Document:

EXHIBIT
10.1

 

Intellinetics,
inc.

 

SECURITIES
PURCHASE AGREEMENT

 

This
SECURITIES PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of March 2, 2020, 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”).

 

RECITALS

 

The
Company is offering (the “Offering”) pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule
506(b) promulgated thereunder, an aggregate of (i) up to 43,750,000 shares (“Shares”) of the Company’s
common stock, par value $0.001 per share (“the “Common Stock”), at the price of $0.08 per Share and (ii)
up to 2,000 units (“Units”), with each Unit consisting of $1,000 in principal amount of 12% subordinated promissory
notes, in the form attached hereto as Exhibit B (“Notes”) and 2,000 shares of Common Stock (“Unit
Shares”). The Shares, Units, Notes, and Unit Shares are referred to herein as the “Securities.”

 

The
Investors, severally and not jointly, desire to purchase, the Company is willing to sell to each Investor, upon the terms and
conditions stated in this Agreement and in a Private Placement Memorandum circulated to each Investor, the Securities designated
on the signature page hereof and as more fully described in this Agreement.

 

AGREEMENT

 

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 Securities 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 5.5(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 preamble 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 February 4, 2020, 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 preamble 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).

 

“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 January 24, 2020, by and between the Placement Agent and the Company.

 

“Placement
Agent” means Taglich Brothers, Inc.

 

“Principal
Amount” as defined in Section 2.3.

 

“Private
Placement Memorandum” means the Company’s Private Placement Memorandum dated January 24, 2020, and any amendments
or supplements thereto.

 

“Purchase
Price” shall mean (i) for Shares, $0.08 per Share, and (ii) for Units, $1,000 per Unit.

 

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“Registrable
Securities” shall mean the (i) Shares, (ii) the Unit 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).

 

“Registration
Rights Agreement” means that certain registration rights agreement, dated March 2, 2020, by and among the Company and
the Investors.

 

“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 Registration Rights Agreement, 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.

 

“Unit”
as defined in the recitals above.

 

“Unit
Share” as defined in the recitals above.

 

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2.
Sale and Purchase of Securities.

 

2.1.
Purchase of Shares and/or Units 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 Securities, in the respective amounts set forth on the signature pages attached hereto in exchange for the
Purchase Price. Each Investor may purchase Shares or Units, or both, subject to acceptance by the Company at its sole discretion.

 

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, such number
of Securities 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
such number of Securities 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 number of Securities to be sold at the First Closing and all Subsequent Closings in the aggregate shall
not exceed (i) 43,750,000 Shares (in exchange for $3,500,000 in Purchase Price) and (ii) 2,000 Units (in exchange for $2,000,000
in Purchase Price).

 

(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 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
Purchase Price (as provided below), as applicable (i) duly issued certificates representing the Shares and Unit Shares and (ii)
Notes, dated as of the applicable Closing Date, payable to the respective 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 (the “Principal Amount”). At each Closing,
each Investor shall deliver or cause to be delivered to the Company the Purchase Price set forth in its counterpart signature
page annexed hereto by (i) surrendering the Bridge Notes, or (ii) 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:

 

US
Bank

5065
Wooster Road

Cincinnati,
OH 45226

Acct
Name: Delaware Trust Company

ABA#:
042000013

A/C#:
130125268891

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

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 Securities to be received by such Investor hereunder 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 Securities. 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 Securities (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.

 

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

 

(a)
“The securities represented hereby may not be transferred unless (i) such securities have been registered for sale pursuant
to the Securities Act of 1933, as amended, (ii) such securities may be sold pursuant to an available exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act, or (iii) the Company has received an opinion of counsel reasonably
satisfactory to it that such transfer may lawfully be made without registration under the Securities Act of 1933 or qualification
under applicable state securities laws.”

 

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(b)
If required by the authorities of any state in connection with the issuance of sale of the Shares, 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 Securities 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.

 

(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 Securities) 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.
Securities Duly Authorized. The Shares and Unit Shares to be issued to each such Investor pursuant to this Agreement, when
issued and delivered in accordance with the terms of this Agreement, will be duly and validly issued and will be fully paid and
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. The issuance of the Notes is duly authorized and upon issuance in accordance
with the terms of this Agreement, will be duly and validly issued and will be free from all taxes or Liens with respect to the
issue thereof. Subject to the accuracy of the representations and warranties of the Investors to this Agreement, the offer and
issuance by the Company of the Securities is exempt from registration under the Securities Act.

