Exhibit 10.1


 


Intellinetics,
inc.


 


NOTE PURCHASE
AGREEMENT


 


This NOTE PURCHASE AGREEMENT
(this “Agreement”) is made and entered into as of ______________ __, 201_, by and between Intellinetics,
Inc., a Nevada corporation (the “Company”), and the investors set forth on the signature pages affixed hereto
(each, an “Investor” and, collectively, the “Investors”).


 


WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant to exemptions from registration under the Securities Act (as
defined below), the Investors wish to purchase from the Company, and the Company wishes to sell and issue to the Investors, upon
the terms and conditions stated in this Agreement, subordinated convertible promissory notes in the aggregate principal amount
of up to $1,250,000 (individually, a “Note” and collectively, the “Notes”), which Notes are
convertible into shares (the “Shares” and collectively with the Notes, the “Securities”)
of the Company’s common stock, par value $0.001 per share (the “Common Stock”), at a conversion price
of $0.65 upon the terms and conditions set forth in the Notes (the “Offering”); and


 


WHEREAS, in connection
with the Investors’ purchase of the Notes and the conversion of the Notes into Shares, the Investors will be subject to certain
restrictions on the transfer of the Securities, all as more fully set forth in this Agreement.


 


NOW, THEREFORE, in
consideration of the mutual terms, conditions and other agreements set forth herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto hereby
agree to the sale and purchase of the Notes as set forth herein.


 


		1.	Definitions.



 


For purposes of this Agreement,
the terms set forth below shall have the corresponding meanings provided below.


 


“Affiliate” shall
mean, with respect to any specified Person (as defined below), (i) if such Person is an individual, the spouse, heirs, executors,
or legal representatives of such individual, or any trusts for the benefit of such individual or such individual’s spouse
and/or lineal descendants, or (ii) otherwise, another Person that directly, or indirectly through one or more intermediaries, controls,
is controlled by, or is under common control with, the Person specified. As used in this definition, “control” shall
mean the possession, directly or indirectly, of the sole and unilateral power to cause the direction of the management and policies
of a Person, whether through the ownership of voting securities or by contract or other written instrument.


 


“Blue Sky Application”
as defined in Section 5.4(a) hereof.


 


“Business Day”
shall mean any day on which banks located in New York City are not required or authorized by law to remain closed.


 


“Closing” and
“Closing Date” as defined in Section 2.2 (c) hereof.


 


“Common Stock”
as defined in the recitals above.


 


“Company” as defined
in the recitals above.


 




     

     


    

 


“Company
Financial Statements” as defined in Section 4.5(a) hereof.


 


“Company’s Knowledge”
means the actual knowledge of any executive officer (as defined in Rule 405 under the Securities Act) or director of the Company,
or the knowledge of any fact or matter which any person would reasonably be expected to become aware of in the course of performing
the duties and responsibilities as an executive officer or director of the Company.


 


“Escrow Agreement”
means that certain agreement, dated December __, 2016 by and among the Company, the Placement Agent and Delaware Trust Company.


 


“Exchange Act”
means the Securities Exchange Act of 1934, as amended.


 


“First Closing”
and “First Closing Date” as defined in Section 2.2(a) hereof.


 


“Investor” and
“Investors” as defined in the recitals above.


 


“Liens”
means any mortgage, lien, title claim, assignment, encumbrance, security interest, adverse claim,
contract of sale, restriction on use or transfer or other defect of title of any kind.


 


“Material Adverse Effect”
means a material adverse effect on (i) the assets, liabilities, results of operations, condition (financial or otherwise), business,
or prospects of the Company and its Subsidiaries taken as a whole, (ii) the transactions contemplated hereby or in any of the Transaction
Documents or (iii) the ability of the Company to perform its obligations under the Transaction Documents (as defined below).


 


“Note Purchase Amount”
as defined in Section 2.1.


 


“Notes” as defined
in the recitals above.


 


“Offering” as
defined in the recitals above.


 


“PA Warrant Shares”
shall mean any shares issuable upon exercise of warrants issued to the Placement Agent as compensation in connection with the transactions
contemplated hereby.


 


“Person” shall
mean an individual, entity, corporation, partnership, association, limited liability company, limited liability partnership, joint-stock
company, trust or unincorporated organization.


 


“Piggyback Registration”
as defined in Section 5.1 hereof.


 


“Placement Agency Agreement”
means that certain agreement, dated December 22, 2016, by and between the Placement Agent and the Company.


 


“Placement Agent”
means Taglich Brothers, Inc.


 


“Principal Amount”
as defined in Section 2.1.


 


“Private Placement Memorandum”
means the Company’s Private Placement Memorandum dated December 22, 2016, and any amendments or supplements thereto.


 


“Registrable
Securities” shall mean the (i) Shares, and (iii) PA Warrant Shares; provided, that a security shall cease to be
a Registrable Security upon (A) sale pursuant to a Registration Statement or Rule 144 under the Securities Act, or (B) such security
becoming eligible for sale without any restriction pursuant to Rule 144 (including, without limitation, volume restrictions) and
without the need for current public information required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable).


 




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“Registration Statement”
shall mean any registration statement of the Company filed under the Securities Act that covers the resale of any of the Registrable
Securities pursuant to the provisions of this Agreement, amendments and supplements to such Registration Statement, including post-effective
amendments, all exhibits and all material incorporated by reference in such Registration Statement.


 


“Regulation D”
as defined in Section 3.7 hereof.


 


“Regulation S”
as defined in Section 6.1(i)(E) hereof.


 


“Rule 144” as
defined in Section 6.1(i)(C) hereof.


 


“SEC” means the
U.S. Securities and Exchange Commission.


 


“SEC Documents”
as defined in Section 4.5 hereof.


 


“Securities” as
defined in the recitals above.


 


“Securities Act”
means the Securities Act of 1933, as amended.


 


“Shares” as defined
in the recitals above.


 


“Subsequent Closing”
and “Subsequent Closing Date” as defined in Section 2.2(b) hereof.


 


“Subsidiaries”
shall mean any corporation or other entity or organization, whether incorporated or unincorporated, in which the Company owns,
directly or indirectly, any equity or other ownership interest or otherwise controls through contract or otherwise.


 


“Transaction Documents”
shall mean this Agreement, the Private Placement Memorandum, the Placement Agency Agreement, the Notes and the Escrow Agreement.


 


“Transfer” shall
mean any sale, transfer, assignment, conveyance, charge, pledge, mortgage, encumbrance, hypothecation, security interest or other
disposition, or to make or effect any of the above.


 


“Underwriter”
shall mean any entity engaged by the Company to serve as an underwriter in connection with a registration or offering of securities
referred to in Section 5.


 




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		2.	Sale and Purchase of the Notes.



 


2.1.        Purchase
of Notes by Investors. Subject to the terms and conditions of this Agreement, on the Closing Date (as hereinafter defined)
each of the Investors shall severally, and not jointly, purchase, and the Company shall sell and issue to the Investors, the Notes,
each such Note containing the terms as set forth in the form attached hereto as Exhibit B, in the respective principal amounts
set forth opposite such Investor’s name on the signature pages attached hereto under the heading “Principal Amount”
in exchange for the payment of the respective “Note Purchase Amount” as set forth opposite such Investor’s
name on Exhibit A-1 or Exhibit A-2 attached hereto, as the case may be.


 


2.2         Closings.


 


(a)       First
Closing. Subject to the terms and conditions set forth in this Agreement, the Company shall issue and sell to each Investor,
and each Investor shall, severally and not jointly, purchase from the Company on the First Closing Date, a Note in such Principal
Amount set forth on the signature pages attached hereto, which will be reflected opposite such Investor’s name on Exhibit
A-1 (the “First Closing”). The date of the First Closing is hereinafter referred to as the “First
Closing Date.”


