Exhibit
10.1


 


Subscription
Agreement


 


This Subscription Agreement (this “Agreement”)
is dated July 21, 2009, by and between the investor identified on the
signature page hereto (the “Investor”) and Wave Systems Corp., a
Delaware corporation (the “Company”), whereby the parties agree as
follows:


 


1.             Subscription.


 


(a)  Investor
agrees to buy and the Company agrees to sell and issue to Investor (i) such
number of shares (the “Shares”) of Class A common stock, par value $0.01
per share (“Common Stock”), and (ii) a Warrant, in substantially the form
delivered to the Investor herewith, to purchase such number of shares of Common
Stock (the “Warrants”) of the Company, set forth on the signature page hereto,
for an aggregate purchase price set forth on the signature page hereto
(the “Purchase Price”).  The
shares of Common Stock issuable upon exercise of the Warrants are referred to
herein as the “Warrant Shares”.


 


(b)  The Shares,
Warrants and Warrant Shares have been registered on a Registration Statement on
Form S-3, Registration No. 333-150340, which registration statement
(the “Registration Statement”) has been declared effective by the
Securities and Exchange Commission, has remained effective since such date and
is effective on the date hereof.


 


(c)  ON JULY 22,
2009 (THE “CLOSING DATE”), THE INVESTOR SHALL REMIT BY WIRE TRANSFER THE
AMOUNT OF FUNDS EQUAL TO THE AGGREGATE PURCHASE PRICE FOR THE SHARES AND
WARRANTS BEING PURCHASED BY THE INVESTOR TO THE FOLLOWING ACCOUNT DESIGNATED BY
THE COMPANY:


 


Account:  Wave Systems Corp


HSBC
Bank


452
Fifth Avenue


New
York, NY 10018


Bank
ABA/Routing #  021001088


US
Govt MM Fund:  610185055


 


Such funds shall be
delivered unless (i) the Placement Agency Agreement (the “Placement
Agreement”) between the Company and the placement agent engaged by the
Company in connection with the sale and issuance of the Shares and Warrants (the
“Placement Agent”) is terminated pursuant to the terms thereof or (ii) the
conditions to closing in the Placement Agreement have not been satisfied.  The Company’s obligation to issue the Shares
and Warrants to the Investor will be subject to (i) the receipt by the
Company of the aggregate purchase price for the Shares and Warrant being
purchased hereunder as set forth on the signature page, (ii) the accuracy
of the representations and warranties made by the Investor in this Agreement, (iii) the
Registration Statement remaining in effect and no stop order proceedings with
respect thereto being pending or threatened, and (iv) there being no
objections raised by the staff of the NASDAQ Stock Market to the consummation
of the sale without the approval of the Company’s stockholders.  The Company proposes to enter into
substantially this same form of Agreement with certain other investors
(collectively with this Agreement, the “Transaction”) and the Investor’s
obligations are expressly not conditioned on the purchase by any or all such other
investors of the Shares and Warrants that they have agreed to purchase from the
Company.  The Company shall issue a press
release announcing the Transaction prior to 9:30am Eastern Time on the business
day immediately following the date hereof. 
The Placement Agent shall have no rights in or to any of the funds,
except in respect of the Company’s obligation to pay the Placement Agent’s
fees.


 

















 


(d)  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 ARE MAINTAINED TO SET UP
A DEPOSIT/WITHDRAWAL AT CUSTODIAN (“DWAC”) INSTRUCTING THE TRANSFER
AGENT TO CREDIT SUCH ACCOUNT OR ACCOUNTS WITH THE SHARES ON THE CLOSING DATE.


 


(e)  On the
Closing Date, the Company shall deliver to Investor (i) the Shares via the
Depository Trust Company’s (“DTC”) Deposit or Withdrawal at Custodian
system via the DTC instructions set forth on the signature page hereto and
(ii) the Warrants in physical, certificated form to the address set forth
on the signature page hereto, such Shares and Warrants to be registered in
such name or names as designated by the Investor on the signature page hereto. 
The Shares and Warrants shall be unlegended and free of any resale
restrictions.


