shall be applicable to the Collateral:

(a)        The Grantor covenants and agrees that at all times during the term of this Agreement it shall keep accurate and complete books and records concerning the Collateral that is now owned by the Grantor.

(b)        The Holders or their representatives shall have the right, upon reasonable prior written notice to Grantor and during the regular business hours of the Grantor, to examine and inspect the Collateral and to review the books and records of the Grantor concerning the Collateral that is now owned or acquired after the date of this Agreement by the Grantor and to copy the same and make excerpts therefrom; provided, however, that from and after the occurrence of an Event of Default, the rights of inspection and entry shall be subject to the requirements of the Code.

(c)        The Grantor shall at all times during the term of this Agreement keep the Equipment, Inventory and Fixtures that are now owned by each Grantor in the states set forth on Schedule I or, upon written notice to the Collateral Agent, at such other locations for which the Holders have filed financing statements, and in no other states without 10 days’ prior written notice to the Holders, except that the Grantor shall have the right until one or more Events of Default shall occur to sell, move or otherwise dispose of Inventory and other Collateral in the ordinary course of business.

(d)        The Grantor shall not move the location of its principal executive offices without prior written notification to the Collateral Agent.

(e)        Without the prior written consent of the Holders, the Grantor shall not sell, lease or otherwise dispose of any Equipment or Fixtures, except in the ordinary course of their business.

(f)        Promptly upon request of the Holders or the Collateral Agent, from time to time, the Grantor shall furnish the Holders or the Collateral Agent with such information and documents regarding the Collateral and Grantor’s financial condition, business, assets or liabilities, at such times and in such form and detail as the Holders may reasonably request.

(g)        During the term of this Agreement, the Grantor shall deliver to the Holders or the Collateral Agent, upon their reasonable, written request from time to time, without limitation,

(i)        all invoices and customer statements rendered to account debtors, documents, contracts, chattel paper, instruments and other writings pertaining to the Grantor’s contracts or the performance of the Grantor’s contracts,

(ii)        evidence of the Grantor’s accounts and statements showing the aging, identification, reconciliation and collection thereof, and

(iii)        reports as to the Grantor’s inventory and sales, shipment, damage or loss thereof, all of the foregoing to be certified by authorized officers or other employees of the Grantor, and Grantor shall take all necessary action during the term of this Agreement to facilitate perfection of any and all security interests in favor of the Holders by the Collateral Agent.

(h)        Notwithstanding the security interest in the Collateral granted to and created in favor of the Holders under this Agreement, Grantor shall have the right until one or more Events of Default shall occur, at its own cost and expense, to collect the Accounts and the Chattel Paper and to enforce its contract rights.

(i)        After the occurrence of an Event of Default, the Collateral Agent shall have the right, in its sole discretion, to give notice of the Holders’ security interest to account debtors obligated to the Grantor and to take over and direct collection of the Accounts and the Chattel Paper, to notify such account debtors to make payment directly to the Holders and to enforce payment of the Accounts and the Chattel Paper and to enforce the Grantor’s contract rights. It is understood and agreed by the Grantor that the Collateral Agent shall have no liability whatsoever under this subsection (i) except for their own gross negligence or willful misconduct.

(j)        At all times during the term of this Agreement, the Grantor shall promptly deliver to the Collateral Agent, upon its written request, all existing leases, and all other leases entered into by the Grantor from time to time, covering any Equipment or Inventory which is leased to third parties.

(k)        Grantor shall not change its name, entity status, federal taxpayer identification number, or provincial organizational or registration number, or the state under which it is organized without the prior written consent of the Holders, which consent shall not be unreasonably withheld.

(l)        Grantor shall not close any of its Deposit Accounts or open any new or additional Deposit Accounts without first giving the Holders at least ten (10) days’ prior written notice thereof; however, Holders grant Collateral Agent the power to waive a portion of the notice period if such waiver does not harm Holders’ security position.

(m)        Grantor shall cooperate with the Holders and the Collateral Agent, at each Grantor’s reasonable expense, in perfecting Holders’ security interest in any of the Collateral.

(n)        The Collateral Agent may file any necessary financing statements and other documents the Collateral Agent deems reasonably necessary in order to perfect Holders’ security interest without Grantor’s signature. Grantor grants to the Collateral Agent a power of attorney for the sole purpose of executing any documents on behalf of Grantor which the Collateral Agent deems reasonably necessary to perfect Holders’ security interest. Such power, coupled with an interest, is irrevocable.

