Document:

Addendum
#4 to Commitment Letter

 

Addendum
Effective Date: June 30, 2016

 

WHEREAS,
Cachet Financial Solutions, Inc. (“Borrower”) and Mike Hanson (“Lender”) (collectively “Parties”)
entered into a Commitment Letter, effective July 30th, 2014 and as amended in previous addendums (collectively the
“Agreement”); and

 

WHEREAS,
the Parties desire to extend the date for which any outstanding interest balance due under the agreement from 6/30/16 to 1/31/17;

 

NOW
THEREFORE, for valuable consideration, the adequacy and receipt of which are hereby acknowledged, the Parties agree as follows:

 

	 	1.	Section
    4
	 	 	 
	 	 	Interest
    only payments that were due and payable on June 30, 2016, September 30, 2016 and December 31, 2016 as stated in the Addendum
    #3 to Commitment Letter, dated February 24, 2016 are now due and payable on January 31, 2017.
	 	 	 
	 	2.	Pre-Established
    Terms
	 	 	
	 	 	All
    terms and conditions of the Agreement shall remain in full force and effect and apply to this Addendum, unless specifically
    modified herein.
	 	 	 
	 	 	In
    Witness Whereof, this Amendment to the Commitment Letter has been duly executed as of the Addendum Effective Date written
    above.

 

	Borrower:	 	Lender:
	 	 	 
	Cachet
    Financial Solutions, Inc.	 	Michael
    Hanson
	 	 	 	 	 
	By:
    	/s/
    Bryan Meier	 	By:
    	/s/
    Michael Hanson
	Its:
    	Bryan
    Meier CFOAddendum
#1 to Demand Promissory Note 

Note
Number DN2015-07

 

Addendum
Effective Date: June 30, 2016

 

WHEREAS,
Cachet Financial Solutions Inc. (“Borrower”) and Mike Hanson (“Lender”) (collectively “Parties”)
entered into a Promissory Note, effective December 22, 2015; and

 

WHEREAS,
the Parties desire to extend the date for which any outstanding balance due under the agreement from 6/30/16 to 1/31/17;

 

NOW
THEREFORE, for valuable consideration, the adequacy and receipt of which are hereby acknowledged, the Parties agree as follows:

 

	 	1.	Section
    3
	 	 	 
	 	 	The
    Parties agree that Section 3 (b) of the Agreement shall be amended from “the close of business on June 30, 3016”
    to state “the close of business on January 31, 2017”.
	 	 	 
	 	2.	Pre-Established
    Terms
	 	 	 
	 	 	All
    terms and conditions of the Agreement shall remain in full force and effect and apply to this Addendum, unless specifically
    modified herein.
	 	 	 
	 	 	In
    Witness Whereof, this Amendment to the Commitment Letter has been duly executed as of the Addendum Effective Date written
    above.

 

	Borrower:	 	Lender:
	 	 	 
	Cachet
    Financial Solutions Inc.	 	Michael
    Hanson
	 	 	 	 	 
	By:	/s/
    Bryan Meier	 	By:	/s/
    Michael Hanson
	Its:  	Chief
    Financial OfficerNEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A
LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

Original
Issue Date: July 13, 2016

Principal
Amount: $360,000

 

CONVERTIBLE
PROMISSORY NOTE

 

THIS
CONVERTIBLE PROMISSORY NOTE is a duly authorized and validly issued convertible note of Cachet Financial Solutions, Inc., a Delaware
corporation, (the “Company”), having its principal place of business at 18671 Lake Drive East, Southwest Tech
Center A, Minneapolis, MN 55317 (the “Note”).

 

FOR
VALUE RECEIVED, the Company promises to pay to James L. Davis, or his registered assigns (the “Holder”),
or shall have paid pursuant to the terms hereunder, the principal sum of $360,000.00 (the “Principal Amount”)
on the Maturity Date (as defined herein) or such earlier date as this Note is required or permitted to be repaid as provided hereunder,
and to pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Note in accordance
with the provisions hereof. The aggregate consideration to the Company from the Holder for this Note and the warrant issued on
date hereof by the Company to the Holder (the “Warrant”) is $300,000.00 (the “Consideration”) in
United States currency, due to an original issuance discount of $60,000.00 (the “OID”). The Holder shall pay
$300,000 within three (3) business days after the issuance of this Note and the Warrant (collectively, the “Transaction
Documents”). At the closing, the outstanding principal amount under this Note shall be $360,000.00. The maturity date
of this Note shall be six (6) months from the date hereof (each a “Maturity Date”), and is the date upon which
the principal sum, as well as any accrued and unpaid interest , shall be due and payable. This Note is also subject to
the following additional provisions:

 

 Section
1. Definitions. For the purposes hereof, in addition to the terms defined elsewhere in this Note the following terms
shall have the following meanings:

 

    	 

    	 	 	 

    

 

“Affiliate”
has the meaning set forth in Rule 144 promulgated under the Securities Act.

