Document:

Exhibit 4.2

 

DESCRIPTION OF THE COMPANY’S SECURITIES REGISTERED

PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934

 

The following is a brief description of the common stock, $0.001 par value per share (the “Common Stock”), of PetMed Express, Inc., a Florida corporation (the “Company”), which is the only security of the Company registered pursuant to Section 12 of the Securities Exchange Act of 1934 (the “Exchange Act”).

 

Description of Common Stock

 

General

 

The following descriptions of our Common Stock and of certain provisions of Florida law do not purport to be complete and are subject to and qualified in their entirety by reference to our amended and restated articles of incorporation, our amended and restated bylaws and the Florida Business Corporation Act, as amended (the “Florida Act”). The Company has authorized 40,000,000 shares of Common Stock of which as of May 26, 2020, 20,166,382 shares of Common Stock are issued and outstanding. All of our outstanding shares of Common Stock are fully paid and non-assessable. Our Common Stock is listed on the NASDAQ Global Select Market under the symbol “PETS.”

 

Common Stock

 

Holders of the Common Stock have no pre-emptive, redemption, subscription or conversion rights. Each outstanding share of Common Stock is entitled to one vote on all matters submitted to a vote of the Company's shareholders. Subject to the dividend rights of the holders of any outstanding preferred stock, each share of Common Stock is entitled to participate equally with respect to dividends as may be declared by the board of directors out of funds legally available therefor. In the case of voluntary or involuntary liquidation, distribution or sale of assets, dissolution, or winding up of the Company, holders of our Common Stock are entitled to receive a pro rata share of the amount distributed after provisions for payment of all debts, other liabilities and any liquidation preferences of outstanding preferred stock. The Florida Act also may affect the terms of these securities.

 

Limitations on Rights of Holders of Common Stock – Preferred Stock

 

The rights of holders of Common Stock may be materially limited or qualified by the rights of holders of preferred stock that we may issue in the future. Set forth below is a description of the Company’s authority to issue preferred stock and the possible terms of that stock.

 

Our amended and restated articles of incorporation authorizes our board of directors, without further shareholder action, to provide for the issuance of up to 5,000,000 shares of preferred stock, with a par value of $.001 per share, in one or more series, and to fix the designations, preferences, conversion rights, cumulative, relative, participating, optional or other rights, including voting rights, qualifications, limitations or restrictions, redemption and liquidation preferences of each of these series. Of the preferred stock, 250,000 shares have been designated Convertible Preferred Stock of which as of May 26, 2020, 3,000 shares of Convertible Preferred Stock are issued and outstanding. We may amend from time to time our amended and restated articles of incorporation to increase the number of authorized shares of preferred stock. Any such amendment would require the approval of the holders of a majority of our shares of Common Stock entitled to vote.

 

Shareholder Action by Written Consent and Special Meeting

 

Our amended and restated bylaws provide for action by our shareholders without a meeting with the written consent of shareholders holding the number of shares necessary to approve such action if it were taken at a meeting at which all shares entitled to vote thereon were present. Our amended and restated bylaws also provide that shareholder action can be taken at an annual meeting of the shareholders or at a special meeting which may be called, for any purpose or purposes, by the board of directors or the person or persons authorized to do so by the board of directors and must be called by the Secretary if the holders of not less than ten percent of all votes entitled to be cast on any issue proposed to be considered at such special meeting sign, date and deliver to the Secretary one or more written demands for a special meeting, describing the purpose or purposes for which it is to be held.

 

Exhibit 4.2 Page 1 of 3

 

 

 

Authorized but Unissued Shares 

 

Our authorized but unissued shares of Common Stock and preferred stock are available for future issuance without shareholder approval, subject to the requirements of applicable law or regulation, including any listing requirement of the principal stock exchange on which our Common Stock is then listed. These additional shares may be utilized for a variety of corporate purposes, including future public offerings to raise additional capital, corporate acquisitions and employee benefit plans. The existence of authorized but unissued shares of Common Stock and preferred stock could render more difficult or discourage an attempt to obtain control of a majority of our Common Stock by means of a proxy contest, tender offer, merger or otherwise.

