Document:

ex10-6.htm

Exhibit 10.6

 

ESCROW DEPOSIT AGREEMENT

 

This ESCROW DEPOSIT AGREEMENT (this “Agreement”), dated as of this __ day of _____ 2015, by and among AEGIS IDENTITY SOFTWARE, INC., a [Delaware] corporation (the “Company”), having an address at 750 West Hampden Avenue, Suite 500, Englewood, Colorado 80110, BURNHAM SECURITIES INC. (the “Underwriter”), a Delaware corporation, having an address at 18500 Von Karman Ave., Suite 560, Irvine, California 92612, and SIGNATURE BANK (the “Escrow Agent”), a New York State chartered bank, having an office at 261 Madison Avenue, New York, New York 10016.  All capitalized terms not herein defined shall have the meaning ascribed to them in that certain Prospectus incorporated in the Registration Statement on Form S-1, originally filed with the U.S. Securities and Exchange Commission on ___________, 2015, in connection with the Company’s initial public offering of its shares of Common Stock, as amended or supplemented from time to time, including all exhibits thereto (the “Prospectus”).

W I T N E S S E T H:

WHEREAS, pursuant to the terms of the Prospectus, the Company desires to sell (the “Offering”) a minimum of $50,000,000 (the “Minimum Amount”) and a maximum of $100,000,000 (the “Maximum Amount”) of its shares of Common Stock (the “Shares”), plus up to an additional allotment of $15,000,000 of Shares, with each Share being sold at a price of $____ per Share;

 

WHEREAS, unless the Company sells the Minimum Amount and the Shares are listed for trading on the Nasdaq Capital Market on or before sixty (60) days after the date of the Prospectus (the “Termination Date”), the Offering shall terminate and all funds shall be returned to the subscribers in the Offering, and if the Minimum Amount and Nasdaq listing are satisfied, the Offering may continue until the Termination Date;

 

WHEREAS, the Company and Underwriter desire to establish an escrow account with the Escrow Agent into which the Company and Underwriter shall instruct subscribers introduced to the Company by Underwriter (the “Subscribers”) to deposit checks and other instruments for the payment of money made payable to the order of “Signature Bank as Escrow Agent for Aegis Identity Software, Inc.,” and the Escrow Agent is willing to accept said checks and other instruments for the payment of money in accordance with the terms hereinafter set forth;

 

WHEREAS, the Company, as issuer, and Underwriter, as the sole book-running manager, represent and warrant to the Escrow Agent that they will comply with all of their respective obligations under applicable federal and state securities laws and regulations with respect to sale of the Offering;

WHEREAS, the Company and Underwriter represent and warrant to the Escrow Agent that they have not stated to any individual or entity that the Escrow Agent’s duties will include anything other than those duties stated in this Agreement; and

  

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WHEREAS, the Company and Underwriter warrant to the Escrow Agent that a copy of each document that has been delivered to Subscribers and third parties that includes the Escrow Agent’s name and duties has been attached hereto as Schedule I.

NOW, THEREFORE, IT IS AGREED as follows:

 

1.                 Delivery of Escrow Funds.

 

(a)           The Underwriter and the Company shall instruct Subscribers to deliver to the Escrow Agent checks made payable to the order of “Signature Bank, as Escrow Agent for Aegis Identity Software, Inc.,” or wire transfer to Signature Bank, ABA No. 026013576, 261 Madison Avenue, New York, New York 10016, for credit to Signature Bank, as Escrow Agent for Aegis Identity Software, Inc., Account No. _____________, in each case with the name and address of the individual or entity making payment.  In the event any Subscriber’s address is not provided to Escrow Agent by the Subscriber, then the Company agrees to promptly provide Escrow Agent with such information in writing.  The checks or wire transfers shall be deposited into a non-interest-bearing account at Signature Bank entitled “Aegis Identity Software, Inc., Signature Bank, as Escrow Agent” (the “Escrow Account”).

 

(b)           The collected funds deposited into the Escrow Account are referred to as the “Escrow Funds.”

 

(c)           The Escrow Agent shall have no duty or responsibility to enforce the collection or demand payment of any funds deposited into the Escrow Account.  If, for any reason, any check deposited into the Escrow Account shall be returned unpaid to the Escrow Agent, the sole duty of the Escrow Agent shall be to return the check to the Subscriber and advise the Company and Underwriter promptly thereof.

 

2.                 Release of Escrow Funds.  The Escrow Funds shall be paid by the Escrow Agent in accordance with the following:

 

(a)           In the event that the Company and Underwriter advise the Escrow Agent in writing that the Offering has been terminated (the “Termination Notice”), the Escrow Agent shall promptly return the funds paid by each Subscriber to said Subscriber without interest or offset.

 

(b)           Provided that the Escrow Agent does not receive the Termination Notice in accordance with Section 2(a) and there is the Minimum Amount deposited into the Escrow Account and the Company satisfies the listing conditions to trade the Shares on the Nasdaq Capital Market on or prior to the Termination Date, the Escrow Agent shall, upon receipt of written instructions, in the form of Exhibit A attached hereto and made a part hereof, or in a form and substance satisfactory to the Escrow Agent, received from the Company and Underwriter, pay the Escrow Funds in accordance with such written instructions, which instructions shall be limited to the payment of the Underwriter’s fee and other offering expenses and the payment of the balance to the Company.  Such payment or payments shall be made by wire transfer within one (1) Business Day of receipt of such written instructions, which must be received by the Escrow Agent no later than 3:00 p.m., Eastern Time, on a Business Day for the Escrow Agent to process such instructions that Business Day.

  

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(c)           If by 3:00 p.m., Eastern time, on the Termination Date, the Escrow Agent has not received written instructions from the Company and Underwriter regarding the disbursement of the Escrow Funds and the total amount of the Escrow Funds is less than the Minimum Amount or the Nasdaq listing conditions have not been satisfied, then the Escrow Agent shall promptly return the Escrow Funds to the Subscribers without interest or offset.  The Escrow Funds returned to each Subscriber shall be free and clear of any and all claims of the Escrow Agent.

 

(d)           The Escrow Agent shall not be required to pay any uncollected funds or any funds that are not available for withdrawal.

 

(e)           If the Termination Date or any date that is a deadline under this Agreement for giving the Escrow Agent notice or instructions or for the Escrow Agent to take action is not a Business Day, then such date shall be the Business Day that immediately precedes that date.  A “Business Day” is any day other than a Saturday, Sunday or a Bank holiday.

 

3.                 Acceptance by Escrow Agent.  The Escrow Agent hereby accepts and agrees to perform its obligations hereunder, provided that:

 

(a)           The Escrow Agent may act in reliance upon any signature believed by it to be genuine, and may assume that any person who has been designated by Underwriter or the Company to give any written instructions, notice or receipt, or make any statements in connection with the provisions hereof has been duly authorized to do so.  Escrow Agent shall have no duty to make inquiry as to the genuineness, accuracy or validity of any statements or instructions or any signatures on statements or instructions.  The names and true signatures of each individual authorized to act singly on behalf of the Company and Underwriter are stated in Schedule II, which is attached hereto and made a part hereof.  The Company and Underwriter may each remove or add one or more of its authorized signers stated on Schedule II by notifying the Escrow Agent of such change in accordance with this Agreement, which notice shall include the true signature for any new authorized signatories.

 

(b)           The Escrow Agent may act relative hereto in reliance upon advice of counsel in reference to any matter connected herewith.  The Escrow Agent shall not be liable for any mistake of fact or error of judgment or law, or for any acts or omissions of any kind, unless caused by its willful misconduct or gross negligence.

 

(c)           The Underwriter and the Company agree to indemnify and hold the Escrow Agent harmless from and against any and all claims, losses, costs, liabilities, damages, suits, demands, judgments or expenses (including but not limited to reasonable attorney’s fees) claimed against or incurred by Escrow Agent arising out of or related, directly or indirectly, to this Escrow Agreement unless caused by the Escrow Agent’s gross negligence or willful misconduct.

 

(d)           In the event that the Escrow Agent shall be uncertain as to its duties or rights hereunder, the Escrow Agent shall be entitled to (i) refrain from taking any action other than to keep safely the Escrow Funds until it shall be directed otherwise by a court of competent jurisdiction, or (ii) deliver the Escrow Funds to a court of competent jurisdiction.

 

  

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(e)           The Escrow Agent shall have no duty, responsibility or obligation to interpret or enforce the terms of any agreement other than Escrow Agent’s obligations hereunder, and the Escrow Agent shall not be required to make a request that any monies be delivered to the Escrow Account, it being agreed that the sole duties and responsibilities of the Escrow Agent shall be to the extent not prohibited by applicable law (i) to accept checks or other instruments for the payment of money and wire transfers delivered to the Escrow Agent for the Escrow Account and deposit said checks and wire transfers into the non-interest bearing Escrow Account, and (ii) to disburse or refrain from disbursing the Escrow Funds as stated above, provided that the checks received by the Escrow Agent have been collected and are available for withdrawal.

 

4.                 Escrow Account Statements and Information. The Escrow Agent agrees to send to the Company and/or the Underwriter a copy of the Escrow Account periodic statement, upon request in accordance with the Escrow Agent’s regular practices for providing account statements to its non-escrow clients and to also provide the Company and/or Underwriter, or their designee, upon request other deposit account information, including Escrow Account balances, by telephone or by computer communication, to the extent practicable.  The Company and Underwriter agree to complete and sign all forms or agreements required by the Escrow Agent for that purpose.  The Company and Underwriter each consent to the Escrow Agent’s release of such Escrow Account information to any of the individuals designated by Company or Underwriter, which designation has been signed in accordance with Section 3(a) by any of the persons in Schedule II.  Further, the Company and Underwriter have an option to receive e-mail notification of incoming and outgoing wire transfers.  If this e-mail notification service is requested and subsequently approved by the Escrow Agent, the Company and/or Underwriter agrees to provide a valid e-mail address and other information necessary to set-up this service and sign all forms and agreements required for such service.  The Company and Underwriter each consent to the Escrow Agent’s release of wire transfer information to the designated e-mail address(es).  The Escrow Agent’s liability for failure to comply with this section shall not exceed the cost of providing such information.

 

5.                 Resignation and Termination of the Escrow Agent.  The Escrow Agent may resign at any time by giving thirty (30) days’ prior written notice of such resignation to Underwriter and the Company.  Upon providing such notice, the Escrow Agent shall have no further obligation hereunder except to hold as depositary the Escrow Funds that it receives until the end of such thirty (30)-day period.  In such event, the Escrow Agent shall not take any action, other than receiving and depositing Subscribers checks and wire transfers in accordance with this Agreement, until the Company has designated a banking corporation, trust company, attorney or other person as successor.  Upon receipt of such written designation signed by Underwriter and the Company, the Escrow Agent shall promptly deliver the Escrow Funds to such successor and shall thereafter have no further obligations hereunder.  If such instructions are not received within thirty (30) days following the effective date of such resignation, then the Escrow Agent may deposit the Escrow Funds held by it pursuant to this Agreement with a clerk of a court of competent jurisdiction pending the appointment of a successor.  In either case provided for in this section, the Escrow Agent shall be relieved of all further obligations and released from all liability thereafter arising with respect to the Escrow Funds.

 

  

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6.                 Termination.  The Company and Underwriter may terminate the appointment of the Escrow Agent hereunder upon written notice specifying the date upon which such termination shall take effect, which date shall be at least thirty (30) days from the date of such notice.  In the event of such termination, the Company and Underwriter shall, within thirty (30) days of such notice, appoint a successor escrow agent and the Escrow Agent shall, upon receipt of written instructions signed by the Company and Underwriter, turn over to such successor escrow agent all of the Escrow Funds; provided, however, that if the Company and Underwriter fail to appoint a successor escrow agent within such thirty (30) day period, such termination notice shall be null and void and the Escrow Agent shall continue to be bound by all of the provisions hereof.  Upon receipt of the Escrow Funds, the successor escrow agent shall become the escrow agent hereunder and shall be bound by all of the provisions hereof and Escrow Agent shall be relieved of all further obligations and released from all liability thereafter arising with respect to the Escrow Funds and under this Agreement.

 

7.                 Investment.  All funds received by the Escrow Agent shall be held only in non-interest bearing bank accounts at Escrow Agent.

 

8.                 Compensation.  The Escrow Agent shall be entitled, for the duties to be performed by it hereunder, to a fee of $4,000, which fee shall be paid by the Company upon the signing of this Agreement.  In addition, the Company shall be obligated to reimburse Escrow Agent for all fees, costs and expenses incurred or that become due in connection with this Agreement or the Escrow Account, including reasonable attorney’s fees.  Neither the modification, cancellation, termination or rescission of this Agreement nor the resignation or termination of the Escrow Agent shall affect the right of Escrow Agent to retain the amount of any fee which has been paid, or to be reimbursed or paid any amount which has been incurred or becomes due, prior to the effective date of any such modification, cancellation, termination, resignation or rescission.  To the extent the Escrow Agent has incurred any such expenses, or any such fee becomes due, prior to any closing, the Escrow Agent shall advise the Company and the Company shall direct all such amounts to be paid directly at any such closing.

 

9.                 Notices.  All notices, requests, demands and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if sent by hand-delivery, by facsimile (followed by first-class mail), by nationally recognized overnight courier service or by prepaid registered or certified mail, return receipt requested, to the addresses set forth below:

 

If to Underwriter:

 

Burnham Securities Inc.

18500 Von Karman Ave., Suite 560

Irvine, California 92612

Attention: Mr. Daniel J. McClory, Managing Director

Fax: (949) 390-9579

 

  

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If to the Company:

 

Aegis Identity Software, Inc.

750 West Hampden Avenue, Suite 500

Englewood, Colorado 80110

Attention: Robert Lamvik, Chief Executive Officer

Fax: (303) 474-7892

 

If to Escrow Agent:

 

Signature Bank

261 Madison Avenue

New York, New York 10016

Attention: Mr. Cliff Broder, Group Director and Senior Vice President

Fax: (646) 822-1359

 

10.               General.

 

(a)This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York applicable to agreements made and to be entirely performed within such State, without regard to choice of law principles and any action brought hereunder shall be brought in the courts of the State of New York, located in the County of New York.  Each party hereto irrevocably waives any objection on the grounds of venue, forum non­conveniens or any similar grounds and irrevocably consents to service of process by mail or in any manner permitted by applicable law and consents to the jurisdiction of said courts.  Each of the parties hereto hereby waives all right to trial by jury in any action, proceeding or counterclaim arising out of the transactions contemplated by this Agreement.

 

(b)           This Agreement sets forth the entire agreement and understanding of the parties with respect to the matters contained herein and supersedes all prior agreements, arrangements and understandings relating thereto.

 

(c)           All of the terms and conditions of this Agreement shall be binding upon, and inure to the benefit of and be enforceable by, the parties hereto, as well as their respective successors and assigns.

 

(d)           This Agreement may be amended, modified, superseded or canceled, and any of the terms or conditions hereof may be waived, only by a written instrument executed by each party hereto or, in the case of a waiver, by the party waiving compliance.  The failure of any party at any time or times to require performance of any provision hereof shall in no manner affect its right at a later time to enforce the same.  No waiver of any party of any condition, or of the breach of any term contained in this Agreement, whether by conduct or otherwise, in any one or more instances shall be deemed to be or construed as a further or continuing waiver of any such condition or breach or a waiver of any other condition or of the breach of any other term of this Agreement.  No party may assign any rights, duties or obligations hereunder unless all other parties have given their prior written consent.

 

(e)           If any provision included in this Agreement proves to be invalid or unenforceable, it shall not affect the validity of the remaining provisions.

 

  

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(f)           This Agreement and any modification or amendment of this Agreement may be executed in several counterparts or by separate instruments and all of such counterparts and instruments shall constitute one agreement, binding on all of the parties hereto.

 

11.              Form of Signature.  The parties hereto agree to accept a facsimile transmission copy of their respective actual signatures as evidence of their actual signatures to this Agreement and any modification or amendment of this Agreement; provided, however, that each party who produces a facsimile signature agrees, by the express terms hereof, to place, promptly after transmission of his or her signature by fax, a true and correct original copy of his or her signature in overnight mail to the address of the other party.

 

12.              No Third-Party Beneficiaries.  This Agreement is solely for the benefit of the parties and their respective successors and permitted assigns, and no other person has any right, benefit, priority, or interest under or because of the existence of this Agreement.

 

 

[Signature page follows]

  

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    IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first set forth above.

 

AEGIS IDENTITY SOFTWARE, INC.

 

By:           ______________________________

                 Name:

                 Title:

 

BURNHAM SECURITIES INC.

 

By:           ______________________________

                 Name:

                 Title:

 

SIGNATURE BANK

 

By:           _____________________________

 Name:

Title:

 

By:           _____________________________

Name:

Title:

 

 

  

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Schedule I

 

OFFERING DOCUMENTS

 

  

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Schedule II

 

The Escrow Agent is authorized to accept instructions signed or believed by the Escrow Agent to be signed by any one of the following on behalf of the Company and Underwriter.

 

AEGIS IDENTITY SOFTWARE, INC.

 

 

	 	Name 	 	

True Signature

	 
	 	 	 	 	 
	 	 	 	 	 
	 	________________________ 	 	________________________ 	 
	 	 	 	 	 
	 	________________________ 	 	________________________ 	 

 

 

BURNHAM SECURITIES INC.

 

 

  

	 	Name 	 	

True Signature

	 
	 	 	 	 	 
	 	 	 	 	 
	 	________________________ 	 	________________________ 	 
	 	 	 	 	 
	 	________________________ 	 	________________________ 	 

  

  

  

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Exhibit A

 

FORM OF ESCROW RELEASE NOTICE

 

Date: ___________, 201__

Signature Bank

261 Madison Avenue

New York, New York 10016

Attention: Mr. Cliff Broder, Group Director and Senior Vice President

 

Dear Sirs:

In accordance with the terms of Section 2(b) of an Escrow Agreement dated as of ________ __, 2015 (the “Escrow Agreement”), by and between Aegis Identity Software, Inc. (the “Company”), Burnham Securities Inc. (the “Underwriter”), and Signature Bank (the “Escrow Agent”), the Company and Underwriter hereby notify the Escrow Agent that the ________ closing will be held on ___________ for gross proceeds of $_________.

 

PLEASE DISTRIBUTE FUNDS BY WIRE TRANSFER AS FOLLOWS (wire instructions attached):

 

	Aegis Identity Software, Inc.:	$  	_____________________________
	 	 	 
	Burnham Securities Inc.: 	 $  	_____________________________

 

Very truly yours,

	
AEGIS IDENTITY SOFTWARE, INC.

	  
	
By:

	_____________________________
	
Name:

	_____________________________
	
Title:

	_____________________________

	
BURNHAM SECURITIES INC.

	  
	
By:

	_____________________________
	
Name:

	_____________________________
	
Title:

	_____________________________

 

11ex10-7.htm

Exhibit 10.7

AEGIS IDENTITY SOFTWARE, INC.

 

SUBSCRIPTION AGREEMENT

 

The undersigned (the “Investor”) hereby confirms its agreement with Aegis Identity Software, Inc., a [Delaware] corporation (the “Company”), as follows:

 

1.           This Subscription Agreement, including the Terms and Conditions for Purchase of Securities attached hereto as Annex I (collectively, this “Agreement”) is made as of the date set forth below between the Company and the Investor.

 

2.           The Company has authorized the sale and issuance to certain investors of a minimum of __________ and up to a maximum of __________ authorized and unissued shares (the “Shares”) of its common stock, par value $0.0001 per share (the “Common Stock”), at an initial public offering price of $____ per Share (the “Purchase Price”).

 

3.           The offering and sale of the Shares (the “Offering”) are being made pursuant to (1) an effective Registration Statement on Form S-1, File No. 333-_____ (the “Registration Statement”) filed under the Securities Act of 1933, as amended (the “Securities Act”), and by the Company with the U.S. Securities and Exchange Commission (the “Commission”) (including the preliminary prospectus contained therein (the “Preliminary Prospectus”)), and (2) if applicable, certain “free writing prospectuses” (as that term is defined in Rule 405 under the Securities Act), that have been filed with the Commission and delivered to the Investor on or prior to the date hereof (the “Issuer Free Writing Prospectus”), containing certain supplemental information regarding the Shares, the terms of the Offering and the Company, and (3) a final prospectus (the “Prospectus”) that has been or will be filed with the Commission and delivered to the Investor (or made available to the Investor by the filing by the Company of an electronic version thereof with the Commission).

 

4.           The Company and the Investor agree that at the Closing (as defined in Section 3.1 of Annex I), the Investor will purchase from the Company and the Company will issue and sell to the Investor the Shares set forth below for the aggregate Purchase Price set forth below.  The Shares shall be purchased pursuant to the Terms and Conditions for Purchase of Securities attached hereto as Annex I and incorporated herein by this reference as if fully set forth herein.  The Investor acknowledges that the Offering is not being underwritten by the Underwriter (the “Underwriter”) named in the Prospectus.

 

5.           The manner of settlement of the Shares purchased by the Investor shall be determined by such Investor as follows (check one):

 

[   ]         A.      Delivery by crediting the account of the Investor’s prime broker (as specified by such Investor on Exhibit A annexed hereto) with the Depository Trust Company (“DTC”) through its Deposit/Withdrawal At Custodian (“DWAC”) system, whereby Investor’s prime broker shall initiate a DWAC transaction on the Closing Date using its DTC participant identification number, and released by DTC, the Company’s transfer agent (the “Transfer Agent”), at the Company’s direction.  NO LATER THAN ONE (1) BUSINESS DAY AFTER THE EXECUTION OF THIS AGREEMENT BY THE INVESTOR AND THE COMPANY, THE INVESTOR SHALL:

 

  

  

  

	
  

	
(I)

	
DIRECT THE BROKER-DEALER AT WHICH THE ACCOUNT OR ACCOUNTS TO BE CREDITED WITH THE SHARES ARE MAINTAINED TO SET UP A DWAC INSTRUCTING THE TRANSFER AGENT TO CREDIT SUCH ACCOUNT OR ACCOUNTS WITH THE SHARES, AND

 

	
  

	
(II)

	
REMIT BY WIRE TRANSFER THE AMOUNT OF FUNDS EQUAL TO THE AGGREGATE PURCHASE PRICE FOR THE SHARES BEING PURCHASED BY THE INVESTOR TO THE FOLLOWING ACCOUNT:

 

Bank Name: Signature Bank

 

ABA Number: _____________

 

A/C Name: Signature Bank, as Escrow Agent for

Aegis Identity Software, Inc.

 

A/C Number:  _____________

 

FBO: Investor Name: ______________________________

 

Social Security Number or

Employer Identification Number: ____________________

 

	
  

	
—OR—

 

[   ]         B.       Delivery versus payment (“DVP”) through DTC (i.e., on the Closing Date, the Company shall issue Shares registered in the Investor’s name and address as set forth below and released by the Transfer Agent directly to the account(s) at Burnham Securities Inc. (the “Underwriter”) identified by the Investor; upon receipt of such Shares, the Underwriter shall promptly electronically deliver such Shares to the Investor, provided, that not later than the date that is one (1) business day prior to the Closing Date, payment shall be made by the Underwriter by wire transfer to an Escrow Account).  NO LATER THAN ONE (1) BUSINESS DAY AFTER THE EXECUTION OF THIS AGREEMENT BY THE INVESTOR AND THE COMPANY, THE INVESTOR SHALL:

 

	
  

	
(I)

	
NOTIFY AGENT OF THE ACCOUNT OR ACCOUNTS AT THE UNDERWRITER TO BE CREDITED WITH THE SHARES BEING PURCHASED BY SUCH INVESTOR, AND

 

	
  

	
(II)

	
CONFIRM THAT THE ACCOUNT OR ACCOUNTS AT THE UNDERWRITER TO BE CREDITED WITH THE SHARES BEING PURCHASED BY THE INVESTOR HAVE A MINIMUM BALANCE EQUAL TO THE AGGREGATE PURCHASE PRICE FOR THE SHARES BEING PURCHASED BY THE INVESTOR.

 

IT IS THE INVESTOR’S RESPONSIBILITY TO (A) MAKE THE NECESSARY WIRE TRANSFER OR CONFIRM THE PROPER ACCOUNT BALANCE IN A TIMELY MANNER AND (B) ARRANGE FOR SETTLEMENT BY WAY OF DWAC OR DVP IN A TIMELY MANNER.  IF THE INVESTOR DOES NOT DELIVER THE AGGREGATE PURCHASE PRICE FOR THE SHARES OR DOES NOT MAKE PROPER ARRANGEMENTS FOR SETTLEMENT IN A TIMELY MANNER, THE SHARES MAY NOT BE DELIVERED AT CLOSING TO THE INVESTOR OR THE INVESTOR MAY BE EXCLUDED FROM THE CLOSING ALTOGETHER.

 

  

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6.           The Investor represents that, except as set forth below, (a) it has had no position, office or other material relationship within the past three years with the Company or persons known to it to be affiliates of the Company, (b) it is not a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) or an Associated Person (as such term is defined under the FINRA’s NASD Membership and Registration Rules Section 1011) as of the Closing, and (c) neither the Investor nor any group of Investors (as identified in a public filing made with the Commission) of which the Investor is a part in connection with the Offering, acquired, or obtained the right to acquire, 20% or more of the Common Stock (or securities convertible into or exercisable for Common Stock) or the voting power of the Company on a post-transaction basis.  Exceptions:

 

(If no exceptions, write “none.”  If left blank, response will be deemed to be “none.”)

 

7.           The Investor represents that it has received (or otherwise had made available to it by the filing by the Company of an electronic version thereof with the Commission) the Preliminary Prospectus which is a part of the Company’s Registration Statement, the documents incorporated by reference therein and any free writing prospectus (collectively, the “Disclosure Package”), prior to or in connection with the receipt of this Agreement.  The Investor acknowledges that, prior to the delivery of this Agreement to the Company, the Investor will receive certain additional information regarding the Offering, including pricing information (the “Offering Information”).  Such information may be provided to the Investor by any means permitted under the Securities Act, including the Prospectus, a free writing prospectus and oral communications.

 

8.           No offer by the Investor to buy Shares will be accepted and no part of the Purchase Price will be delivered to the Company until the Investor has received the Offering Information and the Company has accepted such offer by countersigning a copy of this Agreement, and any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time prior to the Company (or Agent on behalf of the Company) sending (orally, in writing or by electronic mail) notice of its acceptance of such offer.  An indication of interest will involve no obligation or commitment of any kind until the Investor has been delivered the Offering Information and this Agreement is accepted and countersigned by or on behalf of the Company.

 

	
Number of Shares:

	  	 
	
 

Purchase Price per Share:

	

$

	 
	
 

Aggregate Purchase Price:

	

$

	 

 

  

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Please confirm that the foregoing correctly sets forth the agreement between us by signing in the space provided below for that purpose.

 

	  	
Dated as of: __________ __, 2015

	  	  
	  	  
	  	
INVESTOR

	  	  	  
	  	
By:

	  
	  	
Print Name:

	  
	  	
Title:

	  
	  	
Address:

	  
	  	  	  
	  	  	  

Agreed and Accepted

 

this ____ day of _________ 2015:

 

	
AEGIS IDENTITY SOFTWARE, INC.

	  
	
By:

	 	  
	  	
Name:

	  
	  	
Title:

	  

  

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ANNEX I

 

TERMS AND CONDITIONS FOR PURCHASE OF SECURITIES

 

1.           Authorization and Sale of the Shares.  Subject to the terms and conditions of this Agreement, the Company has authorized the sale of the Shares.

 

2.           Agreement to Sell and Purchase the Shares; Underwriter.

 

2.1           At the Closing (as defined in Section 3.1), the Company will sell to the Investor, and the Investor will purchase from the Company, upon the terms and conditions set forth herein, the number of Shares set forth on the last page of the Agreement to which these Terms and Conditions for Purchase of Securities are attached as Annex I (the “Signature Page”) for the aggregate purchase price therefor set forth on the Signature Page.

 

2.2           The Company proposes to enter into substantially this same form of Subscription Agreement with certain other investors (the “Other Investors”) and expects to complete sales of Shares to them.  The Investor and the Other Investors are hereinafter sometimes collectively referred to as the “Investors,” and this Agreement and the Subscription Agreements executed by the Other Investors are hereinafter sometimes collectively referred to as the “Agreements.”

 

2.3           Investor acknowledges that the Company has agreed to pay Burnham Securities Inc. (the “Underwriter”) a fee (the “Underwriting Fee”) and to reimburse the Underwriter for certain expenses in respect of the sale of the Shares to the Investor, to make certain other payments to the Underwriter (the “Advisory Fee”) and to deliver certain warrants to the Underwriter (the “Underwriter’s Warrants”), all as set forth in the Preliminary Prospectus.

 

2.4           The Company has entered into an Underwriting Agreement, dated the date hereof (the “Underwriting Agreement”), with the Underwriter that contains certain representations, warranties, covenants and agreements of the Company that may be relied upon by the Investor, which shall be a third party beneficiary thereof.

 

3.           Closings and Delivery of the Securities and Funds.

 

3.1           Closing.  The completion of the purchase and sale of the Shares (the “Closing”) shall occur at a place and time (the “Closing Date”) to be specified by the Company and the Underwriter, and of which the Investors will be notified in advance by the Underwriter, in accordance with Rule 15c6-l promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  At the Closing, (a) the Company shall cause Depository Trust Company, the Company’s “Transfer Agent,” to deliver to the Investor the number of Shares purchased by the Investor as set forth on the Signature Page registered in the name of the Investor or, if so indicated on the Investor Questionnaire attached hereto as Exhibit A, in the name of a nominee designated by the Investor, and (b) the aggregate purchase price for the Shares being purchased by the Investor will be delivered by or on behalf of the Investor to the Company.

 

  

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3.2           Conditions to the Obligations of the Parties.

 

(a)          Conditions to the Company’s Obligations.  The Company’s obligation to issue and sell the Shares to the Investor shall be subject to: (i) the receipt by the Company of the purchase price for the Shares being purchased hereunder as set forth on the Signature Page and (ii) the accuracy of the representations and warranties made by the Investor and the fulfillment of those undertakings of the Investor to be fulfilled prior to the Closing Date, all as set forth in this Annex I and in the Subscription Agreement to which it is attached.

 

(b)          Conditions to the Investor’s Obligations.  The Investor’s obligation to purchase the Shares will be subject to the accuracy of the representations and warranties made by the Company and the fulfillment of those undertakings of the Company to be fulfilled prior to the Closing Date, including without limitation, those contained in the Underwriting Agreement, and to the condition that the Underwriter shall not have: (a) terminated the Underwriting Agreement pursuant to the terms thereof or (b) determined that the conditions to the closing in the Underwriting Agreement have not been satisfied.  The Investor’s obligations are expressly not conditioned on the purchase by any Other Investor of the Shares that such Other Investor has agreed to purchase from the Company, but are explicitly conditioned on the purchase by Investors and sale by the Company of not less than _________ Shares in the offering.  The Investor understands and agrees that, in the event that the Underwriter in its sole discretion determines that the conditions to closing in the Underwriting Agreement have not been satisfied or if the Underwriting Agreement may be terminated for any other reason permitted by such Underwriting Agreement, then the Underwriter may, but shall not be obligated to, terminate such Agreement, which shall have the effect of terminating this Subscription Agreement pursuant to Section 13 below.

 

3.3           Delivery of Funds.

 

(a)          DWAC Delivery.  If the Investor elects to settle the Shares purchased by such Investor through DTC’s Deposit/Withdrawal at Custodian (“DWAC”) delivery system, no later than one (1) business day after the execution of this Agreement by the Investor and the Company, the Investor shall remit by wire transfer the amount of funds equal to the aggregate purchase price for the Shares being purchased by the Investor to the following Escrow Account designated by the Company:

 

Bank Name:

ABA Number:

A/C Name:

A/C Number:

 

FBO: Investor Name: ______________________________

 

Social Security Number or

Employer Identification Number: ____________________

 

(b)          Delivery Versus Payment through The Depository Trust Company.  If the Investor elects to settle the Shares purchased by such Investor by delivery versus payment through DTC, no later than one (1) business day after the execution of this Agreement by the Investor and the Company, the Investor shall confirm that the account or accounts at the Underwriter to be credited with the Shares being purchased by the Investor have a minimum balance equal to the aggregate purchase price for the Shares being purchased by the Investor.

 

  

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3.4           Delivery of Shares.

 

(a)          DWAC Delivery.  If the Investor elects to settle the Shares purchased by such Investor through DTC’s DWAC delivery system, no later than one (1) business day after the execution of this Agreement by the Investor and the Company, the Investor shall direct the broker-dealer at which the account or accounts to be credited with the Shares being purchased by such Investor are maintained, which broker/dealer shall be a DTC participant, to set up a DWAC instructing the Transfer Agent to credit such account or accounts with the Shares.  Such DWAC instruction shall indicate the settlement date for the deposit of the Shares, which date shall be provided to the Investor by the Underwriter.  Upon the closing of the Offering, the Company shall direct the Transfer Agent to credit the Investor’s account or accounts with the Shares pursuant to the information contained in the DWAC.

 

(b)          Delivery Versus Payment through The Depository Trust Company.  If the Investor elects to settle the Shares purchased by such Investor by delivery versus payment through DTC, no later than one (1) business day after the execution of this Agreement by the Investor and the Company, the Investor shall notify the Underwriter of the account or accounts at the Underwriter to be credited with the Shares being purchased by such Investor.  On the Closing Date, the Company shall deliver the Shares to the Investor through DTC directly to the account(s) at the Underwriter identified by Investor.  Upon receipt of such Shares, the Underwriter shall promptly electronically deliver such Shares to the Investor, and simultaneously therewith payment shall be made by the Underwriter by wire transfer to the Company.

 

4.           Representations, Warranties and Covenants of the Investor.

 

The Investor acknowledges, represents and warrants to, and agrees with, the Company and the Underwriter that:

 

4.1           The Investor (a) has answered all questions in this Subscription Agreement, including this Annex I and the Investor Questionnaire in Exhibit A, and the answers thereto are true and correct as of the date hereof and will be true and correct as of the Closing Date and (b) in connection with its decision to purchase the Shares set forth in the Subscription Agreement, has received and is relying only upon the Disclosure Package and the documents incorporated by reference therein and the Offering Information.

 

4.2           (a) No action has been or will be taken in any jurisdiction outside the United States by the Company or the Underwriter that would permit an offering of the Shares, or possession or distribution of offering materials in connection with the issue of the Shares in any jurisdiction outside the United States where action for that purpose is required, (b) if the Investor is outside the United States, it will comply with all applicable laws and regulations in each foreign jurisdiction in which it purchases, offers, sells or delivers Shares or has in its possession or distributes any offering material, in all cases at its own expense and (c) the Underwriter is not authorized to make and has not made any representation, disclosure or use of any information in connection with the issue, placement, purchase and sale of the Shares, except as set forth or incorporated by reference in the Preliminary Prospectus, the Prospectus or any free writing prospectus.

 

  

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4.3           (a) The Investor has full right, power, authority and capacity to enter into this Agreement and to consummate the transactions contemplated hereby and has taken all necessary action to authorize the execution, delivery and performance of this Agreement, and (b) this Agreement constitutes a valid and binding obligation of the Investor enforceable against the Investor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ and contracting parties’ rights generally and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and except as to the enforceability of any rights to indemnification or contribution that may violate the public policy underlying any law, rule or regulation (including any federal or state securities law, rule or regulation).

 

4.4           The Investor understands that nothing in this Agreement, the Preliminary Prospectus, the Disclosure Package, the Offering Information, the Prospectus or any other materials presented to the Investor in connection with the purchase and sale of the Shares constitutes legal, tax or investment advice.  The Investor has consulted such legal, tax and investment advisors and made such investigation as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of Shares.

 

5.           Survival of Representations, Warranties and Agreements; Third Party Beneficiary.  Notwithstanding any investigation made by any party to this Agreement or by the Underwriter, all covenants, agreements, representations and warranties made by the Company and the Investor herein will survive the execution of this Agreement, the delivery to the Investor of the Shares and the payment therefor.  The Underwriter shall be a third party beneficiary with respect to the representations, warranties and agreements of the Investor in Section 4 hereof.

 

6.           Notices.  All notices, requests, consents and other communications hereunder will be in writing, will be mailed (a) if within the domestic United States by first-class registered or certified airmail, or nationally recognized overnight express courier, postage prepaid, or by facsimile or (b) if delivered from outside the United States, by International Federal Express or facsimile, and will be deemed given (i) if delivered by first-class registered or certified mail domestic, three business days after so mailed, (ii) if delivered by nationally recognized overnight carrier, one business day after so mailed, (iii) if delivered by International Federal Express, two business days after so mailed, and (iv) if delivered by facsimile, upon electronic confirmation of receipt and will be delivered and addressed as follows:

 

(a)           if to the Company, to:

 

Aegis Identity Software, Inc.

750 West Hampden Avenue, Suite 500

Englewood, Colorado 80110

Facsimile:  (303) 474-7892

Attention:  Mr. Robert Lamvik, Chief Executive Officer

  

7

  

with a copy (which shall not constitute notice) to each of:

 

Olshan Frome Wolosky LLP

Park Avenue Tower

65 East 55th Street

New York, NY 10022

Facsimile:  (212) 451-2222

Attention:  Spencer G. Feldman, Esq.

 

Burnham Securities Inc.

18500 Von Karman Avenue, Suite 560

Irvine, CA 92162

Facsimile: (949) 390-9579

Attention:  Mr. Daniel J. McClory, Managing Director, Investment Banking

 

(b)           if to the Investor, at its address on the Signature Page hereto, or at such other address or addresses as may have been furnished to the Company in writing.

 

7.           Changes.  This Agreement may not be modified or amended except pursuant to an instrument in writing signed by the Company and the Investor.

 

8.           Headings.  The headings of the various sections of this Agreement have been inserted for convenience of reference only and will not be deemed to be part of this Agreement.

 

9.           Severability.  In case any provision contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein will not in any way be affected or impaired thereby.

 

10.           Governing Law.  This Agreement will be governed by, and construed in accordance with, the internal laws of the State of New York, without giving effect to the principles of conflicts of law that would require the application of the laws of any other jurisdiction.

 

11.           Counterparts.  This Agreement may be executed in two or more counterparts, each of which will constitute an original, but all of which, when taken together, will constitute but one instrument, and will become effective when one or more counterparts have been signed by each party hereto and delivered to the other parties.  The Company and the Investor acknowledge and agree that the Company shall deliver its counterpart to the Investor along with the Prospectus (or the filing by the Company of an electronic version thereof with the Commission).

 

12.           Confirmation of Sale.  The Investor acknowledges and agrees that such Investor’s receipt of the Company’s signed counterpart to this Agreement, together with the Prospectus (or the filing by the Company of an electronic version thereof with the Commission), shall constitute written confirmation of the Company’s sale of the Shares to such Investor.

 

13.           Termination.  In the event that the Underwriting Agreement is terminated by the Underwriter pursuant to the terms thereof, this Agreement shall terminate without any further action on the part of the parties hereto.

 

  

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EXHIBIT A

 

AEGIS IDENTITY SOFTWARE, INC.

 

INVESTOR QUESTIONNAIRE

 

Pursuant to Section 3 of Annex I to the Agreement, please provide us with the following information:

 

	
1.

	
The exact name that your Shares are to be registered in.  You may use a nominee name if appropriate:

	  
	
 

2.

	
The relationship between the Investor and the registered holder listed in response to item 1 above:

	  
	
 

3.

	
The mailing address of the registered holder listed in response to item 1 above:

	  
	
 

4.

	
The Social Security Number or Tax Identification Number of the registered holder listed in the response to item 1 above:

	  
	
 

5.

	
Name of DTC Participant (broker-dealer at which the account or accounts to be credited with the Shares are maintained):

	  
	
 

6.

	
DTC Participant Number:

	  
	
 

7.

	
Name of Account at DTC Participant being credited with the Shares:

	  
	
 

8.

	
Account Number at DTC Participant being credited with the Shares:

	  

 

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