Document:

Exhibit 10.1

 

SUBSCRIPTION
AGREEMENT

 

October 29, 2008

 

Wave Systems Corp.

480 Pleasant Street

Lee, MA 01238

 

The undersigned (the “Investor”)
hereby confirms its agreement with you as follows:

 

1.                                      This
Subscription Agreement (this “Agreement”) is made as of the date set
forth below between Wave Systems Corp., a Delaware corporation (the “Company”),
and the Investor.

 

2.                                      The
Company has authorized the sale and issuance to certain investors of (a) up
to 111 shares of Series J Convertible Preferred Stock (the “Total
Shares”), par value $0.01 per share (the “Series J Preferred Stock”)
for a purchase price of $6,500 per share (the “Purchase Price”) and (b) warrants,
in substantially the form attached hereto as Annex II (the “Warrants”
and, collectively, with the Total Shares, the “Securities”), to purchase
up to 2,220,000 shares of Class A Common Stock of the Company, par value
$0.01 per share (the “Common Stock”) at an exercise price of $0.40 per
share (the “Exercise Price”). 
Investors will be issued Warrants to purchase 20,000 shares of Common
Stock for each share of Series J Preferred Stock purchased by such
Investor.  The terms of the Series J
Preferred Stock will be set forth in the Certificate of Designations
substantially in the form attached hereto as Annex III (the “Certificate of
Designations”).

 

3.                                      The
offering and sale of the Securities (the “Offering”) are being made
pursuant to the Company’s registration statement including a base prospectus
(the “U.S. Base Prospectus”) on Form S-3 (Registration No. 333-150340) filed with the United States Securities and
Exchange Commission (the “Commission”) (which, together with all
amendments or supplements thereto is referred to herein as the “Registration
Statement”) and a Prospectus Supplement containing certain supplemental
information regarding the Securities and terms of the Offering that will be
filed with the Commission (the “Prospectus Supplement”).

 

4.                                      The
Company and the Investor agree that the Investor will purchase from the Company
and the Company will issue and sell to the Investor, for the aggregate purchase
price set forth below, (a) the number of shares of Series J Preferred
Stock set forth below (the “Investor Shares”) and (b) a Warrant to
purchase the number of shares of Common Stock set forth below (the “Investor
Warrant” and, collectively with the Investor Shares, the “Investor
Securities”).  The Investor
Securities 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.

 

 

5.                                      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 any of its affiliates and (b) it has no direct or
indirect affiliation or association with any NASD member.  Exceptions:

 

 

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

  

 

6.                                      The
Investor acknowledges that, prior to or in connection with the execution and
delivery of this Agreement, it has reviewed the final U.S. Base Prospectus,
dated June 23, 2008, which is a part of
the Company’s Registration Statement, and the Prospectus Supplement.  THIS
AGREEMENT SHALL NOT CONSTITUTE A BINDING COMMITMENT ON THE PART OF THE
COMPANY UNTIL (A) THE COMPANY HAS TIMELY RECEIVED AN EXECUTED COPY OF THE
COMPLETED SUBSCRIPTION AGREEMENT FROM THE INVESTOR AND (B) THE COMPANY HAS
DELIVERED TO THE INVESTOR AN EXECUTED COUNTERPART SIGNATURE PAGE
HERETO.  THE INVESTOR ACKNOWLEDGES THAT,
AT ANY TIME PRIOR TO THE DELIVERY OF ITS EXECUTED COUNTERPART SIGNATURE
PAGE, THE COMPANY MAY ELECT TO NOT ENTER INTO THIS SUBSCRIPTION AGREEMENT
FOR ANY REASON.

 

 

SIGNATURE PAGE

 

Number of Investor Shares:

 

Price Per Investor Share:                $6,500

 

Aggregate Purchase Price:

 

Shares of Common Stock issuable upon exercise
of Investor Warrant:

 

Exercise Price of Investor Warrant:        $0.40

 

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: October 29, 2008

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  INVESTOR

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Print Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Phone #:

  	
   

  
	
   

  	
   

  	
  Email:

  	
   

  
	
   

  	
   

  	
   

  
	
  Agreed and
  Accepted

  	
   

  	
   

  
	
  October 29,
  2008:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WAVE SYSTEMS
  CORP.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name: Gerard
  T. Feeney

  	
   

  	
   

  
	
  Title:   CFO

  	
   

  	
   

  
									

 

 

EXHIBIT A

 

WAVE SYSTEMS
CORP.