 


(b)       Subsequent
Closing(s). The Company agrees to issue and sell to each Investor listed on the Subsequent Closing Schedule of Investors, and
each Investor agrees, severally and not jointly, to purchase from the Company on such Subsequent Closing Date a Note in such Principal
Amount set forth on the signature pages attached hereto, which will be reflected opposite such Investor’s name on Exhibit
A-2 (a “Subsequent Closing”). There may be more than one Subsequent Closing; provided, however,
that the final Subsequent Closing shall take place within the time periods set forth in the Private Placement Memorandum. The date
of any Subsequent Closing is hereinafter referred to as a “Subsequent Closing Date.” Notwithstanding the foregoing,
the maximum Principal Amount of Notes to be sold at the First Closing and all Subsequent Closings shall not exceed $1,250,000 in
the aggregate.


 


(c)       Closing.
The First Closing and any applicable Subsequent Closings are each referred to in this Agreement as a “Closing.”
The First Closing Date and any Subsequent Closing Dates are sometimes referred to herein as a “Closing Date.”
All Closings shall occur within the time periods set forth in the Private Placement Memorandum at the offices of Sichenzia Ross
Ference Kesner LLP, counsel to the Placement Agent, at 61 Broadway, 32nd Floor, New York, New York 10006, or remotely
via the exchange of documents and signatures.


 


2.3.        Closing
Deliveries. At each Closing, the Company shall deliver to the Investors, against delivery by the Investor of the Note Purchase
Amount of each respective Note (as provided below), a Note, dated as of the applicable Closing Date, payable to the order of the
Investor in the Principal Amount set forth opposite such Investor’s name on Exhibit A-1 or Exhibit A-2, as
the case may be. At each Closing, each Investor shall deliver or cause to be delivered to the Company the Note Purchase Amount
set forth opposite such Investor’s name on Exhibit A-1 or Exhibit A-2, as the case may be, by paying United
States dollars via bank, certified or personal check which has cleared prior to the applicable Closing Date or in immediately available
funds, by wire transfer to the following escrow account:


 


PNC Bank


300 Delaware Avenue


Wilmington, DE 19801


Acct Name: Delaware Trust Company


ABA#: 031100089


A/C#: 5605012373


OBI: FFC: Intellinetics, Inc. Escrow;
79-2558


Ref: Investor Name


 




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		3.	Representations, Warranties and Acknowledgments of the Investors.



 


Each Investor, severally
and not jointly, represents and warrants to the Company solely as to such Investor that:


 


3.1        Authorization.
The execution, delivery and performance by such Investor of the Transaction Documents to which such Investor is a party have been
duly authorized and will each constitute the valid and legally binding obligation of such Investor, enforceable against such Investor
in accordance with their respective terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability, relating to or affecting creditors’ rights generally.


 


3.2        Purchase
Entirely for Own Account. The Notes to be received by such Investor hereunder, and upon conversion of the Note, the Shares,
will be acquired for such Investor’s own account, not as nominee or agent, and not with a view to the resale or distribution
of any part thereof in violation of the Securities Act, and such Investor has no present intention of selling, granting any participation
in, or otherwise distributing the same in violation of the Securities Act, without
prejudice, however, to such Investor’s right at all times to sell or otherwise dispose of all or any part of such Securities
in compliance with applicable federal and state securities laws. Nothing
contained herein shall be deemed a representation or warranty by such Investor to hold the Securities for any period of time.
Such Investor is not a broker-dealer registered with the SEC under the Exchange Act or an entity engaged in a business
that would require it to be so registered.


 


3.3.       Investment
Experience. Such Investor acknowledges that the purchase of the Securities is a highly speculative investment and that it can
bear the economic risk and complete loss of its investment in the Securities and has such knowledge and experience in financial
or business matters such that it is capable of evaluating the merits and risks of the investment contemplated hereby.


 


3.4        Disclosure
of Information. Such Investor has had an opportunity to receive all information related to the Company and the Securities requested
by it and to ask questions of and receive answers from the Company regarding the Company, its business and the terms and conditions
of the offering of the Notes. Neither such inquiries nor any other due diligence investigation conducted by such Investor shall
modify, amend or affect such Investor’s right to rely on the Company’s representations and warranties contained in
this Agreement and the Private Placement Memorandum. Such Investor acknowledges that it has received and reviewed the Private Placement
Memorandum describing the offering of the Notes (including copies of the Company’s relevant SEC Filings annexed to the Private
Placement Memorandum.


 


3.5        Restricted
Securities. Such Investor understands that the Securities, and the components thereof, are characterized as “restricted
securities” under the U.S. federal securities laws since they are being acquired from the Company in a transaction not involving
a public offering and that under such laws and applicable regulations such securities may be resold without registration under
the Securities Act only in certain limited circumstances.


 




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3.6        Legends.
It is understood that, except as provided below, certificates evidencing the Securities may bear the following or any similar legend:


 


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


 


(b)       If
required by the authorities of any state in connection with the issuance of sale of the Notes, the legend required by such state
authority.


 


3.7        Accredited
Investor. Such Investor is an accredited investor as defined in Rule 501(a) of Regulation D, as amended, under the Securities
Act (“Regulation D”).


 


3.8        No
General Solicitation. Such Investor did not learn of the investment in the Notes as a result of any public advertising or general
solicitation.


 


3.9        Brokers
and Finders. No Investor will have, as a result of the transactions contemplated by the Transaction Documents, any valid right,
interest or claim against or upon the Company, any Subsidiary or any other Investor, for any commission, fee or other compensation
pursuant to any agreement, arrangement or understanding entered into by or on behalf of such Investor.


 


		4.	Representations and Warranties of the Company.



 


The Company represents,
warrants and covenants to the Investors that:


 


4.1.        Organization;
Execution, Delivery and Performance.


 


(a)       The
Company and each of its Subsidiaries, if any, is a corporation or other entity duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is incorporated or organized, with full power and authority (corporate and other)
to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted.
The Company is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which its
ownership or use of property or the nature of the business conducted by it makes such qualification necessary except where the
failure to be so qualified or in good standing would not have a Material Adverse Effect.


 




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(b)       (i)
The Company has all requisite corporate power and authority to enter into and perform the Transaction Documents and to consummate
the transactions contemplated hereby and thereby and to issue the Securities, in accordance with the terms hereof and thereof,
(ii) the execution and delivery of the Transaction Documents by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby (including without limitation, the issuance of the Notes and the reservation for issuance and issuance
of the Shares upon conversion of the Notes) have been duly authorized by the Company’s Board of Directors and no further
consent or authorization of the Company, its Board of Directors, or its stockholders, is required, (iii) each of the Transaction
Documents has been duly executed and delivered by the Company by its authorized representative, and such authorized representative
is a true and official representative with authority to sign each such document and the other documents or certificates executed
in connection herewith and bind the Company accordingly, and (iv) each of the Transaction Documents constitutes, and upon execution
and delivery thereof by the Company will constitute, a legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except to the extent limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other laws of general application affecting enforcement of creditors’ rights and general principles of equity that restrict
the availability of equitable or legal remedies.