 

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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 for the filing with the SEC of one or more Registration Statements in accordance with the requirements
of the Registration Rights Agreement or 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 Securities 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.

 

4.4.
Capitalization.

 

(a)
As of January 24, 2020, and prior to the consummation of the Reverse Split (as described and defined in the paragraph below),
the authorized capital stock of the Company consists of (i) 75,000,000 shares of Common Stock, of which 19,346,307 shares are
issued and outstanding, 6,726,625 shares are reserved for issuance pursuant to existing warrants to purchase Common Stock; 3,366,506
are reserved for issuance pursuant to the 2015 Intellinetics, Inc. Equity Incentive Plan, and 28,355,653 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 or Unit 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.

 

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(b)
Immediately prior to the Closing, and as a condition precedent to the Closing as set forth in Section 8.3, the Company anticipates,
but in no way guarantees, an action by the requisite shareholders of the Company to approve (i) a 1-for-50 reverse stock split
of the Company’s Common Stock (the “Reverse Split”) and (ii) an amendment to the Company’s Articles of
Incorporation to effectuate the Reverse Split and set the authorized capital stock of the Company to 25,000,000 shares of Common
Stock. Thus, immediately prior to the Closing, assuming a Closing Date of February 28, 2020, the Company anticipates that the
authorized capital stock of the Company will consist of (i) 25,000,000 shares of Common Stock, of which 386,926 shares will be
issued and outstanding, 134,532 shares will be reserved for issuance pursuant to existing warrants to purchase Common Stock; 67,330
will be reserved for issuance pursuant to the 2015 Intellinetics, Inc. Equity Incentive Plan, and 571,026 shares will be reserved
for issuance in accordance with outstanding convertible notes. In the Offering contemplated by this Agreement, up to 955,000 shares
of Common Stock may be issued and up to an additional 95,500 shares of Common Stock may be issued if all the Placement Agent Warrants
are exercised. The aggregate total number of Common Stock that could be issued in this Offering (not including Common Stock that
may be issued in connection with an exchange offer to the holders of outstanding convertible notes, as further described below
is 1,050,500 (the “Maximum Number of Shares Offered”).

 

(c)
As a condition precedent to the Closing and immediately prior to the Closing, the Company will seek to effect a conversion of
the outstanding principal and accrued interest of existing convertible notes issued by the Company into Common stock at a price
of $0.08 per share on a post-Reverse Split basis (the “Note Conversion”). Thus, assuming completion of the Note Conversion
(which is not guaranteed), and assuming an approximate closing date of February 28, 2020, after giving effect to a fully-subscribed
Offering, the Company anticipates that the authorized capital stock of the Company will consist of (i) 25,000,000 shares of Common
Stock, of which 2,816,012 shares will be issued and outstanding, 230,032 shares will be reserved for issuance pursuant to existing
warrants to purchase Common Stock; and 67,330 will be reserved for issuance pursuant to the 2015 Intellinetics, Inc. Equity Incentive
Plan.

 

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, 2019 (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 available for quotation 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 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, 2019, 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.

 

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4.8
No Material Changes.

 

(a)
Since September 30, 2019, 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

 

(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 Securities being offered hereby.

 

4.10
No Integrated Offering. Except with respect to the Note Conversion as set forth in Section 4.4(c), above, 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. Except with respect to the Note Conversion as set forth in Section 4.4(c),
above, 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.

 

    	10

    	 

    

 

4.13
Form D; Blue Sky Laws. The Company agrees to file a Form D with respect to the Securities as required under Regulation
D within fifteen (15) days after the first subscription is received by the Escrow Agent and to provide a copy thereof to the Placement
Agent promptly after such filing. The Company and the Placement Agent shall work together and 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).

 

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.

 

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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.

 

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 Shares 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”.

 

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5.
Registration Rights.

 

5.1.
Mandatory Registration. The Company shall prepare and, as soon as practicable, but in no event later than 45 days after
the First Closing Date, file with the SEC a Registration Statement on Form S-3 covering the resale of all of the Registrable Securities,
provided that if Form S-3 is unavailable for such a registration, the Company shall register the resale of the Registrable Securities
on another appropriate form reasonably acceptable to the Investors and (ii) undertake to register the resale of the Registrable
Securities on Form S-3 as soon as such form is available, provided that the Company shall maintain the effectiveness of all Registration
Statements then in effect and the availability for use of each prospectus contained therein until such time as a Registration
Statement on Form S-3 covering the resale of all the Registrable Securities has been declared effective by the SEC and the prospectus
contained therein is available for use. The Company shall use commercially reasonable efforts to have such initial Registration
Statement, and each other Registration Statement required to be filed pursuant to the terms of this Agreement, declared effective
by the SEC as soon as practicable, but in no event later than 135 days after the First Closing Date (or 90 days after such date
when the Company is then obligated to file another Registration Statement).