 


2.             Company Representations and Warranties.  The Company represents and
warrants that: (a) it has full right, power and authority to enter into
this Agreement and to perform all of its obligations hereunder; (b) this Agreement
has been duly authorized and executed by and constitutes a valid and binding
agreement of the Company enforceable in accordance with its terms; (c) the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby do not conflict with or result in a breach of (i) the
Company’s Restated Certificate of Incorporation or Restated By-Laws, or (ii) any
material agreement to which the Company is a party or by which any of its
property or assets is bound; (d) the Shares, Warrants and Warrant Shares have
been duly authorized for sale and issuance, and when the Shares and Warrant
Shares are issued and delivered by the Company against payment therefor
pursuant to this Subscription or the Warrants, as the case may be, will be
validly issued, fully paid and nonassessable; (e) the Registration
Statement and any post-effective amendment thereto, at the time it became
effective, did 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; (f) the prospectus contained in the
Registration Statement, as amended or supplemented, did not contain as of the
effective date thereof, and as of the date hereof does not contain, 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; and (g) there are no preemptive rights or
rights of first refusal held by stockholders of the Company and applicable to
the transactions contemplated hereby.


 


3.             Investor Representations,
Warranties and Acknowledgments.  The Investor
represents and warrants that: (a) it has full right, power and authority
to enter into this Agreement and to perform all of its obligations hereunder; (b) this
Agreement has been duly authorized and executed by the Investor and constitutes
a valid and binding agreement of the Investor enforceable against the Investor
in accordance with its terms; (c) the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby do not conflict
with or result in a breach of (i) the Investor’s certificate of
incorporation or by-laws (or other governing documents), or (ii) any
material agreement or any law or regulation to which the Investor is a party or
by which any of its property or assets is bound; (d) the Investor hereby
confirms that it has had full access to and relied only upon the Disclosure
Package, including the Company’s periodic reports and other information
incorporated by reference therein, and was able to read, review, download and
print such materials. For purposes hereof, the term “Disclosure Package”
means: (i) a base prospectus dated June 23, 2008, (ii) if
applicable, a preliminary prospectus supplement related to the offering, (iii) the
final prospectus supplement related to the offering, and (iv) the pricing
information contained in this Agreement; and (e) the Investor is
knowledgeable, sophisticated and experienced in making, and is qualified to
make decisions with respect to, investments in shares presenting an investment
decision like that involved in the purchase of the Shares and Warrant,
including investments in securities issued by the Company and investments in
comparable companies, and has


 

















 


requested, received,
reviewed and considered all information it deemed relevant in making an
informed decision to purchase the Shares and Warrant.


 


4.             Miscellaneous.


 


(a)  This Agreement
constitutes the entire understanding and agreement between the parties with
respect to its subject matter, and there are no agreements or understandings
with respect to the subject matter hereof which are not contained in this Agreement. 
This Agreement may be amended or modified only in writing signed by the parties
hereto.


 


(b)  This Agreement
may be executed in any number of counterparts, all of which taken together
shall constitute one and the same instrument and shall become effective when
counterparts have been signed by each party and delivered to the other parties
hereto, it being understood that all parties need not sign the same
counterpart.  Execution may be made by delivery by facsimile or pdf sent
via electronic transmission.


 


(c)  The
provisions of this Agreement are severable and, in the event that any court or
officials of any regulatory agency of competent jurisdiction shall determine
that any one or more of the provisions or part of the provisions contained in
this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision or part of a provision of this Agreement
and this Agreement shall be reformed and construed as if such invalid or
illegal or unenforceable provision, or part of such provision, had never been
contained herein, so that such provisions would be valid, legal and enforceable
to the maximum extent possible, so long as such construction does not
materially adversely effect the economic rights of either party hereto.


 


(d)  All
communications hereunder, except as may be otherwise specifically provided
herein, shall be in writing and shall be mailed, hand delivered, sent by a
recognized overnight courier service such as Federal Express, or sent via
facsimile and confirmed by letter, to the party to whom it is addressed at the
following addresses or such other address as such party may advise the other in
writing:


 


To the Seller:  as
set forth on the signature page hereto.


 


To the Buyer:  as
set forth on the signature page hereto.


 


All notices hereunder
shall be effective upon receipt by the party to which it is addressed.


 


(e)  This Agreement
shall be governed by and interpreted in accordance with the internal laws of
the State of New York for contracts to be wholly performed in such state and
without giving effect to the principles thereof regarding the conflict of
laws. Any legal action, suit or proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby shall only be
instituted, heard and adjudicated (excluding appeals) in a state or federal
court located in New York, and each party hereto knowingly, voluntarily and
intentionally waives any objection which such party may now or hereafter have
to the laying of the venue of any such action, suit or proceeding, and
irrevocably submits to the exclusive personal jurisdiction of any such court in
any such action, suit or proceeding. 
Service of process in connection with any such action, suit or
proceeding may be served on each party hereto anywhere in the world by the same
methods as are specified for the giving of notices under this Agreement.


 

















 


(f)  The Company
agrees that the Investor shall be a third party beneficiary of the representations,
warranties, covenants and agreements given by the Company in the Placement
Agreement.


 


(g)  This Agreement
shall not be assigned by any party hereto, without the express prior written
consent of the Company or the Investor.


 

















 


If the foregoing
correctly sets forth our agreement, please confirm this by signing and
returning to us the duplicate copy of this Agreement.


 


	
   

  	
  WAVE
  SYSTEMS CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Steven K. Sprague

  
	
  Number
  of Shares:

  	
   

  	
  Title:Chief Executive
  Officer

  
	
   

  	
   

  	
   

  
	
  Number
  of Shares underlying the Warrant:

  	
   

  
	
  (such
  number to be equal to       % of the aggregate number
  of Shares being purchased by the Investor)

  	
   

  



 


	
  Purchase Price Per Share:     $

  	
   

  	
  Address
  for Notice:

  
	
   

  	
   

  	
   

  
	
  Warrant Exercise Price:   
      $

  	
   

  	
  Wave
  Systems Corp.

  
	
   

  	
   

  	
   

  
	
  Aggregate Purchase Price:    $

  	
   

  	
  480 Pleasant Street

  
	
   

  	
   

  	
  Lee, Massachusetts 01238

  
	
  INVESTOR:
                                                                      

  	
   

  	
  Attention:
  Chief Executive Officer

  
	
   

  	
   

  	
  Facsimile: 413-243-0045

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address
  for Notice and Delivery of Warrants:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Facsimile:

  	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  DWAC
  Instructions:

  	
   

  	
   

  	
   

  
	
  Name of DTC
  Participant:

  	
   

  	
   

  	
   

  	
   

  
	
  DTC Participant
  Number:

  	
   

  	
   

  	
   

  
	
  Account Number:

  	
   

  	
   

  	
   

  
						



 

















 


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 ARE MAINTAINED TO SET UP A DEPOSIT/WITHDRAWAL AT
CUSTODIAN (“DWAC”) INSTRUCTING THE TRANSFER AGENT TO CREDIT SUCH ACCOUNT
OR ACCOUNTS WITH THE SHARES ON THE CLOSING DATE.


 


ON THE CLOSING DATE, THE INVESTOR
SHALL REMIT BY WIRE TRANSFER THE AMOUNT OF FUNDS EQUAL TO THE AGGREGATE
PURCHASE PRICE FOR THE SHARES AND WARRANTS BEING PURCHASED BY THE INVESTOR TO
THE FOLLOWING ACCOUNT:


 


Account:  Wave Systems Corp


HSBC Bank


452 Fifth Avenue


New York, NY 10018


Bank ABA/Routing #  021001088


US Govt MM Fund:  610185055