Exhibit 10.5

 

SUBSCRIPTION AGREEMENT

 

This Subscription Agreement (this “Agreement”) has been executed by the
subscriber set forth on the signature page hereof (the “Subscriber”) in
connection with the private placement offering (the “Offering”) by Danlax, Corp.
(intended to be renamed Akoustis Technologies, Inc.), a Nevada corporation (the
“Company”) of a minimum of $3,000,000 (the “Minimum Offering”)1 and a maximum of
$6,000,000 (the “Maximum Offering”) of shares (the “Shares”) of the Company’s
common stock, par value $0.001 per share (“Common Stock”) issued, at a purchase
price of $1.50 per Share (the “Purchase Price”). This subscription is being
submitted to you in accordance with and subject to the terms and conditions
described in this Agreement, the Confidential and Non-Binding Summary Term Sheet
of the Company dated April 17, 2015, relating to the Offering (as the same may
be amended or supplemented, the “Term Sheet”), and any other Disclosure
Materials (as defined below). The minimum subscription is $90,000 (60,000
Shares). The Company may accept subscriptions for less than $90,000 in its sole
discretion.

 

The Shares being subscribed for pursuant to this Agreement have not been
registered under the Securities Act of 1933, as amended (the “Securities Act”).
The Offering is being made on a reasonable best efforts basis to “accredited
investors,” as defined in Regulation D under the Securities Act.

 

The Shares are being offered and sold in connection with a reverse triangular
merger (the “Merger”) between a subsidiary of the Company and Akoustis, Inc., a
Delaware corporation (“Akoustis”), and certain other transactions, on the terms
and conditions described in the Term Sheet, pursuant to which Akoustis will
become a wholly owned subsidiary of the Company, and all of the outstanding
Akoustis stock will be converted into shares of the Company’s Common Stock, and
Akoustis stock options and warrants (if any) will be converted into options and
warrants to purchase the Company’s Common Stock, as further described in the
Term Sheet. Prior to the first Closing (as defined below), the Company intends
to change its name to “Akoustis Technologies, Inc.” or another name that
reflects its intended new business.

 

The undersigned acknowledges receipt of a copy of the Registration Rights
Agreement, substantially in the form of Exhibit A hereto (the “Registration
Rights Agreement”).

 

Each closing of the Offering (a “Closing,” and the date on which such Closing
occurs hereinafter referred to as the “Closing Date”) shall take place at the
offices of CKR Law LLP, at 1330 Avenue of the Americas, New York, New York 10019
(or such other place as is mutually agreed to by the Company and the Placement
Agents (as defined below)).

 

The initial Closing will not occur unless:

 

a.funds deposited in escrow as described in Section 2(b) below, plus the
outstanding principal amount of the Akoustis Notes converted into Shares, equal
at least the Minimum Offering, and corresponding documentation with respect to
such amounts has been delivered by Subscribers and the holders of Akoustis Notes
as described in Section 2(a) below; and

 

 

1Upon the Closing of the Merger and the Minimum Offering, $645,000 outstanding
principal amount of certain convertible notes of Akoustis (the “Akoustis Notes”)
will be converted into 430,000 Shares at a price per Share equal to the Purchase
Price, and the aggregate principal amount so converted will be included in the
gross proceeds of the Offering for purposes of meeting the Minimum Offering
amount.

 

 

 

 

b.the Merger shall have been effected (or is simultaneously effected).

 

Thereafter, the Company may conduct one or more additional Closings for the sale
of the Shares until the termination of the Offering. Unless terminated earlier
by the Company, the Offering shall continue until May 15, 2015, which date may
be extended until June 15, 2015, by the Company, without notice to any
Subscriber, past, current or prospective.

 

The Term Sheet and any supplement or amendment thereto, and any disclosure
schedule or other information document, delivered to the Subscriber prior to
Subscriber’s execution of this Agreement, and any such document delivered to the
Subscriber after Subscriber’s execution of this Agreement and prior to the
Closing of the Subscriber’s subscription hereunder (including, without
limitation, a draft of the Current Report on Form 8-K to be filed with the
Company with the Securities and Exchange Commission (the “SEC”) within four
business days after the closing of the merger and the initial closing of the
Offering (the “Super 8-K”), are collectively referred to as the “Disclosure
Materials.”

 

1.Subscription. The undersigned Subscriber hereby subscribes to purchase the
number of Shares set forth on the Omnibus Signature Page attached hereto, for
the aggregate Purchase Price as set forth on such Omnibus Signature Page,
subject to the terms and conditions of this Agreement and on the basis of the
representations, warranties, covenants and agreements contained herein.

 

2.Subscription Procedure. To complete a subscription for the Shares, the
Subscriber must fully comply with the subscription procedure provided in
paragraphs a. through c. of this Section on or before the Closing Date.

 

a.Subscription Documents. On or before the Closing Date, the Subscriber shall
review, complete and execute the Omnibus Signature Page to this Agreement, the
Investor Profile, Anti-Money Laundering Form and Investor Certification,
attached hereto following the Omnibus Signature Page (collectively, the
“Subscription Documents”), and deliver the Subscription Documents to the
Company’s attorneys, CKR Law LLP (“CKR”), at the address set forth under the
caption “How to subscribe for Shares in the private offering of Danlax, Corp.”
below. Executed documents may be delivered to CKR by facsimile or electronic
mail (e-mail), if the Subscriber delivers the original copies of the documents
to CKR as soon as practicable thereafter.

 

b.Purchase Price. Simultaneously with the delivery of the Subscription Documents
to CKR as provided herein, and in any event on or prior to the Closing Date, the
Subscriber shall deliver to Delaware Trust Company, in its capacity as escrow
agent (the “Escrow Agent”), the full Purchase Price by certified or other bank
check or by wire transfer of immediately available funds, pursuant to the
instructions set forth under the caption “How to subscribe for Shares in the
private offering of Danlax, Corp.” below. Such funds will be held for the
Purchaser’s benefit and will be returned promptly, without interest or offset,
if this Subscription Agreement is not accepted by the Company or the Offering is
terminated pursuant to its terms by the Company prior to the Closing as defined
herein.

 

c.Company Discretion. The Subscriber understands and agrees that the Company in
its sole discretion reserves the right to accept or reject this or any other
subscription for Shares, in whole or in part, notwithstanding prior receipt by
the Subscriber of notice of acceptance of this subscription. The Company shall
have no obligation hereunder until the Company shall execute and deliver to the
Subscriber an executed copy of this Agreement. If this subscription is rejected
in whole, or the offering of Shares is terminated, all funds received from the
Subscriber will be returned without interest or offset, and this Agreement shall
thereafter be of no further force or effect. If this subscription is rejected in
part, the funds for the rejected portion of this subscription will be returned
without interest or offset, and this Agreement will continue in full force and
effect to the extent this subscription was accepted.

 

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In addition, on or before the initial Closing Date, each holder of the Akoustis
Notes shall deliver to the Company an instrument in form and substance
satisfactory to the Company evidencing such holder’s agreement to convert upon
the initial Closing the outstanding principal amount of its Akoustis Notes into
Shares at a price per Share equal to the Purchase Price, without additional
consideration and with no further obligation by the Company or Akoustis with
respect to the Akoustis Notes.

 

3.Placement Agents. Northland Securities, Inc., and Katalyst Securities LLC,
each a broker-dealer licensed with FINRA, have been engaged on a co-exclusive
basis as placement agents (the “Placement Agents”) for the Offering on a
reasonable best efforts basis. The Placement Agents and their sub-agents will be
paid at closing a cash commission of 10% of funds raised from investors in the
Offering (or 2% in the case of certain existing Akoustis investors) in the
Offering and will receive warrants to purchase a number of shares of Common
Stock equal to 10% of the number of Shares sold in the Offering (or 2% in the
case of certain existing Akoustis investors), with a term of five (5) years and
at an exercise price of $1.50 per share (the “Placement Agent Warrants”). The
Placement Agent Warrants will have “weighted average” anti-dilution protection,
subject to customary exceptions. Any sub-agent of a Placement Agent that
introduces investors to the Offering will be entitled to share in the cash fees
and attributable to those investors as described above, pursuant to the terms of
an executed sub-agent agreement. The Company will pay certain expenses of the
Placement Agents in connection with the Offering.