 

5.2.
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.

 

5.3.
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.

 

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5.4.
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,
Unit Shares, or PA Warrant Shares then (ii) any Registrable Securities that are not Shares or Unit 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).

 

5.5.
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.

 

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(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.

 

(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.

 

    	15

    	 

    

 

(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.

 

5.6.
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 Securities 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.

 

6.
Transfer Restrictions.

 

6.1.
Transfer or Resale. Each Investor understands that:

 

(i)
Except as provided in the Registration Rights Agreement, 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

 

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(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.

 

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 and/or Unit Shares, an amount in cash equal to one
percent (1.0%) of the aggregate Purchase Price of such Investor’s Shares and/or Unit Shares 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 and/or Unit 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.

 

7.
Conditions to Closing of the Investors.

 

The
obligation of each Investor hereunder to purchase the Securities 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:

 

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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 Securities.

 

7.3
Delivery by Company. The Company shall have duly executed and delivered to such Investor (A) each of the other Transaction
Documents, (B) an instruction letter to the Company’s transfer agent regarding the issuance of the Shares or Unit Shares
in the number as is set forth on the signature page hereby being purchased by such Investor at the Closing pursuant to this Agreement,
and (C) the Notes in the Principal Amount set forth on the signature page hereby 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

    	 

    

 

8.3.
Action to Amend Articles. The Company shall have effectuated the Reverse Split by Amending its Articles of Incorporation
with the State of Nevada to reflect the Reverse Split and to change the number of authorized shares of Common Stock to 25,000,000
shares.

 

8.4.
Simultaneous Closing of Acquisition. The Company shall have received all requisite approvals internally and from the owners
of Graphic Sciences, Inc. (“GSI”) to effectuate the closing of an acquisition of GSI by the Company, with such acquisition
closing to be simultaneous with, or immediately following, the First Closing of the Offering.

 

8.5
Simultaneous Completion of Note Conversion. The Company shall have received all requisite approvals to amend all of its
outstanding convertible notes in order to permit the Company to convert the outstanding balance and accrued and unpaid interest
of such convertible notes into shares of Common Stock at the current Offering price of $0.08 per share on a post-Reverse Split
basis. Such conversion shall be effected either simultaneously with or immediately prior to the First Closing of the Offering.

 

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 Purchase Price of the Securities sold at each Closing, payable in cash,
(b) an expense allowance, which shall include reasonable reimbursement of expenses incurred in connection with the transactions
contemplated hereby (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 ten percent
(10%) of the number of Shares and Unit Shares sold in the Offering, at an exercise price equal to $0.08 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.
    James F. DeSocio,	 	 	Facsimile:
    (614) 464-2634
	 	President
    and Chief Executive Officer	 	 	Attention:
    Erin C. Herbst

 

    	19

    	 

    

 

 

The
Investors:

 

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

 

Taglich
Brothers, Inc.:

 

	Taglich
    Brothers, Inc.
	275
    Madison Avenue, Suite 1618
	New
    York, NY 10016
	Telephone:
    	(212)
    661-6886
	Facsimile:
    	(212)
    661-6824
	Attention:
    	Robert
    C. Schroeder
	 	Vice
    President, Investment Banking

 

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.

 

    	20

    	 

    

 

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 Securities in a private transaction
from an Investor or to any of its “affiliates,” as that term is defined under the 1934 Act.

 

9.8.
Public Disclosures. The Company shall on or before 5:30 p.m., New York time, on the fourth (4th) Business Day
after the date of this Agreement, (x) issue a press release (the “Press Release”) reasonably acceptable to
the Investors disclosing all the material terms of the transactions contemplated by the Transaction Documents and (y) 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 aside from the Confidential Private Placement Memorandum
(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 Press Release and 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 as is required by applicable
law and regulations. 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 in the 8-K Filing, any Registration
Statement registering the Shares or Unit 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 all
of the following: (a) the Company, (b) a majority-in-interest of the Investors in Shares (based on the number of Shares purchased
hereunder), and (c) a majority-in-interest of the Investors in Units (based on the number of Units purchased hereunder).