 

“Alternate
Consideration” shall have the meaning set forth in Section 5(e).

 

“Alternate
Conversion Price” shall mean 60% of the lowest VWAP of the Common Stock for the 21 consecutive Trading Days immediately
preceding the applicable Conversion Date.

 

“Bankruptcy
Event” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in
Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the
Company or any Significant Subsidiary thereof, (b) there is commenced against the Company or any Significant Subsidiary thereof
any such case or proceeding that is not dismissed within 60 days after commencement, (c) the Company or any Significant Subsidiary
thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered
or any order, judgment, or decree shall be entered approving a petition seeking liquidation or reorganization, (d) the Company
or any Significant Subsidiary thereof suffers any appointment of any custodian, receiver, trustee, liquidator, or the like for
it or any substantial part of its property that is not discharged or stayed within 60 calendar days after such appointment, (e)
the Company or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company or
any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring
of its debts or (g) the Company or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent
to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any
of the foregoing.

 

“Buy-In”
shall have the meaning set forth in Section 4(b)(v).

 

“Change
of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof
by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act)
of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise)
of in excess of 50% of the voting securities of the Company (other than by means of conversion or exercise of the Note and the
Securities issued together with the Note), (b) the Company merges into or consolidates with any other person, or any person merges
into or consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company immediately
prior to such transaction own less than 50% of the aggregate voting power of the Company or the successor entity of such transaction,
(c) the Company sells or transfers all or substantially all of its assets to another person and the stockholders of the Company
immediately prior to such transaction own less than 50% of the aggregate voting power of the acquiring entity immediately after
the transaction, (d) a replacement at one time or within a three year period of more than one-half of the members of the Board
of Directors which is not approved by a majority of those individuals who are members of the Board of Directors on the Original
Issue Date (or by those individuals who are serving as members of the Board of Directors on any date whose nomination to the Board
of Directors was approved by a majority of the members of the Board of Directors who are members on the date hereof), or (e) the
execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the events
set forth in clauses (a) through (d) above.

 

    	 

    	 	 	 

    

 

“Common
Stock” shall mean the Company’s common stock.

 

“Conversion”
shall have the meaning ascribed to such term in Section 4.

 

“Conversion
Date” shall have the meaning set forth in Section 4(a).

 

“Conversion
Schedule” means the Conversion Schedule in the form of Schedule 1 attached hereto.

 

“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Note in accordance with the
terms hereof.

 

“Note
Register” shall have the meaning set forth in Section 2(b).

 

“DTC”
means the Depository Trust Company.

 

“DTC/FAST
Program” means the DTC’s Fast Automated Securities Transfer Program.

 

“DWAC
Eligible” means that (a) the Common Stock is eligible at DTC for full services pursuant to DTC’s Operational Arrangements,
including without limitation transfer through DTC’s DWAC system, (b) the Company has been approved (without revocation)
by the DTC’s underwriting department, (c) the Transfer Agent is approved as an agent in the DTC/FAST Program, (d) the Conversion
Shares are otherwise eligible for delivery via DWAC, and (e) the Transfer Agent does not have a policy prohibiting or limiting
delivery of the Conversion Shares via DWAC.

 

“Event
of Default” shall have the meaning set forth in Section 6(a).

 

“Fundamental
Transaction” shall have the meaning set forth in Section 5(e).

 

“Late
Fees” shall have the meaning set forth in Section 2(c).

 

    	 

    	 	 	 

    

 

“Mandatory
Default Amount” means the payment of 120% multiplied by the total amount outstanding under the Note at the time of calculation,
in addition to the payment of all other amounts, costs, expenses and liquidated damages due in respect of this Note.

 

“Florida
Courts” shall have the meaning set forth in Section 7(d).

 

“Notice
of Conversion” shall have the meaning set forth in Section 4(a).

 

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

  

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Share
Delivery Date” shall have the meaning set forth in Section 4(c)(ii).

 

“Successor
Entity” shall have the meaning set forth in Section 5(e).

 

“Trading
Days” means any day on which the Common Stock is tradable for any period on the OTCQB, or on the principal securities
exchange or other securities market on which the Common Stock is then being traded. 