(o)       Grantor agrees to take, at its expense, all reasonable steps, including, without limitation, in the USPTO, the USCO and any other governmental authority located in the United States, to pursue the registration and maintenance of each Patent, Trademark, or Copyright registration or application, now or hereafter included in such Intellectual Property Collateral of Grantor.

(p)       Grantor shall not do or permit any act or knowingly omit to do any act whereby any of its Intellectual Property Collateral may lapse, be terminated, or become invalid or unenforceable or placed in the public domain (or in the case of a trade secret, becomes publicly known).

(q)       Grantor shall take all reasonable steps to preserve and protect each item of its Intellectual Property Collateral, including, without limitation, maintaining the quality of any and all products or services used or provided in connection with any of the Trademarks, consistent with the quality of the products and services as of the date hereof, and taking all reasonable steps necessary to ensure that all licensed users of any of the Trademarks abide by the applicable license’s terms with respect to standards of quality.

(r)       Within 60 days after the end of each calendar quarter Grantor shall provide a list of any additional applications for or registrations of Intellectual Property of Grantor not previously disclosed to the Collateral Agent including such information as is necessary for such Grantor to make appropriate filings in the U.S. Patent and Trademark Office and the U.S. Copyright Office and deliver to the Collateral Agent at such time the short-form security agreement with respect to such Patents, Trademarks or Copyrights in appropriate form for filing with the USPTO or USCO, as applicable and file such agreements with the USPTO or USCO, as applicable.

4.                  Actions with Respect to Accounts. Each Grantor irrevocably makes, constitutes and appoints the Collateral Agent its true and lawful attorney-in-fact with power to sign its name and to take any of the following actions after the occurrence and prior to the cure of an Event of Default, at any time without notice to Grantor and at Grantor’s reasonable expense:

(a)        Verify the validity and amount of, or any other matter relating to, the Collateral by mail, telephone, telegraph or otherwise;

(b)        Notify all account debtors that the Accounts have been assigned to the Holders and that the Holders have a security interest in the Accounts;

(c)        Direct all account debtors to make payment of all Accounts directly to the Holders;

(d)        Take control in any reasonable manner of any cash or non-cash items of payment or proceeds of Accounts;

(e)        Receive, open and respond to all mail addressed to Grantor;

(f)        Take control in any manner of any rejected, returned, stopped in transit or repossessed goods relating to Accounts;

(g)        Enforce payment of and collect any Accounts, by legal proceedings or otherwise, and for such purpose the Holders may:

(1)        Demand payment of any Accounts or direct any account debtors to make payment of Accounts directly to the Holders;

(2)        Receive and collect all monies due or to become due to Grantor pursuant to the Accounts;

(3)        Exercise all of Grantor’s rights and remedies with respect to the collection of Accounts;

(4)        Settle, adjust, compromise, extend, renew, discharge or release Accounts in a commercially reasonable manner;

(5)        Sell or assign Accounts on such reasonable terms, for such reasonable amounts and at such reasonable times as the Holders reasonably deem advisable;

(6)        Prepare, file and sign Grantor’s name or names on any Proof of Claim or similar documents in any proceeding filed under federal or state bankruptcy, insolvency, reorganization or other similar law as to any account debtor;

(7)        Prepare, file and sign Grantor’s name or names on any notice of lien, claim of mechanic’s lien, assignment or satisfaction of lien or mechanic’s lien or similar document in connection with the Collateral;

(8)        Endorse the name of Grantor upon any chattel papers, documents, instruments, invoices, freight bills, bills of lading or similar documents or agreements relating to Accounts or goods pertaining to Accounts or upon any checks or other media of payment or evidence of a security interest that may come into the Holders’ possession;

(9)        Sign the name or names of Grantor to verifications of Accounts and notices of Accounts sent by account debtors to Grantor; or

(10)        Take all other actions that the Holders reasonably deem to be necessary or desirable to protect Grantor’s interest in the Accounts.