 

INVESTOR
QUESTIONNAIRE

 

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

 

	
  1.

  	
  The exact name that your Investor Shares and Warrant 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 response to item 1 above:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  The mailing address to which the Investor Share certificate and
  Warrant should be delivered:

  	
   

  	
   

  

 

 

ANNEX I

 

TERMS AND CONDITIONS FOR PURCHASE OF
SECURITIES

 

All capitalized terms not otherwise defined
in this Annex I shall have the meanings ascribed thereto in the Subscription
Agreement to which this Annex I is attached.

 

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

 

2.                                      Agreement
to Sell and Purchase the Investor Securities; Placement Agent.

 

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 Investor Shares and corresponding
Investor Warrants set forth on the last page of the Subscription Agreement
to which these Terms and Conditions for Purchase of Investor 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 some or all of the remaining Securities to them as part of
the Offering (subject to Section 3.2(b) below).  The Investor and the Other Investors are
hereinafter sometimes collectively referred to as the “Investors”.  The Company may complete sales of the
remaining Securities in this Offering to certain of the Other Investors without
requiring such Other Investors to enter into a Subscription Agreement; such
sales shall nevertheless be on the same price terms as the price terms for all
of the other sales in the Offering.

 

2.3.                            The
Investor acknowledges that the Company intends to pay Security Research
Associates, Inc. (the “Placement Agent”) a fee (the “Placement Fee”) in
respect of the sale of the Securities to the Investor pursuant to a Placement
Agency Agreement (the “Placement Agreement”) with the Placement Agent.  A copy of the Placement Agreement is
available to the Investor upon request.

 

3.                                      Closings
and Delivery of the Securities and Funds.

 

3.1.                            Closing.  The completion of the purchase and sale of
the Securities (the “Closing”) will occur on or before October 31, 2008
(the “Closing Date”).  At the Closing: (a) the
Company will deliver (by overnight courier) a certificate representing the
number of shares of Series J Preferred Stock set forth on the Signature Page registered
in the name of the Investor or, if so indicated on the Investor Questionnaire
attached to the Subscription Agreement as Exhibit A, in the name of a
nominee designated by the Investor, (b) the Company will deliver (by
overnight courier) a Warrant to purchase the number of shares of Common Stock
set forth on the Signature Page registered in the name of the Investor or,
if so indicated on the Investor Questionnaire attached to the Subscription
Agreement as Exhibit A, in the name of a nominee designated by the
Investor and (c) the aggregate purchase price for the Investor Securities
being purchased by the Investor will be paid by or on behalf of the Investor to
the Company by wire 

 

 

transfer of immediately
available funds to the account set forth on Annex IV hereto the aggregate
purchase price for the Investor Securities being purchased by the Investor
hereunder.

 

3.2.                            (a)                                  Conditions to the Company’s Obligations.  The Company’s obligation to issue the
Investor Securities to the Investor will be subject to (i) the receipt by
the Company of the aggregate purchase price for the Investor Securities 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
fulfillment of those undertakings of the Investor to be fulfilled prior to the
Closing Date, (iv) the Registration Statement remaining in effect and no
stop order proceedings with respect thereto being pending or threatened, and (v) 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.

 

(b)                                 Conditions to the Investor’s Obligations.  The
Investor’s obligation to purchase the Investor Securities will be subject to (i) the
filing by the Company of the Certificate of Designations with the Secretary of
State of the State of Delaware, substantially in the form attached hereto as
Annex III and (ii) the fulfillment of those other undertakings of the
Company with respect to the Investor Securities and/or the Investor to be
fulfilled prior to the Closing Date.  The
Investor’s obligations are expressly not conditioned on the purchase by any or
all of the Other Investors of the remaining Securities that they have agreed to
purchase from the Company.