 

4.Representations and Warranties of the Company. The Company hereby represents
and warrants to the Subscriber, as of the Closing Date and giving effect to the
Merger (unless otherwise specified), the following:

 

a)Organization and Qualification. The Company and each of its subsidiaries is a
corporation or other business entity duly organized and validly existing in good
standing under the laws of the jurisdiction of its formation, and has the
requisite corporate power to own its properties and to carry on its business as
now being conducted. The Company and each of its subsidiaries is duly qualified
as a foreign corporation to do business and is in good standing in every
jurisdiction in which the nature of the business conducted by it makes such
qualification necessary, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on the
assets, business, condition (financial or otherwise), results of operations or
future prospects of the Company and its subsidiaries taken as a whole (a
“Material Adverse Effect”). Each subsidiary of the Company is identified on
Schedule 4a attached hereto.

 

b)Authorization, Enforcement, Compliance with Other Instruments. (i) The Company
has the requisite corporate power and authority to enter into and perform its
obligations under this Agreement, the Registration Rights Agreement and each of
the other agreements and documents that are exhibits hereto or thereto or are
contemplated hereby or thereby or necessary or desirable to effect the
transactions contemplated hereby or thereby (the “Transaction Documents”) and to
issue the Shares, in accordance with the terms hereof and thereof, (ii) the
execution and delivery by the Company of each of the Transaction Documents and
the consummation by it of the transactions contemplated hereby and thereby,
including, without limitation, the issuance of the Shares, have been, or will be
at the time of execution of such Transaction Document, duly authorized by the
Company’s Board of Directors, and no further consent or authorization is, or
will be at the time of execution of such Transaction Document, required by the
Company, its respective Board of Directors or its stockholders, (iii) each of
the Transaction Documents will be duly executed and delivered by the Company,
(iv) the Transaction Documents when executed will constitute the valid and
binding obligations of the Company enforceable against the Company in accordance
with their terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the
enforcement of creditors’ rights and remedies.

 

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c)Capitalization. The authorized capital stock of the Company consists of
300,000,000 shares of Common Stock and 10,000,000 shares of preferred stock.
Immediately before giving effect to the Merger and the initial Closing of the
Offering, the Company has 3,000,000 shares of Common Stock and no preferred
stock issued and outstanding. All of the outstanding shares of Common Stock and
of the stock of each of the Company’s subsidiaries have been duly authorized,
validly issued and are fully paid and nonassessable. After giving effect to the
Merger: (i) no shares of capital stock of the Company or any of its subsidiaries
will be subject to preemptive rights or any other similar rights or any liens or
encumbrances suffered or permitted by the Company; (ii) except as set forth on
Schedule 4c(ii) there will be no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company or any of its subsidiaries, or contracts, commitments, understandings 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, (iii) there will be no outstanding debt securities other than
indebtedness as set forth in Schedule 4c(iii), (iv) other than pursuant to the
Registration Rights Agreement or as set forth in Schedule 4c(iv), there will be
no agreements or arrangements under which the Company or any of its subsidiaries
is obligated to register the sale of any of their securities under the
Securities Act, (v) there will be no outstanding registration statements, and
there will be no outstanding comment letters from the SEC or any other
regulatory agency; (vi) except as provided in this Agreement or as set forth in
Schedule 4c(vi), there will be no securities or instruments containing
anti-dilution or similar provisions, including the right to adjust the exercise,
exchange or reset price under such securities, that will be triggered by the
issuance of the Shares as described in this Agreement; and (vii) no co-sale
right, right of first refusal or other similar right will exist with respect to
the Shares or the issuance and sale thereof. Immediately after giving effect to
the Merger and the Closing of the Minimum Offering or the Maximum Offering, the
pro forma outstanding capitalization of the Company will be as set forth under
“Pro Forma Capitalization” in Schedule 4c. Upon request, the Company will make
available to the Subscriber true and correct copies of the Company’s Certificate
of Incorporation, and as in effect on the date hereof (the “Certificate of
Incorporation”), and the Company’s By-laws, as in effect on the date hereof (the
“By-laws”), and the terms of all securities exercisable for Common Stock and the
material rights of the holders thereof in respect thereto other than stock
options issued to officers, directors, employees and consultants.

 

d)Issuance of Securities. The Shares are duly authorized and, upon issuance in
accordance with the terms hereof, shall be duly issued, fully paid and
nonassessable, and are free from all taxes, liens and charges with respect to
the issue thereof.

 

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e)No Conflicts. The execution, delivery and performance of each of the
Transaction Documents by the Company, and the consummation by the Company of the
transactions contemplated hereby and thereby will not (i) result in a violation
of the Certificate of Incorporation or the By-laws (or equivalent constitutive
document) of the Company or any of its subsidiaries 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 would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company or
any subsidiary is a party, except for those which could not reasonably be
expected to have a Material Adverse Effect, or (iii) result in a violation of
any law, rule, regulation, order, judgment or decree (including U.S. federal and
state securities laws and regulations) applicable to the Company or any
subsidiary or by which any property or asset of the Company or any subsidiary is
bound or affected. Neither the Company nor any subsidiary is in violation of any
term of or in default under its constitutive documents. Except those which could
not reasonably be expected to have a Material Adverse Effect, neither the
Company nor any subsidiary is in violation of any term of or in default under
any material contract, agreement, mortgage, indebtedness, indenture, instrument,
judgment, decree or order or any statute, rule or regulation applicable to the
Company or any subsidiary. The business of the Company and its subsidiaries is
not being conducted, and shall not be conducted in violation of any law,
ordinance, or regulation of any governmental entity, except for any violation
which could not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect. Except as specifically contemplated by this
Agreement and as required under the Securities Act and any applicable state
securities laws, neither the Company nor any of its subsidiaries is required to
obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it to execute,
deliver or perform any of its obligations under or contemplated by this
Agreement or the other Transaction Documents in accordance with the terms hereof
or thereof. Except as set forth on Schedule 4e, neither the execution and
delivery by the Company of the Transaction Documents, nor the consummation by
the Company of the transactions contemplated hereby or thereby, will require any
notice, consent or waiver under any contract or instrument to which the Company
or any subsidiary is a party or by which the Company or any subsidiary is bound
or to which any of their assets is subject. All consents, authorizations,
orders, filings and registrations which the Company or any of its subsidiaries
is required to obtain pursuant to the preceding two sentences have been or will
be obtained or effected on or prior to the Closing. The Company is unaware of
any facts or circumstance, which might give rise to any of the foregoing.

 

f)Absence of Litigation. Except as set forth on Schedule 4f, there is no action,
suit, proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body now pending or, to the
knowledge of the Company, threatened, against or affecting the Company or any of
its subsidiaries.

 

g)Acknowledgment Regarding Subscriber’s Purchase of the Shares. The Company
acknowledges and agrees that each Subscriber is acting solely in the capacity of
an arm’s length purchaser with respect to the Transaction Documents and the
transactions contemplated hereby and thereby.

 

h)No General Solicitation. Neither the Company, nor any of its affiliates, nor,
to the knowledge of the Company, any person acting on its or their behalf, has
engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with the offer or sale of the Shares.

 

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i)No Integrated Offering. Neither the Company, nor any of its affiliates, nor to
the knowledge of the Company, any person acting on its or their behalf has,
directly or indirectly, made any offers or sales of any security or solicited
any offers to buy any security, under circumstances that would require
registration of the Shares under the Securities Act or cause this offering of
the Shares to be integrated with prior offerings by the Company for purposes of
the Securities Act.

 

j)Employee Relations. Neither Company nor any subsidiary is involved in any
labor dispute nor, to the knowledge of the Company, is any such dispute
threatened. Neither Company nor any subsidiary is party to any collective
bargaining agreement. The Company’s and/or its subsidiaries’ employees are not
members of any union, and the Company believes that its and its subsidiaries’
relationship with their respective employees is good.