 


4.2.        Notes
and Shares Duly Authorized. The issuance of the Notes is duly authorized and upon issuance in accordance with the terms of
this Agreement shall be validly issued, fully paid and nonassessable and free from all taxes or Liens with respect to the issue
thereof and shall not be subject to preemptive rights or other similar rights of stockholders of the Company. As of the applicable
Closing Date, the Company shall have reserved from its duly authorized capital stock not less than 100% of the maximum number of
Shares initially issuable upon conversion of the Notes (assuming for purposes hereof that the Notes are convertible at the initial
Conversion Price (as defined in the Notes) and without taking into account any limitations on the conversion of the Notes set forth
in the Notes. Upon issuance or conversion in accordance with the terms of this Agreement and the Notes, the Shares, when issued,
will be validly issued, fully paid and nonassessable and free from all taxes or Liens with respect to the issue thereof and shall
not be subject to preemptive rights or other similar rights of stockholders of the Company. Subject to the accuracy of the representations
and warranties of the Investors to this Agreement, the offer and issuance by the Company of the Notes and upon conversion, the
Shares, is exempt from registration under the Securities Act.


 


4.3         No
Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby will not: (i) conflict with or result in a violation of any provision
of the Certificate of Incorporation or By-laws or (ii) violate or conflict with, or result in a breach of any provision of, or
constitute a default (or an event which with notice or lapse of time or both could become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or instrument
to which the Company or any of its Subsidiaries is a party, except for possible violations, conflicts or defaults as would not,
individually or in the aggregate, have a Material Adverse Effect, or (iii) result in a violation of any law, rule, regulation,
order, judgment or decree (including federal and state securities laws and regulations and regulations of any self-regulatory
organizations to which the Company or its securities are subject) applicable to the Company or any of its Subsidiaries or by which
any property or asset of the Company or any of its Subsidiaries is bound or affected. Except for the failure of the Company to
hold a shareholder meeting in 2012, as required by its By-laws, neither the Company nor any of its Subsidiaries is in violation
of its Certificate of Incorporation, By-laws or other organizational documents. Neither the Company nor any of its Subsidiaries
is in default (and no event has occurred which with notice or lapse of time or both could put the Company or any of its Subsidiaries
in default) under, and neither the Company nor any of its Subsidiaries has taken any action or failed to take any action that
would give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument
to which the Company or any of its Subsidiaries is a party or by which any property or assets of the Company or any of its Subsidiaries
is bound or affected, or for possible defaults as would not, individually or in the aggregate, have a Material Adverse Effect.
The businesses of the Company and its Subsidiaries are not being conducted in violation of any law, rule ordinance or regulation
of any governmental entity, except for possible violations which would not, individually or in the aggregate, have a Material
Adverse Effect. Except as required under the Securities Act, the Exchange Act, the
rules and regulations of the OTCQB and any applicable state securities laws, the Company is not required to obtain any
consent, authorization or order of, or make any filing or registration with, any court, governmental agency, regulatory agency,
self regulatory organization or stock market or any third party in order for it to execute, deliver or perform any of its obligations
under this Agreement or to issue and sell the Notes and upon conversion, the Shares, in accordance with the terms hereof. All
consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to the date hereof.


 




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4.4.        Capitalization.
As of December 16, 2016, the authorized capital stock of the Company consists of 50,000,000 shares of Common Stock, of which 16,815,850
shares are issued and outstanding, 5,501,171 shares are reserved for issuance pursuant to existing warrants to purchase Common
Stock; 1,930,557 are reserved for issuance pursuant to the 2015 Intellinetics, Inc. Equity Incentive Plan, and 281,250 shares are
reserved for issuance in accordance with outstanding convertible notes. Except as described above or in the Private Placement Memorandum,
(i) there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements,
understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or rights convertible
into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, or arrangements by which the Company
or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries,
(ii) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale
of any of its or their securities under the Securities Act (except for the registration rights provisions contained herein) and
(iii) there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement
providing rights to security holders) that will be triggered by the issuance of the Shares. All of such outstanding shares of capital
stock are, or upon issuance will be, duly authorized, validly issued, fully paid and nonassessable. No shares of capital stock
of the Company are subject to preemptive rights or any other similar rights of the stockholders of the Company or any Lien imposed
through the actions or failure to act of the Company.


 


4.5.        SEC
Information.


 


(a)       Since
the filing of the “Form 10 information” referenced in Section 4.19 of this Agreement, the Company has timely filed
all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting
requirements of the Exchange Act (all of the foregoing and all other documents filed with the SEC prior to the date hereof and
all exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein, being
hereinafter referred to herein as the “SEC
Documents”). The SEC Documents have been made available to the Investors via the SEC’s EDGAR system. As
of their respective dates, the SEC Documents complied in all material respects with the requirements of the Exchange Act and the
rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the
time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were
made, not misleading. As of their respective dates, the financial statements of the Company included in the SEC Documents (“Company
Financial Statements”) complied as to form in all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto. The Company Financial Statements have been prepared in accordance with United
States generally accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent
they may not include footnotes or may be condensed or summary statements) and fairly present in all material respects the consolidated
financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).
Except as set forth in the Company Financial Statements, the Company has no liabilities, contingent or otherwise, other than: (i)
liabilities incurred in the ordinary course of business subsequent to September 30, 2016 (the fiscal period end of the Company’s
most recently-filed periodic report), and (ii) obligations under contracts and commitments incurred in the ordinary course of business
and not required under generally accepted accounting principles to be reflected in such financial statements, which, individually
or in the aggregate, are not material to the financial condition or operating results of the Company.


 




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(b)       The
shares of Common Stock are currently traded on the OTCQB. Except as set forth in the SEC Documents, the Company has not  received
notice (written or oral) from the OTC Markets or the Financial Industry Regulatory Authority, Inc. to the effect that the Company
is not in compliance with the continued listing and maintenance requirements of such market. The Company is in material compliance
with all such listing and maintenance requirements.


 


4.6         Permits;
Compliance. The Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations, licenses,
permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate its
properties and to carry on its business as it is now being conducted (collectively, the “Company
Permits”), and there is no action pending or, to the knowledge of the Company, threatened regarding suspension
or cancellation of any of the Company Permits. Neither the Company nor any of its Subsidiaries is in conflict with, or in default
or violation of, any of the Company Permits, except for any such conflicts, defaults or violations which, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect. Since September 30, 2016, neither the Company nor
any of its Subsidiaries has received any notification with respect to possible conflicts, defaults or violations of applicable
laws, except for notices relating to possible conflicts, defaults or violations, which conflicts, defaults or violations would
not have a Material Adverse Effect.


 


4.7         Litigation.
Except as set forth in the SEC Documents, there is no action, suit, claim, proceeding, inquiry or investigation before or by any
court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any
of its Subsidiaries, threatened against or affecting the Company or any of its Subsidiaries, or their respective businesses, properties
or assets or their officers or directors in their capacity as such, that would have a Material Adverse Effect. The Company is unaware
of any facts or circumstances which might give rise to any of the foregoing. There has not been, and to the Company’s Knowledge,
there is not pending or contemplated, any investigation by the SEC involving the Company, any of its Subsidiaries or any current
or former director or executive officer of the Company or any of its Subsidiaries.


 


4.8         No
Material Changes.


 


(a)         Since
September 30, 2016, except as set forth in the SEC Documents, there has not been:


 


(i)       Any
material adverse change in the financial condition, operations or business of the Company from that shown on the Company Financial
Statements, or any material transaction or commitment effected or entered into by the Company outside of the ordinary course of
business;


 


(ii)       Any
effect, change or circumstance which has had, or could reasonably be expected to have, a Material Adverse Effect; or


 




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(iii)       Any
incurrence of any material liability outside of the ordinary course of business.


 


4.9        No
General Solicitation. Neither the Company nor any person participating on the Company’s behalf in the transactions contemplated
hereby has conducted any “general solicitation,” as such term is defined in Regulation D promulgated under the Securities
Act, with respect to any of the Notes being offered hereby.