 

    	21

    	 

    

 

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.

 

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 Securities
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 Kegler, Brown, Hill & Ritter Co., L.P.A. has served as counsel to the Company only.

 

9.15
Omnibus Signature Page. This Agreement is intended to be read and construed in conjunction with the Transaction Documents
pertaining to the issuance by the Company of the Securities to the Investors. Accordingly, it is hereby agreed that the execution
by the Investor and the Company of this Agreement, in the place set forth herein, shall constitute an agreement to be bound by
the terms and conditions of both this Agreement and the Registration Rights Agreement with the same effect as if both this Agreement
and the Registration Rights Agreement were separately signed.

 

[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:
    	 
	 	 	James
    F. DeSocio
	 	 	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 the Registration Rights Agreement and agreed to the terms
    hereof and thereof.

 

    	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 and/or Units as set forth below, hereby agrees to purchase such
Shares and/or Units 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.

 

	The
    Investor hereby elects to purchase: 	 	Name
    of Investor:
	(to
    be completed by Investor)	 	 
	 	 	If
    an entity:
	____________
    Shares	 	Print
    Name of Entity:
	 	 	 
	               at
    a purchase price of $0.08 per Share	 	By:
	 	 	
	Total
    Share Purchase Price of $__________ 	 	Name:
	 	 	Title:
	 	 	 
	____________
    Units	 	If
    an individual:
	 	 	Print
    Name:_______________________________________
	               at
    a purchase price of $1,000 per Unit 	 	 
	 	 	Signature:________________________________________
	Total
    Unit Purchase Price of $__________	 	 
	 	 	If
    joint individuals:
	 	 	Print
    Name:_______________________________________
	Total
    Purchase Price ____________________	 	 
	 	 	Signature:________________________________________
	 	 	 
	 	 	All
    Investors:
	 	 	 
	 	 	Address:_________________________________________
	 	 	 
	 	 	
	 	 	 
	 	 	Telephone
    No.: _________________________________
	 	 	 
	 	 	Facsimile
    No.:__________________________________
	 	 	 
	 	 	Email
    Address:__________________________________

 

    	24

    	 

    

 

Exhibit
A-1

 

Schedule
of Investors

 

	Investor	 	Shares	 	Note
                                         Principal

                                                                             Amount
	 	Unit
    Shares	 	Purchase

                                                                                Price
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	TOTAL	 	 	 	 	 	 	 	 	 

 

    	25

    	 

    

 

Exhibit
B

 

Form
of Subordinated Promissory NoteEXHIBIT 10.2

 

THIS SECURITY HAS NOT 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 MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN
SECURED BY SUCH SECURITY.

 

THE HOLDER AGREES HEREIN
TO SUBORDINATE THE INDEBTEDNESS OWED TO HOLDER UNDER THIS NOTE TO THE COMPANY’S SENIOR LENDER(S).

 

Original Issue Date: March 2, 2020

$_______________

 

12%
SUBORDINATED pROMISSORY NOTE

DUE
FEBRUARY 28, 2023

 

THIS 12% SUBORDINATED PROMISSORY NOTE is one
of a series of duly authorized and validly issued 12% Subordinated Promissory Notes of Intellinetics, Inc., a Nevada corporation,
(the “Company”), having its principal place of business at 2190 Dividend Drive, Columbus, OH 43228, designated
as its 12% Subordinated Promissory Note due February 28, 2023 (this Note, the “Note” and, collectively with
the other Notes of such series, the “Notes”).

 

FOR VALUE RECEIVED, the
Company promises to pay to ________________________ or its registered assigns (the “Holder”), or shall have
paid pursuant to the terms hereunder, the principal sum of $_______________ on February 28, 2023 (the “Maturity Date”)
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 then outstanding principal amount of this Note in accordance with the provisions hereof. This Note is subject
to the following additional provisions:

 

Section 1. Definitions.
For the purposes hereof, in addition to the terms defined elsewhere in this Note, (a) capitalized terms not otherwise defined herein
shall have the meanings set forth in the Purchase Agreement and (b) the following terms shall have the following meanings:

 

    	1

    	 

    

 

“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, (d) the
Company or any Significant Subsidiary thereof suffers any appointment of any custodian 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.

 

“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to
close.

 

“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 the Securities issued together with the Notes),
(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 66%
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 66% 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.

 

    	2

    	 

    

 

“Common
Stock” shall mean shares of the Company’s common capital stock, par value $0.001.

 

“Event
of Default” shall have the meaning set forth in Section 5(a).

 

“Fundamental
Transaction” means one of the following: (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 (excluding specifically the license or other disposition of the Company’s intellectual
property in the ordinary course of business), (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, or (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 or group of Persons whereby such other Person or group
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).

 

“Interest
Payment Date” shall have the meaning set forth in Section 2(a).

 

“Mandatory
Default Amount” means the sum of (a) 120% of the outstanding principal amount of this Note, plus 100% of accrued and
unpaid interest hereon, and (b) all other amounts, costs, expenses and liquidated damages due in respect of this Note.

 

“New
York Courts” shall have the meaning set forth in Section 6(d).

 

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

 

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

 

“Purchase
Agreement” means the Securities Purchase Agreement, dated as of [February___], 2020 among the Company and the original
Holders, as amended, modified or supplemented from time to time in accordance with its terms.

 

    	3

    	 

    

 

“Required
Holders” means Holders of at least 51% in principal amount of the then outstanding Notes.

 

“Senior
Lenders” means any future senior lender to the Company.

 

“Trading
Day” means a day on which the principal Trading Market is open for trading.

 

“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New
York Stock Exchange, the OTC Bulletin Board or the OTCQB operated by OTC Markets Group Inc. (or any successors to any of the foregoing).

 

Section 2. Interest.

 

a) Payment
of Interest in Cash. The Company shall pay interest to the Holder on the aggregate then outstanding principal amount of this
Note at the rate of 12.0% per annum in the aggregate, subject to adjustment as set forth herein, payable quarterly in cash in arrears
on the first Business Day of each fiscal quarter, beginning on June 30, 2020 and on the Maturity Date (each such date, an “Interest
Payment Date”) (if any Interest Payment Date is not a Business Day, then the applicable payment shall be due on the next
succeeding Business Day). If any quarterly interest payment is not made by its Interest Payment Date, then the interest shall accrue
at the rate of 14%. Upon the occurrence and continuation of an Event of Default under Section 5(a)(i) below, interest shall accrue
and be payable in cash at the rate of 14% per annum.

 

b) Interest
Calculations. Interest on the outstanding principal amount 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) Prepayment.
The Company may prepay any portion of the principal amount of this Note without the prior written consent of the Holder, provided,
however, that any prepayment is done on a pro rata basis on all Notes then outstanding.

 

Section 3. Registration
of Transfers and Exchanges.

 

a) Different
Denominations. This Note is exchangeable for an equal aggregate principal amount of 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.

 

    	4

    	 

    

 

b) Investment
Representations. This Note has been issued subject to certain investment representations of the original Holder set forth in
the Purchase Agreement and may be transferred or exchanged only in compliance with applicable federal and state securities laws
and regulations.

 

c) Reliance
on Note Register. Prior to 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. Negative
Covenants. As long as at least 25% of the original aggregate principal amount of all Notes remains outstanding, unless the
Required Holders (and treating any Notes owned by the Company or any Affiliate of the Company as not outstanding for such purpose)
shall have otherwise given prior written consent, the Company shall not, and shall not permit any of the Subsidiaries to, directly
or indirectly:

 

a) amend its
charter documents, including, without limitation, its certificate of incorporation and bylaws, in any manner that materially and
adversely affects any rights of the Holder (which limitation shall expressly not apply to any proposal to increase the number of
authorized shares of the Company’s Common Stock);

 

b) repay, repurchase
or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its Common Stock or common
stock equivalents;

 

c) pay cash dividends
or distributions on any equity securities of the Company; or

 

d) enter into
any transaction with any Affiliate of the Company which would be required to be disclosed in any public filing with the Commission,
unless such transaction is made on an arm’s-length basis and expressly approved by a majority of the disinterested directors
of the Company (even if less than a quorum otherwise required for board approval).