 

k)Intellectual Property Rights. Except as set forth on Schedule 4k, the Company
and its subsidiaries own or possess all patents, trademarks, domain names
(whether or not registered) and any patentable improvements or copyrightable
derivative works thereof, websites and intellectual property rights relating
thereto, service marks, trade names, copyrights, licenses and authorizations,
and all rights with respect to the foregoing, which are necessary for the
conduct of its business as now conducted without any conflict with the rights of
others except for such conflicts that would not result in a Material Adverse
Effect. Neither Company nor any subsidiary has received any notice of
infringement of, or conflict with, the asserted rights of others with respect to
any intellectual property that it utilizes.

 

l)Environmental Laws.

 

(i)The Company and each subsidiary has complied with all applicable
Environmental Laws (as defined below), except for violations of Environmental
Laws that, individually or in the aggregate, have not had and would not
reasonably be expected to have a Material Adverse Effect. There is no pending
or, to the knowledge of the Company, threatened civil or criminal litigation,
written notice of violation, formal administrative proceeding, or investigation,
inquiry or information request, relating to any Environmental Law involving the
Company or any subsidiary, except for litigation, notices of violations, formal
administrative proceedings or investigations, inquiries or information requests
that, individually or in the aggregate, have not had and would not reasonably be
expected to have a Material Adverse Effect. For purposes of this Agreement,
“Environmental Law” means any national, state, provincial or local law, statute,
rule or regulation or the common law relating to the environment or occupational
health and safety, including without limitation any statute, regulation,
administrative decision or order pertaining to (i) treatment, storage, disposal,
generation and transportation of industrial, toxic or hazardous materials or
substances or solid or hazardous waste; (ii) air, water and noise pollution;
(iii) groundwater and soil contamination; (iv) the release or threatened release
into the environment of industrial, toxic or hazardous materials or substances,
or solid or hazardous waste, including without limitation emissions, discharges,
injections, spills, escapes or dumping of pollutants, contaminants or chemicals;
(v) the protection of wild life, marine life and wetlands, including without
limitation all endangered and threatened species; (vi) storage tanks, vessels,
containers, abandoned or discarded barrels, and other closed receptacles; (vii)
health and safety of employees and other persons; and (viii) manufacturing,
processing, using, distributing, treating, storing, disposing, transporting or
handling of materials regulated under any law as pollutants, contaminants, toxic
or hazardous materials or substances or oil or petroleum products or solid or
hazardous waste. As used above, the terms “release” and “environment” shall have
the meaning set forth in the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.

 

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(ii)To the knowledge of the Company there is no material environmental liability
with respect to any solid or hazardous waste transporter or treatment, storage
or disposal facility that has been used by the Company or any subsidiary.

 

(iii)The Company and its subsidiaries (i) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (ii) are in compliance, in all material
respects, with all terms and conditions of any such permit, license or approval.

 

m)Permits; FCC Compliance. The Company and its subsidiaries have all
authorizations, approvals, clearances, licenses, permits, certificates or
exemptions (including manufacturing approvals and authorizations, pricing and
reimbursement approvals, labeling approvals, registration notifications or their
foreign equivalent) issued by any regulatory authority or governmental agency
(collectively, “Permits”) required to conduct their respective businesses as
currently conducted except to the extent that the failure to have such Permits
would not have a Material Adverse Effect. The conduct of business by the Company
complies, and at all times has substantially complied, in all material respects
with the Telecommunications Act of 1996 and similar federal, state and foreign
laws applicable to the evaluation, testing, manufacturing, distribution,
advertising and marketing of each of the Company’s products, in whatever stage
of development or commercialization except to the extent that the failure to so
comply would not have a Material Adverse Effect. To the knowledge of the
Company, as of the date hereof, neither the Federal Communications Commission
(the “FCC”) nor any comparable regulatory authority or governmental agency is
considering limiting, suspending or revoking any such Permit or changing the
marketing classification or labeling of the products of the Company or any of
its subsidiaries. To the knowledge of the Company, there is no false or
misleading information or material omission in any product application or other
submission by the Company or any of its subsidiaries to the FCC or any
comparable regulatory authority or governmental agency. The Company or its
subsidiaries have fulfilled and performed in all material respects their
obligations under each Permit, and, as of the date hereof, to the knowledge of
the Company, no event has occurred or condition or state of facts exists which
would constitute a breach or default or would cause revocation or termination of
any such Permit except to the extent that such breach, default, revocation or
termination would not have a Material Adverse Effect. To the knowledge of the
Company, any third party that is a manufacturer or contractor for the Company or
any of its subsidiaries is in compliance in all material respects with all
Permits insofar as they pertain to the manufacture of product components or
products for the Company. The Company and its subsidiaries have not received any
notice of adverse finding, warning letter, notice of violation, notice of action
or any other notice from the FCC or other governmental agency alleging or
asserting noncompliance with any applicable laws or Permits. The Company and its
subsidiaries have made all notifications, submissions and reports required by
applicable federal, state and foreign laws, except to the extent that the
failure to make such notifications, submission or reports would not have a
Material Adverse Effect.

 

n)Title. Neither the Company nor any of its subsidiaries owns any real property.
Except as set forth on Schedule 4n, each of the Company and its subsidiaries has
good and marketable title to all of its personal property and assets, free and
clear of any material restriction, mortgage, deed of trust, pledge, lien,
security interest or other charge, claim or encumbrance which would have a
Material Adverse Effect. Except as set forth on Schedule 4n, with respect to
properties and assets it leases, each of the Company and its subsidiaries is in
material compliance with such leases and holds a valid leasehold interest free
of any liens, claims or encumbrances which would have a Material Adverse Effect.

 

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o)No Material Adverse Breaches, etc. Neither Company nor any subsidiary is
subject to any charter, corporate or other legal restriction, or any judgment,
decree, order, rule or regulation which in the judgment of the Company’s
officers has had, or is reasonably expected in the future to have, a Material
Adverse Effect. Neither Company nor any subsidiary is in breach of any contract
or agreement which breach, in the judgment of the Company’s officers, has had,
or is reasonably expected to have a Material Adverse Effect.

 

p)Tax Status. The Company and each subsidiary has made and filed (taking into
account any valid extensions) all federal and state income and all other tax
returns, reports and declarations required by any jurisdiction to which it is
subject and (unless and only to the extent that the Company or such subsidiary
has set aside on its books provisions reasonably adequate for the payment of all
unpaid and unreported taxes) has 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 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. To the knowledge of the Company, there
are no unpaid taxes in any material amount claimed to be due from the Company or
any subsidiary by the taxing authority of any jurisdiction, and the officers of
the Company know of no basis for any such claim.

 

q)Certain Transactions. Except for arm’s length transactions pursuant to which
the Company or any subsidiary makes payments in the ordinary course of business
upon terms no less favorable than it could obtain from third parties, none of
the officers, directors, or employees of the Company or any subsidiary is
presently a party to any transaction with the Company or any subsidiary (other
than for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company, any corporation, partnership, trust or other entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.

 

r)Rights of First Refusal. Except as set forth on Schedule 4c(i) or Schedule 4r,
the Company is not obligated to offer the securities offered hereunder on a
right of first refusal basis or otherwise to any third parties including, but
not limited to, current or former stockholders of the Company, underwriters,
brokers, agents or other third parties.

 

s)The Company has insurance policies of the type and in amounts customarily
carried by organizations conducting businesses or owning assets similar to those
of the Company and its subsidiaries. There is no material claim pending under
any such policy as to which coverage has been questioned, denied or disputed by
the underwriter of such policy.

 

t)SEC Reports. The Company has filed all reports, schedules, forms, statements
and other documents required to be filed by the Company under the Securities
Exchange Act of 1934, as amended, including pursuant to Section 13(a) or 15(d)
thereof, for the two years preceding the date hereof (or such shorter period as
the Company was required by law or regulation to file such material).

 

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t.Brokers’ Fees. Except as set forth on Schedule 4t, the Company does not have
any liability or obligation to pay any fees or commissions to any broker, finder
or agent with respect to the transactions contemplated by this Agreement, except
for the payment of fees to the Placement Agents as described below.