 


4.10       No
Integrated Offering. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly
or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances that would
require registration under the Securities Act of the issuance of the Securities to the Investors. The issuance of the Securities
to the Investors will not be integrated with any other issuance of the Company’s securities (past, current or future) for
purposes of any stockholder approval provisions applicable to the Company or its securities.


 


4.11       No
Brokers. Except as set forth in Section 9.1, the Company has taken no action which would give rise to any claim by any person
for brokerage commissions, transaction fees or similar payments relating to this Agreement or the transactions contemplated hereby.


 


4.12      Internal
Controls. The Company is in material compliance with the provisions of the Sarbanes-Oxley
Act of 2002 currently applicable to the Company. The Company and the Subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles. The Company has established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Company and designed such disclosure controls
and procedures to ensure that material information relating to the Company, including the Subsidiaries, is made known to the certifying
officers by others within those entities, particularly during the period in which the Company’s most recently filed period
report under the Exchange Act, as the case may be, is being prepared. The Company's certifying officers have evaluated the effectiveness
of the Company's controls and procedures as of the end of the period covered by the most recently filed periodic report under
the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic
report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and
procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no significant changes
in the Company's internal controls (as such term is defined in Item 308 of Regulation S-K) or, to the Company's Knowledge, in
other factors that could significantly affect the Company's internal controls. The Company maintains and will continue to maintain
a standard system of accounting established and administered in accordance with GAAP and the applicable requirements of the Exchange
Act.


 


4.13      Form
D; Blue Sky Laws. The Company agrees to file a Form D with respect to the Notes as required under Regulation D within five
(5) business days after the First Closing and to provide a copy thereof to the Placement Agent promptly after such filing. The
Company shall take such action as the Company shall reasonably determine is necessary to qualify the Securities for sale to the
Investors at the applicable Closing pursuant to this Agreement under applicable securities or “blue sky” laws of the
states of the United States (or to obtain an exemption from such qualification).


 




    	 	10	 



     


    

 


4.14      Disclosure.
The Company confirms that neither it nor any other Person acting on its behalf has provided any of the Investors or their agents
or counsel with any information that constitutes or could reasonably be expected to constitute material, non-public information
concerning the Company or any of its Subsidiaries, other than the existence of the transactions contemplated by this Agreement
and the other Transaction Documents. The Company understands and confirms that each of the Investors will rely on the foregoing
representations in effecting transactions in securities of the Company. All disclosure provided to the Investors regarding the
Company and its Subsidiaries, their businesses and the transactions contemplated hereby, including the schedules to this Agreement,
furnished by or on behalf of the Company or any of its Subsidiaries is true and correct in all material respects and does not contain
any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading. Each press release issued by the Company or any of
its Subsidiaries during the twelve (12) months preceding the date of this Agreement did not at the time of release contain any
untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they are made, not misleading. No event or circumstance has
occurred or information exists with respect to the Company or any of its Subsidiaries or its or their business, properties, liabilities,
results of operations or financial conditions, which, under applicable law, rule or regulation, requires public disclosure at or
before the date hereof or announcement by the Company but which has not been so publicly disclosed. The Company acknowledges and
agrees that no Investor makes or has made any representations or warranties with respect to the transactions contemplated hereby
other than those specifically set forth in Section 3.


 


4.15      Intellectual
Property Rights. The Company and its Subsidiaries own or possess adequate rights or licenses to use all trademarks, trade names,
service marks, service mark registrations, service names, patents, patent rights, copyrights, original works, inventions, licenses,
approvals, governmental authorizations, trade secrets and other intellectual property rights and all applications and registrations
therefor (“Intellectual Property Rights”) necessary to conduct their respective businesses as
now conducted and as presently proposed to be conducted. None of the Company’s or its Subsidiaries’ Intellectual Property
Rights have expired, terminated or been abandoned, or are expected to expire, terminate or be abandoned, within two (2) years from
the date of this Agreement. The Company has no knowledge of any infringement by the Company or any of its Subsidiaries of Intellectual
Property Rights of others. Except as set forth in the SEC Documents, there is no claim, action or proceeding being made or brought,
or to the Company’s Knowledge, being threatened, against the Company or any of its Subsidiaries regarding their Intellectual
Property Rights. The Company is not aware of any facts or circumstances which might give rise to any of the foregoing infringements
or claims, actions or proceedings. The Company and each of its Subsidiaries have taken reasonable security measures to protect
the secrecy, confidentiality and value of all of their Intellectual Property Rights, except where failure to take such measures
would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.


 


4.16      Tax
Status. Except for occurrences that would not, either individually or in the aggregate, reasonably be expected to result in
a Material Adverse Effect, the Company and each of its Subsidiaries (i) has timely made or filed all foreign, federal and state
income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has timely
paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith and (iii) has set aside on its books provision reasonably
adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers
of the Company and its Subsidiaries know of no basis for any such claim. The Company is not operated in such a manner as to qualify
as a passive foreign investment company, as defined in Section 1297 of the U.S. Internal Revenue Code of 1986, as amended.


 




    	 	11	 



     


    

 


4.17      Acknowledgement
Regarding Investors’ Trading Activity. It is understood and acknowledged by the Company that (i) following the public
disclosure of the transactions contemplated by the Transaction Documents in accordance with the terms thereof, none of the Investors
have been asked by the Company or any of its Subsidiaries to agree, nor has any Investor agreed with the Company or any of its
Subsidiaries, to desist from effecting any transactions in or with respect to (including, without limitation, purchasing or selling,
long and/or short) any securities of the Company, or “derivative” securities based on securities issued by the Company
or to hold any of the Securities for any specified term; (ii) any Investor, and counterparties in “derivative” transactions
to which any such Investor is a party, directly or indirectly, presently may have a “short” position in the Common
Stock which was established prior to such Investor’s knowledge of the transactions contemplated by the Transaction Documents;
and (iii) each Investor shall not be deemed to have any affiliation with or control over any arm’s length counterparty in
any “derivative” transaction. The Company further understands and acknowledges that following the public disclosure
of the transactions contemplated by the Transaction Documents, one or more Investors may engage in hedging and/or trading activities
at various times during the period that the Securities are outstanding, and such hedging and/or trading activities, if any, can
reduce the value of the existing stockholders’ equity interest in the Company both at and after the time the hedging and/or
trading activities are being conducted. The Company acknowledges that such aforementioned hedging and/or trading activities do
not constitute a breach of this Agreement or any other Transaction Document or any of the documents executed in connection herewith
or therewith.


 


4.18      Manipulation
of Price. Neither the Company nor any of its Subsidiaries has, and, to the Company’s Knowledge, no Person acting on their
behalf has, directly or indirectly, (i) taken any action designed to cause or to result in the stabilization or manipulation of
the price of any security of the Company or any of its Subsidiaries to facilitate the sale or resale of any of the Securities,
(ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities (other than the Placement
Agent), or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of
the Company or any of its Subsidiaries (other than the Placement Agent).


 


4.19      Shell
Company Status. The Company was previously a “shell issuer”, as defined in Rule 144(i)(1), promulgated under the
Securities Act. The Company confirms that: (i) effective February 10, 2012, it ceased to be a “shell issuer”; (ii)
it has not been a “shell issuer” between February 10, 2012 and the date of this Agreement; (iii) it is subject to the
reporting requirements of Section 13 of the Exchange Act; (iv) it has filed all reports and other materials required to be filed
by Section 13 of the Exchange Act during the 12 month period prior to the date of this Agreement, and (v) more than one year ago,
it filed current “Form 10 information”, as defined in Rule 144(i)(3), with the SEC, which reflects that it is not a
“shell issuer”.