 

Board Authority to Amend Bylaws 

 

Under our amended and restated bylaws, our board of directors has the authority to adopt, amend or repeal the bylaws without the approval of our shareholders unless the Florida Act reserves the power to amend a particular bylaw provision exclusively to the shareholders.

 

Certain Anti-Takeover provisions of Florida Law and our Bylaws

 

Florida Business Corporation Act

 

We are subject to certain anti-takeover provisions that apply to public corporations under Florida law. Pursuant to Section 607.0901 of the Florida Act, a publicly held Florida corporation may not engage in a broad range of business combinations or other extraordinary corporate transactions with an “interested shareholder” without the approval of the holders of two-thirds of the voting shares of such corporation (excluding shares held by the interested shareholder), unless:

 

	 	
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			the transaction is approved by a majority of disinterested directors before the shareholder becomes an interested shareholder;

			

 

	 	
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			the interested shareholder has owned at least 80% of the corporation’s outstanding voting shares for at least five years preceding the announcement date of any such business combination;

			

 

	 	
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			the interested shareholder is the beneficial owner of at least 90% of the outstanding voting shares of the corporation, exclusive of shares acquired directly from the corporation in a transaction not approved by a majority of the disinterested directors; or

			

 

	 	
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			the consideration paid to the holders of the corporation’s voting stock is at least equal to certain fair price criteria.

			

 

An “interested shareholder” is defined as a person who together with affiliates and associates beneficially owns more than 10% of a corporation’s outstanding voting shares. We have not made an election in our amended and restated articles of incorporation to opt out of Section 607.0901.

 

In addition, we are subject to Section 607.0902 of the Florida Act which prohibits the voting of shares in a publicly held Florida corporation that are acquired in a “control share acquisition” unless (i) our board of directors approved such acquisition prior to its consummation or (ii) after such acquisition, in lieu of prior approval by our board of directors, the holders of a majority of the corporation’s voting shares, exclusive of shares owned by officers of the corporation, employee directors or the acquiring party, approve the granting of voting rights as to the shares acquired in the control share acquisition. A “control share acquisition” is defined as an acquisition that immediately thereafter entitles the acquiring party to 20% or more of the total voting power in an election of directors.

 

These statutory provisions may prevent takeover attempts that might result in a premium over the market price for shares of our common stock.

 

Exhibit 4.2 Page 2 of 3

 

 

 

Advance Notice of Shareholder Proposals or Nominations

 

Our amended and restated bylaws provide that shareholders at an annual meeting may only consider proposals or nominations (i) specified in the notice of meeting given by or at the direction of the Board, (ii) properly brought before the meeting by or at the direction of the Board or (iii) otherwise properly brought before the meeting by a shareholder of the Company who was a shareholder of record on (a) the date of the giving of timely notice to our Corporate Secretary and (b) the record date for the meeting, who is entitled to vote at the meeting and who has given our Corporate Secretary timely written notice, in proper form. In addition to certain other applicable requirements, for business to be properly brought before an annual meeting by a shareholder, such shareholder generally must have given notice thereof in proper written form to our Corporate Secretary not less than 90 days nor more than 120 days prior to the anniversary date of the immediately preceding annual meeting of shareholders. Our amended and restated bylaws may have the effect of precluding the conduct of certain business at a meeting if the proper procedures are not followed or may discourage or defer a potential acquiror from conducting a solicitation of proxies to elect its own slate of directors or otherwise attempting to obtain control of us.

 

Proxy Access

 

Our By-Laws permit a shareholder (or a group of up to 20 shareholders) owning three percent (3%) or more of our common stock continuously for at least three years to nominate and include in our proxy statement candidates for up to the greater of 2 of 20% of our Board. To be timely, a notice of a nomination under our proxy access bylaw provisions must be delivered to or mailed and received at the principal executive offices of the Company not less than one-hundred twenty (120) days nor more than one-hundred fifty (150) days prior to the anniversary of the date that the Company first distributed its proxy statement to shareholders for the immediately preceding annual meeting of shareholders. The notice must contain certain information specified in our amended and restated bylaws.