 

u.Disclosure Materials. The Disclosure Materials taken as a whole do not contain
an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The Super 8-K does not omit to state
a material fact required to be stated therein.

 

v.Reliance. The Company acknowledges that the Subscriber is relying on the
representations and warranties made by the Company hereunder and that such
representations and warranties are a material inducement to the Subscriber
purchasing the Shares. The Company further acknowledges that without such
representations and warranties of the Company made hereunder, the Subscribers
would not enter into this Agreement.

 

5.Representations, Warranties and Agreements of the Subscriber. The Subscriber
represents and warrants to, and agrees with, the Company the following:

 

a.The Subscriber has the knowledge and experience in financial and business
matters necessary to evaluate the merits and risks of its prospective investment
in the Company, and has carefully reviewed and understand the risks of, and
other considerations relating to, the purchase of Shares and the tax
consequences of the investment, and have the ability to bear the economic risks
of the investment.

 

b.The Subscriber is acquiring the Shares for investment for its own account and
not with the view to, or for resale in connection with, any distribution
thereof. The Subscriber understands and acknowledges that the Shares have not
been registered under the Securities Act or any state securities laws, by reason
of a specific exemption from the registration provisions of the Securities Act
and applicable state securities laws, which depends upon, among other things,
the bona fide nature of the investment intent as expressed herein. The
Subscriber further represents that it does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participation to any third person with respect to any of the Shares. The
Subscriber understands and acknowledges that the offering of the Shares pursuant
to this Agreement will not be registered under the Securities Act nor under the
state securities laws on the ground that the sale provided for in this Agreement
and the issuance of securities hereunder is exempt from the registration
requirements of the Securities Act and any applicable state securities laws.

 

c.The Subscriber is an “accredited investor” as defined in Rule 501 of
Regulation D as promulgated by the SEC under the Securities Act, for the
reason(s) specified on the Accredited Investor Certification attached hereto as
completed by Subscriber, and Subscriber shall submit to the Company such further
assurances of such status as may be reasonably requested by the Company. The
Subscriber resides in the jurisdiction set forth on the Subscriber’s Omnibus
Signature Page affixed hereto.

 

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d.The Subscriber (i) if a natural person, represents that he or she is the
greater of (A) 21 years of age or (B) the age of legal majority in his or her
jurisdiction of residence, and has full power and authority to execute and
deliver this Agreement and all other related agreements or certificates and to
carry out the provisions hereof and thereof; (ii) if a corporation, partnership,
or limited liability company or partnership, or association, joint stock
company, trust, unincorporated organization or other entity, represents that
such entity was not formed for the specific purpose of acquiring the Shares,
such entity is duly organized, validly existing and in good standing under the
laws of the state or jurisdiction of its organization, the consummation of the
transactions contemplated hereby is authorized by, and will not result in a
violation of state law or its charter or other organizational documents, such
entity has full power and authority to execute and deliver this Agreement and
all other related agreements or certificates and to carry out the provisions
hereof and thereof and to purchase and hold the Shares, the execution and
delivery of this Agreement has been duly authorized by all necessary action,
this Agreement has been duly executed and delivered on behalf of such entity and
is a legal, valid and binding obligation of such entity; or (iii) if executing
this Agreement in a representative or fiduciary capacity, represents that it has
full power and authority to execute and deliver this Agreement in such capacity
and on behalf of the subscribing individual, ward, partnership, trust, estate,
corporation, or limited liability company or partnership, or other entity for
whom the Subscriber is executing this Agreement, and such individual,
partnership, ward, trust, estate, corporation, or limited liability company or
partnership, or other entity has full right and power to perform pursuant to
this Agreement and make an investment in the Company, and represents that this
Agreement constitutes a legal, valid and binding obligation of such entity. The
execution and delivery of this Agreement will not violate or be in conflict with
any order, judgment, injunction, agreement or controlling document to which the
Subscriber is a party or by which it is bound.

 

e.The Subscriber understands that the Shares are being offered and sold to it in
reliance on specific exemptions from the registration requirements of United
States federal and state securities laws and that the Company is relying in part
upon the truth and accuracy of, and such Subscriber’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
such Subscriber set forth herein in order to determine the availability of such
exemptions and the eligibility of such Subscriber to acquire such securities.
The Subscriber further acknowledges and understands that the Company is relying
on the representations and warranties made by the Subscriber hereunder and that
such representations and warranties are a material inducement to the Company to
sell the Shares to the Subscriber. The Subscriber further acknowledges that
without such representations and warranties of the Subscriber made hereunder,
the Company would not enter into this Agreement with the Subscriber.

 

f.The Subscriber understands that no public market now exists, and there may
never be a public market for, the Shares, that only a limited public market for
the Company’s Common Stock exists and that there can be no assurance that an
active public market for the Common Stock will exist or continue to exist.

 

g.The Subscriber has received and reviewed information about the Company,
including all Disclosure Materials, and have had an opportunity to discuss the
Company’s business, management and financial affairs with the Company’s
management. The Subscriber understands that such discussions, as well as any
Disclosure Material provided by the Company, were intended to describe the
aspects of the Company’s business and prospects which the Company believes to be
material, but were not necessarily a thorough or exhaustive description, and
except as expressly set forth in this Agreement, the Company makes no
representation or warranty with respect to the completeness of such information
and makes no representation or warranty of any kind with respect to any
information provided by any entity other than the Company. Some of such
information may include projections as to the future performance of the Company,
which projections may not be realized, may be based on assumptions which may not
be correct and may be subject to numerous factors beyond the Company’s control.
Additionally, the Subscriber understands and represents that it is purchasing
the Shares notwithstanding the fact that the Company may disclose in the future
certain material information the Subscriber has not received, including (without
limitation) financial statements of the Company and/or Akoustis for the current
or prior fiscal periods, and any subsequent period financial statements that
will be filed with the SEC, that it is not relying on any such information in
connection with its purchase of the Shares and that it waives any right of
action with respect to the nondisclosure to it prior to its purchase of the
Shares of any such information. Each Subscriber has sought such accounting,
legal and tax advice as it has considered necessary to make an informed
investment decision with respect to its acquisition of the Shares.

 

10

 

 

h.The Subscriber acknowledges that none of the Company or the Placement Agents
is acting as a financial advisor or fiduciary of the Subscriber (or in any
similar capacity) with respect to the Transaction Documents and the transactions
contemplated hereby and thereby, and no investment advice has been given by the
Company, the Placement Agents or any of their respective representatives or
agents in connection with the Transaction Documents and the transactions
contemplated hereby and thereby. The Subscriber further represents to the
Company that the Subscriber’s decision to enter into the Transaction Documents
has been based solely on the independent evaluation by the Subscriber and its
representatives.

 

i.As of the Closing, all actions on the part of Subscriber, and its officers,
directors and partners, if applicable, necessary for the authorization,
execution and delivery of this Agreement and the Registration Rights Agreement
and the performance of all obligations of the Subscriber hereunder and
thereunder shall have been taken, and this Agreement and the Registration Rights
Agreement, assuming due execution by the parties hereto and thereto, constitute
valid and legally binding obligations of the Subscriber, enforceable in
accordance with their respective terms, subject to: (i) judicial principles
limiting the availability of specific performance, injunctive relief, and other
equitable remedies and (ii) bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect generally relating to or
affecting creditors’ rights.

