Exhibit 10.10

 

[pg1img1_ex10-10.jpg] Highly Confidential

  

December 19, 2016

 

Akoustis Technologies, Inc.

9805 Northcross Center Court

Suite H

Huntersville, NC 28078

 

Attn:Mr. Jeffrey Shealy

President & Chief Executive Officer

 

ENGAGEMENT AGREEMENT PROVIDING FOR

INVESTMENT BANKING SERVICES

 

Dear Mr. Shealy:

 

This letter agreement (this “Agreement”) is to confirm the engagement by
Akoustis Technologies, Inc. and its subsidiaries and affiliates (the “Company”
or “you”) of Northland Securities, Inc. (“Northland”) as its non-exclusive
financial advisor in connection with an institutional equity capital raise(s)
(“each a Transaction” and each an “Offering”).

 

The Offering will raise a minimum of gross proceeds of five hundred thousand
dollars ($500,000) (the “Minimum Offering Amount”) and a maximum of gross
proceeds of ten million dollars ($10,000,000) (the “Maximum Offering Amount”)
through the sale of shares of common stock, par value $0.001 per share, of the
Company (the “Common Stock”), at the Purchase Price of $5.00 per share (the
“Offering Price”). The minimum subscription is twenty- five thousand dollars
($25,000) or five thousand shares (5,000), provided, however, that subscriptions
in lesser amounts may be accepted by the Company in its sole discretion.

 

Placement of the Securities by Northland will be made on a reasonable best
efforts basis. The Company agrees and acknowledges that Northland is not acting
as an underwriter with respect to the Offering and the Company shall determine
the purchasers in the Offering in its sole discretion. The Shares will be
offered by the Company to potential subscribers, which may include related
parties of Northland or the Company, commencing on December 12, 2016 through
January 9, 2017 (the “Initial Offering Period”), which date may be extended by
the Company in its sole discretion (this additional period, if any, and the
Initial Offering Period shall be referred to as the “Offering Period”). The date
on which the Offering is terminated shall be referred to as the “Termination
Date”. The closing of the Offering may be held up to ten days after the
Termination Date.

  

Accordingly, the parties hereto agree as follows:

 

Section 1.          Engagement of Northland. Northland’s services under this
Agreement will, to the extent requested and appropriate, consist of:

 

(a)          advising you concerning the negotiations, structure, price and
other terms and conditions of a Transaction;

  

 

 

 

Highly Confidential

 

(b)          Identifying and introducing potential investors and credit
enhancement providers to the Company in respect of a Transaction. “Introduced
Investors” shall mean a list of investors, where the Offering was made known to
each listed investor.

 

(c)          assisting with due diligence performed by Investors in respect of a
Transaction; and

 

(d)          taking such actions on your behalf as may be appropriate in
Northland’s reasonable judgment with your prior consent.

 

Any and all work product created by Northland, including but not limited to
teasers, presentations, confidential information memoranda, operating and
valuation models, and target investor lists shall not be distributed to any
third party without the Company receiving express written consent of Northland
prior to such distribution.

 

The Company acknowledges that Northland and its affiliates are in the business
of providing investment banking services (of all types contemplated by this
agreement) to others. Nothing herein contained shall be construed to limit or
restrict Northland or its affiliates in conducting such business with respect to
others or in rendering such advice to others.

 

Section 2.          Compensation. As consideration for Northland’s agreement to
perform the services described in this Agreement, the Company agrees to pay
Northland the following fees on the closing date of each Transaction
(“Transaction Fees”):

 

A.   Cash Success Fees:

 

i.            For gross proceeds of less than $3,000,000 from Northland
Introduced: 8.0% of the gross proceeds paid or payable for equity or
equity-linked securities issued by the Company, or

 

ii.          In the event Northland places $3,000,000 or more with Northland
Introduced Investors: 10.0% of the entire gross proceeds paid or payable for
equity or equity-linked securities issued by the Company,

 

B.   Warrant Success Fees:

 

i.            10.0% of the gross proceeds paid or payable for equity or
equity-linked securities issued by the Company to Northland Introduced
Investors;