 

“Trading
Market” means the OTCQB, or the principal securities exchange or other securities market on which the Common Stock is
then being traded.

 

 Section
2. Interest and Repayment.

 

a) No
Payment of Interest in Cash or Kind. Except as otherwise provided herein, the Company shall pay no interest to the Holder
on the aggregate unconverted and then outstanding principal amount of this Note.

 

b) Interest
Calculations. Interest shall be calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods, and
shall accrue daily commencing on the Original Issue Date until payment in full of the outstanding principal, together with all
accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made. Interest hereunder
will be paid to the person in whose name this Note is registered on the records of the Company regarding registration and transfers
of this Note (the “Note Register”).

 

c) Payment
and Redemption. Upon three (3) days written notice to the Holder (each, a “Repayment Period”), the Company
may repay the total outstanding amount under this Note as provided herein. If the Company exercises its right to repay the Note,
the Company shall make payment to the Holder of an amount in cash equal to the sum of the then outstanding principal amount and
interest of this Note multiplied by 120% (the “Repayment Amount”). Holder cannot convert the Note during each
Repayment Period unless an Event of Default has occurred hereunder and at least six months and 3 days have elapsed since the Original
Issue Date. Upon the occurrence of an Event of Default, which is not cured within the three (3) calendar days as provided in Section
6, the Holder shall have the right to require the Company to make payment to the Holder of an amount in cash equal to the Mandatory
Default Amount.

 

    	 

    	 	 	 

    

 

Section
3. Registration of Transfers and Exchanges.

 

a) Different
Denominations. This Note is exchangeable for an equal aggregate principal amount of convertible promissory notes of different
authorized denominations, as requested by the Holder surrendering the same. No service charge will be payable for such registration
of transfer or exchange.

 

b) Investment
Representations. Holder has represented to the Company that he is an “accredited investor” as defined in Regulation
D of the Securities Act and he is not acquiring this Note or the Common Stock to be acquired upon conversion with a “view
to distribution.” This Note may be transferred or exchanged only in compliance with applicable federal and state securities
laws and regulations.

 

c) Reliance
on Note Register. Prior to due presentment for transfer to the Company of this Note, the Company and any agent of the Company
may treat the person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving
payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such
agent shall be affected by notice to the contrary.

 

Section
4. Conversion.

 

a) Voluntary
Conversion. If an Event of Default occurs, then at any time after six months and three days after the Original Issue Date,
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 (subject to the conversion limitations set forth in Section 4(d) hereof). The Holder shall effect conversions
by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A (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. 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 a Conversion Schedule 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 day 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.

 

    	 

    	 	 	 

    

 

Conversion
Price. The conversion price in effect on any Conversion Date (assuming that a conversion is permitted pursuant to Section
4(a) of this Note) shall be equal to the Alternate Conversion Price.

 

b)
Mechanics of Conversion.

 

i.
Conversion Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon a conversion
hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Note to be converted
and any accrued and unpaid interest to be converted by (y) the Alternate Conversion Price (subject to adjustment as provided herein).

     

ii.
Delivery of Certificate Upon 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) a certificate or certificates
representing the Conversion Shares which, on or after the date on which such Conversion Shares are eligible to be sold under Rule
144 without the need for current public information and the Company has received an opinion of counsel to such effect reasonably
acceptable to the Company (which opinion the Company will be responsible for obtaining) shall be free of restrictive legends and
trading restrictions (other than those which may then be required by securities laws) 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 (if the Company
has elected or is required to pay accrued interest in cash). All certificate or certificates required to be delivered by the Company
under this Section 4(d) shall be delivered electronically through the Depository Trust Company or another established clearing
corporation performing similar functions. If the Conversion Date is prior to the date on which such Conversion Shares are eligible
to be sold under Rule 144 without the need for current public information the Conversion Shares shall bear a restrictive legend
in the following form, as appropriate:

 

    	 

    	 	 	 

    

 

“NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (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 (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN
A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS 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.”

     

Notwithstanding
the foregoing, commencing on such date that the Conversion Shares are eligible for sale under Rule 144 subject to current public
information requirements, the Company, upon request of the Holder, shall obtain a legal opinion to allow for such sales under
Rule 144.

 

 iii. Failure to Deliver. If, in the case of any Notice of Conversion, such certificate or certificates 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 certificate or certificates, 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 Common Stock certificates issued to such Holder pursuant to the rescinded Conversion Notice. 