 

4.                                      Representations, Warranties and
Covenants.

 

4.1.                            Representations,
Warranties and Covenants of the Investor.

 

(a)                                  The
Investor represents and warrants to, and covenants with, the Company that: (a) 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 Investor
Securities, 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 Investor Securities; (b) the Investor has answered all
questions on the Signature Page for use in the Prospectus Supplement 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 (c) the Investor, in connection
with its decision to purchase the number of Investor Securities set forth on
the Signature Page, is relying only upon the U.S. Base Prospectus, the
Prospectus Supplement and the documents incorporated by reference therein.

 

(b)                                 The
Investor acknowledges, represents and agrees that no action has been or will be
taken in any jurisdiction outside the United States by the Company or the
Placement Agent that would permit an offering of the Investor Securities, or
possession or distribution of offering materials in connection with the issue
of the Investor Securities, in any jurisdiction outside the United States where
action for that purpose is required.  The
Investor, if outside the United States, will comply with all applicable laws
and regulations in each foreign jurisdiction in which it purchases, offers,
sells or delivers Investor Securities or has in its possession or distributes
any offering material, in all cases at its own expense.  The Placement Agent is not 

 

 

authorized to make and
has not made any representation or use of any information in connection with
the issue, placement, purchase and sale of the Investor Securities, except as
set forth or incorporated by reference in the U.S. Base Prospectus or the
Prospectus Supplement.

 

(c)                                  The
Investor further represents and warrants to, and covenants with, the Company
that: (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).

 

(d)                                 The
Investor understands that nothing in this Agreement or any other materials
presented to the Investor in connection with the purchase and sale of the
Investor Securities constitutes legal, tax or investment advice.  The Investor has consulted such legal, tax
and investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of Investor Securities.

 

(e)                                  The
Investor acknowledges that the shares of Common Stock acquired upon the
exercise of the Investor Warrant or the conversion of the Investor Shares, if
not registered, will have restrictions on resale imposed by state and federal
securities laws.

 

(f)                                    The
Investor represents, warrants and agrees that, since the earlier to occur of (i) the
date on which either Placement Agent first contacted the Investor about the
Offering and (ii) the date that is the tenth (10th) trading day
prior to the date of this Agreement, it has not directly or indirectly (a) engaged
in any short selling, (b) established or increased any “put equivalent
position” as defined in Rule 16(a)-1(h) under the Securities
Exchange Act of 1934 or (c) granted any option for the purchase of or
entered into any hedging or similar transaction with the same economic effect
as a short sale, in each case with respect to the Company’s securities.

 

5.                                      Survival of Representations, Warranties and
Agreements.  Notwithstanding
any investigation made by any party to this Agreement, 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 Investor Securities being purchased and the payment therefor.

 

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:

 

WaveSystemsCorp.

480PleasantStreet

Lee,MA01238

Fax:(413)243-0391

ATTN:  Gerard T. Feeney, CFO

 

with copies to:

 

BinghamMcCutchenLLP

399ParkAvenue

NewYork,NY10022

Fax:(212)752-5378

ATTN:  Neil W. Townsend

 

(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 shall 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; Jurisdiction.  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.  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) only 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.

 

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.

 

 

12.                               Confirmation of Sale.  The Investor acknowledges and agrees that
such Investor’s receipt of the Company’s counterpart to this Agreement shall
constitute written confirmation of the Company’s sale of Investor Securities to
such Investor.

 

13.                               Entire Agreement.  This Agreement and
the Warrant constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings between such parties with respect to such subject matter.

 

14.                               No Assignment.  This Agreement shall not be
assigned by any party hereto, without the express prior written consent of the
Company or the Investor.

 

 

ANNEX IV

 

Company
Wire Instructions

 

In accordance with section 3.1(b) of the
terms and conditions attached hereto as Annex I, 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:

 

Wire info for:  Wave Systems Corp

480 Pleasant Street

Lee, MA 01238

 

Account: 
Wave Systems Corp

HSBC Bank

452 Fifth Avenue

New York, NY 10018

 

Bank ABA/Routing #  021001088

US Govt MM Fund:  610185055

Contact: 
Will Aquino  /  Phone: 
212-525-8859   / Fax: 212-525-8924

International Transactions:  Use Swift #  
MRMDUS33Exhibit 10.2

 

October 29, 2008

 

Gerard T. Feeney

Chief Financial Officer

Wave Systems Corp.