 

The Warrant Success Fee warrants shall have a term of five-years, and contain
cashless exercise provisions and piggyback registration rights, providing
Northland with the right to purchase one share of the Company’s common stock per
warrant with an exercise price $5.00. At Northland’s option and upon Northland’s
written instructions to the Company, the Company shall issue all or a portion of
any warrants due to Northland under this Agreement directly to specified
Northland employees. The warrants and the shares issuable upon exercise of the
warrants may constitute restricted shares and may contain restrictive legends
indicating such restrictions; provided, however, that the warrants and shares
issuable shall contain piggyback registration rights requiring their inclusion
with any registration statement filed by the Company. In the event no
registration statement is filed, the Company’s counsel shall be responsible for
drafting and executing the Rule 144 comfort letter (and any other required
paperwork as required by the transfer agent), at the Company’s expense,
providing for the sale of such underlying shares.

 

  Main 612-851-5900    |    Toll Free 800-851-2920 Division of Northland
Securities, Inc., Member FINRA and SIPC 45 South 7th Street, Suite 2000 |
Minneapolis, MN 55402

 

NorthlandSecurities.com | Member FINRA and SIPC

 

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The Company agrees that it shall not enter into any agreement with a Northland
Introduced Investor that (i) does not require Northland to be paid its
Transaction Fees in full on the closing date of the initial Transaction and any
subsequent Transactions in strict accordance with provision contained in this
Agreement and (ii) materially conflicts with the provisions of this Agreement.
The Company may, in its sole discretion, accept or reject, in whole or in part,
any prospective investment in the Transaction or allot to any prospective
subscriber less than the number of securities such subscriber wishes to
purchase.

 

Section 3.          Expenses; Payments. Whether or not any Transaction is
consummated or this Agreement is terminated or expires, the Company agrees, upon
request, but no less frequently than monthly, to reimburse Northland promptly
for all reasonable and documented out-of-pocket costs and expenses (including,
without limitation, the reasonable fees, disbursements and other charges of
counsel) incurred in connection with the preparation of documents or other
matters relating to the Transaction, provided that Northland shall seek prior
written approval from the Company for all expenses in aggregate in excess of
$10,000.

 

All fees and expenses payable under this agreement are payable in U.S. dollars
in immediately available funds. All fees, expenses and other payments under this
agreement shall be paid without giving effect to any withholding or deduction of
any tax or similar governmental assessment.

 

Section 4.          Information. You agree that you will not and will cause your
affiliates not to disclose this Agreement, the contents hereof or the activities
of Northland pursuant hereto, directly or indirectly, to any person without the
prior written approval of Northland, except that the Company may disclose this
Agreement and the contents hereof (i) to its directors, officers, members,
direct or indirect equity holders, counsel and professional advisors, in each
case on a “need-to-know” basis (in which case the Company will (x) inform any
such persons of the confidentiality obligations contained herein and (y) remain
responsible for any breaches of any such obligations by any such persons) and
(ii) other than to the extent covered by the preceding clause (i), as required
by applicable law or regulation or compulsory legal, judicial, administrative or
regulatory process (in which case the Company will inform any such persons of
the confidentiality obligations contained herein). The obligations of the
Company pursuant to this paragraph shall survive any expiration or termination
of this agreement or Northland’s engagement hereunder. Notwithstanding anything
to the contrary contained in this Agreement, the Company (and each employee,
representative or other agent of the Company) may disclose to any and all
persons, without limitation of any kind, the tax treatment and tax structure of
the transactions contemplated by this Agreement and all materials of any kind
(including opinions or other tax analyses) that are provided to the Company
relating to such tax treatment and structure.