 

j.Subscriber represents that neither it nor, to its knowledge, any person or
entity controlling, controlled by or under common control with it, nor any
person having a beneficial interest in it, nor any person on whose behalf the
Subscriber is acting: (i) is a person listed in the Annex to Executive Order No.
13224 (2001) issued by the President of the United States (Executive Order
Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten
to Commit, or Support Terrorism); (ii) is named on the List of Specially
Designated Nationals and Blocked Persons maintained by the U.S. Office of
Foreign Assets Control; (iii) is a non-U.S. shell bank or is providing banking
services indirectly to a non-U.S. shell bank; (iv) is a senior non-U.S.
political figure or an immediate family member or close associate of such
figure; or (v) is otherwise prohibited from investing in the Company pursuant to
applicable U.S. anti-money laundering, anti-terrorist and asset control laws,
regulations, rules or orders (categories (i) through (v), each a “Prohibited
Subscriber”). The Subscriber agrees to provide the Company, promptly upon
request, all information that the Company reasonably deems necessary or
appropriate to comply with applicable U.S. anti-money laundering, anti-terrorist
and asset control laws, regulations, rules and orders. The Subscriber consents
to the disclosure to U.S. regulators and law enforcement authorities by the
Company and its affiliates and agents of such information about the Subscriber
as the Company reasonably deems necessary or appropriate to comply with
applicable U.S. antimony laundering, anti-terrorist and asset control laws,
regulations, rules and orders. If the Subscriber is a financial institution that
is subject to the USA Patriot Act, the Subscriber represents that it has met all
of its obligations under the USA Patriot Act. The Subscriber acknowledges that
if, following its investment in the Company, the Company reasonably believes
that the Subscriber is a Prohibited Subscriber or is otherwise engaged in
suspicious activity or refuses to promptly provide information that the Company
requests, the Company has the right or may be obligated to prohibit additional
investments, segregate the assets constituting the investment in accordance with
applicable regulations or immediately require the Subscriber to transfer the
Shares. The Subscriber further acknowledges that the Subscriber will have no
claim against the Company or any of its affiliates or agents for any form of
damages as a result of any of the foregoing actions.

 

11

 

 

If the Subscriber is affiliated with a non-U.S. banking institution (a “Foreign
Bank”), or if the Subscriber receives deposits from, makes payments on behalf
of, or handles other financial transactions related to a Foreign Bank, the
Subscriber represents and warrants to the Company that: (1) the Foreign Bank has
a fixed address, other than solely an electronic address, in a country in which
the Foreign Bank is authorized to conduct banking activities; (2) the Foreign
Bank maintains operating records related to its banking activities; (3) the
Foreign Bank is subject to inspection by the banking authority that licensed the
Foreign Bank to conduct banking activities; and (4) the Foreign Bank does not
provide banking services to any other Foreign Bank that does not have a physical
presence in any country and that is not a regulated affiliate.

 

k.The Subscriber or its duly authorized representative realizes that because of
the inherently speculative nature of businesses of the kind conducted and
contemplated by the Company, the Company’s financial results may be expected to
fluctuate from month to month and from period to period and will, generally,
involve a high degree of financial and market risk that could result in
substantial or, at times, even total losses for investors in securities of the
Company.

 

l.The Subscriber has adequate means of providing for its current and anticipated
financial needs and contingencies, is able to bear the economic risk for an
indefinite period of time and has no need for liquidity of the investment in the
Shares and could afford complete loss of such investment.

 

m.The Subscriber is not subscribing for Shares as a result of or subsequent to
any advertisement, article, notice or other communication, published in any
newspaper, magazine or similar media or broadcast over television, radio, or the
internet, or presented at any seminar or meeting, or any solicitation of a
subscription by a person not previously known to the Subscriber in connection
with investments in securities generally.

 

n.The Subscriber acknowledges that no U.S. federal or state agency or any other
government or governmental agency has passed upon the Shares or made any finding
or determination as to the fairness, suitability or wisdom of any investments
therein.

 

o.The Subscriber agrees to be bound by all of the terms and conditions of the
Registration Rights Agreement and to perform all obligations thereby imposed
upon it.

 

p.All of the information that the Subscriber has heretofore furnished or which
is set forth herein is true, correct and complete as of the date of this
Agreement, and, if there should be any material change in such information prior
to the admission of the undersigned to the Company, the Subscriber will
immediately furnish revised or corrected information to the Company.

 

12

 

 

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

 

6.Transfer Restrictions. The Subscriber acknowledges and agrees as follows:

 

a.The Shares have not been registered for sale under the Securities Act, in
reliance on the private offering exemption in Section 4(a)(2) thereof; other
than as expressly provide in the Registration Rights Agreement, the Company does
not currently intend to register the Shares under the Securities Act at any time
in the future; and the undersigned will not immediately be entitled to the
benefits of Rule 144 with respect to the Shares.

 

b.The Subscriber understands that there are substantial restrictions on the
transferability of the Shares (collectively, the “Securities”) that the
certificates representing the Securities shall bear a restrictive legend in
substantially the following form (and a stop-transfer order may be placed
against transfer of such certificates or other instruments):

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS, AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE
OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A
REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES
ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) AN EXEMPTION FROM SUCH
REGISTRATION EXISTS AND THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER
OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE SATISFACTORY TO THE COMPANY,
THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN
THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS. HEDGING TRANSACTIONS
INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
SECURITIES ACT.

 

The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which it is
stamped, if (a) such Shares are sold pursuant to a registration statement under
the Securities Act, or (b) such holder delivers to the Company an opinion of
counsel, reasonably acceptable to the Company, that a disposition of the
Securities is being made pursuant to an exemption from such registration and
that the Securities, after such transfer, shall no longer be “restricted
securities” within the meaning of Rule 144.

 

13

 

 

c.Each Subscriber understands that prior to the Merger, the Company will be a
“shell company” as defined in Rule 12b-2 under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), and that upon the filing of a Current
Report on Form 8-K (the “Super 8-K) reporting the consummation of the Merger and
the Transactions and otherwise containing Form 10 information discussed below,
the Company will cease to be a shell company. Pursuant to Rule 144(i),
securities issued by a current or former shell company (that is, the Securities)
that otherwise meet the holding period and other requirements of Rule 144
nevertheless cannot be sold in reliance on Rule 144 until one year after the
Company (a) is no longer a shell company; and (b) has filed current “Form 10
information“ (as defined in Rule 144(i)) with the SEC reflecting that it is no
longer a shell company, and provided that at the time of a proposed sale
pursuant to Rule 144, the Company is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act and has filed all reports and other
materials required to be filed by Section 13 or 15(d) of the Exchange Act, as
applicable, during the preceding 12 months (or for such shorter period that the
issuer was required to file such reports and materials), other than Form 8-K
reports. As a result, the restrictive legends on certificates for the Securities
cannot be removed except in connection with an actual sale meeting the foregoing
requirements or pursuant to an effective registration statement.

 

7.Indemnification.

 

a.The Subscriber agrees to indemnify and hold harmless the Company, the
Placement Agents and any other broker, agent or finder engaged by the Company
for the Offering, and their respective officers, directors, employees, agents,
control persons and affiliates from and against all losses, liabilities, claims,
damages, costs, fees and expenses whatsoever (including, but not limited to, any
and all expenses incurred in investigating, preparing or defending against any
litigation commenced or threatened) based upon or arising out of the
Subscriber’s actual or alleged false acknowledgment, representation or warranty,
or misrepresentation or omission to state a material fact, or breach by the
Subscriber of any covenant or agreement made by the Subscriber, contained herein
or in any other document delivered by the Subscriber in connection with this
Agreement. The liability of the Subscriber under this paragraph shall not exceed
the total Purchase Price paid by the Subscriber hereunder.

 

b.The Company agrees to indemnify and hold harmless the Subscriber from and
against all losses, liabilities, claims, damages, costs, fees and expenses
whatsoever (including, but not limited to, any and all expenses incurred in
investigating, preparing or defending against any litigation commenced or
threatened) based upon or arising out of the Company’s actual or alleged false
acknowledgment, representation or warranty, or misrepresentation or omission to
state a material fact, or breach by the Company of any covenant or agreement
made by the Company, contained herein or in any other any other Disclosure
Materials. The liability of the Company under this paragraph shall not exceed
the total Purchase Price paid by the Subscriber hereunder.