 


		5.	Registration Rights.



 


5.1.       PiggyBack
Registration. Whenever the Company proposes to register any of its securities under the Securities Act, whether for its own
account or for the account of another stockholder (except for the registration of securities (A) to be offered pursuant to an employee
benefit plan on Form S-8 or (B) pursuant to a registration made on Form S-4, or any successor forms then in effect) at any time
and the registration form to be used may be used for the registration of the Registrable Securities (a “Piggyback Registration”),
it will so notify in writing all holders of Registrable Securities no later than the earlier to occur of (i) the tenth (10th)
day following the Company’s receipt of notice of exercise of other demand registration rights, or (ii) thirty (30) days prior
to the anticipated filing date. Subject to the provisions of this Agreement, the Company will include in the Piggyback Registration
all Registrable Securities, on a pro rata basis based upon the total number of Registrable Securities with respect to which the
Company has received written requests for inclusion within ten (10) business days after the applicable holder’s receipt of
the Company’s notice.


 




    	 	12	 



     


    

 


5.2.       Expenses.
All fees and expenses incident to the performance of or compliance with this Agreement by the Company shall be borne by the Company,
whether or not any Registrable Securities are sold pursuant to the Registration Statement. The fees and expenses referred to in
the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with the trading market on which the Common Stock is then listed
for trading, and (B) in compliance with applicable state securities or Blue Sky laws, (ii) processing expenses of the Placement
Agent, including, but not limited to, printing expenses, messenger, telephone and delivery expenses and customary marketing expenses,
(iii) fees and disbursements of counsel and independent public accountants for the Company, (iv) fees and disbursements of one
counsel to the Placement Agent, and (v) filing fees and counsel fees of the Placement Agent if a determination is made that a FINRA
Rule 5110 filing is required to be made with respect to the Registration Statement.


 


5.3.       Offering.
In the event the staff of the SEC (the “Staff”) or the SEC seeks to characterize any offering pursuant
to a Registration Statement filed pursuant to this Agreement as constituting an offering of securities by, or on behalf of,
the Company, or in any other manner, such that the Staff or the SEC do not permit such Registration Statement to
become effective and used for resales in a manner that does not constitute such an offering and that permits the continuous resale
at the market by the Investors participating therein (or as otherwise may be acceptable to each Investor) without being
named therein as an “underwriter,” then the Company shall reduce the number of shares to be included in such Registration
Statement until such time as the Staff and the SEC shall so permit such Registration Statement to become effective as aforesaid. In
making such reduction, the Company shall (X) reduce, and if necessary, eliminate, in order, (i) any Registrable Securities that
are not Shares or PA Warrant Shares then (ii) any Registrable Securities that are not Shares, then (Y) if necessary, reduce the
number of shares to be included by all Investors on a pro rata basis (based upon the number of Registrable Securities otherwise
required to be included for each Investor) unless the inclusion of shares by a particular Investor or a particular set of Investors
are resulting in the Staff or the SEC’s “by or on behalf of the Company” offering position, in which event
the shares held by such Investor or set of Investors shall be the only shares subject to reduction (and if by a set of Investors
on a pro rata basis by such Investors or on such other basis as would result in the exclusion of the least number of shares by
all such Investors).  In addition, in the event that the Staff or the SEC requires any Investor seeking to sell securities
under a Registration Statement filed pursuant to this Agreement to be specifically identified as an “underwriter” in
order to permit such Registration Statement to become effective, and such Investor does not consent to being so named as an underwriter
in such Registration Statement, then, in each such case, the Company shall reduce the total number of Registrable Securities
to be registered on behalf of such Investor, until such time as the Staff or the SEC does not require such identification
or until such Investor accepts such identification and the manner thereof. Notwithstanding anything else to the foregoing,
any reduction pursuant to this paragraph will first reduce all securities that are not Registrable Securities,. In the
event of any reduction in Registrable Securities pursuant to this paragraph, an affected Investor shall have the right
to require, upon delivery of a written request to the Company signed by such Investor, the Company to file a registration statement
within thirty (30) days of such request (subject to any restrictions imposed by Rule 415 promulgated by the SEC under the Securities
Act or required by the Staff or the SEC) for resale by such Investor in a manner acceptable to such Investor, and the
Company shall following such request cause to be and keep effective such registration statement in the same manner as otherwise
contemplated in this Agreement for registration statements hereunder, in each case until such time as: (i) all Registrable
Securities held by such Investor have been registered and sold pursuant to an effective Registration Statement in a manner
acceptable to such Investor or (ii) all Registrable Securities may be resold by such Investor without restriction (including,
without limitation, volume limitations) pursuant to Rule 144 (taking account of any Staff position with respect to “affiliate”
status) and without the need for current public information required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable) or (iii)
such Investor agrees to be named as an underwriter in any such Registration Statement in a manner acceptable to such Investor as
to all Registrable Securities held by such Investor and that have not theretofore been included in a Registration Statement under
this Agreement (it being understood that the special demand right under this sentence may be exercised by an Investor multiple
times and with respect to limited amounts of Registrable Securities in order to permit the resale thereof by such Investor as contemplated
above).


 




    	 	13	 



     


    

 


5.4.        Indemnification.


 


(a)       Indemnification
by the Company. The Company will indemnify and hold harmless each Investor and its officers, directors, members, shareholders,
partners, representatives, employees and agents, successors and assigns, and each other person, if any, who controls such Investor
within the meaning of the Securities Act, against any losses, obligations, claims, damages, liabilities, contingencies, judgments,
fines, penalties, charges, costs (including, without limitation, court costs, reasonable attorneys’ fees and costs of defense
and investigation), amounts paid in settlement or expenses, joint or several, (collectively, “Claims”) incurred in
investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing
by or before any court or governmental, administrative or other regulatory agency, body or the SEC, whether pending or threatened,
whether or not an indemnified party is or may be a party thereto, to which any of them may become subject insofar as such Claims
(or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue
statement or alleged untrue statement of any material fact contained in any Registration Statement, any preliminary prospectus
or final prospectus contained therein, or the Private Placement Memorandum, or any amendment or supplement thereof; (ii) any blue
sky application or other document executed by the Company specifically for that purpose or based upon written information furnished
by the Company filed in any state or other jurisdiction in order to qualify any or all of the Registrable Securities under the
securities laws thereof (any such application, document or information herein called a “Blue Sky Application”);
(iii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; (iv) any violation by the Company or its agents of any rule or regulation promulgated under
the Securities Act applicable to the Company or its agents and relating to action or inaction required of the Company in connection
with such registration; or (v) any failure to register or qualify the Registrable Securities included in any such Registration
Statement in any state where the Company or its agents has affirmatively undertaken or agreed in writing that the Company will
undertake such registration or qualification on an Investor’s behalf and will reimburse such Investor, and each such officer,
director or member and each such controlling person for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such Claim or action; provided, however, that the Company will not be liable in any
such case if and to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by such Investor or
any such controlling person in writing specifically for use in such Registration Statement or Prospectus.