     

iv.
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, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment
against any person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the Holder or any other person of any obligation to the Company or any violation or alleged violation
of law by the Holder or any other person, and irrespective of any other circumstance which might otherwise limit such obligation
of the Company to the Holder in connection with the issuance of such Conversion Shares; provided, however, that
such delivery shall not operate as a waiver by the Company of any such action the Company may have against the Holder. If the
Company fails for any reason to deliver to the Holder such certificate or certificates pursuant to Section 4(c)(ii) by the Share
Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, $3,000 per Trading Day
for each Trading Day after such Share Delivery Date until such certificates are delivered or Holder rescinds such conversion.
Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section
6 hereof for the Company’s failure to deliver Conversion Shares within the period specified herein and the Holder shall
have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce
damages pursuant to any other Section hereof or under applicable law.

 

    	 

    	 	 	 

    

 

v.
Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available
to the Holder, if the Company fails for any reason to deliver to the Holder such certificate or certificates by the Share Delivery
Date pursuant to Section 4(c)(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 4(c)(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 certificates representing shares of Common Stock upon conversion of this Note as required pursuant to
the terms hereof.

 

    	 

    	 	 	 

    

 

vi. 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 a number of shares of Common Stock at least equal to 100% of the total amount of Common Stock that this Note would be convertible into based upon the Alternative Conversion Price, in full and irrespective of beneficial ownership limitations, at any time, 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 Note), not less than such aggregate number of shares of the Common Stock as shall 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.

   

vii. 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 Alternate Conversion Price, or round up to the next whole share.

   

viii. Transfer Taxes and Expenses. The issuance of certificates for shares of the Common Stock 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 certificates, 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 certificate 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 certificates 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.

   

c)
[Reserved.] 

 

d) If,
during the period that the Note is outstanding and prior to the full satisfaction of the Note (through repayment or conversion),
the Company enters into a subsequent convertible debt financing (including but not limited to transactions that include equity
incentives) with any third party on terms that, taken as a whole, are more favorable in the aggregate to the third party than
to the Holder’s terms under this Note, taken as a whole, then the Company and the Holder shall discuss in good faith and
agree upon a fair and equitable adjustment to the terms of the Note and shall amend the relevant agreements accordingly, to ensure
that the terms of the third party financing, taken as a whole, shall no longer be more favorable in the aggregate to such respective
third party than the Holder’s terms under this Note, taken as a whole. No such adjustment shall be required if the Company
prepays the Note entirely at the time of closing of such more favorable third party financing, or with the proceeds thereof.

 

    	 

    	 	 	 

    

 

Section
5. Certain Adjustments.

 

a) 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, or payment
of interest on, the Note), (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 Alternate 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.

 

b) Intentionally
Omitted.

 

c) Intentionally
Omitted.

 

d) Intentionally
Omitted.

 

e) Fundamental
Transaction. If, at any time while this Note is outstanding, (i) the Company, directly or indirectly, in one or more related
transactions effects any merger or consolidation of the Company with or into another person, (ii) the Company, directly or indirectly,
effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets
in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether
by the Company or another person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange
their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common
Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization
or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted
into or exchanged for other securities, cash or property, (v) the Company, directly or indirectly, in one or more related transactions
consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another person whereby such other person acquires more than 50% of the
outstanding shares of Common Stock (not including any shares of Common Stock held by the other person or other persons making
or party to, or associated or affiliated with the other persons making or party to, such stock or share purchase agreement or
other business combination) (each a “Fundamental Transaction”), then, upon any subsequent conversion of this
Note, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion
immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation in Section 4(e) on the conversion
of this Note) based upon the Alternate Conversion Price calculated upon the occurrence of a Fundamental Transaction, the number
of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and
any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction
by a holder of the number of shares of Common Stock for which this Note is convertible immediately prior to such Fundamental Transaction
(without regard to any limitation in Section 4(d) on the conversion of this Note). For purposes of any such conversion, the determination
of the applicable conversion price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount
of Alternate Consideration issuable in respect of one (1) share of Common Stock in such Fundamental Transaction, and the Company
shall apportion the applicable conversion price among the Alternate Consideration in a reasonable manner reflecting the relative
value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities,
cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any conversion of this Note following such Fundamental Transaction. The Company shall cause any
successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”)
to assume in writing all of the obligations of the Company under this Note and the Warrant in accordance with the provisions of
this Section 5(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the
Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the holder of this Note,
deliver to the Holder in exchange for this Note a security of the Successor Entity evidenced by a written instrument substantially
similar in form and substance to this Note which is convertible for a corresponding number of shares of capital stock of such
Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon conversion of
this Note (without regard to any limitations on the conversion of this Note) prior to such Fundamental Transaction, and with a
conversion price which applies the conversion price hereunder to such shares of capital stock (but taking into account the relative
value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such
number of shares of capital stock and such conversion price being for the purpose of protecting the economic value of this Note
immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance
to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted
for (so that from and after the date of such Fundamental Transaction, the provisions of this Note and the Warrant referring to
the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company
and shall assume all of the obligations of the Company under this Note and the Warrant with the same effect as if such Successor
Entity had been named as the Company herein.