 

In connection with Northland’s engagement, the Company will actively assist
Northland in achieving a placement of the Transaction that is reasonably
satisfactory to the Company in the Company’s sole discretion. Such assistance
shall include (a) furnishing to, or causing to be furnished to, Northland such
information concerning the Company that Northland and the Company may reasonably
deem necessary or appropriate to complete such distribution (including, but not
limited to, financial projections) (the “Information”); (b) making reasonably
available your officers, directors, employees, accountants, counsel and other
representatives (collectively, the “Representatives”); (c) using commercially
reasonable efforts to ensure that the distribution efforts of Northland benefit
materially from your existing investor relationships and your existing banking
relationships (without jeopardizing the anticipated financial benefits of
identifying new investors); and (d) otherwise reasonably assisting Northland in
its distribution efforts, including by making presentations regarding the
business and affairs of the Company and its subsidiaries, as appropriate, at one
or more one-on-one meetings of prospective Investors that have agreed to
mutually acceptable confidentiality arrangements. In performing its services
hereunder, Northland shall be entitled to rely upon and shall not be responsible
for the accuracy or completeness of information supplied to it by the Company or
any of its Representatives and shall not be responsible for conducting any
appraisal of assets or liabilities.

 

  Main 612-851-5900    |    Toll Free 800-851-2920 Division of Northland
Securities, Inc., Member FINRA and SIPC 45 South 7th Street, Suite 2000 |
Minneapolis, MN 55402

 

NorthlandSecurities.com | Member FINRA and SIPC

 

Page | 3 

 

 

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The Company represents and warrants to Northland that all Information relating
to the Company or which the Company provides in writing (collectively, the
“Materials”) will be materially complete and correct. The Company further
represents and warrants that any projections provided by it to Northland will
have been prepared in good faith and will be based upon assumptions, which, in
light of the circumstances under which they are made, are reasonable. The
Company recognizes and confirms that Northland (i) will use and rely primarily
on the Materials and on information available from generally recognized public
sources in performing the services contemplated by this Agreement without having
independently verified the same; (ii) is authorized to transmit to any
prospective investor the Materials and other legal documentation supplied to
Northland for transmission to parties that have entered into a customary form of
confidentiality agreement (including a “click-through” on a secure website) by
or on behalf of the Company; (iii) does not assume responsibility for the
accuracy or completeness of the Materials and such other information; (iv) will
not make an appraisal of the Company; and (v) retains the right to continue to
perform due diligence during the course of its engagement hereunder to the
extent that it is reasonably necessary for it to perform the services
contemplated hereby (it being understood that Northland will not be authorized
to act as an initial purchaser or underwriter but will merely be acting as a
placement agent without underwriter liability under the Securities Act of 1933).

 

In connection with Northland's engagement, for all Transactions reasonably
satisfactory to the Company  (in the sole discretion of the Company), it is
understood and agreed that Northland will manage and control all aspects of the
placement of any Transaction in consultation with you, including decisions as to
the selection of prospective Investors, when commitments will be accepted and
the final allocations of the commitments among the Investors (which shall be
done solely with the Company’s approval). It is understood that no Investor
investing in any Transaction will receive compensation from you in order to
obtain its commitment, except as contemplated herein, including upfront fees
paid to all Investors to ensure a successful placement of any Transaction, or as
otherwise directed by Northland.

 

Section 5.          Public Announcements. The Company acknowledges that
Northland may, at its option and expense and after the Closing Date or the
consummation of any Transaction, place announcements and advertisements
describing Northland’s role in such transaction and such other information as is
publicly disclosed (which may include the reproduction of the Company’s logo and
a hyperlink to the Company’s website on Northland’s website) provided that
Northland receives the written consent of the Company in advance, such consent
not to be unreasonably withheld. Furthermore, if requested by Northland, the
Company shall include a mutually acceptable reference to Northland in any press
release or other public announcement made by the Company regarding the matters
described in this agreement.

 

Section 6.          Indemnity. Since Northland will be acting on behalf of the
Company in connection with this engagement, the Company and Northland agree to
the indemnity provisions and other matters set forth in Annex B, which is
incorporated by reference into this agreement and is an integral part hereof.
The obligations of the Company pursuant to Annex B shall survive any expiration
or termination of this agreement or Northland’s engagement hereunder.