 

Transfer Agent and Registrar

 

The transfer agent and registrar for the Company's common stock is Continental Stock Transfer & Trust Company.

 

Exhibit 4.2 Page 3 of 3Exhibit 10.1

 

 

 

Promissory
Note

 

	Date 	Loan Amount	Interest Rate after Deferment Period	Deferment Period 
	May 20, 2020	$1,633,225.00	1.00% fixed per annum	6 months

 

This Promissory Note
(“Note”) sets forth and confirms the terms and conditions of a term loan to Akoustis Inc (whether one or more than
one, “Borrower”) from Bank of America, NA, a national banking association having an address of P.O. Box 15220, Wilmington,
DE 19886-5220 (together with its agents, affiliates, successors and assigns, the “Bank”) for the Loan Amount and at
the Interest Rate stated above (the “Loan”). The Loan is made pursuant to the Paycheck Protection Program under the
Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The funding of the Loan is conditioned upon approval
of Borrower’s application for the Loan and Bank’s receiving confirmation from the SBA that Bank may proceed with the
Loan. The date on which the funding of the Loan takes place is referred to as the “Funding Date”. If the Funding Date
is later than the date of this Note, the Deferment Period commences on the Funding Date and ends six months from the Funding Date.
After sixty (60) days from the date the Loan is funded, but not more than ninety (90) days from the date the Loan is funded, Borrower
shall apply to Bank for loan forgiveness. If the SBA confirms full and complete forgiveness of the unpaid balance of the Loan,
and reimburses Bank for the total outstanding balance, principal and interest, Borrower’s obligations under the Loan will
be deemed fully satisfied and paid in full. If the SBA does not confirm forgiveness of the Loan, or only partly confirms forgiveness
of the Loan, or Borrower fails to apply for loan forgiveness, Borrower will be obligated to repay to the Bank the total outstanding
balance remaining due under the Loan, including principal and interest (the “Loan Balance”), and in such case, Bank
will establish the terms for repayment of the Loan Balance in a separate letter to be provided to Borrower, which letter will set
forth the Loan Balance, the amount of each monthly payment, the interest rate (not in excess of a fixed rate of one per cent (1.00%)
per annum), the term of the Loan, and the maturity date of two (2) years from the funding date of the Loan. No principal or interest
payments will be due prior to the end of the Deferment Period. Borrower promises, covenants and agrees with Bank to repay the Loan
in accordance with the terms for repayment as set forth in that letter (the “Repayment Letter”). Payments greater than
the monthly payment or additional payments may be made at any time without a prepayment penalty but shall not relieve Borrower
of its obligations to pay the next succeeding monthly payment.

 

In consideration of the
Loan received by Borrower from Bank, Borrower agrees as follows:

 

		1.	DEPOSIT ACCOUNT/USE OF LOAN PROCEEDS: Borrower is required to maintain a deposit account with Bank
of America, N.A. (the “Deposit Account”) until the Loan is either forgiven in full or the Loan is fully paid by Borrower.
Borrower acknowledges and agrees that the proceeds of the Loan shall be deposited by Bank into the Deposit Account. The Loan proceeds
are to not be used by Borrower for any illegal purpose and Borrower represents to the Bank that it will derive material benefit,
directly and indirectly, from the making of the Loan.

 

		2.	DIRECT DEBIT. If the Loan is not forgiven and a Loan Balance remains, Borrower agrees that on the
due date of any amount due as set forth in the Repayment Letter, Bank will debit the amount due from the Deposit Account established
by Borrower in connection with this Loan. Should there be insufficient funds in the Deposit Account to pay all such sums when due,
the full amount of such deficiency be shall be immediately due and payable by Borrower.

 

		3.	INTEREST RATE: Bank shall charge interest on the unpaid principal balance of the Loan at the interest
rate set forth above under “Interest Rate” from the date the Loan was funded until the Loan is paid in full.

 

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	4.	REPRESENTATIONS, WARRANTIES AND COVENANTS. (1) Borrower represents and warrants to Bank, and covenants and agrees with Bank, that: (i) Borrower has read the statements included in the Application, including the Statements Required by Law and Executive Orders, and Borrower understands them. (ii) Borrower was and remains eligible to receive a loan under the rules in effect at the time Borrower submitted to Bank its Paycheck Protection Program Application Form (the “Application”) that have been issued by the SBA implementing the Paycheck Protection Program under Division A, Title I of the CARES Act (the “Paycheck Protection Program Rule”). (iii) Borrower (a) is an independent contractor, eligible self-employed individual, or sole proprietor or (b) employs no more than the greater of 500 employees or, if applicable, the size standard in number of employees established by the SBA in 13 C.F.R. 121.201 for Borrower’s industry. (iv) Borrower will comply whenever applicable, with the civil rights and other limitations in the Application. (v) All proceeds of the Loan will be used only for business-related purposes as specified in the Application and consistent with the Paycheck Protection Program Rule. (vi) To the extent feasible, Borrower will purchase only American-made equipment and products. (vii) Borrower is not engaged in any activity that is illegal under federal, state or local law. (viii) Borrower certifies that any loan received by Borrower under Section 7(b)(2) of the Small Business Act between January 31, 2020 and April 3, 2020 that will remain outstanding after funding of this Loan was for a purpose other than paying payroll costs and other allowable uses loans under the Paycheck Protection Program Rule. (ix) Borrower was in operation on February 15, 2020 and had employees for whom Borrower paid salaries and payroll taxes or paid independent contractors (as reported on Form(s) 1099-MISC). (x) The current economic uncertainty makes the request for the Loan necessary to support the ongoing operations of Borrower. (xi) All proceeds of the Loan will be used to retain workers and maintain payroll or make mortgage interest payments, lease payments, and utility payments, as specified under the Paycheck Protection Program Rule and Borrower acknowledges that if the funds are knowingly used for unauthorized purposes, the federal government may hold Borrower and/or Borrower’s authorized representative legally liable, such as for charges of fraud. (xii) Borrower has provided Bank true, correct and complete information demonstrating that Borrower had employees for whom Borrower paid salaries and payroll taxes on or around February 15, 2020. (xiii) Borrower has provided to Bank all documentation available to Borrower on a reasonable basis verifying the dollar amounts of average monthly payroll costs for the calendar year 2019, which documentation shall include, as applicable, copies of payroll processor records, payroll tax filings and/or Form 1099-MISC. (xiv) Borrower will promptly provide to Bank (a) any additional documentation that Bank requests in order to verify payroll costs and (b) documentation verifying the number of full-time equivalent employees on payroll as well as the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities for the eight week period following the Loan. (xv) Borrower acknowledges that (a) loan forgiveness will be provided by the SBA for the sum of documented payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities, and not more than 25% of the Forgivable Amount may be for non-payroll costs (xvi) During the period beginning on February 15, 2020 and ending on December 31, 2020, Borrower has not and will not receive any other loan under the Paycheck Protection Program. (xvii) Borrower certifies that the information provided in the Application and the information that Borrower provided in all supporting
documents and forms is true and accurate in all material respects. Borrower acknowledges that knowingly making a false statement to obtain a guaranteed loan from SBA is punishable under the law, including under 18 USC 1001 and 3571 by imprisonment of not more than five years and/or a fine of up to $250,000; under 15 USC 645 by imprisonment of not more than two years and/or a fine of not more than $5,000; and, if submitted to a Federally insured institution, under 18 USC 1014 by imprisonment of not more than thirty years and/or a fine of not more than $1,000,000. (xviii) Borrower understands, acknowledges and agrees that Bank can share any tax information received from Borrower or any Owner with SBA’s authorized representatives, including authorized representatives of the SBA Office of Inspector General, for the purpose of compliance with SBA Loan Program Requirements and all SBA reviews. (xix) Neither Borrower nor any Owner, is presently suspended, debarred, proposed for debarment, declared ineligible, voluntarily excluded from participation in this transaction by any Federal department or agency, or presently involved in any bankruptcy. (xx) Neither Borrower, nor any Owner, nor any business owned or controlled by any of them, ever obtained a direct or guaranteed loan from SBA or any other Federal agency that is currently delinquent or has defaulted in the last 7 years and caused a loss to the government. (xxi) Neither Borrower, nor any Owner, is an owner of any other business or has common management with any other business, except as disclosed to the Bank in connection with the Borrower’s Application. (xxii) Borrower did not receive an SBA Economic Injury Disaster Loan between January 31, 2020 and April 3, 2020, except as disclosed to the Bank in connection with the Borrower’s Application. (xxiii) Neither Borrower (if an individual), nor any individual owning 20% or more of the equity of Borrower (each, an “Owner”), is subject to an indictment, criminal information, arraignment, or other means by which formal criminal charges are brought in any jurisdiction, or presently incarcerated, on probation or parole. (xxiv) Neither Borrower (if an individual), nor any Owner, has within the last 5 years been convicted; pleaded guilty; pleaded nolo contendere; been placed on pretrial diversion; or been placed on any form of parole or probation (including probation before judgment) for any felony. (xxv) The United States is the principal place of residence for all employees of Borrower included in Borrower’s payroll calculation included in the Application. (xxvi) The Borrower correctly indicated on its Application whether it is a franchise that is listed in the SBA’s franchise directory. (xxvii) If Borrower is claiming an exemption from all SBA affiliation rules applicable to Paycheck Protection Program loan eligibility under the religious exemption to the affiliation rules, Borrower has made a reasonable, good faith determination that it qualifies for such religious exemption under 13 C.F.R. 121.103(b)(10), which provides that “[t]he relationship of a faithbased organization to another organization is not considered an affiliation with the other organization...if the relationship is based on a religious teaching or belief or otherwise constitutes a part of the exercise of religion.” (2) At all times during the term the of the Loan, Borrower represents and warrants to the Bank, that (i) if Borrower is anything other than a natural person, it is duly formed and existing under the laws of the state or other jurisdiction where organized; (ii) this Note, and any instrument or agreement required under this Note, are within Borrower’s powers, have been duly authorized, and do not conflict with any of its organizational papers; (iii) the information included in the Beneficial Ownership Certification most recently provided to the Bank, if applicable, is true and correct in all respects; and (iv) in each state in which Borrower does business, it is properly licensed, in good standing,
and, where required, in compliance with fictitious name (e.g. trade name or d/b/a) statutes. IF THE FUNDING DATE IS AFTER THE DATE OF THIS NOTE, BORROWER AGREES THAT BORROWER SHALL BE DEEMED TO HAVE REPEATED AND REISSUED, IMMEDIATELY PRIOR TO THE FUNDING ON THE FUNDING DATE, THE REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS SET FORTH ABOVE IN THIS PARAGRAPH

 

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		5.	EVENTS OF DEFAULT: If the Loan is not forgiven and a Loan Balance remains, then from the date the
Repayment Letter is sent to Borrower until the Loan Balance is fully paid, the occurrence and continuation of any of the following
events shall constitute a default hereunder: (i) insolvency, bankruptcy, dissolution, issuance of an attachment or garnishment
against Borrower; (ii) failure to make any payment when due under the Loan or any or all other loans made by Bank to Borrower,
and such failure continues for ten (10) days after it first became due; (iii) failure to provide current financial information
promptly upon request by Bank; (iv) the making of any false or materially misleading statement on any application or any financial
statement for the Loan or for any or all other loans made by Bank to Borrower; (v) Bank in good faith believes the prospect of
payment under the Loan or any or all other loans made by Bank to Borrower is impaired; (vi) Borrower under or in connection with
the Loan or any or all other loans made by Bank to Borrower fails to timely and properly observe, keep or perform any term, covenant,
agreement, or condition therein; (vii) default shall be made with respect to any other indebtedness for borrowed money of Borrower,
if the default is a failure to pay at maturity or if the effect of such default is to accelerate the maturity of such indebtedness
for borrowed money or to permit the holder or obligee thereof or other party thereto to cause any such indebtedness for borrowed
money to become due prior to its stated maturity; (viii) the Bank in its sole discretion determines in good faith that an event
has occurred that materially and adversely affects Borrower; (ix) any
change shall occur in the ownership of the Borrower; (x) permanent cessation of Borrower’s business operations; (xi) Borrower,
if an individual, dies, or becomes disabled, and such disability prevents the Borrower from continuing to operate its business;
(xii) Bank receives notification or is otherwise made aware that Borrower, or any affiliate of Borrower, is listed as or appears
on any lists of known or suspected terrorists or terrorist organizations provided to Bank by the U.S. government under the USA
Patriot Act of 2001; and (xiii) Borrower fails to maintain the Deposit Account with the Bank.

 

		6.	REMEDIES: If the Loan is not forgiven and a Loan Balance remains, then from the date the Repayment
Letter is sent to Borrower, upon the occurrence of a default, all or any portion of the entire amount owing on the Loan, and any
and all other loans made by Bank to Borrower, shall, at Bank’s option, become immediately due and payable without demand
or notice. Upon a default, Bank may exercise any other right or remedy available to it at law or in equity. All persons included
in the term “Borrower” are jointly and severally liable for repayment, regardless of to whom any advance of credit
was made. Borrower shall pay any costs Bank may incur including without limitation reasonable attorney’s fees and court costs
should the Loan and/or any and all other loans made by Bank to Borrower be referred to an attorney for collection to the extent
permitted under applicable state law. EACH PERSON INCLUDED IN THE TERM BORROWER WAIVES ALL SURETYSHIP AND OTHER SIMILAR DEFENSES
TO THE FULL EXTENT PERMITTED BY APPLICABLE LAW.

 

		7.	CREDIT INVESTIGATION: If the Loan is not forgiven and a Loan Balance remains, then from the date
the Repayment Letter is sent to Borrower until the Loan Balance is fully paid, Borrower authorizes Bank and any of its affiliates
at any time to make whatever credit investigation Bank deems is proper to evaluate Borrower’s credit, financial standing
and employment and Borrower authorizes Bank to exchange Borrower’s credit experience with credit bureaus and other creditors
Bank reasonably believes are doing business with Borrower. Borrower also agrees to furnish Bank with any financial statements Bank
may request at any time and in such detail as Bank may require.

 

		8.	NOTICES: Borrower’s request for Loan forgiveness, and the documentation that must accompany
that request, shall be submitted to Bank by transmitting the communication to the electronic address, website, or other electronic
transmission portal provided by Bank to Borrower. Otherwise,
all notices required under this Note shall be personally delivered or sent by first class mail, postage prepaid, or by overnight
courier, to the addresses on the signature page of this Note, or sent by facsimile to the fax number(s) listed on the signature
page, or to such other addresses as the Bank and the Borrower may specify from time to time in writing (any such notice a “Written
Notice”). Written Notices shall be effective (i) if mailed, upon the earlier of receipt or five (5) days after deposit
in the U.S. mail, first class, postage prepaid, (ii) if telecopied, when transmitted, or (iii) if hand-delivered, by courier or
otherwise (including telegram, lettergram or mailgram), when delivered. In lieu of a Written Notice, notices and/or communications
from the Bank to the Borrower may, to the extent permitted by law, be delivered electronically (i) by transmitting the communication
to the electronic address provided by the Borrower or to such other electronic address as the Borrower may specify from time to
time in writing, or (ii) by posting the communication on a website and sending the Borrower a notice to the Borrower’s postal
address or electronic address telling the Borrower that the communication has been posted, its location, and providing instructions
on how to view it (any such notice, an “Electronic Notice”). Electronic Notices shall be effective when presented
to the Borrower, or is sent to the Borrower’s electronic address or is posted to the Bank’s website. To retain a copy
for your records, please download and print or save a copy to your device.