 

14

 

 

c.Promptly after receipt by an indemnified party under this Section 7 of notice
of the commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under this Section
7, notify the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 7. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein, and to the extent that it may
elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel satisfactory to such indemnified party; provided,
however, if the defendants in any such action include both the indemnified party
and the indemnifying party and either (i) the indemnifying party or parties and
the indemnified party or parties mutually agree or (ii) representation of both
the indemnifying party or parties and the indemnified party or parties by the
same counsel is inappropriate under applicable standards of professional conduct
due to actual or potential differing interests between them, the indemnified
party or parties shall have the right to select separate counsel to assume such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 7 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed counsel in connection with the assumption
of legal defenses in accordance with the proviso to the next preceding sentence
(it being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel in such circumstance), (ii)
the indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense of
the indemnifying party. No indemnifying party shall (i) without the prior
written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment of the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any indemnified party
from and against any loss or liability by reason of such settlement or judgment.

 

8.Revocability; Binding Effect. The subscription hereunder may be revoked prior
to the Closing thereon, provided that written notice of revocation is sent and
is received by the Company or a Placement Agent at least three business days
prior to the Closing on such subscription. The Subscriber hereby acknowledges
and agrees that this Agreement shall survive the death or disability of the
Subscriber and shall be binding upon and inure to the benefit of the parties and
their heirs, executors, administrators, successors, legal representatives and
permitted assigns. If the Subscriber is more than one person, the obligations of
the Subscriber hereunder shall be joint and several and the agreements,
representations, warranties and acknowledgments herein shall be deemed to be
made by and be binding upon each such person and such person’s heirs, executors,
administrators, successors, legal representatives and permitted assigns.

 

9.Modification. This Agreement shall not be modified or waived except by an
instrument in writing signed by the party against whom any such modification or
waiver is sought to be enforced.

 

10.Immaterial Modifications to the Registration Rights Agreement. The Company
may, at any time prior to the initial Closing, amend the Registration Rights
Agreement if necessary to clarify any provision therein, without first providing
notice or obtaining prior consent of the Subscriber.

 

15

 

 

11.Notices. Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be mailed by certified mail, return
receipt requested, or delivered against receipt to the party to whom it is to be
given (a) if to the Company, at the address set forth above, with a copy to CKR
Law LLP, 1330 Avenue of the Americas, New York, NY 10019, Attention: Barrett S.
DiPaolo, facsimile +1-212-400-6901, or (b) if to the Subscriber, at the address
set forth on the Omnibus Signature Page hereof (or, in either case, to such
other address as the party shall have furnished in writing in accordance with
the provisions of this Section). Any notice or other communication given by
certified mail shall be deemed given at the time of certification thereof,
except for a notice changing a party’s address which shall be deemed given at
the time of receipt thereof.

 

12.Assignability. This Agreement and the rights, interests and obligations
hereunder are not transferable or assignable by the Subscriber, and the transfer
or assignment of the Shares shall be made only in accordance with all applicable
laws.

 

13.Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without reference to the
principles thereof relating to the conflict of laws.

 

14.Arbitration. The parties agree to submit all controversies to arbitration in
accordance with the provisions set forth below and understand that:

 

a.Arbitration shall be final and binding on the parties.

 

b.The parties are waiving their right to seek remedies in court, including the
right to a jury trial.

 

c.Pre-arbitration discovery is generally more limited and different from court
proceedings.

 

d.The arbitrator’s award is not required to include factual findings or legal
reasoning and any party’s right to appeal or to seek modification of rulings by
arbitrators is strictly limited.

 

e.The panel of arbitrators will typically include a minority of arbitrators who
were or are affiliated with the securities industry.

 

f.All controversies which may arise between the parties concerning this
Agreement shall be determined by arbitration pursuant to the rules then
pertaining to the Financial Industry Regulatory Authority in New York City, New
York. Judgment on any award of any such arbitration may be entered in the
Supreme Court of the State of New York or in any other court having jurisdiction
of the person or persons against whom such award is rendered. Any notice of such
arbitration or for the confirmation of any award in any arbitration shall be
sufficient if given in accordance with the provisions of this Agreement. The
parties agree that the determination of the arbitrators shall be binding and
conclusive upon them. The prevailing party, as determined by such arbitrators,
in a legal proceeding shall be entitled to collect any costs, disbursements and
reasonable attorney’s fees from the other party. Prior to filing an arbitration,
the parties hereby agree that they will attempt to resolve their differences
first by submitting the matter for resolution to a mediator, acceptable to all
parties, and whose expenses will be borne equally by all parties. The mediation
will be held in the County of New York, State of New York, on an expedited
basis. If the parties cannot successfully resolve their differences through
mediation, the matter will be resolved by arbitration. The arbitration shall
take place in the County of New York, State of New York, on an expedited basis.

 

16

 

 

15.Blue Sky Qualification. The purchase of Shares under this Agreement is
expressly conditioned upon the exemption from qualification of the offer and
sale of the Shares from applicable federal and state securities laws. The
Company shall not be required to qualify this transaction under the securities
laws of any jurisdiction and, should qualification be necessary, the Company
shall be released from any and all obligations to maintain its offer, and may
rescind any sale contracted, in the jurisdiction.

 

16.Use of Pronouns. All pronouns and any variations thereof used herein shall be
deemed to refer to the masculine, feminine, neuter, singular or plural as the
identity of the person or persons referred to may require.

 

17.Confidentiality. The Subscriber acknowledges and agrees that any information
or data the Subscriber has acquired from or about the Company or may acquire in
the future, not otherwise properly in the public domain, including, without
limitation, the Disclosure Materials, was received in confidence. The Subscriber
agrees not to divulge, communicate or disclose, except as may be required by law
or for the performance of this Agreement, or use to the detriment of the Company
or for the benefit of any other person, or misuse in any way, any confidential
information of the Company, including any scientific, technical, trade or
business secrets of the Company and any scientific, technical, trade or business
materials that are treated by the Company as confidential or proprietary,
including, but not limited to, internal personnel and financial information of
the Company or its affiliates, the manner and methods of conducting the business
of the Company or its affiliates and confidential information obtained by or
given to the Company about or belonging to third parties. The Subscriber
understands that the Company may rely on Subscriber’s agreement of
confidentiality to comply with the exemptive provisions of Regulation FD under
the Securities Act of 1933 as set forth in Rule 100(a)(b)(2)(ii) of Regulation
FD. In addition, the Subscriber acknowledges that it is aware that the United
States securities laws generally prohibit any person who is in possession of
material nonpublic information about a public company such as the Company from
purchasing or selling securities of such company. The provisions of this Section
17 are in addition to and not in replacement of any other confidentiality
agreement between the Company and the Subscriber.

 

18.Anti-Dilution. The Subscriber shall have anti-dilution protection such that
if within twelve (12) months after the final Closing of the Offering the Company
shall issue Additional Shares of Common Stock (as defined below) for a
consideration per share, or with an exercise or conversion price per share, less
than the Purchase Price (the “Lower Price”), the Subscriber shall be entitled to
receive from the Company (for no additional consideration) additional Shares in
an amount such that, when added to the number of Shares purchased by Subscriber
under this Agreement, will equal the number of Shares that the Subscriber’s
Purchase Price for the Shares set forth on the Subscriber’s signature page
hereof would have purchased at the Lower Price.

 

17

 

 

“Additional Shares of Common Stock” shall mean all shares of Common Stock issued
by the Company after the first Closing of the Offering (including without
limitation any shares of Common Stock issuable upon conversion or exchange of
any convertible securities or upon exercise of any option or warrant, on an
as-converted basis), other than: (i) shares of Common Stock issued or issuable
upon conversion or exchange of any convertible securities or exercise of any
options or warrants outstanding as of immediately following the Merger and the
initial Closing; (ii) shares of Common Stock issued or issuable upon exercise of
the Placement Agent Warrants; (iii) shares of Common Stock issued or issuable by
reason of a dividend, stock split, split-up or other distribution on shares of
Common Stock relating to any recapitalization, reclassification or
reorganization of the capital stock of the Company, or any consolidation or
merger of the Company with another corporation, or the sale of all or
substantially all of its assets or other transaction effected in such a way that
there is no change of control; (iv) shares of Common Stock issued in a firmly
underwritten registered public offering under the Securities Act; (v) shares of
Common Stock issued or issuable pursuant to the acquisition of another entity or
business by the Company by merger, purchase of substantially all of the assets
or other reorganization or pursuant to a joint venture or technology license
agreement, but not including a transaction in which the Company is issuing
securities primarily for the purpose of raising capital or to an entity whose
primary business is investing in securities; (vi) shares of Common Stock issued
or issuable to officers, directors and employees of, or consultants to, the
Company pursuant to stock grants, option plans, purchase plans or other employee
stock incentive programs or arrangements approved by the Board of Directors, or
upon exercise of options or warrants granted to such parties pursuant to any
such plan or arrangement; (vii) any securities issued or issuable by the Company
pursuant to the Subscription Agreements; and (viii) securities issued to
financial institutions, institutional investors or lessors in connection with
credit arrangements, equipment financings, lease arrangements or similar
transactions, in the aggregate not exceeding five percent (5%) of the number of
shares of Common Stock outstanding at any time, and in case of clauses (iii)
through (viii) above, such issuance is approved by a majority of disinterested
directors of the Company and includes no “death spiral” provision of any kind.