 

  Main 612-851-5900    |    Toll Free 800-851-2920 Division of Northland
Securities, Inc., Member FINRA and SIPC 45 South 7th Street, Suite 2000 |
Minneapolis, MN 55402

 

NorthlandSecurities.com | Member FINRA and SIPC

 

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Section 7.          Term and Termination. Unless otherwise agreed to in writing
by the parties hereto, this Agreement shall terminate upon the first to occur
of: (i) the six (6) month anniversary of the date hereof; (ii) the Final
Closing; or (iii) an Early Termination as defined in the Section 7 below (the
“Term”). Northland’s engagement hereunder may be terminated by either Northland
or the Company at any time upon thirty (30) days’ prior written notice thereof
to the other Party. Upon any termination of this Agreement, the obligations of
the parties hereunder shall terminate, except for their obligations under
Section 4 (with respect to confidentiality), this Section 7, any outstanding
obligations under Section 2 and Sections 3, 4, 6, 8-13. If within the three (3)
months following the termination of this Agreement by the Company , the Company
or any of its subsidiaries or affiliates consummates any Transaction with a
Northland Introduced Investor as included on Annex A as amended from time to
time in writing, including email, Northland shall be entitled to payment in full
of the applicable fees and the benefit of the other provisions described in
Section 2 of this Agreement with respect to such transaction or transactions. If
within the six (6) months following the termination of this Agreement by the
Company if the Company or any of its subsidiaries or affiliates consummates any
Transaction with a Northland Introduced Investor who actually participates in
the Transaction, as included on Annex A, contemplated by this Agreement,
Northland shall be entitled to payment in full of the applicable fees and the
benefit of the other provisions described in Section 2 of this Agreement with
respect to such transaction or transactions. The three (3) and six (6) month
periods referred to in the preceding two sentences shall collectively be
referred to as the “Tail Period” in this Agreement. Northland will provide the
Company with a completed Annex A within five (5) days of the Final Closing.
Northland agrees and acknowledges that the Company will have final approval on
Annex A submitted by Northland..

 

Section 8.          Late Payment Fee. Any amounts due Northland pursuant to this
Agreement that are not paid on the due date specified herein shall accrue
interest thereon at the rate of 1.5% per month, compounded monthly until paid
in-full.

 

Section 9.          Non-Circumvention. During the term of this Agreement and for
the Tail Period, unless otherwise authorized by Northland in a specific written
consent, the Company will not, and Company will cause each of its affiliates and
representatives not to initiate, maintain contact to discuss or attempt to enter
into (i) a Transaction with any Northland Introduced Investor without the active
ongoing involvement of Northland and (ii) any other transaction not contemplated
in this Agreement with a Northland Introduced Investor without first entering
into a compensation agreement with Northland in respect of any such
transactions.

 

Section 10.         Required Notices and Disclosures. The Company shall provide
written notice and disclosure to Northland during the term of this Agreement and
for the Tail Period with respect to any of the following events as follows:

 

(a)          within three (3) days of the receipt of a term sheet or commitment
letter by the Company from a party with respect to any Transaction or from any
Northland Introduced Investor with respect to any other transaction not
contemplated under this Agreement. Such notice will include a copy of such term
sheet or commitment letter; and

 

(b)          no less than five (5) days prior to the expected receipt of funds
by the Company or the closing of any transaction with a Northland Introduced
Investor so that Northland can prepare and deliver an invoice for payment to the
Company. Such notice will include the amount and expected date of receipt of
funds to be received on account of a transaction.

 

 

  Main 612-851-5900    |    Toll Free 800-851-2920 Division of Northland
Securities, Inc., Member FINRA and SIPC 45 South 7th Street, Suite 2000 |
Minneapolis, MN 55402

 

NorthlandSecurities.com | Member FINRA and SIPC

 

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All notices to Northland hereunder shall be in writing (including facsimile
transmission) and shall be sent to:

 

Jeff Peterson

Northland Securities, Inc.