480 Pleasant Street

Lee, MA 01238

 

Dear Mr. Feeney:

 

We are pleased to confirm the arrangements
under which Security Research Associates, Inc. (“SRA”) is engaged by Wave
Systems Corp. (the “Company”) as non-exclusive
placement agent on a “best-efforts” basis in connection with one or more
equity financing transactions to be completed by the Company (a “Financing”).  The term of this Agreement shall extend to November 4,
2008 (the “Term”).

 

During the term of our engagement, we will
provide you with assistance in connection with the Financing, which may include
performing valuation analyses and assisting you in negotiating the financial
aspects of the transaction.  During the
term of our engagement, we will also identify and contact potential investors
for the Company (the “SRA Investors”).

 

In the event the Financing is consummated,
the Company agrees to pay to SRA a transaction fee (the “Transaction Fee”)
consisting of (i) 6% (six percent) of the gross proceeds from the
Financing received by the Company at closing, and (ii) 36 month warrants
to acquire a number of shares of the Company’s Common Shares equal to 6% (six
percent) of the aggregate gross proceeds from the Financing received by the
Company divided by the effective price per share of the Company’s common shares
(on an as-if converted basis in the event of a convertible security) paid by
all of the investors in the Financing received by the Company at closing (the “SRA
Warrants”).  There will be no Transaction
Fees or Warrants issued to SRA on the exercise of Warrants by Investors.

 

The SRA Warrants issued to SRA pursuant to
this agreement will have a “cashless exercise” provision and will have an
exercise price of $0.40 per share and the underlying shares will be fully
registered and issued from the Company’s shelf. 
..

 

The SRA Warrants received by SRA from the
Company pursuant to this agreement shall be subject to a lock-up restriction
which complies with NASD Conduct Rule 2710(g)(1). The SRA warrants shall
not be sold by SRA during the offering, or sold, transferred, assigned,
pledged, or hypothecated, or be the subject of any hedging, short sale,
derivative, put, or call transaction that would result in the effective
economic disposition of the securities by any person for a period of 180 days
immediately 

 

 

following the date of effectiveness or commencement
of sales of the public offering of the Company’s stock, except as provided in
NASD Conduct Rule 2710(g) (2).

 

Subject to applicable laws, rules and
regulations, the Company agrees to provide all information and documents
reasonably required to permit the SRA Investors to make an informed investment
decision with respect to an investment in the Company. Such information and
documents shall be provided at the cost of the Company.

 

The Company also agrees to
reimburse SRA periodically, upon request, or upon termination of our services
pursuant to this letter (the “Agreement”), for our reasonable and reasonably
documented out-of-pocket expenses, incurred in connection with our financial
advisory services and the Financing, including the reasonable fees and expenses
of legal counsel, travel expenses and printing. All such out-of-pocket fees and
expenses shall not exceed a combined aggregate amount of $10,000.

 

Please note that any written
or oral opinion or advice provided by SRA in connection with our engagement is
exclusively for the information of the Board of Directors and senior management
of the Company, and may not be disclosed to any third party (other than the
Company’s legal, accounting or other advisors, who shall have been instructed
with respect to the confidentiality of such advice) or circulated or referred
to publicly without our prior written consent, except as to the extent required
by law, judicial or administrative process or regulatory demand.

 

The Company or SRA shall be
entitled to terminate this Agreement before the end of the agreement Term on
written notice to the other party at the address set forth for such party on
the signature page hereof.  In the
event of the termination of this Agreement, SRA shall be entitled to be paid
its existing reasonable out-of-pocket expenses subject to the terms described
above.  The confidentiality provisions of
this Agreement shall be unaffected by the termination of this agreement.  The Company shall not be obligated to
reimburse any expenses incurred by SRA or its advisors with respect to
activities undertaken after notification of termination is given.

 

SRA is an independent
contractor and placement agent of the Company. SRA will not have any right or
authority to bind the Company or otherwise create any obligations of any kind
on behalf of the Company and will make no representation to any third party to
the contrary.