(h)        Negotiate and endorse any Document in favor of the Holders or their designees, covering Inventory which constitutes Collateral, and related documents for the purpose of carrying out the provisions of this Agreement and taking any action and executing in the name(s) of Grantor any instrument which the Holders may reasonably deem necessary or advisable to accomplish the purpose hereof. Without limiting the generality of the foregoing, the Collateral Agent shall have the right and power to receive, endorse and collect checks and other orders for the payment of money made payable to Grantor representing any payment or reimbursement made under, pursuant to or with respect to, the Collateral or any part thereof and to give full discharge to the same. Grantor does hereby ratify and approve all acts of said attorney and agrees that said attorney shall not be liable for any acts of commission or omission, nor for any error of judgment or mistake of fact or law, except for said attorney’s own gross negligence or willful misconduct. This power, being coupled with an interest, is irrevocable until the Notes are paid in full (at which time this power shall terminate in full) and Grantor shall have performed all of its obligations under this Agreement. Grantor further agrees to use its reasonable efforts to assist the Collateral Agent in the collection and enforcement of the Accounts and will not hinder, delay or impede the Holders in any manner in its collection and enforcement of the Accounts.

5.                  Preservation and Protection of Security Interest. (a) Grantor represents and warrants that it has, and covenants and agrees that at all times during the term of this Agreement, it will have, good and marketable title to the Collateral now owned by it free and clear of all mortgages, pledges, liens, security interests, charges or other encumbrances, except for the Permitted Liens and those junior in right of payment and enforcement to that of the Holders or in favor of the Holders, and shall defend the Collateral against the claims and demands of all persons, firms and entities whomsoever. Assuming Holders have taken all required action to perfect a security interest in the Collateral as provided by the Code, Grantor represents and warrants that as of the date of this Agreement the Holders have, and that all times in the future the Holders will have, a first priority perfected security interest in the Collateral, prior and superior to the rights of all third parties in the Collateral existing on the date of this Agreement or arising after the date of this Agreement, subject to the Permitted Liens. Except as permitted by this Agreement, Grantor covenants and agrees that it shall not, without the prior written consent of the Holders (i) borrow against the Collateral or any portion of the Collateral from any other person, firm or entity, except for borrowings which are subordinate to the rights of the Holders, (ii) grant or create or permit to attach or exist any mortgage, pledge, lien, charge or other encumbrance, or security interest on, of or in any of the Collateral or any portion of the Collateral except those in favor of the Holders or the Permitted Liens, (iii) permit any levy or attachment to be made against the Collateral or any portion of the Collateral, except those subject to the Permitted Liens, or (iv) permit any financing statements to be on file with respect to any of the Collateral, except financing statements in favor of the Holders or those with respect to the Permitted Liens. Grantor shall faithfully preserve and protect the Holders’ security interest in the Collateral and shall, at its own reasonable cost and expense, cause, or assist the Holders to cause that security interest to be perfected and continue perfected so long as the Notes or any portion of the Notes are outstanding, unpaid or executory. For purposes of the perfection of the Holders’ security interest in the Collateral in accordance with the requirements of this Agreement, Grantor shall from time to time at the request of the Holders file or record, or cause to be filed or recorded, such instruments, documents and notices, including assignments, financing statements and continuation statements, as the Holders may reasonably deem necessary or advisable from time to time in order to perfect and continue perfected such security interest. Grantor shall do all such other acts and things and shall execute and deliver all such other instruments and documents, including further security agreements, pledges, endorsements, assignments and notices, as the Holders in their discretion may reasonably deem necessary or advisable from time to time in order to perfect and preserve the priority of such security interest as a first lien security interest in the Collateral prior to the rights of all third persons, firms and entities, subject to the Permitted Liens and except as may be otherwise provided in this Agreement. Grantor agrees that a carbon, photographic or other reproduction of this Agreement or a financing statement is sufficient as a financing statement and may be filed instead of the original.

(b)        Grant of License to Use Intellectual Property; Power of Attorney. For the exclusive purpose of enabling the Collateral Agent to exercise rights and remedies under this Agreement at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies at any time after and during the continuance of an Event of Default, Grantor hereby grants to the Collateral Agent a non-exclusive, royalty-free, limited license (until the termination or cure of the Event of Default) for cash, upon credit or for future delivery as the Collateral Agent may deem appropriate to use, license or sublicense any of the Intellectual Property Collateral now owned or hereafter acquired by Grantor, and wherever the same may be located, and including in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof; provided, however, that all of the foregoing rights of the Collateral Agent to use such licenses, sublicenses and other rights, and (to the extent permitted by the terms of such licenses and sublicenses) all licenses and sublicenses