45 South 7th Street, Suite 2000

Minneapolis, MN 55402

jpeterson@northlandcapitalmarkets.com

 

Section 11.         Acknowledgements. The Company acknowledges that Northland
and its affiliates are involved in a wide range of banking, investment banking,
private banking, private equity, asset management and other investment and
financial businesses and services, both for its own account and for the accounts
of clients and customers. Northland and its affiliates provide a full range of
securities services, including securities trading and brokerage activities.
Northland and its affiliates may acquire, hold or sell, for its own accounts and
the accounts of customers, equity, debt and other securities and financial
instruments (including bank loans and other obligations) of the Company and any
other company that may be involved in the transactions and other matters
contemplated by this Agreement, as well as provide investment banking and other
financial services to such companies. Northland and its affiliates may have
interests, or be engaged in a broad range of transactions involving interests,
that differ from those of the Company. The Company acknowledges and agrees that
Northland has no obligation to disclose such interests or transactions (or
information relating thereto) to the Company.

 

The Company expressly acknowledges and agrees that Northland’s obligations
hereunder are on a reasonable best efforts basis only and that the execution of
this Agreement does not constitute a commitment by Northland and its affiliates
to purchase any portion of any Transaction and does not ensure the successful
placement of any Transaction or any portion thereof or the success of Northland
or its affiliates with respect to securing any other financing on behalf of the
Company.

 

The Company further acknowledges and agrees that Northland has been retained
solely to provide the services set forth in this Agreement and that no fiduciary
or agency relationship between the Company and Northland has been created in
respect of Northland’s engagement hereunder, regardless of whether Northland has
advised or is advising the Company on other matters. In connection with this
engagement, Northland is acting as an independent contractor, with obligations
owing solely to the Company and not in any other capacity.

 

The Company understands that Northland is not undertaking to provide any legal,
accounting or tax advice in connection with this agreement. Northland shall not
be responsible for the underlying business decision of the Company to effect the
transactions contemplated by this Agreement or for the advice or services
provided by any of the Company’s other advisors or contractors.

 

Section 12.         Miscellaneous. This Agreement shall be binding upon and
inure to the benefit of the Company, Northland and their respective successors.
Except as contemplated by Annex B, this agreement is not intended to confer
rights upon any persons not a party hereto (including security holders,
employees or creditors of the Company). This Agreement constitutes the entire
agreement between the parties and supersedes all prior agreements, both written
and oral, with respect to the subject matter hereof, and no modification of this
Agreement or waiver of the terms and conditions contained herein shall be
binding upon the parties hereto unless approved in writing by each party. If any
term, provision, covenant or restriction herein (including Annex B) is held by a
court of competent jurisdiction to be invalid, void or unenforceable or against
public policy, the remainder of the terms, provisions and restrictions contained
herein shall remain in full force and effect and shall in no way be modified or
invalidated.

  

  Main 612-851-5900    |    Toll Free 800-851-2920 Division of Northland
Securities, Inc., Member FINRA and SIPC 45 South 7th Street, Suite 2000 |
Minneapolis, MN 55402

 

NorthlandSecurities.com | Member FINRA and SIPC

 

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This Agreement may be executed in counterparts, each of which will be deemed to
be an original, but all of which taken together will constitute one and the same
instrument. Delivery of an executed counterpart of a signature page to this
Agreement by facsimile or by electronic “.pdf” transmission shall be effective
as delivery of a manually signed counterpart.

 

Section 13.         Governing Law; Waiver of Jury Trial. All aspects of the
relationship created by this agreement or the engagement hereunder, any other
agreements relating to the engagement hereunder and all claims or causes of
action (whether in contract, tort or otherwise) that may be based upon, arise
out of or relate to this agreement or the engagement hereunder shall be governed
by and construed in accordance with the laws of the State of New York,
applicable to contracts made and to be performed therein and, in connection
therewith. The parties consent to the exclusive jurisdiction of the courts
located in New York County, New York, in connection with any claim or dispute
relating to this Agreement or any services or advice provided hereunder. The
prevailing party in any such litigation shall be entitled to recover its
attorney’s fees and costs. Notwithstanding the foregoing, solely for purposes of
enforcing the Company’s obligations under Annex B, the Company consents to
personal jurisdiction, service and venue in any court proceeding in which any
claim or cause of action relating to or arising out of this agreement or the
engagement hereunder is brought by or against any Indemnified Person. Northland
AND THE COMPANY EACH HEREBY AGREES TO WAIVE ANY RIGHT TO TRIAL BY JURY WITH
RESPECT TO ANY CLAIM, COUNTER CLAIM OR ACTION ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE ENGAGEMENT HEREUNDER.