 

Section 5. 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) and except as shall have been effected with
the consent of the Required Holders:

 

    	5

    	 

    

 

i. any default
in the payment of the principal amount of any Note, which default is not cured within 10 calendar days;

 

ii. the Company
shall fail to observe or perform any other covenant or agreement contained in the Notes which failure is not cured, if possible
to cure, within the earlier to occur of (A) five (5) Business Days after notice of such failure sent by the Holder or by any other
Holder to the Company and (B) 10 Business Days after the Company has become or should have become aware of such failure;

 

iii. a default
or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument) shall occur
under (A) any of the Notes or (B) any other material agreement, lease, document or instrument to which the Company or any Subsidiary
is obligated (and not covered by clause (vi) below);

 

iv. any representation
or warranty made in this Note, any other Note, any written statement pursuant hereto or thereto or any other report, financial
statement or certificate made or delivered to the Holder or any other Holder shall be untrue or incorrect in any material respect
as of the date when made or deemed made;

 

v. 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;

 

vi. the Company
or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture agreement,
factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness
for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation greater than
$150,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming (subject
to any applicable cure period) or being declared due and payable prior to the date on which it would otherwise become due and payable;

 

vii. 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;

 

viii. the Company
shall be a party to any Change of Control Transaction or Fundamental Transaction or shall agree to sell or dispose of all or in
excess of 50% of its assets in one transaction or a series of related transactions (whether or not such sale would constitute a
Change of Control Transaction) and excluding specifically any license or other disposition involving continued royalty or similar
payments of the Company’s intellectual property assets in the ordinary course of business);

 

    	6

    	 

    

 

ix. the Company
shall materially breach any of the Notes; or

 

x. any monetary
judgment, writ or similar final process shall be entered or filed against the Company, any subsidiary or any of their respective
property or other assets for more than $100,000, and such judgment, writ or similar final process shall remain unvacated, unbonded
or unstayed for a period of 45 calendar days.

 

b) Remedies
Upon Event of Default. If an Event of Default occurs pursuant to Section 5(a)(i), the outstanding principal amount of this
Note, plus accrued but unpaid interest, and other amounts owing in respect thereof through the date of acceleration, shall become,
at the Holder’s election and upon notice thereof to the Company, immediately due and payable in cash at the Mandatory Default
Amount. If an Event of Default occurs pursuant to Sections 5(a)(ii) - 5(a)(xii), the outstanding principal amount of this Note,
plus accrued but unpaid interest, and other amounts owing in respect thereof through the date of acceleration, shall become, at
the Holder’s election and upon notice thereof to the Company, immediately due and payable in cash. Commencing 5 days 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 interest rate equal to the lesser of 12% per annum or the maximum rate permitted under applicable law. Upon the payment
in full of this Note pursuant to this Section 5(b), the Holder shall promptly surrender this Note to or as directed by the Company.
In connection with such acceleration described herein, the Holder need not provide, and the Company hereby waives, any presentment,
demand, protest or other notice of any kind, and the Holder may immediately enforce any and all of its rights and remedies hereunder
and all other remedies available to it under applicable law. 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 5(b). No such rescission or annulment shall affect any subsequent Event of Default
or impair any right consequent thereon.

 

c) Subordination.
Holder agrees and acknowledges that this Note is subordinate to the obligation of the Company to the Senior Lender(s). The Holder
hereby agrees, upon the request of the Senior Lender(s) at any time and from time to time, to execute such other documents or instruments
as may be reasonably requested by the Senior Lender(s) further to evidence of public record or otherwise the priority of the Senior
Lender(s) as contemplated hereby.

 

    	7

    	 

    

 

Section 6. Miscellaneous.

 

a) Notices.
Any and all notices or other communications or deliveries to be provided by the Holder hereunder shall be in writing and delivered
personally, 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 6(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 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, as
set forth in the Purchase Agreement. 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 facsimile at the facsimile number
set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on any date, (ii) the next Business 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 Business Day or later than 5:30 p.m. (New York City time) on any Business
Day, (iii) the second Business 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 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 New York, 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 the Notes (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 the City of New York, Borough of Manhattan (the
“New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York
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 Notes), 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 New York Courts, or
such New York 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.

 

    	8

    	 

    

 

e) Amendments,
Waivers. No provision of the Notes may be waived, modified, supplemented or amended except in a written instrument signed by
the Company and Required Holders, which upon execution of such written instrument shall be effective as to all Notes then outstanding.
Any waiver by the Company or the Required Holders of a breach of any provision of the Notes 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 the Notes. The failure of the Company
or the Required Holders to insist upon strict adherence to any term of the 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 the Notes
on any other occasion. Any waiver by the Company or the Required Holders 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) 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.

 

h) 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.

 

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

 

(Signature Pages Follow)

 

    	9

    	 

    

 

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.

 

	 	Intellinetics,
    inc.
	 	 
	 	By:	                      
	 	Name:	 
	 	Title:	 

 

    	10

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