 


(b)       Indemnification
by the Investors. Each Investor agrees, severally but not jointly, to indemnify and hold harmless, to the fullest extent permitted
by law, the Company, its directors, officers, employees, stockholders, partner, representatives and each person who controls the
Company (within the meaning of the Securities Act) against any Claims resulting from any untrue statement of a material fact or
any omission of a material fact required to be stated in the Registration Statement or Prospectus or preliminary prospectus or
amendment or supplement thereto or necessary to make the statements therein not misleading, to the extent, but only to the extent
that such untrue statement or omission is contained in any information furnished in writing by such Investor to the Company specifically
for inclusion in such Registration Statement or Prospectus or amendment or supplement thereto. In no event shall the liability
of an Investor be greater in amount than the dollar amount of the proceeds (net of all expense paid by such Investor in connection
with any claim relating to this Section 5.3 and the amount of any damages such Investor has otherwise been required to pay by reason
of such untrue statement or omission) received by such Investor upon the sale of the Registrable Securities included in the Registration
Statement giving rise to such indemnification obligation.


 




    	 	14	 



     


    

 


(c)       Conduct
of Indemnification Proceedings. Any person entitled to indemnification hereunder shall (i) give prompt notice to the indemnifying
party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense
of such claim with counsel reasonably satisfactory to the indemnified party; provided that any person entitled to indemnification
hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses
of such counsel shall be at the expense of such person unless (a) the indemnifying party has agreed to pay such fees or expenses,
or (b) the indemnifying party shall have failed to assume the defense of such claim or employ counsel reasonably satisfactory to
such person or (c) in the reasonable judgment of any such person, based upon written advice of its counsel, a conflict of interest
exists between such person and the indemnifying party with respect to such claims (in which case, if the person notifies the indemnifying
party in writing that such person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of such claim on behalf of such person); and provided, further,
that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations
hereunder, except to the extent that such failure to give notice shall materially adversely affect the indemnifying party in the
defense of any such claim or litigation. It is understood that the indemnifying party shall not, in connection with any proceeding
in the same jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys at any time for all such indemnified
parties. No indemnifying party will, except with the consent of the indemnified party, which consent shall not be unreasonably
withheld or delayed, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim
or litigation.


 


(d)       Contribution.
If for any reason the indemnification provided for in the preceding paragraphs (a) and (b) is unavailable to an indemnified party
or insufficient to hold it harmless, other than as expressly specified therein, then the indemnifying party shall contribute to
the amount paid or payable by the indemnified party as a result of such Claim in such proportion as is appropriate to reflect the
relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations. No
person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the Securities Act shall be entitled to contribution
from any person not guilty of such fraudulent misrepresentation. In no event shall the contribution obligation of a holder of Registrable
Securities be greater in amount than the dollar amount of the proceeds (net of all expenses paid by such holder in connection with
any claim relating to this Section 5.3 and the amount of any damages such holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission) received by it upon the sale of the Registrable Securities
giving rise to such contribution obligation.


 


5.5.       Cooperation
by Investor. Each Investor shall furnish to the Company or the Underwriter, as applicable, such information regarding the Investor
and the distribution proposed by it as the Company may reasonably request in connection with any registration or offering referred
to in this Section 5. Each Investor shall cooperate as reasonably requested by the Company in connection with the preparation of
the registration statement with respect to such registration, and for so long as the Company is obligated to file and keep effective
such registration statement, shall provide to the Company, in writing, for use in the registration statement, all such information
regarding the Investor and its plan of distribution of the Shares included in such registration as may be reasonably necessary
to enable the Company to prepare such registration statement, to maintain the currency and effectiveness thereof and otherwise
to comply with all applicable requirements of law in connection therewith.


 




    	 	15	 



     


    

 


		6.	Transfer Restrictions.



 


6.1.        Transfer
or Resale. Each Investor understands that:


 


(i)        Except
as provided in the registration rights provisions set forth above, the sale or resale of all or any portion of the Securities has
not been and is not being registered under the Securities Act or any applicable state securities laws, and all or any portion of
the Securities may not be transferred unless:


 


(A)       the
Securities are sold pursuant to an effective registration statement under the Securities Act;


 


(B)        the
Investor shall have delivered to the Company, at the cost of the Company, a customary opinion of counsel that shall be in form,
substance and scope reasonably acceptable to the Company, to the effect that the Securities to be sold or transferred may be sold
or transferred pursuant to an exemption from such registration;


 


(C)        the
Securities are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under the Securities Act (or
a successor rule) (“Rule 144”)) of the Investor who agrees to sell or otherwise transfer the Securities only
in accordance with this Section 6.1 and who is an Accredited Investor;


 


(D)        the
Securities are sold pursuant to Rule 144; or


 


(E)        the
Securities are sold pursuant to Regulation S under the Securities Act (or a successor rule) (“Regulation S”);


 


and, in each case, the Investor shall have
delivered to the Company, at the cost of the Company, a customary opinion of counsel, in form, substance and scope reasonably acceptable
to the Company. Notwithstanding the foregoing or anything else contained herein to the contrary, the Securities may be pledged
as collateral in connection with a bona fide margin account or other lending arrangement.


 


6.2        Transfer
Agent Instructions. If an Investor provides the Company with a customary opinion of counsel, that shall be in form, substance
and scope reasonably acceptable to the Company, to the effect that a public sale or transfer of such Securities may be made without
registration under the Securities Act and such sale or transfer is effected, the Company shall permit the transfer and promptly
instruct its transfer agent to issue one or more certificates, free from restrictive legend, in such name and in such denominations
as specified by such Investor. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable
harm to the Investors, by vitiating the intent and purpose of the transactions contemplated hereby. Accordingly, the Company acknowledges
that the remedy at law for a breach of its obligations under this Section 6.2 may be inadequate and agrees, in the event of a breach
or threatened breach by the Company of the provisions of this Section, that the Investors shall be entitled, in addition to all
other available remedies, to an injunction restraining any breach and requiring immediate transfer, without the necessity of showing
economic loss and without any bond or other security being required.


 




    	 	16	 



     


    

 


6.3        Public
Information.  At any time during the period commencing from the six (6) month anniversary of the Closing Date and ending
on the two (2) year anniversary of the Closing Date, if the Company shall fail for any reason to satisfy the current public information
requirement under Rule 144(c) (a “Public Information Failure”) then, in addition to such Investor’s other
available remedies, the Company shall pay to each Investor, in cash, as partial liquidated damages and not as a penalty, by reason
of any such delay in or reduction of its ability to sell the Shares, an amount in cash equal to one percent (1.0%) of the aggregate
Purchase Price of such Investor’s Notes on the day of a Public Information Failure and on every thirtieth (30th)
day (pro-rated for periods totaling less than thirty days) thereafter until the earlier of (a) the date such Public Information
Failure is cured and (b) such time that such public information is no longer required  for the Investors to transfer the Shares
pursuant to Rule 144.  The payments to which an Investor shall be entitled pursuant to this Section 6.3 are referred to herein
as “Public Information Failure Payments.”  Public Information Failure Payments shall be paid on the earlier
of (i) the last day of the calendar month during which such Public Information Failure Payments are incurred and (ii) the third
(3rd) Business Day after the event or failure giving rise to the Public Information Failure Payments is cured. In the
event the Company fails to make Public Information Failure Payments in a timely manner, such Public Information Failure Payments
shall bear interest at the rate of 1.5% per month (prorated for partial months) until paid in full. Nothing herein shall limit
such Investor’s right to pursue actual damages for the Public Information Failure, and such Investor shall have the right
to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or
injunctive relief.


 




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		7.	Conditions to Closing of the Investors.