 

(the rest of page intentionally blank – signature page follows)

 

  Main 612-851-5900    |    Toll Free 800-851-2920 Division of Northland
Securities, Inc., Member FINRA and SIPC 45 South 7th Street, Suite 2000 |
Minneapolis, MN 55402

 

NorthlandSecurities.com | Member FINRA and SIPC

 

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We are delighted to accept this engagement and look forward to working with you
on this assignment. Please confirm your agreement with the foregoing by signing
and returning to us the enclosed copy of this agreement.

 

  Very truly yours,       NORTHLAND SECURITIES, INC       By:   /s/ Jeffrey
Peterson         Name:   Jeff Peterson         Title:   Head of Investment
Banking

 

Accepted and agreed to as of the date first written above:

 

akoustis technologies, inc.       By:   /s/ Jeffrey B. Shealy         Name: 
Jeffrey Shealy         Title: President & Chief Executive Officer  

 

  Main 612-851-5900    |    Toll Free 800-851-2920 Division of Northland
Securities, Inc., Member FINRA and SIPC 45 South 7th Street, Suite 2000 |
Minneapolis, MN 55402

 

NorthlandSecurities.com | Member FINRA and SIPC

 

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ANNEX A – Northland Introduced Investors

 

  Main 612-851-5900    |    Toll Free 800-851-2920 Division of Northland
Securities, Inc., Member FINRA and SIPC 45 South 7th Street, Suite 2000 |
Minneapolis, MN 55402

 

NorthlandSecurities.com | Member FINRA and SIPC

 

Page | 9 

 

 

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ANNEX B

 

In further consideration of the agreements contained in the Agreement of which
this Annex B is a part, the Company agrees to indemnify and hold harmless
Northland, its affiliates, the respective members, directors, officers,
partners, agents and employees of Northland, and any person controlling
Northland or any of its affiliates (collectively, “Indemnified Persons”) from
and against, and the Company agrees that no Indemnified Person shall have any
liability to the Company or its owners, parents, affiliates, security holders or
creditors for, any losses, claims, damages or liabilities (including actions or
proceedings in respect thereof) (collectively, “Liabilities”) (A) related to or
arising out of (i) the Company’s actions or failures to act (including
statements or omissions made or information provided by the Company or its
agents) in connection with the Transaction or (ii) actions or failures to act by
an Indemnified Person with the Company’s consent or in reliance on the Company’s
actions or failures to act in connection with the Transaction or (B) otherwise
related to or arising out of the Agreement, Northland’s performance thereof or
any other services Northland is asked to provide to the Company (in each case,
including related activities prior to the date hereof), except that this clause
(B) shall not apply to any Liabilities to the extent that they are finally
determined by a court of competent jurisdiction to have resulted primarily from
the gross negligence, fraud or willful misconduct of such Indemnified Person.

 

If such indemnification is for any reason not available or insufficient to hold
an Indemnified Person harmless, the Company agrees to contribute to the
Liabilities involved in such proportion as is appropriate to reflect the
relative benefits received by the Company, on the one hand, and by Northland, on
the other hand, in respect of the Agreement or, if such allocation is determined
by a court of competent jurisdiction to be unavailable, in such proportion as is
appropriate to reflect other equitable considerations such as the relative fault
of the Company on the one hand and of Northland on the other hand; provided,
however, that, to the extent permitted by applicable law, the Indemnified
Persons shall not be responsible for expenses and Liabilities which in the
aggregate are in excess of the amount of all fees actually received by Northland
from the Company pursuant to the Agreement. Relative benefits to the Company, on
the one hand, and Northland, on the other hand, in respect of the Agreement
shall be deemed to be in the same proportion as (i) the total value received or
proposed to be received by the Indemnifying Parties in connection with any
financing contemplated by the Agreement, bears to (ii) all fees actually
received by or committed to Northland in connection with the Agreement.