 

		9.	CHOICE OF LAW; JURISDICTION; VENUE. (1) At all times that Bank is the holder of this Note, except
to the extent that any law of the United States may apply, this Note shall be governed and interpreted according to the internal
laws of the state of Borrower’s principal place of business (the “Governing Law State”), without regard to any
choice of law, rules or principles to the contrary. However, the charging and calculating of interest on the obligations under
this Note shall be governed by, construed and enforced in accordance with the laws of the state of North Carolina and applicable
federal law. Nothing in this paragraph shall be construed to limit or otherwise affect any rights or remedies of Bank under federal
law. Borrower and Bank agree and consent to be subject to the personal jurisdiction of any state or federal court located in the
Governing Law State so that trial shall only be conducted by a court in that state. (2) Notwithstanding the foregoing, when SBA
is the holder, this Note will be interpreted and enforced under federal law, including SBA regulations. Lender or SBA may use state
or local procedures for filing papers, recording documents, giving notice, foreclosing liens, and other purposes. By using such
procedures, SBA does not waive any federal immunity from state or local control, penalty, tax, or liability. As to this Note, Borrower
may not claim or assert against SBA any local or state law to deny any obligation, defeat any claim of SBA, or preempt federal
law.

 

		10.	MISCELLANEOUS. The Loan may be sold or assigned by Bank without notice to Borrower. Borrower may
not assign the Loan or its rights hereunder to anyone without Bank’s prior written consent. If any provision of this Note
is contrary to applicable law or is found unenforceable, such provision shall be severed from this Note without invalidating the
other provisions thereof. Bank may delay enforcing any of its rights under this Note without losing them, and no failure or delay
on the part of Bank in exercising any right, power or privilege hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, power or privilege hereunder preclude any other or future exercise thereof or the exercise of
any other right, power or privilege. Bank, by its acceptance hereof, and the making of the Loan and Borrower understand and agree
that this Note constitutes the complete understanding between them. This Note shall be binding upon Borrower, and its successors
and assigns, and inure to the benefit of Bank and its successors and assigns.

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		11.	BORROWING AUTHORIZED. The signer for Borrower represents, covenants and warrants to Bank that he
or she is certified to borrow for the Borrower and is signing this Note as the duly authorized sole proprietor, owner, sole shareholder,
officer, member, managing member, partner, trustee, principal, agent or representative of Borrower, and further acknowledges and
confirms to Bank that by said signature he or she has read and understands all of the terms and provisions contained in this Note
and agrees and consents to be bound by them. This Note and any instrument or agreement required herein, are within the Borrower’s
powers, have been duly authorized, and do not conflict with any of its organizational papers. The individuals signing this Agreement
on behalf of each Borrower are authorized to sign such documents on behalf of such entities. For purposes of this Note only, the
Bank may rely upon and accept the authority of only one signer on behalf of the Borrower, and for this Note, this resolution supersedes
and replaces any prior and existing contrary resolution provided by Borrower to Bank.

 