6.                  Insurance. Risk of loss of, damage to or destruction of the Equipment, Inventory and Fixtures is on Grantor. Grantor shall insure the Equipment, Inventory and Fixtures against such risks and casualties and in such amounts and with such insurance companies as is ordinarily carried by corporations or other entities engaged in the same or similar businesses and similarly situated or as otherwise reasonably required by the Holders in their sole discretion. In the event of loss of, damage to or destruction of the Equipment, Inventory or Fixtures during the term of this Agreement, Grantor shall promptly notify the Collateral Agent of such loss, damage or destruction. At the reasonable request of the Holders, Grantor’s policies of insurance shall contain loss payable clauses in favor of Grantor and the Holders as their respective interests may appear and shall contain provision for notification of the Holders thirty (30) days prior to the termination of such policy. At the request of the Holders, copies of all such policies, or certificates evidencing the same, shall be deposited with the Holders. If Grantor fails to effect and keep in full force and effect such insurance or fail to pay the premiums when due, the Holders may (but shall not be obligated to) do so for the account of Grantor and add the cost thereof to the Notes. The Holders are irrevocably appointed attorney-in-fact of Grantor to endorse any draft or check which may be payable to Grantor in order to collect the proceeds of such insurance. Unless an Event of Default has occurred and is continuing, the Holders will turn over to Grantor the proceeds of any such insurance collected by it on the condition that Grantor apply such proceeds either (i) to the repair of damaged Equipment, Inventory or Fixtures, or (ii) to the replacement of destroyed Equipment, Inventory or Fixtures with Equipment, Inventory or Fixtures of the same or similar type and function and of at least equivalent value (in the sole judgment of the Holders), provided such replacement Equipment, Fixtures or Inventory is made subject to the security interest created by this Agreement and constitutes a first lien security interest in the Equipment, Inventory and Fixtures subject only to Permitted Liens and other security interests permitted under this Agreement, and is perfected by the filing of financing statements in the appropriate public offices and the taking of such other action as may be necessary or desirable in order to perfect and continue perfected such security interest. Any balance of insurance proceeds remaining in the possession of the Holders after payment in full of the Notes shall be paid over to the Grantor or its order.

7.                  Maintenance and Repair. Grantor shall maintain the Equipment, Inventory and Fixtures, and every portion thereof, in good condition, repair and working order, reasonable wear and tear alone excepted, and shall pay and discharge all taxes, levies and other impositions assessed or levied thereon as well as the cost of repairs to or maintenance of the same. If Grantor fails to do so, the Holders may (but shall not be obligated to) pay the cost of such repairs or maintenance and such taxes, levies or impositions for the account of Grantor and add the amount of such payments to the principal of the Notes

8.                  Preservation of Rights against Third Parties; Preservation of Collateral in Holders’ Possession. Until such time as the Holders exercise their right to effect direct collection of the Accounts and the Chattel Paper and to effect the enforcement of Grantor’s contract rights, Grantor assumes full responsibility for taking any and all commercially reasonable steps to preserve rights in respect of the Accounts and the Chattel Paper and their contracts against prior parties. The Holders shall be deemed to have exercised reasonable care in the custody and preservation of such of the Collateral as may come into its possession from time to time if the Holders take such action for that purpose as the Grantor shall request in writing, provided that such requested action shall not, in the judgment of the Holders, impair the Holders’ security interest in the Collateral or its right in, or the value of, the Collateral, and provided further that the Holders receive such written request in sufficient time to permit the Holders to take the requested action.

9.                  Events of Default and Remedies.

(a)        If any one or more of the Events of Default shall occur or shall exist, the Collateral Agent may then or at any time thereafter, so long as such default shall continue, foreclose the lien or security interest in the Collateral in any way permitted by law, or upon five (5) days prior written notice to the Grantor, sell any or all Collateral at private sale at any time or place in one or more sales, at such price or prices and upon such terms, either for cash or on credit, as the Collateral Agent, in its sole discretion, may elect, or sell any or all Collateral at public auction, either for cash or on credit, as the Collateral Agent, in its sole discretion, may elect, and at any such sale, the Collateral Agent may bid for and become the purchaser of any or all such Collateral. Pending any such action the Collateral Agent may liquidate the Collateral.