 

The Company will not permit any settlement or compromise to include, or consent
to the entry of any judgment that includes, a statement as to, or an admission
of, fault, culpability or a failure to act by or on behalf of an Indemnified
Person, without such Indemnified Person’s prior written consent, which shall not
be unreasonably delayed, conditioned or withheld. If any Indemnified Person
becomes involved in any capacity in any action, claim, suit, investigation or
proceeding, actual or threatened, brought by or against any person, including
stockholders of the Company, in connection with or as a result of the engagement
or any matter referred to in the engagement the Company also agrees to reimburse
such Indemnified Persons for their reasonable and documented out-of-pocket
expenses (including, without limitation, reasonable legal fees and other costs
and expenses incurred in connection with investigating, preparing for and
responding to third party subpoenas or enforcing the engagement) as such
expenses are incurred. The Company’s obligations pursuant to this Annex B shall
inure to the benefit of any successors, assigns, heirs and personal
representatives of each Indemnified Person and are in addition to any rights
that each Indemnified Person may have at common law or otherwise.

 

  Main 612-851-5900    |    Toll Free 800-851-2920 Division of Northland
Securities, Inc., Member FINRA and SIPC 45 South 7th Street, Suite 2000 |
Minneapolis, MN 55402

 

NorthlandSecurities.com | Member FINRA and SIPC

 

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ANNEX C

 

BAD ACTOR DISQUALIFICATION QUESTIONNAIRE

 

Instructions: On September 23, 2013, the Commission issued a rule disqualifying
securities offerings involving certain “felons and other ‘bad actors’” from
reliance on Rule 506 of Regulation D promulgated under the 1933 Act went into
effect. The new rule triggers disclosure of bad actors and bad acts that
occurred on or prior to September 23, 2013, and provides that bad actors/bad
acts occurring after September 23, 2013 cause the disqualification from reliance
on Rule 506. In order to confirm that the Company remains eligible to rely on
Rule 506 and to comply with the related disclosure requirements, each director,
executive officer, general partner or managing member of the company, or
beneficial owner of 20% or more of the company’s outstanding voting equity
securities, is required to complete and execute this Bad Actor Disqualification
Questionnaire (this “Questionnaire”).

 

If you are a person described in clauses (a) or (b) above, you need to complete
this Questionnaire. Please answer “Yes” or “No” with respect to each of the
items set forth below. If you answer “Yes” to any of the following, please
provide a detailed written description of all relevant facts and circumstances
relating the applicable event, conviction, order, proceeding or action.

  

(1)

Have you been convicted, within the prior ten years, of any felony or
misdemeanor: (A) in connection with the purchase or sale of any security; (B)
involving the making of any false filing with the SEC; or (C) arising out of the
conduct of the business of an underwriter, broker, dealer, municipal securities
dealer, investment advisor or paid solicitor of purchasers of securities?

 

¨ Yes  ¨ No (2)

Are you subject to any order, judgment or decree of any court of competent
jurisdiction, entered within the prior five years, that restrains or enjoins you
from engaging or continuing to engage in any conduct or practice: (A) in
connection with the purchase or sale of any security; (B) involving the making
of any false filing with the SEC; or (C) arising out of the conduct of the
business of an underwriter, broker, dealer, municipal securities dealer,
investment advisor or paid solicitor of purchasers of securities? 