 

    	 

    	 	 	 

    

 

f) Calculations.
All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.
For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall
be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and outstanding.

 

g) Notice
to the Holder.

 

i. Adjustment
to Conversion Price. Whenever the Alternate Conversion Price is adjusted pursuant to any provision of this Section 5, the
Company shall promptly deliver to each Holder a notice setting forth the Alternate Conversion Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment.

 

ii. Intentionally
Omitted.

 

 Section
6. Events of Default.

 

a) “Event
of Default” means, wherever used herein, any of the following events (whatever the reason for such event and whether
such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any
court, or any order, rule or regulation of any administrative or governmental body), if such event is not cured within three (3)
calendar days (the three (3) calendar day cure period does not apply to a failure to deliver shares):

 

i. any
default in the payment of (A) the principal amount of the Note or (B) interest, liquidated damages and other amounts owing to
a Holder on this Note, as and when the same shall become due and payable (whether on a Conversion Date or the respective Maturity
Date or by acceleration or otherwise);

 

ii. the
Company shall materially fail to observe or perform any other covenant or agreement in, or a default or event of default (subject
to any grace or cure period) shall occur in, the Note or the Warrant(other than a breach by the Company of its obligations to
deliver shares of Common Stock to the Holder upon conversion, which breach is addressed in clause (vii) below);

 

iii. any
representation or warranty made in this Note or the Warrant shall be untrue or incorrect in any material respect as of the date
when made or deemed made;

 

    	 

    	 	 	 

    

 

iv. the
Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy
Event;

 

v. the
Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible to resume
listing or quotation for trading thereon within five Trading Days or the transfer of shares of Common Stock through the Depository
Trust Company System is no longer available or “chilled”;

 

vi. the
Company shall be a party to any Change of Control Transaction or Fundamental Transaction;

 

vii. the
Company shall fail for any reason to deliver shares of Common Stock to the Holder prior to the second Trading Day after a Conversion
Date pursuant to Section 4(c) or the Company shall provide at any time notice to the Holder, including by way of public announcement,
of the Company’s intention to not honor requests for conversions of any Note in accordance with this terms hereof;

 

viii. the
Company fails to file with the Commission any required reports under Section 13 or 15(d) of the Exchange Act such that it is not
in compliance with Rule 144(c)(1) (or Rule 144(i)(2), if applicable);

 

ix. the
occurrence of any levy upon or seizure or attachment of, or any uninsured loss of or damage to, any property of the Company or
any Subsidiary having an aggregate fair value or repair cost (as the case may be) in excess of $750,000 individually or in the
aggregate, and any such levy, seizure or attachment shall not be set aside, bonded or discharged within thirty (30) days after
the date thereof;

 

x. the
Company shall fail to maintain sufficient reserved shares required to be issued pursuant to this Note upon request of the Holder;

  

xi. the
Company provides written notice to Holder of its intention to repay the Note pursuant to the terms of the Note, but fails to do
so at the conclusion of the applicable Repayment Period; or

 

xii. the
Company fails to repay the Note pursuant to the terms of the Note with funds received from its next underwritten offering of $5,000,000.00
or more which is consummated on or after the Original Issue Date.

 

b) Remedies
Upon Event of Default. If any Event of Default occurs, then the outstanding principal amount of this Note, plus accrued but
unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become,
at the Holder’s election, immediately due and payable in cash at the Mandatory Default Amount. After the occurrence of any
Event of Default that results in the eventual acceleration of this Note, the interest rate on this Note shall accrue at an additional
interest rate equal to the lesser of 24% per annum or the maximum rate permitted under applicable law. Upon the payment in full
of the Mandatory Default Amount, the Holder shall promptly surrender this Note to or as directed by the Company. Such acceleration
may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder
of the Note until such time, if any, as the Holder receives full payment pursuant to this Section 6(b). No such rescission or
annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

 

    	 

    	 	 	 

    

 

 Section
7. Miscellaneous.