(b)        If any one or more of the Events of Default shall occur or shall exist, the Collateral Agents may then, or at any time thereafter, so long as such default shall continue, grant extensions to, or adjust claims of, or make compromises or settlements with, debtors, guarantors or any other parties with respect to Collateral or any securities, guarantees or insurance applying thereon, without notice to or the consent of the Grantor, without affecting Grantor’s liability under this Agreement or the Notes. Grantor waives notice of acceptance, of nonpayment, protest or notice of protest of any Accounts or Chattel Paper, any of its contract rights or Collateral and any other notices to which Grantor may be entitled.

(c)        If any one or more of the Events of Default shall occur or shall exist and be continuing, then in any such event, the Collateral Agent shall have such additional rights and remedies in respect of the Collateral or any portion thereof as are provided by the Code and such other rights and remedies in respect thereof which it may have at law or in equity or under this Agreement, including without limitation the right to enter any premises where Equipment, Inventory and/or Fixtures are located and take possession and control thereof without demand or notice and without prior judicial hearing or legal proceedings, which Grantor expressly waives.

(d)        The Collateral Agent shall apply the Proceeds of any sale or liquidation of the Collateral, and, subject to Section 5, any Proceeds received by the Collateral Agent from insurance, first to the payment of the reasonable costs and expenses incurred by the Collateral Agent in connection with such sale or collection, including without limitation reasonable attorneys’ fees and legal expenses; second to the payment of the Notes, pro rata, whether on account of principal or interest or otherwise as the Collateral Agent, in its sole discretion, may elect, and then to pay the balance, if any, to the Grantor or as otherwise required by law. If such Proceeds are insufficient to pay the amounts required by law, the Grantor shall be liable for any deficiency.

(e)        Upon the occurrence of any Event of Default, Grantor shall promptly upon written demand by the Collateral Agent assemble the Equipment, Inventory and Fixtures and make them available to the Holders at a place or places to be designated by the Collateral Agent The rights of the Collateral Agent under this paragraph to have the Equipment, Inventory and Fixtures assembled and made available to it is of the essence of this Agreement and the Collateral Agent may, at its election, enforce such right by an action in equity for injunctive relief or specific performance, without the requirement of a bond.

10.              Defeasance. Notwithstanding anything to the contrary contained in this Agreement upon payment and performance in full of the Notes, this Agreement shall terminate and be of no further force and effect and the Holders shall thereupon terminate their security interest in the Collateral. Until such time, however, this Agreement shall be binding upon and inure to the benefit of the parties, their successors and assigns, provided that, without the prior written consent of the Holders, Grantor may not assign this Agreement or any of its rights under this Agreement or delegate any of its duties or obligations under this Agreement and any such attempted assignment or delegation shall be null and void. This Agreement is not intended and shall not be construed to obligate the Holders to take any action whatsoever with respect to the Collateral or to incur expenses or perform or discharge any obligation, duty or disability of the Grantor.

11.                  The Collateral Agent.

(a)               Counsel to Grantor. Each Holder expressly agrees and acknowledges that the Collateral Agent is acting as legal counsel for the Grantor in connection with this Agreement and the transactions contemplated hereby, has acted as counsel to Grantor in the past and will continue to act as legal counsel for the Grantor from time to time, notwithstanding its duties as the Collateral Agent hereunder. Each of Grantor and the Holders consents to the Collateral Agent in such capacity as legal counsel for the Grantor and waives any claim that such representation represents a conflict of interest on the part of the Collateral Agent. The Grantor and the Holders understand and acknowledge that the Collateral Agent is relying explicitly on the foregoing provision in entering into this Agreement.

(b)               Delegation of Duties. The Collateral Agent may execute any of its duties under this Agreement or any other Note Documents by or through agents, employees or attorneys in fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Collateral Agent shall not be responsible for the negligence or misconduct of any agent or attorney in fact that it selects with reasonable care.

(c)               Liability of Collateral Agent. None of the Collateral Agent Related Persons (as defined below) shall (i) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Note Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct), or (ii) be responsible in any manner to any of the Holders for any recital, statement, representation or warranty made by any other party, or any officer thereof, contained in this Agreement or in any other Note Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Collateral Agent under or in connection with, this Agreement or any other Note Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Note Document, or for any failure of any other party to this Agreement or any other Note Documents to perform its obligations hereunder or thereunder. No Collateral Agent Related Person shall be under any obligation to any Holder to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Note Document, or to inspect the properties, books or records of the Company or any of the Company’s Subsidiaries or Affiliates. “Collateral Agent Related Persons” means the Collateral Agent and any successor agent arising hereunder, together with their respective affiliates, and the officers, directors, employees, agents and attorneys-in-fact of such persons and affiliates.