 

19.Miscellaneous.

 

a.This Agreement, together with the Registration Rights Agreement and any
Confidentiality Agreement, constitute the entire agreement between the
Subscriber and the Company with respect to the Offering and supersede all prior
oral or written agreements and understandings, if any, relating to the subject
matter hereof. The terms and provisions of this Agreement may be waived, or
consent for the departure therefrom granted, only by a written document executed
by the party entitled to the benefits of such terms or provisions.

 

b.The representations and warranties of the Company and the Subscriber made in
this Agreement shall survive the execution and delivery hereof and delivery of
the Shares for a period of twelve (12) months following the Closing Date.

 

c.Each of the parties hereto shall pay its own fees and expenses (including the
fees of any attorneys, accountants, appraisers or others engaged by such party)
in connection with this Agreement and the transactions contemplated hereby,
whether or not the transactions contemplated hereby are consummated.

 

d.This Agreement may be executed in one or more original or facsimile
counterparts, each of which shall be deemed an original, but all of which shall
together constitute one and the same instrument and which shall be enforceable
against the parties actually executing such counterparts. The exchange of copies
of this Agreement and of signature pages by facsimile transmission or in .pdf
format shall constitute effective execution and delivery of this Agreement as to
the parties and may be used in lieu of the original Agreement for all purposes.
Signatures of the parties transmitted by facsimile or in pdf format shall be
deemed to be their original signatures for all purposes.

 

e.Each provision of this Agreement shall be considered separable and, if for any
reason any provision or provisions hereof are determined to be invalid or
contrary to applicable law, such invalidity or illegality shall not impair the
operation of or affect the remaining portions of this Agreement.

 

18

 

 

f.Paragraph titles are for descriptive purposes only and shall not control or
alter the meaning of this Agreement as set forth in the text.

 

g.The Subscriber understands and acknowledges that there may be multiple
Closings for the Offering.

 

h.The Subscriber hereby agrees to furnish the Company such other information as
the Company may request prior to the Closing with respect to its subscription
hereunder.

 

20.Omnibus Signature Page. This Agreement is intended to be read and construed
in conjunction with the Registration Rights Agreement. Accordingly, pursuant to
the terms and conditions of this Agreement and the Registration Rights
Agreement, it is hereby agreed that the execution by the Subscriber of this
Agreement, in the place set forth on the Omnibus Signature Page below, shall
constitute agreement to be bound by the terms and conditions hereof and the
terms and conditions of the Registration Rights Agreement, with the same effect
as if each of such separate but related agreement were separately signed.

 

21.Public Disclosure. Neither the Subscriber nor any officer, manager, director,
member, partner, stockholder, employee, affiliate, affiliated person or entity
of the Subscriber shall make or issue any press releases or otherwise make any
public statements or make any disclosures to any third person or entity with
respect to the transactions contemplated herein and will not make or issue any
press releases or otherwise make any public statements of any nature whatsoever
with respect to the Company without the Company’s express prior approval. The
Company has the right to withhold such approval in its sole discretion.

 

22.Potential Conflicts. The Placement Agents, their sub-agents, legal counsel to
the Company and/or their respective affiliates, principals, representatives or
employees may now or hereafter own shares of the Company.

 

[Signature page follows.]

 

19

 

 

IN WITNESS WHEREOF, the Company has duly executed this Subscription Agreement as
of the ____ day of _________, 2015.

 

  AKOUSTIS TECHNOLOGIES, INC.   (f/k/a Danlax, Corp.)       By:       Name: Ivan
Krikun     Title: President

 

20

 

 

 

Danlax, Corp. (intended to be renamed Akoustis Technologies, Inc.)

OMNIBUS SIGNATURE PAGE TO

SUBSCRIPTION AGREEMENT AND REGISTRATION RIGHTS AGREEMENT

 

The undersigned, desiring to: (i) enter into the Subscription Agreement, dated
as of ____________ ___,2 2015 (the “Subscription Agreement”), between the
undersigned, Danlax, Corp., a Nevada corporation (the “Company”), and the other
parties thereto, in or substantially in the form furnished to the undersigned,
(ii) enter into the Registration Rights Agreement (the “Registration Rights
Agreement”), among the undersigned, the Company and the other parties thereto,
in or substantially in the form furnished to the undersigned and (iii) purchase
the Shares of the Company’s securities as set forth in the Subscription
Agreement and below, hereby agrees to purchase such Shares from the Company and
further agrees to join the Subscription Agreement and the Registration Rights
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
section in the Subscription Agreement entitled “Representations and Warranties
of the Subscriber” and hereby represents that the statements contained therein
are complete and accurate with respect to the undersigned as a Subscriber.

 

IN WITNESS WHEREOF, the Subscriber hereby executes this Subscription Agreement
and the Registration Rights Agreement.

 

Dated: ____________________, 2015

 

  X $1.50 = $______________ Number of Shares   Purchase Price per Share Total
Purchase Price

 

SUBSCRIBER (individual)   SUBSCRIBER (entity)                   Signature   Name
of Entity                   Print Name   Signature               Print Name:    
  Signature (if Joint Tenants or Tenants in Common)   Title:             Address
of Principal Residence:   Address of Executive Offices:                        
          Social Security Number(s):   IRS Tax Identification Number:          
        Telephone Number:   Telephone Number:                   Facsimile
Number:   Facsimile Number:                   E-mail Address:   E-mail Address:
         

 

 

2 Will reflect the Closing Date. Not to be completed by Subscriber.

 

 

 

 

Danlax, Corp. (intended to be renamed Akoustis Technologies, Inc.)

ACCREDITED INVESTOR CERTIFICATION

 

For Individual Investors Only

(all Individual Investors must INITIAL where appropriate):

 

Initial _______I have a net worth of at least US$1 million either individually
or through aggregating my individual holdings and those in which I have a joint,
community property or other similar shared ownership interest with my spouse.
(For purposes of calculating your net worth under this paragraph, (a) your
primary residence shall not be included as an asset; (b) indebtedness secured by
your primary residence, up to the estimated fair market value of your primary
residence at the time of your purchase of the securities, shall not be included
as a liability (except that if the amount of such indebtedness outstanding at
the time of your purchase of the securities exceeds the amount outstanding 60
days before such time, other than as a result of the acquisition of your primary
residence, the amount of such excess shall be included as a liability); and (c)
indebtedness that is secured by your primary residence in excess of the
estimated fair market value of your primary residence at the time of your
purchase of the securities shall be included as a liability.)

 

Initial _______I have had an annual gross income for the past two years of at
least US$200,000 (or US$300,000 jointly with my spouse) and expect my income (or
joint income, as appropriate) to reach the same level in the current year.

 

Initial _______I am a director or executive officer of Danlax, Corp.

 

For Non-Individual Investors (Entities)

(all Non-Individual Investors must INITIAL where appropriate):

 

Initial _______The investor certifies that it is a partnership, corporation,
limited liability company or business trust that is 100% owned by persons who
meet at least one of the criteria for Individual Investors set forth above (in
which case each such person must complete the Accreditor Investor Certification
for Individuals above as well the remainder of this questionnaire) .