 


The obligation of each
Investor hereunder to purchase the Notes at the Closing is subject to the satisfaction, at or before the applicable Closing Date,
of each of the following conditions, provided that these conditions are for each Investor’s sole benefit and may be waived
by such Investor at any time in its sole discretion by providing the Company with prior written notice thereof:


 


7.1        Representations,
Warranties and Covenants. The representations and warranties of the Company shall be true and correct in all material respects
as of the date when made and as of the Closing Date as though originally made at that time (except for representations and warranties
that speak as of a specific date, which shall be true and correct in all material respects as of such date) and the Company shall
have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required to be performed,
satisfied or complied with by the Company at or prior to the Closing Date. Such Investor shall have received a certificate, executed
by the Chief Executive Officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters
as may be reasonably requested by such Investor in the form reasonably acceptable to such Investor.


 


7.2        Consents.
The Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale
of the Notes.


 


7.3        Delivery
by Company. The Company shall have duly executed and delivered to such Investor (A) each of the other Transaction Documents
and (B) the Notes in the Principal Amount as is set forth on Exhibit A-1 or Exhibit A-2, as the case may be, being purchased by
such Investor at the Closing pursuant to this Agreement.


 


7.4        Legal
Opinion. Such Investor shall have received the opinion of the Company’s counsel, dated as of the Closing Date, in the
form reasonably acceptable to such Investor.


 


7.5       No
Material Adverse Effect. Since the date of first execution of this Agreement, no event or series of events shall have occurred
that reasonably would have or result in a Material Adverse Effect.


 


7.6       No
Prohibition. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any
of the transactions contemplated by the Transaction Documents.


 


7.7        Other
Documents. The Company shall have delivered to such Investor such other documents, instruments or certificates relating to
the transactions contemplated by this Agreement as such Investor or its counsel may reasonably request.


 


		8.	Conditions to Closing of the Company.



 


The obligations of the
Company to effect the transactions contemplated by this Agreement with each Investor are subject to the fulfillment at or prior
to each Closing Date of the conditions listed below.


 


8.1.       Representations
and Warranties. The representations and warranties made by such Investor in Section 3 shall be true and correct in all material
respects at the time of Closing as if made on and as of such date.


 


8.2.       Corporate
Proceedings. All corporate and other proceedings required to be undertaken by such Investor in connection with the transactions
contemplated hereby shall have occurred and all documents and instruments incident to such proceedings shall be reasonably satisfactory
in substance and form to the Company.


 




    	 	18	 



     


    

 


		9.	Miscellaneous.



 


9.1.       Compensation
of Placement Agent. The Investor acknowledges that it is aware that the Placement Agent will receive from the Company, in consideration
for its services as financial advisor and placement agent in respect of the transactions contemplated hereby, (a) a commission
success fee equal to 8% of the Principal Amount of the Notes sold at each Closing, payable in cash, (b) an expense allowance, which
shall include reimbursement of legal expenses incurred in connection with the transactions contemplated hereby, not to exceed $30,000
without the Company’s prior written approval, payable in cash, (c) reimbursement for all filing fees the Placement Agent
is required to pay the Financial Industry Regulatory Authority (“FINRA”) and reasonable fees and expenses of legal
counsel to Placement Agent in connection with such filings with FINRA; and (d) five-year warrants to purchase such number
of shares of the Company’s Common Stock equal to eight percent (8%) of the number of Shares initially issuable upon conversion
of the Notes sold in the Offering, at an exercise price equal to $0.75 per share.


 


9.2.       Notices.
All notices, requests, demands and other communications provided in connection with this Agreement shall be in writing and shall
be deemed to have been duly given at the time when hand delivered, delivered by express courier, or sent by facsimile (with receipt
confirmed by the sender’s transmitting device) in accordance with the contact information provided below or such other contact
information as the parties may have duly provided by notice.


 


The Company:


 





	Intellinetics, Inc.	 	With a copy to:	Kegler, Brown, Hill & Ritter Co., L.P.A.
	2190 Dividend Drive	 	 	65 E. State St., Ste 1800
	Columbus, Ohio 43228-3806	 	 	Columbus, Ohio 43215
	Telephone:   (614) 388-8909	 	 	Telephone:  (614) 462-5400
	Attention:     Mr. Matthew L. Chretien,	 	 	Facsimile:    (614) 464-2634
	President and Chief Executive Officer	 	 	Attention:    Erin C. Herbst







 


The Investors:


 


As per the contact information provided on
the signature pages hereof.


 


Taglich Brothers, Inc.:


 





	Taglich Brothers, Inc.	 	With a copy to:  	Sichenzia Ross Ference Kesner LLP
	275 Madison Avenue, Suite 1618	 	 	61 Broadway, 32nd Floor
	New York, NY 10016	 	 	New York, New York 10006
	Telephone:   (212) 661-6886	 	 	Telephone:  (212) 930-9700
	Facsimile:    (212) 661-6824	 	 	Facsimile:    (212) 930-9725
	Attention:     Robert C. Schroeder	 	 	Attention:    Marc J. Ross, Esq.
	Vice President, Investment Banking	 	 	 







  




    	 	19	 



     


    

 


9.3         Survival
of Representations and Warranties. Each party hereto covenants and agrees that the representations and warranties of such party
contained in this Agreement shall survive the Closing. Each Investor shall be responsible only for its own representations, warranties,
agreements and covenants hereunder.


 


9.4         Indemnification.


 


(a)       The
Company agrees to indemnify and hold harmless each Investor and its Affiliates and their respective directors, officers, employees
and agents from and against any and all losses, claims, damages, liabilities and expenses (including without limitation reasonable
attorney fees and disbursements and other expenses incurred in connection with investigating, preparing or defending any action,
claim or proceeding, pending or threatened and the costs of enforcement thereof) (collectively, “Losses”) to
which such Person may become subject as a result of any breach of representation, warranty, covenant or agreement made by or to
be performed on the part of the Company under the Transaction Documents, and will reimburse any such Person for all such amounts
as they are incurred by such Person.


 


(b)       Promptly
after receipt by any Investor (the “Indemnified Person”) of notice of any demand, claim or circumstances which
would or might give rise to a claim or the commencement of any action, proceeding or investigation in respect of which indemnity
may be sought pursuant to Section 9.4, such Indemnified Person shall promptly notify the Company in writing and the Company shall
assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Person, and shall assume
the payment of all fees and expenses; provided, however, that the failure of any Indemnified Person so to notify
the Company shall not relieve the Company of its obligations hereunder except to the extent that the Company is materially prejudiced
by such failure to notify. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such Indemnified Person unless: (i) the Company and the Indemnified
Person shall have mutually agreed to the retention of such counsel; or (ii) in the reasonable judgment of counsel to such Indemnified
Person representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests
between them. The Company shall not be liable for any settlement of any proceeding effected without its written consent, which
consent shall not be unreasonably withheld, but if settled with such consent, or if there be a final judgment for the plaintiff,
the Company shall indemnify and hold harmless such Indemnified Person from and against any loss or liability (to the extent stated
above) by reason of such settlement or judgment. Without the prior written consent of the Indemnified Person, which consent shall
not be unreasonably withheld, the Company shall not effect any settlement of any pending or threatened proceeding in respect of
which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party,
unless such settlement includes an unconditional release of such Indemnified Person from all liability arising out of such proceeding.


 


9.5.        Entire
Agreement. This Agreement contains the entire agreement between the parties hereto in respect of the subject matter contained
herein and supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter
contained herein.


 


9.6         Third
Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors
and assigns, and, except for the Placement Agent and other registered broker-dealers, if any, who are specifically agreed to be
and acknowledged by each party as third party beneficiaries hereof, is not for the benefit of, nor may any provision hereof be
enforced by, any other person.


 


9.7.        Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns.
Neither the Company nor any Investor shall assign this Agreement or any rights or obligations hereunder without the prior written
consent of the other. Notwithstanding the foregoing, but subject to the provisions of Section 6.1 hereof, any Investor may, without
the consent of the Company, assign its rights hereunder to any person that purchases Shares in a private transaction from an Investor
or to any of its “affiliates,” as that term is defined under the 1934 Act.