(d)               Reliance by Collateral Agent. The Collateral Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper person or persons, and upon advice and statements of legal counsel (including counsel to the Company or Grantor), independent accountants and other experts selected by the Collateral Agent. The Collateral Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Note Document unless it shall first receive such advice or concurrence of the Majority Holders as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Holders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Collateral Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Note Document in accordance with a request or consent of the Majority Holders and such request and any action taken or failure to act pursuant thereto shall be binding upon all of the Holders. “Majority Holders” means at any time a Holder or Holders then holding in excess of 66% of the then aggregate unpaid principal amount of the Notes.

(e)               Notice of Default. The Collateral Agent shall not be deemed to have knowledge or notice of the occurrence of any default or Event of Default, except with respect to defaults in the delivery of any documents or certificates required to be delivered to the Collateral Agent hereunder for the benefit of the Holders, unless the Collateral Agent shall have received written notice from a Holder or the Company or any Grantor referring to this Agreement, describing such default or Event of Default and stating that such notice is a “notice of default”. The Collateral Agent will notify the Holders of its receipt of any such notice. The Collateral Agent shall take such action with respect to such Default or Event of Default as may be requested by the Majority Holders in accordance with this Agreement; provided, however, that unless and until the Collateral Agent has received any such request, the Collateral Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such default or Event of Default as it shall deem advisable or in the best interest of the Holders.

(f)                Indemnification of Collateral Agent. Whether or not the transactions contemplated hereby and by the other Note Documents are consummated, the Holders shall indemnify upon demand the Collateral Agent Related Persons (to the extent not reimbursed by or on behalf of the Company or any Guarantor and without limiting the obligation of the Company or each Grantor to do so), pro rata, from and against any and all Indemnified Liabilities (as defined below); provided, however, that no Holder shall be liable for the payment to the Collateral Agent Related Persons of any portion of such Indemnified Liabilities resulting solely from such Person’s gross negligence or willful misconduct. Without limitation of the foregoing, each Holder shall reimburse the Collateral Agent upon demand for its ratable share of any costs or out of pocket expenses (including fees and disbursements of legal counsel) incurred by the Collateral Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Note Document, or any document contemplated by or referred to herein, to the extent that the Collateral Agent is not reimbursed for such expenses by or on behalf of the Company. Notwithstanding the foregoing, no Holder shall be required to pay, in total under this paragraph (e) and any similar provision in any other Note Document, any amount in excess of the total gross purchase price of the Notes purchased by such Holder. The undertaking in this paragraph shall survive the payment of all obligations hereunder and the resignation or replacement of the Collateral Agent. “Indemnified Liabilities” means all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, charges, expenses and disbursements (including fees and disbursements of legal counsel) of any kind or nature whatsoever which may at any time (including at any time following repayment of the Notes and the termination, resignation or replacement of the Collateral Agent) be imposed on, incurred by or asserted against any Collateral Agent Related Person in any way relating to or arising out of this Agreement or any document contemplated by or referred to herein, or the transactions contemplated hereby and thereby, or any action taken or omitted by any such Collateral Agent Related Person under or in connection with any of the foregoing, including with respect to any investigation, litigation or proceeding (including any bankruptcy or insolvency proceeding or appellate proceeding) related to or arising out of this Agreement or the Notes or the other Note Documents or the use of the proceeds thereof, whether or not any Collateral Agent Related Person is a party thereto.

(g)               Collateral Agent in Individual Capacity. Any Collateral Agent Related Person may engage in transactions with, make loans to, acquire equity interests in and generally engage in any kind of business with the Grantor and their affiliates, including without limitation, providing legal services to the Grantor, as though the Collateral Agent were not the Collateral Agent hereunder and without notice to or consent of the Holders. The Holders acknowledge that, pursuant to such activities, any Collateral Agent Related Person may receive information regarding the Grantor and its affiliates (including information that may be subject to confidentiality obligations in favor of the Grantor and its affiliates) and acknowledge that the Collateral Agent shall be under no obligation to provide such information to them. With respect to any Notes it holds, a Collateral Agent Related Person shall have the same rights and powers under this Agreement as any other Holder and may exercise the same as though the Collateral Agent were not the Collateral Agent, and the terms “Holder” and “Holders” include any such Collateral Agent Related Person in its individual capacity.