 

a) Notices.
Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without limitation,
any Notice of Conversion, shall be in writing and delivered personally, by electronic mail, by facsimile, or sent by a nationally
recognized overnight courier service, addressed to the Company, at the address set forth above, or such other facsimile number
or address as the Company may specify for such purposes by notice to the Holder delivered in accordance with this Section 7(a).
Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered
personally, by electronic mail, by facsimile, or sent by a nationally recognized overnight courier service addressed to each Holder
at the facsimile number or address of the Holder appearing on the books of the Company, or if no such facsimile number or address
appears on the books of the Company, at the principal place of business of such Holder. Any notice or other communication or deliveries
hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication
is delivered via electronic mail or facsimile at the facsimile number provided by the Company or Holder prior to 12:00 p.m. (EST
time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later
than 12:00 p.m. (EST time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service or (iv) upon actual receipt by the party to whom such notice is required to be given.

 

b) Absolute
Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable, on this
Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the
Company. This Note ranks pari passu with all other promissory notes now or hereafter issued under the terms set
forth herein. 

 

c) Lost
or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange
and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed
Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence
of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company.

 

    	 

    	 	 	 

    

 

d) Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by
and construed and enforced in accordance with the internal laws of the State of Minnesota, without regard to the principles of
conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense
of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective
Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting
in Hennepin County, Minnesota (the “Minnesota Courts”). Each party hereto hereby irrevocably submits to the
exclusive jurisdiction of the Minnesota Courts for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents),
and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of such Minnesota Courts, or such Minnesota Courts are improper or inconvenient venue for such proceeding.
Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to
such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted
by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions
contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing
party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses
incurred in the investigation, preparation and prosecution of such action or proceeding.

 

e) Waiver.
Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed to be a
waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Company
or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note on any
other occasion. Any waiver by the Company or the Holder must be in writing.

 

f) Severability.
If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances.
If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury,
the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under
applicable law. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead,
or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would
prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Note as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Note, and
the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants
that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder,
but will suffer and permit the execution of every such as though no such law has been enacted.

 

    	 

    	 	 	 

    

 

g)
Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall
be cumulative and in addition to all other remedies available under this Note and the Warrant at law or in equity (including a
decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s right to pursue
actual and consequential damages for any failure by the Company to comply with the terms of this Note. The Company covenants to
the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts
set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the
amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of
the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees
that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies,
to an injunction restraining any such breach or any such threatened breach, without the necessity of showing economic loss and
without any bond or other security being required. The Company shall provide all information and documentation to the Holder that
is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this
Note.

 

h) Next
Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a business day, such payment
shall be made on the next succeeding business day.

 

i) 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.

 

j)
[Reserved.]

 

*********************

 

(Signature
Pages Follow)

 

    	 

    	 	 	 

    

 

IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above
indicated.

 

	 	Cachet Financial Solutions, Inc. 
	 	 
	 	By:	/s/ Bryan Meier 
	 	Name:	Bryan Meier
	 	Title:	Chief Financial Officer

 

    	 

    	 	 	 

    

 

ANNEX
A

 

 NOTICE
OF CONVERSION

 

The
undersigned hereby elects to convert principal under the convertible promissory note dated July 14, 2016 issued by Cachet Financial
Solutions, Inc., a Delaware 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 4 of this Note, as determined in accordance with Section 13(d) of the
Exchange Act.

 

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:	 
	 	Date to Effect Conversion:
	 	 
	 	Principal Amount of Note to be Converted:
	 	 
	 	Payment of Interest in Common Stock __ yes __ no 
	 	If yes, $_____ of Interest Accrued on Account of Conversion at Issue.
	 	 
	 	Number of shares of Common Stock to be issued:
	 	 
	 	Signature
	 	 
	 	Name:
	 	 
	 	Delivery Instructions:

 

    	 

    	 	 	 

    

 

Schedule
1

 

 CONVERSION
SCHEDULE

 

This
convertible promissory note with an original issue date of July __, 2016 in the original principal amount of $360,000.00 is issued
by Cachet Financial Solutions, Inc., a Delaware corporation. This Conversion Schedule reflects conversions made under Section
4 of the above referenced Note.

 

Dated:

 

	
        Date of Conversion

        (or for first entry,

        Original Issue Date)
	 	Amount of 

Conversion	 	
        Aggregate Principal Amount

        Remaining Subsequent to Conversion

        (or original Principal Amount)
	 	Company Attest

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