 

Initial _______The investor certifies that it is a partnership, corporation,
limited liability company or business trust that has total assets of at least
US$5 million and was not formed for the purpose of investing the Company.

 

Initial _______The investor certifies that it is an employee benefit plan whose
investment decision is made by a plan fiduciary (as defined in ERISA §3(21))
that is a bank, savings and loan association, insurance company or registered
investment advisor.

 

Initial _______The investor certifies that it is an employee benefit plan whose
total assets exceed US$5,000,000 as of the date of this Agreement.

 

Initial _______The undersigned certifies that it is a self-directed employee
benefit plan whose investment decisions are made solely by persons who meet at
least one of the criteria for Individual Investors.

 

Initial _______The investor certifies that it is a U.S. bank, U.S. savings and
loan association or other similar U.S. institution acting in its individual or
fiduciary capacity.

 

Initial _______The undersigned certifies that it is a broker-dealer registered
pursuant to §15 of the Securities Exchange Act of 1934.

 

Initial _______The investor certifies that it is an organization described in
§501(c)(3) of the Internal Revenue Code with total assets exceeding US$5,000,000
and not formed for the specific purpose of investing in the Company.

 

Initial _______The investor certifies that it is a trust with total assets of at
least US$5,000,000, not formed for the specific purpose of investing in the
Company, and whose purchase is directed by a person with such knowledge and
experience in financial and business matters that such person is capable of
evaluating the merits and risks of the prospective investment.

 

Initial _______The investor certifies that it is a plan established and
maintained by a state or its political subdivisions, or any agency or
instrumentality thereof, for the benefit of its employees, and which has total
assets in excess of US$5,000,000.

 

Initial _______The investor certifies that it is an insurance company as defined
in §2(13) of the Securities Act of 1933, or a registered investment company.

 

 

 

 

Danlax, Corp. (intended to be renamed Akoustis Technologies, Inc.)

Investor Profile
(Must be completed by Investor)

 

Section A - Personal Investor Information

 

Investor Name(s):   

 

Individual executing Profile or Trustee:   

 

Social Security Numbers / Federal I.D. Number:   

 

Date of Birth:     Marital Status:   

Joint Party Date of Birth:      Investment Experience (Years):   

Annual Income:     Liquid Net Worth:   

 

Net Worth*:    

 

Tax Bracket: _____ 15% or below _____ 25% - 27.5% _____ Over 27.5%

 

Home Street Address:   

 

Home City, State & Zip Code:   

 

Home Phone: ______________ Home Fax: ________________ Home Email:
_________________

 

Employer:   

 

Employer Street Address:   

 

Employer City, State & Zip Code:   

 

Bus. Phone: _______________ Bus. Fax: _______________ Bus. Email:
_________________

 

Type of Business:  

 

Outside Broker/Dealer:   

 

Section B – Certificate Delivery Instructions

 

____ Please deliver certificate to the Employer Address listed in Section A.

____ Please deliver certificate to the Home Address listed in Section A.

____ Please deliver certificate to the following address:
____________________________________________________

 

Section C – Form of Payment – Check or Wire Transfer

 

____ Check payable to Delaware Trust Company, as Escrow Agent for DANLAX, CORP.,
ACCT# 79-2363

____ Wire funds from my outside account according to Section 2(b) of the
Subscription Agreement.

____ The funds for this investment are rolled over, tax deferred from __________
within the allowed 60 day window.

 

Please check if you are a FINRA member or affiliate of a FINRA member firm: ____

 

      Investor Signature   Date

 

*For purposes of calculating your net worth in this form, (a) your primary
residence shall not be included as an asset; (b) indebtedness secured by your
primary residence, up to the estimated fair market value of your primary
residence at the time of your purchase of the securities, shall not be included
as a liability (except that if the amount of such indebtedness outstanding at
the time of your purchase of the securities exceeds the amount outstanding 60
days before such time, other than as a result of the acquisition of your primary
residence, the amount of such excess shall be included as a liability); and (c)
indebtedness that is secured by your primary residence in excess of the
estimated fair market value of your primary residence at the time of your
purchase of the securities shall be included as a liability.

 

 

 

 

ANTI MONEY LAUNDERING REQUIREMENTS

 

The USA PATRIOT Act

 

The USA PATRIOT Act is designed to detect, deter, and punish terrorists in the
United States and abroad. The Act imposes new anti-money laundering requirements
on brokerage firms and financial institutions. Since April 24, 2002 all
brokerage firms have been required to have new, comprehensive anti-money
laundering programs.

 

To help you understand these efforts, we want to provide you with some
information about money laundering and our steps to implement the USA PATRIOT
Act.

 

What is money laundering?

 

Money laundering is the process of disguising illegally obtained money so that
the funds appear to come from legitimate sources or activities. Money laundering
occurs in connection with a wide variety of crimes, including illegal arms
sales, drug trafficking, robbery, fraud, racketeering, and terrorism.

 

How big is the problem and why is it important?

 

The use of the U.S. financial system by criminals to facilitate terrorism or
other crimes could well taint our financial markets. According to the U.S. State
Department, one recent estimate puts the amount of worldwide money laundering
activity at $1 trillion a year.

 

What are we required to do to eliminate money laundering?

 

Under rules required by the USA PATRIOT Act, our anti-money laundering program
must designate a special compliance officer, set up employee training, conduct
independent audits, and establish policies and procedures to detect and report
suspicious transaction and ensure compliance with such laws. As part of our
required program, we may ask you to provide various identification documents or
other information. Until you provide the information or documents we need, we
may not be able to effect any transactions for you.

 

 

 

 

ANTI-MONEY LAUNDERING INFORMATION FORM

The following is required in accordance with the AML provision of the USA
PATRIOT ACT.

(Please fill out and return with requested documentation.)

 

INVESTOR NAME:           LEGAL ADDRESS:                  SSN# or TAX ID#     OF
INVESTOR:           YEARLY INCOME:           NET WORTH:   *

 

* For purposes of calculating your net worth in this form, (a) your primary
residence shall not be included as an asset; (b) indebtedness secured by your
primary residence, up to the estimated fair market value of your primary
residence at the time of your purchase of the securities, shall not be included
as a liability (except that if the amount of such indebtedness outstanding at
the time of your purchase of the securities exceeds the amount outstanding 60
days before such time, other than as a result of the acquisition of your primary
residence, the amount of such excess shall be included as a liability); and (c)
indebtedness that is secured by your primary residence in excess of the
estimated fair market value of your primary residence at the time of your
purchase of the securities shall be included as a liability.

 

INVESTMENT OBJECTIVE(S) (FOR ALL INVESTORS): ____________________

 

ADDRESS OF BUSINESS OR OF EMPLOYER: ____________________________

 

FOR INVESTORS WHO ARE INDIVIDUALS: AGE: ________________________

 

FOR INVESTORS WHO ARE INDIVIDUALS: OCCUPATION:
_____________________________________

 

FOR INVESTORS WHO ARE ENTITIES: TYPE OF BUSINESS:
____________________________________

 

IDENTIFICATION & DOCUMENTATION AND SOURCE OF FUNDS:

 

1.Please submit a copy of non-expired identification for the authorized
signatory(ies) on the investment documents, showing name, date of birth, address
and signature. The address shown on the identification document MUST match the
Investor’s address shown on the Investor Signature Page.

 

Current Driver’s License or Valid Passport or Identity Card

(Circle one or more)

 

2.If the Investor is a corporation, limited liability company, trust or other
type of entity, please submit the following requisite documents: (i) Articles of
Incorporation, By-Laws, Certificate of Formation, Operating Agreement, Trust or
other similar documents for the type of entity; and (ii) Corporate Resolution or
power of attorney or other similar document granting authority to signatory(ies)
and designating that they are permitted to make the proposed investment.

 

3.Please advise where the funds were derived from to make the proposed
investment:

 

Investments Savings Proceeds of Sale Other ____________

(Circle one or more)

 

Signature:           Print Name:           Title (if applicable):            
Date: