Exhibit 10.2

 

Execution Version

 

PLACEMENT AGENCY AGREEMENT

 

July 16, 2009

 

Roth Capital Partners, LLC

24 Corporate Plaza

Newport Beach, CA 92660

 

Ladies and Gentlemen:

 

Wave Systems Corp., a Delaware corporation (the “Company”), proposes, subject to
the terms and conditions herein, to issue and sell an aggregate of up to
$3,172,199.36 in shares (the “Shares”) of its Class A Common Stock, $0.01 par
value per share (the “Common Stock”) and warrants to purchase shares of Common
Stock (the “Warrants” and, collectively with the Shares, the “Securities”) in
the form attached hereto as Exhibit A, directly to various investors
(collectively, the “Investors”).  The Common Stock issuable upon exercise of the
Warrants is herein referred to as the “Warrant Shares.”

 

The Company hereby confirms its agreement with the Placement Agent as follows:

 

Section 1.                                          Agreement to Act as
Placement Agent.

 

(a)                                  On the basis of the representations,
warranties and agreements of the Company herein contained, and subject to all
the terms and conditions of this Agreement between the Company and Roth Capital
Partners, LLC (“Roth Capital”), Roth Capital shall be the Company’s exclusive
placement agent (in such capacity, the “Placement Agent”), on a best efforts
basis, in connection with the issuance and sale by the Company of the Securities
in the proposed takedown from a shelf registration statement on Form S-3
(Registration Statement No. 333-150340) (the “Registration Statement”), with the
terms of such takedown to be subject to market conditions and negotiations
between the Company, Roth Capital and the prospective Investors (such takedown
shall be referred to herein as the “Offering”).  As compensation for services
rendered, and provided that any of the Securities are sold to Investors in the
Offering, on the Closing Date (as defined below) of the Offering, the Company
shall pay to the Placement Agent an amount equal to (a) 6.0%  and 2.0%
(non-accountable) (for a total of 8.0%) of the gross proceeds received by the
Company from the sale of the Securities; and (b) the Placement Agent’s
out-of-pocket Financial Industry Regulatory Authority (“FINRA”)-related legal
expenses in excess of $20,000, up to a maximum of $20,000.

 

This Agreement shall not give rise to any commitment by the Placement Agent to
purchase any of the Securities, and the Placement Agent shall have no authority
to bind the Company.  The Placement Agent shall act on a best efforts basis to
solicit offers to purchase the Securities and to procure performance by the
Investors in the Securities; provided, however that the Placement Agent does not
guarantee that it will be able to raise new capital in the prospective
Offering.  The Company acknowledges that any advice given by Roth Capital to the
Company is solely for the benefit and use of the Board of Directors of the
Company and may not be used, reproduced, disseminated, quoted or referred to,
without the Placement Agent’s prior written consent.  The Placement Agent may,
with the prior written consent of the Company, retain other brokers or dealers
to act as sub-agents on its behalf in connection with any Offering.

 

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(b)                                 The term of the Placement Agent’s exclusive
engagement will be six months; however, the Company may terminate the engagement
at any time upon 5 days written notice to the Placement Agent.  Upon
termination, the Placement Agent will be entitled to collect all fees earned
and, to the extent provided herein, to be reimbursed for expenses incurred
through the date of termination.  Nothing in this Agreement shall be construed
to limit the ability of the Placement Agent or its affiliates to pursue,
investigate, analyze, invest in, or engage in investment banking, financial
advisory or any other business relationship with entities or persons other than
the Company.

 

Section 2.                                          Representations, Warranties
and Agreements of the Company.

 

The Company hereby represents, warrants and covenants to the Placement Agent as
of the date hereof, and as of the Closing Date of the Offering, as follows:

 

(a)                                  Securities Law Filings.  The Company has
filed with the Securities and Exchange Commission (the “Commission”) the
Registration Statement, which became effective on June 23, 2008, for the
registration under the Securities Act of 1933, as amended (the “Act”), of the
Securities.  On the date of the filing of the Registration Statement and the
date on which the Registration Statement became effective, the Company met the
requirements for use of Form S-3 under the Act.  Such registration statement
meets the requirements set forth in Rule 415(a)(1)(x) under the Act and complies
in all other material respects with said Rule.  The Company will file with the
Commission pursuant to Rule 424(b) under the Act a supplement to the form of
prospectus included in such registration statement relating to a placement of
the Securities and the plan of distribution thereof and the Company has advised
the Placement Agent of all further material information (financial and other)
with respect to the Company to be set forth therein.  Such registration
statement, including the exhibits thereto, as amended at the date of this
Agreement, is hereinafter called the “Registration Statement”; such prospectus,
in the form in which it appears in the Registration Statement, is hereinafter
called the “Base Prospectus”; and the supplemented form of prospectus, in the
form in which it will be filed with the Commission pursuant to Rule 424(b), is
hereinafter called a “Prospectus Supplement.”  Any reference herein to the
Registration Statement, the Base Prospectus or the Prospectus Supplement shall
be deemed to refer to and include the documents incorporated by reference
therein (the “Incorporated Documents”) pursuant to Item 12 of Form S-3 which
were filed under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), on or before the date of this Agreement, or the issue date of the Base
Prospectus or Prospectus Supplement, as the case may be; and any reference
herein to the terms “amend,” “amendment” or “supplement” with respect to the
Registration Statement, the Base Prospectus or the Prospectus Supplement shall
be deemed to refer to and include the filing of any document under the Exchange
Act after the date of this Agreement and prior to the time of the Closing (as
defined below), or the issue date of the Base Prospectus or the Prospectus
Supplement, as the case may be, deemed to be incorporated therein by reference. 
All references in this Agreement to financial statements and schedules and other
information which is “contained,” “included” or “stated” in the Registration
Statement or the Prospectus Supplement (and all other references of like import)
shall be deemed to mean and include all such financial statements and schedules
and other information which is or is deemed to be incorporated by reference in
the Registration Statement or the Prospectus Supplement, as the case may be.

 

(b)                                 No Stop Order.  No stop order suspending the
effectiveness of the Registration Statement or the use of the Base Prospectus or
the Prospectus Supplement has been issued, and no proceeding for any such
purpose is pending or has been initiated or, to the Company’s knowledge, is
threatened by the Commission.

 

(c)                                  Compliance with Applicable Regulations. 
The Registration Statement (and any further documents to be filed with the
Commission) contains all exhibits and schedules as required by the Act. 

 

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Each of the Registration Statement and any post-effective amendment thereto, at
the time it became effective, complied in all material respects with the Act and
the Exchange Act and the applicable rules and regulations of the Commission
thereunder and did not and, as amended or supplemented, if applicable, will not,
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading.  Each of the Base Prospectus and the Prospectus Supplement, as of
its respective date, complied in all material respects with the Act and the
Exchange Act and the applicable rules and regulations of the Commission
thereunder.  Each of the Base Prospectus and the Prospectus Supplement, as
amended or supplemented, did not and will not contain as of the effective date
thereof any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.  The Incorporated Documents, when
they were filed with the Commission, conformed in all material respects to the
requirements of the Exchange Act and the applicable rules and regulations of the
Commission thereunder, and none of such documents, when they were filed with the
Commission, contained any untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein not misleading;
and any further documents so filed and incorporated by reference in the Base
Prospectus or Prospectus Supplement prior to the Closing, when such documents
are filed with the Commission, will conform in all material respects to the
requirements of the Exchange Act and the applicable rules and regulations of the
Commission thereunder, as applicable, and will not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein not misleading.  Notwithstanding the foregoing, the Company
makes no representations or warranties as to the information contained in or
omitted from the Prospectus Supplement or any amendment thereof or supplement
thereto in reliance upon and in conformity with information furnished in writing
to the Company by or on behalf of the Placement Agent specifically for use in
the Registration Statement or the Prospectus Supplement.  No post-effective
amendment to the Registration Statement reflecting any facts or events arising
after the effective date thereof which represent, individually or in the
aggregate, a fundamental change in the information set forth therein is required
to be filed with the Commission.

 

(d)                                 Reports and Documents, etc.  There are no
documents required to be filed with the Commission in connection with the
transaction contemplated hereby that (x) have not been filed as required
pursuant to the Act or (y) will not be filed within the requisite time period. 
There are no contracts or other documents required to be described in the
Prospectus Supplement, or to be filed as exhibits or schedules to the
Registration Statement, which have not been described or filed as required.

 

(e)                                  Offering Materials Furnished to the
Placement Agent.  The Company has delivered, or will as promptly as practicable
deliver, to the Placement Agent complete conformed copies of the Registration
Statement and of each consent and certificate of experts filed as a part
thereof, and conformed copies of the Registration Statement (without exhibits)
and the Base Prospectus and the Prospectus Supplement, as amended or
supplemented, in such quantities and at such places as the Placement Agent
reasonably requests.

 

(f)                                    Distribution of Offering Material.  The
Company has not distributed and will not distribute, prior to the Closing Date,
any offering material in connection with the offering and sale of the Securities
other than the Base Prospectus and the Prospectus Supplement or the Registration
Statement and copies of the documents incorporated by reference therein.  For
the avoidance of doubt, any other material prepared and distributed solely by
the Placement Agent is not deemed to be distributed by the Company for purposes
of this paragraph (f).

 

(g)                                 The Placement Agency Agreement.  This
Agreement has been duly authorized, executed and delivered by, and is a valid
and binding agreement of, the Company, enforceable against the Company in
accordance with its terms, except as rights to indemnification and contribution
hereunder

 

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may be limited by applicable law and except as the enforcement hereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights and remedies of creditors or by general
equitable principles.

 

(h)           Authorization of the Securities.  The Securities have been duly
authorized for issuance and sale, and the Shares, when issued and delivered by
the Company to the Investors against payment therefor pursuant to this
Agreement, will be validly issued, fully paid and nonassessable.  The Warrant
Shares have been duly authorized and reserved for issuance pursuant to the terms
of the Warrants, and the Warrant Shares, when issued by the Company upon the
valid exercise of the Warrants and payment of the exercise price, will be duly
issued, fully paid and nonassessable.

 

(i)            No Material Adverse Change.  Subsequent to the respective dates
as of which information is given in the Base Prospectus and in any Prospectus
Supplement:  (i) there has been no material adverse change or effect, or any
development that could reasonably be expected to result in a material adverse
change or effect, in the condition, financial or otherwise, or in the earnings,
business, operations or prospects of the Company and the Subsidiaries (as
defined below) taken as a whole (any such change or effect, where the context so
requires, is called a “Material Adverse Change” or a “Material Adverse Effect”);
(ii) the Company and the Subsidiaries have not incurred any material liability
or obligation, indirect, direct or contingent, not in the ordinary course of
business nor entered into any material transaction or agreement not in the
ordinary course of business; and (iii) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class of
capital stock or repurchase or redemption by the Company of any class of capital
stock.

 

(j)            Independent Accountants.  KPMG LLP, which has expressed its
opinion with respect to the financial statements (which term as used in this
Agreement includes the related notes and schedules thereto) and supporting
schedules filed with the Commission as a part of the Registration Statement and
incorporated by reference in the Prospectus Supplement, is an independent
registered public accounting firm as required by the Act and the Exchange Act.

 

(k)           Preparation of the Financial Statements.  The financial statements
filed with the Commission as a part of the Registration Statement or included or
incorporated by reference in the Base Prospectus or Prospectus Supplement
present fairly the financial position of the Company and its consolidated
Subsidiaries as of and at the dates indicated and the results of their
operations and cash flows for the periods specified therein.  The supporting
exhibits and schedules included in the Registration Statement, if any, present
fairly the information required to be stated therein subject to the normal
year-end adjustments which are not expected to be material in amount.  The
assumptions used in preparing the pro forma financial statements, if any,
provide a reasonable basis for presenting the significant effects attributable
to the transactions or events described therein, any related pro forma
adjustments comply with Regulation G and give appropriate effect to the
assumptions, and the pro forma columns and reconciliations therein reflect the
proper application of adjustments to the corresponding historical financial
statements.  Such financial statements and supporting schedules, if any, have
been prepared in conformity with generally accepted accounting principles as
applied in the United States (“GAAP”), as applicable, applied on a consistent
basis throughout the periods involved, except as may be expressly stated in the
related notes thereto and comply in all material respects with the Act, the
Exchange Act and the applicable rules and regulations of the Commission
thereunder.  No other financial statements or supporting schedules or exhibits
are required by the Act or the rules and regulations of the Commission
thereunder to be included in the Registration Statement or the Prospectus
Supplement.

 

(l)            Incorporation and Good Standing.  Each of the Company and its
subsidiaries set forth in Exhibit B hereto (the “Subsidiaries”) has been duly
organized and is validly existing and, as applicable, is a corporation in good
standing under the laws of its jurisdiction of incorporation with full corporate
power

 

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and authority to own its properties and other assets and conduct its business as
described in the Prospectus Supplement, and is duly qualified or licensed to do
business as a foreign corporation and, as applicable, is in good standing under
the laws of each jurisdiction which requires such qualification or license,
except where the failure to be so qualified or in good standing would not have a
Material Adverse Effect.

 

(m)          Capitalization and Other Capital Stock Matters.  The authorized,
issued and outstanding capital stock of the Company is as set forth in the
Registration Statement and in each Prospectus Supplement (other than for
issuances after the dates thereof, if any, pursuant to employee benefit plans
described in any Prospectus Supplement or upon exercise of outstanding options
or warrants described in any Prospectus Supplement).  The Securities conform in
all material respects to the description thereof contained in the Base
Prospectus and the Prospectus Supplement.  As of June 30, 2009, there were
67,417,834 shares of common stock outstanding.  Since June 30, 2009, the Company
has not issued any securities other than (i) Common Stock of the Company
pursuant to the exercise of previously outstanding options in connection with
the Company’s employee stock purchase and option plans (the “Plans”),
outstanding warrants and other outstanding obligations, and (ii) options granted
pursuant to the Plans in the ordinary course of business consistent with past
practice, in each case as disclosed in the Base Prospectus and each Prospectus
Supplement.  All the issued and outstanding shares of the capital stock of the
Company and the Subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable and have been issued in compliance, in all material
respects, with federal and state securities laws, as applicable.  Except as set
forth in the Base Prospectus and each Prospectus Supplement, all of the
outstanding shares of capital stock of the Subsidiaries are owned, directly or
indirectly, by the Company.  None of the outstanding shares of capital stock of
the Company or any Subsidiary were issued in violation of any preemptive rights,
rights of first refusal or other similar rights to subscribe for or purchase
securities.  There are no authorized or outstanding options, warrants,
preemptive rights, rights of first refusal or other rights to purchase, or
equity or debt securities convertible into or exchangeable or exercisable for,
any capital stock of the Company or any Subsidiary other than those described in
the Base Prospectus and each Prospectus Supplement.  The description of the
Company’s stock option, stock bonus and other stock plans or arrangements, and
the options, warrants or other rights granted thereunder, set forth in the Base
Prospectus and the Prospectus Supplement accurately and fairly presents the
information required by the Act to be shown with respect to such plans,
arrangements, options and rights.  Except as set forth in the Base Prospectus or
in any Prospectus Supplement, the Company does not have any subsidiaries or own
directly or indirectly any of the capital stock or other equity or long-term
debt securities or have any equity interest in any other person.

 

(n)           Stock Exchange Listing.  The Common Stock is registered under the
Exchange Act and is lised on the NASDAQ Capital Market (“NASDAQ”), and the
Company has taken no action designed to, or likely to have the effect of
terminating the registration of the Common Stock under the Exchange Act or
suspending from trading the Common Stock from NASDAQ, nor has the Company
received any information suggesting that the Commission or FINRA is
contemplating terminating or suspending such registration or quotation.

 

(o)           No Transfer Taxes or Other Fees.  There are no transfer taxes or
other similar fees or charges under United States law or the laws of any state
or any political subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance and sale by the Company
of the Securities.

 

(p)           No Price Stabilization or Manipulation.  The Company has not taken
and will not take, directly or indirectly, any action designed to or that could
reasonably be expected to cause or result in stabilization or manipulation of
the price of the Common Stock to facilitate the sale or resale of the
Securities.

 

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(q)                                 Blue Sky; FINRA Matters.  The Securities
have been or will be qualified for sale under the securities laws of such
jurisdictions (United States and foreign) as the Placement Agent and the
Investors determine, or are or will be exempt from the qualification and
broker-dealer requirements of such jurisdictions.

 

Any certificate signed by an officer of the Company and delivered to the
Placement Agent in connection herewith or in connection with the Offering shall
be deemed to be a representation and warranty by the Company to the Placement
Agent as to the matters set forth therein.

 

Section 3.                                          Delivery and Payment.

 

On July 17, 2009 (the “Closing Date”), each of the Investors will remit by wire
transfer to an account designated by the Company an amount equal to the
aggregate purchase price for the Securities purchased by such Investor as set
forth on the signature page to the Subscription Agreement (each a “Subscription
Agreement”) entered into between the Company and each of the Investors.  At
10:00 a.m., California time or at such other time on the Closing Date as may be
agreed upon by the Company and the Placement Agent, the Company shall deliver to
each Investor (i) the Shares purchased by such Investor via the Depository Trust
Company’s (“DTC”) Deposit or Withdrawal at Custodian system via the DTC
instructions set forth on the signature page of such Investor’s Subscription
Agreement and (ii) the Warrants in physical, certificated form to the address
set forth on the signature page of such Investor’s Subscription Agreement, such
Shares and Warrants to be registered in such name or names as designated by the
Investor on the signature page to the Subscription Agreement.  The closing of
the takedown (the “Closing”) shall take place at the Company’s principal
executive offices or at the offices of the Company’s legal counsel.  All actions
taken at the Closing shall be deemed to have occurred simultaneously.

 

Section 4.                                          Covenants of the Company.

 

The Company further covenants and agrees with the Placement Agent as follows:

 

(a)                                  Registration Statement Matters.  During the
period beginning on the date hereof and ending at the time of the Closing (such
period being referred to herein as the “Prospectus Delivery Period”), the
Company agrees to advise the Placement Agent promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has been
filed or becomes effective or any supplement to the Prospectus Supplement or any
amended Prospectus Supplement has been filed and to furnish the Placement Agent
with copies thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 14 or 15(d) of the Exchange Act subsequent to the
date of the Prospectus Supplement; to advise the Placement Agent, promptly after
it receives notices thereof (i) of any request by the Commission to amend the
Registration Statement or to amend or supplement the Prospectus Supplement or
for additional information and (ii) of the issuance by the Commission, of any
stop order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or any order directed at any Incorporated
Document or any amendment or supplement thereto or any order preventing or
suspending the use of the Base Prospectus or the Prospectus Supplement or any
amendment or supplement thereto or any post-effective amendment to the
Registration Statement, of the suspension of the qualification of the Securities
for offering or sale in any jurisdiction, of the institution or threatened
institution of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration Statement or
Prospectus Supplement or for additional information; and, in the event of the
issuance of any stop order or of any order preventing or suspending the use of
the Base Prospectus or Prospectus Supplement or suspending any such
qualification, promptly to use its reasonable best efforts to obtain the
withdrawal of such order.

 

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(b)           Blue Sky Compliance.  The Company will cooperate with the
Placement Agent and the Investors in endeavoring to qualify the Securities for
sale or satisfy any applicable exemption(s) for sale of the Securities under the
securities laws of such jurisdictions (United States and foreign) as the
Placement Agent and the Investors may reasonably request, and will furnish such
information and execute such applications and documents as may be reasonably
required for that purpose, provided the Company shall not be required to qualify
as a foreign corporation or to file a general consent to service of process in
any jurisdiction where it is not now so qualified or required to file such a
consent, and provided further that the Company shall not be required to produce
any new disclosure document other than the Prospectus Supplement.  The Company
will, from time to time, prepare and file such statements, reports and other
documents as are or may be required to continue such qualifications in effect
for so long a period as the Placement Agent may reasonably request for
distribution of the Securities.

 

(c)           Amendments and Supplements to the Prospectus Supplement and Other
Securities Act Matters.  The Company will comply with the Act and the Exchange
Act, and the rules and regulations of the Commission thereunder, so as to permit
the completion of the distribution of the Securities as contemplated in this
Agreement, the Base Prospectus and any Prospectus Supplement.  If during the
Prospectus Delivery Period, any event shall occur as a result of which, in the
judgment of the Company or in the reasonable opinion of the Placement Agent or
counsel for the Placement Agent, it becomes necessary to amend or supplement the
Base Prospectus or any Prospectus Supplement in order to make the statements
therein, in the light of the circumstances existing at the time the Prospectus
Supplement is delivered to a purchaser, not misleading, or, if it is necessary
at any time to amend or supplement the Base Prospectus or any Prospectus
Supplement to comply with any law, the Company promptly will prepare and file
with the Commission, and furnish at its own expense to the Placement Agent and
to dealers, an appropriate amendment to the Registration Statement or supplement
to the Base Prospectus or any Prospectus Supplement so that the Prospectus
Supplement as so amended or supplemented will not, in the light of the
circumstances existing at the time it is so delivered, be misleading, or so that
the Base Prospectus or any Prospectus Supplement will comply with such law. 
Before amending the Registration Statement or supplementing the Base Prospectus
in connection with the Offering, the Company will furnish the Placement Agent
with a copy of such proposed amendment or supplement, allow the Placement Agent
a reasonable amount of time to review such proposed amendment or supplement and
will not file any amendment or supplement to which the Placement Agent
reasonably objects in writing, including via electronic mail.

 

(d)           Copies of any Amendments and Supplements to the Prospectus
Supplement.  The Company agrees to furnish the Placement Agent, without charge,
during the Prospectus Delivery Period, as many copies of the Base Prospectus and
Prospectus Supplement and any amendments and supplements thereto (including any
Incorporated Documents) as the Placement Agent may reasonably request.

 

(e)           Use of Proceeds.  The Company shall apply the net proceeds from
the sale of the Securities sold by it in the manner described under the caption
“Use of Proceeds” in the Registration Statement or the applicable Prospectus
Supplement.

 

(f)            Transfer Agent.  The Company shall engage and maintain, at its
expense, a registrar and transfer agent for the Common Stock.

 

(g)           Earnings Statement.  As soon as practicable and in accordance with
applicable requirements under the Act, but in any event not later than 18 months
after the Closing Date of the Offering, the Company will make generally
available to its security holders and to the Placement Agent an earnings
statement, covering a period of at least 12 consecutive months beginning after
the Closing Date, that satisfies the provisions of Section 11(a) and Rule 158
under the Act.

 

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(h)                                 Periodic Reporting Obligations.  During the
Prospectus Delivery Period, the Company shall duly file, on a timely basis, with
the Commission all reports and documents required to be filed under the Exchange
Act within the time periods and in the manner required by the Exchange Act.

 

(i)                                     Additional Documents.  The Company will
enter into any subscription, purchase or other customary agreements as the
Placement Agent or the Investors deem necessary or appropriate to consummate the
Offering, all of which will be in form and substance reasonably acceptable to
the Placement Agent, the Investors and the Company.  The Company agrees that the
Placement Agent may rely upon, and is a third party beneficiary of, the
representation and warranties, and applicable covenants, set forth in any such
purchase, subscription or other agreement with Investors in the Offering.

 

Section 5.                                          Conditions of the
Obligations of the Placement Agent.

 

The obligations of the Placement Agent hereunder shall be subject to the
accuracy of the representations and warranties on the part of the Company set
forth in Section 2 as of the date hereof and as of the Closing Date of the
Offering as though then made, to the timely performance by the Company of its
covenants and other obligations hereunder on and as of such dates, and to each
of the following additional conditions:

 

(a)                                  Compliance with Registration Requirements;
No Stop Order; No Objection from FINRA.  Each Prospectus Supplement shall have
been duly filed with the Commission in accordance with Rule 424(b); no stop
order suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; no order preventing or
suspending the use of any Prospectus Supplement shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; no order having the effect of ceasing or suspending the distribution
of the Securities or any other securities of the Company shall have been issued
by any securities commission, securities regulatory authority or stock exchange
and no proceedings for that purpose shall have been instituted or shall be
pending or, to the knowledge of the Company, contemplated by any securities
commission, securities regulatory authority or stock exchange; all requests for
additional information on the part of the Commission shall have been complied
with; and FINRA shall have raised no objection to the fairness and
reasonableness of the placement agency terms and arrangements.

 

(b)                                 Corporate Proceedings.  All corporate
proceedings and other legal matters in connection with this Agreement, the
Registration Statement and each Prospectus Supplement, and the registration,
authorization, issue, sale and delivery of the Securities, shall have been
reasonably satisfactory to the Placement Agent’s counsel, and such counsel shall
have been furnished with such papers and information as they may reasonably have
requested to enable them to pass upon the matters referred to in this Section 5.

 

(c)                                  No Material Adverse Change.  Subsequent to
the execution and delivery of this Agreement and prior to the Closing Date,
there shall not have occurred any Material Adverse Change or Material Adverse
Effect, which, in the reasonable judgment of the Placement Agent, makes it
impracticable or inadvisable to proceed with the Offering on the terms and in
the manner contemplated by the applicable Prospectus Supplement.

 

(d)                                 Opinion of Counsel for the Company.  The
Placement Agent shall have received on the Closing Date of the Offering, and the
Company shall cause to be delivered to the Placement Agent an opinion of legal
counsel to the Company in customary form, dated the Closing Date, addressed to
the Placement Agent.

 

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(e)                                  Accountants’ Comfort Letter.  The Placement
Agent shall have received on the Closing Date and the Company shall cause to be
delivered to the Placement Agent a letter from KPMG LLP (or the Company’s then
current independent auditors), addressed to the Placement Agent, dated as of the
Closing Date, in customary form.  The letter shall not disclose any change in
the condition (financial or otherwise), earnings, operations, business or
prospects of the Company from that set forth in the Registration Statement or
the applicable Prospectus Supplement, which, in the reasonable judgment of the
Placement Agent, is material and adverse and that makes it, in the reasonable
judgment of the Placement Agent, impracticable or inadvisable to proceed with
the public offering of the Securities as contemplated by such Prospectus
Supplement.

 

(f)            Officers’ Certificate.  The Placement Agent shall have received
on the Closing Date a certificate of the Company, in a form satisfactory to the
Placement Agent, dated as of the Closing Date signed by the Chief Executive
Officer and Chief Financial Officer of the Company, to the effect that:

 

(i)            The representations and warranties of the Company in this
Agreement are true and correct, as if made on and as of the Closing Date, and
the Company has complied with all the agreements and satisfied in all material
respects all the conditions on its part to be performed or satisfied at or prior
to the Closing Date;

 

(ii)           No stop order suspending the effectiveness of the Registration
Statement or the use of the Base Prospectus or the Prospectus Supplement has
been issued and no proceedings for that purpose have been instituted or are
pending or, to the Company’s knowledge, threatened under the Act; no order
having the effect of ceasing or suspending the distribution of the Securities or
any other securities of the Company has been issued by any securities
commission, securities regulatory authority or stock exchange in the United
States and no proceedings for that purpose have been instituted or are pending
or, to the knowledge of the Company, contemplated by any securities commission,
securities regulatory authority or stock exchange in the United States;

 

(iii)          When the Registration Statement became effective and at all times
subsequent thereto up to the delivery of such certificate, the Registration
Statement, the Base Prospectus and each Prospectus Supplement and any amendments
or supplements thereto, and Incorporated Documents, when such documents became
effective or were filed with the Commission, contained all material information
required to be included therein by the Act and the Exchange Act and the
applicable rules and regulations of the Commission thereunder, as the case may
be, and in all material respects conformed to the requirements of the Act and
the Exchange Act and the applicable rules and regulations of the Commission
thereunder, as the case may be, and the Registration Statement and the Base
Prospectus and the Prospectus Supplement, and any amendments or supplements
thereto, did not and do not include any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading (provided, however, that the preceding representations and
warranties contained in this paragraph (iii) shall not apply to any statements
or omissions made in reliance upon and in conformity with information furnished
in writing to the Company by the Placement Agent expressly for use therein) and,
since the effective date of the Registration Statement, there has occurred no
event required by the Act and the rules and regulations of the Commission
thereunder to be set forth in an amended or supplemented Prospectus Supplement
which has not been so set forth;

 

(iv)          Subsequent to the respective dates as of which information is
given in the Registration Statement, the Base Prospectus and each Prospectus
Supplement, there has not been:  (a) any Material Adverse Change; (b) any
transaction that is material to the Company and the

 

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Subsidiaries taken as a whole, except transactions entered into in the ordinary
course of business; (c) any obligation, direct or contingent, that is material
to the Company and the Subsidiaries taken as a whole, incurred by the Company or
any Subsidiary, except obligations incurred in the ordinary course of business;
(d) any material change in the capital stock (except changes thereto resulting
from the exercise of outstanding stock options or warrants) or outstanding
indebtedness of the Company or any Subsidiary; (e) any dividend or distribution
of any kind declared, paid or made on the capital stock of the Company; or
(f) any loss or damage (whether or not insured) to the property of the Company
or any Subsidiary which has been sustained or will have been sustained which has
a Material Adverse Effect; and

 

(v)           The Company has been subject to continuous disclosure requirements
of the Exchange Act for a period of at least 12 calendar months immediately
preceding the filing of the Registration Statement, has timely filed all reports
required of it to be filed under the Exchange Act during the past 12 calendar
months and the portion of the month in which the Registration Statement was
filed, and as of the date of the Base Prospectus and each Prospectus Supplement
is currently in compliance with such obligations.

 

(g)           Listing.  The Common Stock (including the Shares and Warrant
Shares) is registered under the Exchange Act and is or will as of the Closing
Date be listed on NASDAQ, and the Company has taken no action designed to, or
likely to have the effect of terminating the registration of the Shares and
Warrant Shares under the Exchange Act or suspending from trading the Shares and
Warrant Shares on NASDAQ, nor has the Company received any written information
suggesting that the Commission or the FINRA is contemplated terminating such
registration or quotation.

 

(h)           Compliance with Prospectus Delivery Requirements.  The Company
shall have complied with the provisions of Sections 3 and 4(c) and (d) with
respect to the furnishing of Prospectus Supplements.

 

(i)            Lock-Up Agreements.  Each of the Company’s officers and directors
shall execute and deliver a Lock-up Agreement, in a form satisfactory to the
Placement Agent, restricting the transfer or other disposition of any shares of
Common Stock of the Company or securities convertible into, exchangeable, or
exercisable for Common Stock of the Company held of record or beneficially by
such officers and directors for a period of ninety (90) days after the Closing
Date.

 

(j)            Additional Documents.  On or before the Closing Date, the
Placement Agent and counsel for the Placement Agent shall have received such
information and documents as they may reasonably require for the purposes of
enabling them to pass upon the issuance and sale of the Securities as
contemplated herein, or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the conditions or
agreements, herein contained.

 

If any condition specified in this Section 5 is not satisfied in all material
respects when and as required to be satisfied, this Agreement may be terminated
by the Placement Agent by notice to the Company signed by the Placement Agent at
any time on or prior to the Closing Date, which termination shall be without
liability on the part of any party to any other party, except that Section 6
(Payment of Expenses), Section 7 (Reimbursement of Placement Agent’s Expenses),
Section 8 (Indemnification and Contribution) and Section 10 (Representations and
Indemnities to Survive Delivery) shall at all times be effective and shall
survive such termination.

 

Section 6.              Payment of Expenses.

 

The Company agrees to pay all costs, fees and expenses incurred in connection
with the

 

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performance of its obligations hereunder and in connection with the transactions
contemplated hereby, including without limitation:  (i) all expenses incident to
the issuance, delivery and qualification of the Securities (including all
printing and engraving costs); (ii) all fees and expenses of the registrar and
transfer agent of the Common Stock; (iii) all necessary issue, transfer and
other stamp taxes in connection with the issuance and sale of the Securities;
(iv) all fees and expenses of the Company’s counsel, independent public or
certified public accountants and other advisors; (v) all costs and expenses
incurred in connection with the preparation, printing, filing, shipping and
distribution of the Registration Statement (including financial statements,
exhibits, schedules, consents and certificates of experts), the Base Prospectus,
any Preliminary Prospectus and each Prospectus Supplement, and all amendments
and supplements thereto, and this Agreement; (vi) all filing fees, reasonable
attorneys’ fees and expenses incurred by the Company or the Placement Agent in
connection with qualifying or registering (or verifying or obtaining exemptions
from the qualification or registration of) all or any part of the Securities for
offer and sale under the state securities or blue sky laws, and, if requested by
the Placement Agent, preparing and printing a “Blue Sky Survey,” an
“International Blue Sky Survey” or other memorandum, and any supplements
thereto, advising the Placement Agent of such qualifications, registrations and
exemptions; (vii) the filing fees incident to, and the reasonable fees and
expenses of counsel for the Placement Agent in connection with, the review and
approval by FINRA of the Placement Agent’s participation in the offering and
distribution of the Securities; (viii) the fees and expenses associated with
including the Shares and Warrant Shares for listing on NASDAQ; (ix) all costs
and expenses incident to the travel and accommodation of the Company’s employees
on the “roadshow,” if any; and (x) all other fees, costs and expenses referred
to in Part II of the Registration Statement.

 

Section 7.              Reimbursement of Placement Agent’s Expenses.

 

Whether or not this Agreement is terminated, and whether or not the sale to the
Investors of the Securities on any Closing Date is consummated, the Company
agrees to reimburse the Placement Agent, upon demand, for all reasonable and
documented out-of-pocket expenses that shall have been reasonably incurred by
the Placement Agent in connection with the Offering, including, but not limited
to, printing expenses, travel and accommodation expenses, postage, facsimile and
telephone charges (collectively, the “Expenses”), provided, however, that
(a) the Company shall in no event be obligated to reimburse the Placement Agent
for Expenses in excess of $10,000 that are incurred without the prior written
approval of  the Company and (b) in no event shall the Company be obligated to
reimburse the Placement Agent for Expenses in excess of $45,000, excluding fees
and expenses addressed in Section 6(vi) and (vii) above if not paid directly by
the Company.

 

Section 8.              Indemnification and Contribution.

 

(a)           Indemnification of the Placement Agent.  The Company agrees to
indemnify and hold harmless the Placement Agent, its officers and employees, and
each person, if any, who controls the Placement Agent within the meaning of the
Act and the Exchange Act against any loss, claim, damage, liability or expense,
as incurred, to which such Placement Agent or such controlling person may become
subject, under the Act, the Exchange Act, or other federal or state statutory
law or regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Company, which consent shall not be unreasonably withheld), insofar as such
loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based:  (i) upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, or any amendment thereto, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; or (ii) upon any untrue statement or alleged untrue
statement of a material fact contained in the Base Prospectus, any Preliminary
Prospectus or the Prospectus Supplement (or any amendment or supplement
thereto), or the omission or alleged omission

 

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therefrom of a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading; or
(iii) in whole or in part upon any inaccuracy in the representations and
warranties of the Company contained herein; or (iv) in whole or in part upon any
failure of the Company to perform its obligations hereunder or under law; or
(v) any act or failure to act or any alleged act or failure to act by the
Placement Agent in connection with, or relating in any manner to, the Securities
or the Offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out of or
based upon any matter covered by clause (i), (ii), (iii) or (iv) above, provided
that the Company shall not be liable under this clause (v) to the extent that a
court of competent jurisdiction shall have determined by a final judgment that
such loss, claim, damage, liability or action resulted directly from any such
acts or failures to act undertaken or omitted to be taken by such Placement
Agent through its bad faith or willful misconduct; and to reimburse such
Placement Agent and each such controlling person for any and all expenses
(including the reasonable fees and disbursements of one counsel chosen by the
Placement Agent) as such expenses are reasonably incurred by such Placement
Agent or such controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action; provided, however, that the foregoing indemnity agreement
shall not apply to any loss, claim, damage, liability or expense to the extent,
but only to the extent, arising out of or based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with written information furnished to the Company by the
Placement Agent expressly for use in the Registration Statement, the Base
Prospectus, any Preliminary Prospectus or the Prospectus Supplement (or any
amendment or supplement thereto).

 

(b)           Indemnification of the Company, its Directors and Officers.  The
Placement Agent agrees to indemnify and hold harmless the Company, each of its
directors, each of its officers who signed the Registration Statement and each
person, if any, who controls the Company within the meaning of the Act or the
Exchange Act, against any loss, claim, damage, liability or expense, as
incurred, to which the Company, or any such director, officer or controlling
person may become subject, under the Act, the Exchange Act, or other federal,
state statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Placement Agent; which consent shall not be unreasonably
withheld), insofar as such loss, claim, damage, liability or expense (or actions
in respect thereof as contemplated below) arises out of or is based upon any
untrue or alleged untrue statement of a material fact contained in any
Preliminary Prospectus or Prospectus Supplement (or any amendment or supplement
thereto), or arises out of or is based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in such Preliminary Prospectus or Prospectus
Supplement (or any amendment or supplement thereto), in reliance upon and in
conformity with written information furnished to the Company by such Placement
Agent expressly for use therein and to reimburse the Company, or any such
director, officer or controlling person for any legal and other expense
reasonably incurred by the Company, or any such director, officer or controlling
person in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action.  The
indemnity agreement set forth in this Section 8(b) shall be in addition to any
liabilities that the Placement Agent may otherwise have.

 

(c)           Information Provided by the Placement Agent.  The Company and each
person, if any, who controls the Company within the meaning of the Act or the
Exchange Act, hereby acknowledges that the only information that the Placement
Agent will furnish to the Company expressly for use in any Prelininary
Propsectus or Prospectus Supplement (or any amendment or supplement thereto) are
the statements regarding the Placement Agent set forth under the caption “Plan
of Distribution” in the Prospectus Supplement.

 

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(d)           Notifications and Other Indemnification Procedures.  Promptly
after receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 8, notify
the indemnifying party in writing of the commencement thereof, but the omission
so to notify the indemnifying party will not relieve it from any liability,
which it may have to any indemnified party for contribution to the extent it is
not prejudiced as a proximate result of such failure.  In case any such action
is brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties.  Upon receipt of notice
from the indemnifying party to such indemnified party of such indemnifying
party’s election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless:  (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party shall not be liable for the
expenses of more than one separate counsel (together with local counsel),
approved by the indemnifying party), representing the indemnified parties who
are parties to such action); (ii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of commencement of the action; or
(iii) the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party, in each of which
cases the fees and expenses of counsel shall be at the expense of the
indemnifying party.

 

(e)           Settlements.  The indemnifying party under this Section 8 shall
not be liable for any settlement of any proceeding effected without its written
consent, which consent shall not be unreasonably withheld, but if settled with
such consent or if there be a final non-appealable judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party against any
loss, claim, damage, liability or expense by reason of such settlement or
judgment.  No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement, compromise or consent to the entry of
judgment in any pending or threatened action, suit or proceeding in respect of
which any indemnified party is or could have been a party and indemnity was or
could have been sought hereunder by such indemnified party, unless such
settlement, compromise or consent includes:  (i) an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding; and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.

 

(f)            Contribution.  If the indemnification provided for in this
Section 8 is unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a) or (b) above in respect of any losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) then each
indemnifying party shall contribute to the aggregate amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect the
relative benefits received by such party on the one hand and the Placement Agent
on the other from the offering of the Securities.  If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law then each indemnifying party shall

 

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contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of such indemnifying party on the one hand and the Placement
Agent on the other in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof), as well as any other relevant equitable considerations.  The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company, its directors, its officers or its controlling persons on the one hand
or the Placement Agent on the other and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.

 

The Company and Placement Agent agree that it would not be just and equitable if
contributions pursuant to this Section 8(f) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 8(f).  The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) referred
to above in this Section 8(f) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim.  Notwithstanding the
provisions of this Section 8(f):  (i) the Placement Agent shall not be required
to contribute any amount in excess of the amount of the placement agent fees
actually received by such Placement Agent pursuant to this Agreement; and
(ii) no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.

 

(g)           Timing of Any Payments of Indemnification.  Any losses, claims,
damages, liabilities or expenses for which an indemnified party is entitled to
indemnification or contribution under this Section 8 shall be paid by the
indemnifying party to the indemnified party as such losses, claims, damages,
liabilities or expenses are incurred, but in all cases, no later than forty-five
(45) days of invoice to the indemnifying party.

 

(h)           Acknowledgements of Parties.  The parties to this Agreement hereby
acknowledge that they are sophisticated business persons who were represented by
counsel during the negotiations regarding the provisions hereof including,
without limitation, the provisions of this Section 8, and are fully informed
regarding said provisions.  They further acknowledge that the provisions of this
Section 8 fairly allocate the risks in light of the ability of the parties to
investigate the Company and its business in order to assure that adequate
disclosure is made in the Registration Statement, any Preliminary Prospectus and
the Prospectus Supplement as required by the Act and the Exchange Act.

 

Section 9.                                           Covenants of the Placement
Agent

 

(a)           The Placement Agent has not distributed and will not distribute
any offering material in connection with the Offering and sale of the Securities
other than the Base Prospectus, any Prelininary Prospectus and the Prospectus
Supplement or the Registration Statement and copies of the documents
incorporated by reference therein and the Subscription Agreement in the form
approved by the Company.

 

(b)           The Placement Agent will not use or refer to any materials on the
Company’s website in connection with the offering and sale of the Securities.

 

Section 10.                                     Representations and Indemnities
to Survive Delivery.

 

The respective indemnities, agreements, representations, warranties and other
statements of the Company or any person controlling the Company, including its
officers and directors, and of the

 

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Placement Agent set forth in or made pursuant to this Agreement, including, but
not limited to the indemnity and contribution agreements contained in Section 8,
will remain in full force and effect, regardless of (i) any investigation made
by or on behalf of any Placement Agent or any person controlling such Placement
Agent, the Company, its directors or officers or any persons controlling the
Company; (ii) delivery and acceptance of any Securities and payment therefor
hereunder; and (iii) any termination of this Agreement.  A successor to any
Placement Agent, or to the Company, its directors or officers or any person
controlling the Company, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 8.

 

Section 11.            Notices.

 

All communications hereunder shall be in writing and shall be mailed, hand
delivered or telecopied and confirmed to the parties hereto as follows:

 

If to the Placement Agent:

 

Roth Capital Partners, LLC

24 Corporate Plaza

Newport Beach, California 92660

Facsimile:  (949) 720-7215

Attention:  Managing Director

 

With a copy to:

 

K&L Gates LLP

10100 Santa Monica Boulevard,

Seventh Floor
Los Angeles, California 90067

Facsimile:  (310) 552-5001

Attention:  Leib Orlanski, Esq.

 

If to the Company:

 

Wave Systems Corp.

480 Pleasant Street

Lee, Massachusetts 01238

Facsimile:  413-243-0045

Attention:  Chief Executive Officer

 

With a copy to:

 

Bingham McCutchen LLP

399 Park Avenue

New York, NY 10022-4689

Facsimile:  212-752-5378

Attention:  David Cosgrove, Esq.

 

Any party hereto may change the address for receipt of communications by giving
written notice to the others.

 

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Section 12.                                   Successors.

 

This Agreement will inure to the benefit of and be binding upon the parties
hereto, and to the benefit of the employees, officers and directors and
controlling persons referred to in Section 8, and to their respective
successors, and personal representatives, and no other person will have any
right or obligation hereunder.  Neither the Company nor the Placement Agent
shall be entitled to assign their rights, or delegate their responsibilities,
hereunder without the prior written consent of the other party hereto.

 

Section 13.                                   Partial Unenforceability.

 

The invalidity or unenforceability of any section, paragraph or provision of
this Agreement shall not affect the validity or enforceability of any other
Section, paragraph or provision hereof.  If any Section, paragraph or provision
of this Agreement is for any reason determined to be invalid or unenforceable,
there shall be deemed to be made such minor changes (and only such minor
changes) as are necessary to make it valid and enforceable.

 

Section 14.                                   Governing Law Provisions.

 

(a)                                  Governing Law.  This agreement shall be
governed by and construed in accordance with the internal laws of the state of
New York applicable to agreements made and to be performed in such state.

 

(b)                                 Consent to Jurisdiction.  Any legal suit,
action or proceeding arising out of or based upon this Agreement or the
transactions contemplated hereby (“Related Proceedings”) may be instituted in
the federal courts of the United States of America located in New York County,
New York, or the courts of the State of New York in each case located in New
York County (collectively, the “Specified Courts”), and each party irrevocably
submits to the exclusive jurisdiction (except for proceedings instituted in
regard to the enforcement of a judgment of any such court (a “Related
Judgment”), as to which such jurisdiction is non-exclusive) of such courts in
any such suit, action or proceeding.  Service of any process, summons, notice or
document by mail to such party’s address set forth above shall be effective
service of process for any suit, action or other proceeding brought in any such
court.  The parties irrevocably and unconditionally waive any objection to the
laying of venue of any suit, action or other proceeding in the Specified Courts
and irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such suit, action or other proceeding brought in any such
court has been brought in an inconvenient forum.

 

Section 15.                                   General Provisions.

 

This Agreement constitutes the entire agreement of the parties to this Agreement
and supersedes all prior written or oral and all contemporaneous oral
agreements, understandings and negotiations with respect to the subject matter
hereof.  This Agreement may be executed in two or more counterparts (including
via facsimile or pdf), each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument. 
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit. 
Section headings herein are for the convenience of the parties only and shall
not affect the construction or interpretation of this Agreement.

 

[The remainder of this page has been intentionally left blank.]

 

[Signature Page Follows]

 

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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company the enclosed copies hereof, whereupon this
instrument, along with all counterparts hereof, shall become a binding agreement
in accordance with its terms.

 

 

Very truly yours,

 

 

 

WAVE SYSTEMS CORP.,

 

a Delaware corporation

 

 

 

 

 

By:

/s/ Steven K. Sprague

 

 

Name: Steven K. Sprague

 

 

Title: Chief Executive Officer

 

The foregoing Placement Agency Agreement is hereby confirmed and accepted by the
Placement Agent as of the date first above written.

 

ROTH CAPITAL PARTNERS LLC

 

 

By:

/s/ David Enzer

 

 

Name: David Enzer

 

 

Title: Managing Director

 

 

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