		12.	ELECTRONIC COMMUNICATIONS AND SIGNATURES. This Note and any document, amendment, approval, consent,
information, notice, certificate, request, statement, disclosure or authorization related to this Note (each a “Communication”),
including Communications required to be in writing, may, if agreed by the Bank, be in the form of an Electronic Record and may
be executed using Electronic Signatures, including, without limitation, facsimile and/or .pdf. The Borrower agrees that any Electronic
Signature (including, without limitation, facsimile or .pdf) on or associated with any Communication shall be valid and binding
on the Borrower to the same extent as a manual, original signature, and that any Communication entered into by Electronic Signature,
will constitute the legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with the
terms thereof to the same extent as if a manually executed original signature was delivered to the Bank. Any Communication may
be executed in as many counterparts as necessary or convenient, including both paper and electronic counterparts, but all such
counterparts are one and the same Communication. For the avoidance of doubt, the authorization under this paragraph may include,
without limitation, use or acceptance by the Bank of a manually signed paper Communication which has been converted into electronic
form (such as scanned into PDF format), or an electronically signed Communication converted into another format, for transmission,
delivery and/or retention. The Bank may, at its option, create one or more copies of any Communication in the form of an imaged
Electronic Record (“Electronic Copy”), which shall be deemed created in the ordinary course of the Bank’s
business, and destroy the original paper document. All Communications in the form of an Electronic Record, including an Electronic
Copy, shall be considered an original for all purposes, and shall have the same legal effect, validity and enforceability as a
paper record. Notwithstanding anything contained herein to the contrary, the Bank is under no obligation to accept an Electronic
Signature in any form or in any format unless expressly agreed to by the Bank pursuant to procedures approved by it; provided,
further, without limiting the foregoing, (a) to the extent the Bank has agreed to accept such Electronic Signature, the Bank shall
be entitled to rely on any such Electronic Signature without further verification and (b) upon the request of the Bank any Electronic
Signature shall be promptly followed by a manually executed, original counterpart. For purposes hereof, “Electronic Record”
and “Electronic Signature” shall have the meanings assigned to them, respectively, by 15 USC §7006, as
it may be amended from time to time.

 

		13.	CONVERSION TO PAPER ORIGINAL. At the Bank’s discretion the authoritative electronic copy
of this Note (“Authoritative Copy”) may be converted to paper and marked as the original by the Bank (the “Paper
Original”). Unless and until the Bank creates a Paper Original, the Authoritative Copy of this Agreement: (1) shall at all
times reside in a document management system designated by the Bank for the storage of authoritative copies of electronic records,
and (2) is held in the ordinary course of business. In the event the Authoritative Copy is converted to a Paper Original, the parties
hereto acknowledge and agree that: (1) the electronic signing of this Agreement also constitutes issuance and delivery of the Paper
Original, (2) the electronic signature(s) associated with this Agreement, when affixed to the Paper Original, constitutes legally
valid and binding
signatures on the Paper Original, and (3) the Borrower’s obligations will be evidenced by the Paper Original after such conversion.

 

		14.	BORROWER ATTESTATION. Borrower attests and certifies to Bank that it has not provided false or
misleading information or statements to the Bank in its application for the Loan, and that the certifications, representations,
warranties, and covenants made to the Bank in this Note and elsewhere relating to the Loan are true, accurate, and correct. Borrower
further attests and certifies to Bank that it is has read, understands, and acknowledges that the Loan is being made under the
CARES Act, and any use of the proceeds of the Loan other than as permitted by the CARES Act, or any false or misleading information
or statements provided to the Bank in its application for the Loan or in this Note may subject the Borrower to criminal and civil
liability under applicable state and federal laws and regulations, including but not limited to, the False Claims Act, 31 U.S.C.
Section 3729, et. seq. Borrower further acknowledges and understands that this Note is not valid and effective until and unless
Borrower’s application for the Loan is approved and Bank’s receiving confirmation from the SBA that Bank may proceed
with the Loan.

  

IN WITNESS WHEREOF,
I, the authorized representative of the Borrower, hereto have caused this Promissory Note to be duly executed as of the date set
forth below.

 

	BORROWER:  Akoustis Inc	 
	 	 
	/s/ Kenneth Boller	 
	Signature of Authorized Representative of Borrower	 
	 	 
	Kenneth Boller	 
	Print Name	 
	 	 
	Authorized Representative	 
	Title	 
	 	 
	STREET ADDRESS: 10602 Bailey Rd Ste C	 
	CITY/STATE/ZIP CODE:  Cornelius, NC, 28031-9360	 

  

 

4

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