¨ Yes  ¨ No

 

  Main 612-851-5900    |    Toll Free 800-851-2920 Division of Northland
Securities, Inc., Member FINRA and SIPC 45 South 7th Street, Suite 2000 |
Minneapolis, MN 55402

 

NorthlandSecurities.com | Member FINRA and SIPC

 

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Highly Confidential

 

(3)

Are you subject to a final order of a U.S. state securities commission (or an
agency or officer of a U.S. state performing like functions); a U.S. state
authority that supervises or examines banks, savings associations, or credit
unions; a U.S. state insurance commission (or an agency or officer of a state
performing like functions); an appropriate U.S. federal banking agency; the U.S.
Commodity Futures Trading Commission (the “CFTC”); or the U.S. National Credit
Union Administration that: (A) bars you from: (1) association with an entity
regulated by such commission, authority, agency, or officer; (2) engaging in the
business of securities, insurance or banking; or (3) engaging in savings
association or credit union activities; or (B) constitutes a final order based
on a violation of any law or regulation that prohibits fraudulent, manipulative,
or deceptive conduct entered within the last ten years?

 

¨ Yes  ¨ No (4)

Are you subject to an order of the SEC entered pursuant to section 15(b) or
15B(c) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
or section 203(e) or (f) of the Investment Advisers Act of 1940, as amended (the
“Advisers Act”), that (A) suspends or revokes your registration as a broker,
dealer, municipal securities dealer or investment adviser; (B) places
limitations on your activities, functions or operations; or (C) bars you from
being associated with any entity or from participating in the offering of any
penny stock?

 

¨ Yes  ¨ No (5)

Are you subject to any order of the SEC entered within the last five years that
orders you to cease and desist from committing or causing a violation or future
violation of: (A) any scienter-based anti-fraud provision of the federal
securities laws, including without limitation section 17(a)(1) of the 1933 Act,
section 10(b) of the Exchange Act, and 17 CFR 240.10b-5, section 15(c)(1) of the
Exchange Act and section 206(1) of the Advisers Act, or any other rule or
regulation thereunder; or (B) Section 5 of the 1933?

 

¨ Yes  ¨ No (6)

Are you suspended or expelled from membership in, or suspended or barred from
association with a member of, a registered national securities exchange or a
registered national or affiliated securities association for any act or omission
to act constituting conduct inconsistent with just and equitable principles of
trade?

¨ Yes  ¨ No       (7)

Have you filed (as a registrant or issuer), or were you an underwriter or were
you named as an underwriter in, any registration statement or Regulation A
offering statement filed with the SEC that, within the prior five years, was the
subject of a refusal order, stop order, or order suspending the Regulation A
exemption, or are you the subject of an investigation or proceeding to determine
whether a stop order or suspension order should be issued?

¨ Yes  ¨ No

 

(8)

Are you subject to a United States Postal Service false representation order
entered within the last five years, or are you subject to a temporary
restraining order or preliminary injunction with respect to conduct alleged by
the United States Postal Services to constitute a scheme or device for obtaining
money or property through the mail by means of false representations?

¨ Yes  ¨ No

 

  Main 612-851-5900    |    Toll Free 800-851-2920 Division of Northland
Securities, Inc., Member FINRA and SIPC 45 South 7th Street, Suite 2000 |
Minneapolis, MN 55402

 

NorthlandSecurities.com | Member FINRA and SIPC

 

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Highly Confidential

 

(9) To the best of your knowledge, are you now the subject of any action,
regulatory complaint, proceeding or other event that could result in a “yes”
answer to any part of items 1-8 above? ¨ Yes  ¨ No

 

 

You hereby certify, represent and warrant that each of the above statements is
true and correct and agree to immediately notify the company if such information
becomes inaccurate in any respect. You further agree to immediately notify the
company of any action, proceeding, investigation, event, action or development
that could result in a “Yes” answer to any of the statements set forth above.

 

By:         Name:           Date:    

 

  Main 612-851-5900    |    Toll Free 800-851-2920 Division of Northland
Securities, Inc., Member FINRA and SIPC 45 South 7th Street, Suite 2000 |
Minneapolis, MN 55402

 

NorthlandSecurities.com | Member FINRA and SIPC

 

Page | 13