 




    	 	20	 



     


    

 


9.8.       Public
Disclosures. The Company shall on or before 5:30 p.m., New York time, on the fourth Business Day after the date of this Agreement,
file a Current Report on Form 8-K describing all the material terms of the transactions contemplated by the Transaction Documents
in the form required by the 1934 Act and attaching all the material Transaction Documents (including, without limitation, this
Agreement (and all schedules to this Agreement) (including all attachments, the “8-K Filing”). From and after
the issuance of the 8-K Filing, the Company shall have disclosed all material, non-public information (if any) delivered to any
of the Investors by the Company in connection with the transactions contemplated by the Transaction Documents. Neither the Company
nor any Investor shall issue any press releases or any other public statements with respect to the transactions contemplated hereby;
provided, however, the Company shall be entitled, without the prior approval of any Investor, to make a press release or other
public disclosure with respect to such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith
and (ii) as is required by applicable law and regulations (provided that in the case of clause (i) each Investor shall be consulted
by the Company in connection with any such press release or other public disclosure prior to its release). Without the prior written
consent of the applicable Investor (which may be granted or withheld in such Investor’s sole discretion), the Company shall
not disclose the name of such Investor in any filing (other than any Registration Statement registering the Shares and any other
filing as is required by applicable law and regulations), announcement, release or otherwise.


 


9.9.       Binding
Effect; Benefits. This Agreement and all the provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns; nothing in this Agreement, expressed or implied, is intended to confer
on any persons other than the parties hereto or their respective successors and permitted assigns, any rights, remedies, obligations
or liabilities under or by reason of this Agreement.


 


9.10.     Amendment;
Waivers. All modifications, amendments or waivers to this Agreement shall require the written consent of both the Company and
a majority-in-interest of the Investors (based on the principal face amount of Notes then currently outstanding).


 


9.11.     Applicable
Law; Disputes. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without
giving effect to the conflict of law provisions thereof, and the parties hereto irrevocably submit to the exclusive jurisdiction
of the United States District Court for the Southern District of New York, or, if jurisdiction in such court is lacking, the Supreme
Court of the State of New York, New York County, in respect of any dispute or matter arising out of or connected with this Agreement


 


9.12.     Further
Assurances. Each party hereto shall do and perform or cause to be done and performed all such further acts and shall execute
and deliver all such other agreements, certificates, instruments and documents as any other party hereto reasonably may request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.


 


9.13.     Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which
taken together shall constitute one and the same instrument. This Agreement may also be executed via facsimile or by e-mail delivery
of a “pdf” format data file, which shall be deemed an original.


 




    	 	21	 



     


    

 


9.14       Independent
Nature of Investors. The obligations of each Investor under this Agreement or other transaction document are several and not
joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance of the obligations
of any other Investor under this Agreement or any other transaction document. Each Investor shall be responsible only for its own
representations, warranties, agreements and covenants hereunder. The decision of each Investor to purchase Notes pursuant to this
Agreement has been made by such Investor independently of any other Investor and independently of any information, materials, statements
or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial
or otherwise) or prospects of the Company which may have been made or given by any other Investor or by any agent or employee of
any other Investor, and no Investor or any of its agents or employees shall have any liability to any other Investor (or any other
person) relating to or arising from any such information, materials, statements or opinions. Nothing contained herein or in any
other transaction document, and no action taken by any Investor pursuant hereto or thereto, shall be deemed to constitute the Investors
as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in
any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement. Except
as otherwise provided in this Agreement or any other transaction document, each Investor shall be entitled to independently protect
and enforce its rights arising out of this Agreement or out of the other transaction documents, and it shall not be necessary for
any other Investor to be joined as an additional party in any proceeding for such purpose. Each Investor has been represented by
its own separate legal counsel in connection with the transactions contemplated hereby and acknowledge and understand that Sichenzia
Ross Friedman Ference LLP has served as counsel to the Placement Agent only.


 


[SIGNATURE PAGES IMMEDIATELY
FOLLOW]


 




    	 	22	 



     


    

 


IN
WITNESS WHEREOF, the undersigned Investors and the Company have caused this Securities Purchase Agreement to be duly
executed as of the date first above written.


 


	 	INTELLINETICS, INC.
	 	 
	 	By:	 
	 	 	Matthew L. Chretien
	 	 	President and Chief Executive Officer


 


	  	INVESTORS:
	 	 
	 	The Investors executing the Signature Page in the form attached hereto as Annex A and delivering the same to the Company or its agents shall be deemed to have executed this Agreement and agreed to the terms hereof.
	 	 	 


 




    	 	23	 



     


    

 


Annex A


Securities Purchase Agreement


Investor Counterpart Signature Page


 


The undersigned, desiring to: (i) enter into
this Securities Purchase Agreement dated as of _________ __, 201__ (the “Agreement”),
with the undersigned, Intellinetics, Inc., a Nevada corporation (the “Company”),
in or substantially in the form furnished to the undersigned and (ii) purchase the Shares as set forth below, hereby agrees to
purchase such Shares from the Company as of the Closing and further agrees to join the Agreement as a party thereto, with all the
rights and privileges appertaining thereto, and to be bound in all respects by the terms and conditions thereof. The undersigned
specifically acknowledges having read the representations in the Agreement section entitled “Representations, Warranties
and Acknowledgments of the Investors,” and hereby represents that the statements contained therein are complete and accurate
with respect to the undersigned as an Investor.


 


	 	Name of Investor:
	 	 
	 	If an entity:
	 	 
	 	Print Name of Entity:
	 	 


 


	 	By: 	 
	 	 	Name:
	 	 	Title:


 


	 	If an individual:
	 	 
	 	Print Name:	 
	 	 
	 	Signature: 	 
	 	 
	 	If joint individuals:
	 	 
	 	Print Name:	 
	 	 
	 	Signature: 	 
	 	 
	 	All Investors:


 


	 	Address: 	 
	 	 
	 	Telephone No.:  	 
	 	Facsimile No.: 	 
	 	Email Address: 	 
	 	 
	 	The Investor hereby elects to purchase $____________ in Principal Amount of Notes (to be completed by Investor).


 




    	 	24	 



     


    

 


Exhibit A-1


 


First Closing held on [DATE]


 


Schedule of Investors


 


	Investor	 	Principal Amount	 	 	Note Purchase 

Amount	 
	 	 	 	 	 	 	 
	 	 	$	 	 	 	$	 	 
	 	 	$	 	 	 	$	 	 
	 	 	$	 	 	 	$	 	 
	 	 	$	 	 	 	$	 	 
	 	 	$	 	 	 	$	 	 
	 	 	$	 	 	 	$	 	 
	 	 	$	 	 	 	$	 	 
	 	 	$	 	 	 	$	 	 
	 	 	$	 	 	 	$	 	 
	 	 	$	 	 	 	$	 	 
	 	 	$	 	 	 	$	 	 
	 	 	$	 	 	 	$	 	 
	 	 	$	 	 	 	$	 	 
	FIRST CLOSING TOTAL	 	$	 	 	 	$	 	 



 




    	 	25	 



     


    

 


Exhibit A-2


 


Second Closing held on [DATE]


 


Schedule of Investors


 


	Investor	 	Principal Amount	 	 	Note Purchase Amount	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	SECOND CLOSING TOTAL	 	$	 		 	$	 	



 




    	 	26	 



     


    

 


Exhibit B


 


Form of Subordinated Convertible Promissory
Note


 




    	 	27