(h)               Successor Collateral Agent. The Collateral Agent may, and at the request of the Majority Holders shall, resign as Collateral Agent upon 30 days’ notice to the Holders. If the Collateral Agent resigns under this Agreement, the Majority Holders shall appoint from among the Holders a successor agent for the Holders, which successor agent shall be approved by the Company, such approval not to be unreasonably withheld. If no successor agent is appointed prior to the effective date of the resignation of the Collateral Agent, the Collateral Agent may appoint, after consulting with the Holders and the Company, a successor agent from among the Holders. Upon the acceptance of its appointment as successor agent hereunder, such successor agent shall succeed to all the rights, powers and duties of the retiring Collateral Agent and the term “Collateral Agent” shall mean such successor agent and the retiring Collateral Agent’s appointment, powers and duties as Collateral Agent shall be terminated. After any retiring Collateral Agent’s resignation hereunder as Collateral Agent, the provisions of this Section 11 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Collateral Agent under this Agreement. If no successor agent has accepted appointment as Collateral Agent by the date which is 30 days following a retiring Collateral Agent’s notice of resignation, the retiring Collateral Agent’s resignation shall nevertheless thereupon become effective and the Holders shall perform all of the duties of the Collateral Agent hereunder until such time, if any, as the Majority Holders appoint a successor agent as provided for above.

12.                  Miscellaneous.

(a)        The provisions of this Agreement are intended to be severable. If any provision of this Agreement shall for any reason be held invalid or unenforceable in whole or in part in any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without in any manner affecting the validity or enforceability of such provision in any other jurisdiction or any other provision of this Agreement in any jurisdiction.

(b)       No failure or delay on the part of the Holders in exercising any right, remedy, power or privilege under this Agreement and the Notes shall operate as a waiver thereof or of any other right, remedy, power or privilege of the Holders under this Agreement, the Notes or any of the other Note Documents; nor shall any single or partial exercise of any such right, remedy, power or privilege preclude any other right, remedy, power or privilege or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges of the Holders under this Agreement, the Notes and the other Note Documents are cumulative and not exclusive of any rights or remedies which they may otherwise have.

(c)        Unless otherwise provided herein, all demands, notices, consents, service of process, requests and other communications hereunder shall be in writing and shall be delivered in person or by overnight courier service, or mailed by certified mail, return receipt requested, addressed:

If to Grantor:

At the address for the Company set forth in the Subscription Agreement

If to Collateral Agent:

The Crone Law Group, P.C.

500 Fifth Avenue, Suite 938

New York, NY 10110

Fax: 818-688-3130

mcrone@cronelawgroup.com

Any such notice shall be effective when delivered, if delivered by hand delivery, overnight courier service, or U.S. Mail return receipt requested.

(d)        The section headings contained in this Agreement are for reference purposes only and shall not control or affect its construction or interpretation in any respect.

(e)        Unless the context otherwise requires, all terms used in this Agreement which are defined by the Code shall have the meanings stated in the Code.

(f)        The Code shall govern the settlement, perfection and the effect of attachment and perfection of the Holders’ security interest in the Collateral, and the rights, duties and obligations of the Holders and Grantor with respect to the Collateral. This Agreement shall be deemed to be a contract under the laws of the State of Florida and the execution and delivery of this Agreement and, to the extent not inconsistent with the preceding sentence, the terms and provisions of this Agreement shall be governed by and construed in accordance with the laws of that State. GRANTOR HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY NOTECONTEMPLATED HEREBY.

(g)        This Agreement may be executed in several counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument. All of such counterparts shall be read as though one, and they shall have the same force and effect as though all the signers had signed a single page. In the event that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, and intending to be legally bound, the parties have executed and delivered this Security Agreement as of the day and year set forth at the beginning of this Security Agreement.

ACCEPTED BY:

THE CRONE LAW GROUP, P.C.

as Collateral Agent

By: __________________

Name: Mark E. Crone

Title: Managing Partner

Schedule I

Florida

Exhibit 10.6

GROM SOCIAL ENTERPRISES, INC.

SUBSCRIPTION AGREEMENT

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

1.       SUBSCRIPTION AND PURCHASE PRICE

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

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

2.       grant of common stock of the company

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

3.       Acceptance and Closing Procedures

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

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

4.       THE SUBSCRIBER’s Representations, Warranties AND cOVENANTS

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

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

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

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

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

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

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

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

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

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

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

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

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

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