 

During the term of this
Agreement and thereafter, each of the Company and SRA agrees to keep
confidential and not disclose to any third party any confidential information
of the other party, and to use such confidential information only in connection
with the engagement hereunder; provided, however, the foregoing will not
prohibit disclosures (i) to the parties’ employees, agents and other
representatives to the extent necessary to enable the Company or SRA to perform
its responsibilities under this Agreement, (ii) to the extent required by
law, judicial or administrative process or regulatory demand, or (iii) with
respect to matters which become public other than by the actions of the
disclosing party hereunder. This section will survive the termination of this
Agreement for a period of five years.

 

 

Each of the Company and SRA
agrees that in connection with any Financing intended to qualify for the
exemption from the registration requirements of the Securities Act of 1933, as
amended (the “Act”), provided by Section 4(2) of the Act, the Company
and SRA shall limit offers to sell, and solicitations of offers to buy,
securities of the Company in connection with the Financing to persons
reasonably believed by it to be “qualified institutional buyers” as such term
is defined in Rule 144A under the Act or “accredited investors” as such
term is defined in Rule 501(a) of Regulation D promulgated under the
Act.

 

Each of the Company and SRA
agrees that any offers it makes in connection with the Financing will be made
only to prospective purchasers on an individual basis and that it will not
engage in any form of general solicitation or general advertising (within the
meaning of Rule 502 under the Act) in connection with the Financing.  Each of the Company and SRA agrees to conduct
the Financing in a manner intended to comply with the registration or
qualification requirements, or available exemptions there from, under
applicable state “blue sky” laws and applicable securities laws of other
jurisdictions.

 

The Company may decline to
consummate the Financing with any prospective purchaser in the Company’s sole
discretion.

 

The
Company agrees to:

 

(a)                                  Indemnify and hold SRA
harmless against any and all losses, claims, damages or liabilities to which
SRA may become subject arising out of or in connection with any of the services
rendered by SRA pursuant to this Agreement, unless such losses, claims, damages
or liabilities resulting from the gross negligence or willful misconduct of SRA
or a breach of this agreement by SRA; and

 

(b)                                 Reimburse SRA periodically
for reasonable legal or other expenses incurred by SRA in connection with
investigating, preparing to defend or defending, or providing evidence in or
preparing to serve or serving as a witness with respect to, any lawsuits,
investigations, claims or other proceedings arising in any manner out of or in
connection with the rendering of services by SRA pursuant to this Agreement
(including, without limitation, in connection with the enforcement of this Agreement
and the indemnification obligations set forth herein); it being understood
however that the Company shall have no obligation to reimburse SRA for any such
expenses and SRA shall immediately repay any such reimbursements by the Company
in the event any losses, claims, damages or liabilities are finally judicially
determined to have resulted from the gross negligence or willful misconduct of
SRA or a breach of this agreement by SRA.

 

The Company agrees that the
indemnification and reimbursement commitments set forth in this document shall
apply whether or not SRA is a formal party to any 

 

 

lawsuits, arbitrations,
claims or other proceedings and that such commitments shall extend upon the
terms set forth in this paragraph to any controlling person, affiliate,
director, officer, employee or agent of SRA (each, with SRA, an “Indemnified
Person”).  In the event an Indemnified
Person is made a formal party to a lawsuit, claim or other proceeding arising
out of or in connection with any of the services rendered by SRA pursuant to
this Agreement, and the Company takes over the defense of such action for an
Indemnified Person, the Company further agrees that it will not, without such
Indemnified Person’s prior written consent, which consent shall not be unreasonably
withheld, enter into any settlement of a lawsuit, claim or other proceeding
arising out of or in connection with the transaction unless such settlement
includes an express and unconditional release from the party bringing the
lawsuit, claim or other proceeding of all Indemnified Persons.  With respect to the immediately preceding
sentence, in the event an Indemnified Person reasonably withholds their consent
to a settlement, the Indemnified Person shall be responsible for all subsequent
costs and expenses arising out of the defense of the Indemnified Person.

 

The Company further agrees
that the Indemnified Persons are entitled to retain separate counsel of their
selection in connection with any of the matters in respect of which
indemnification, reimbursement or contribution may be sought under this
Agreement, provided that, in connection with any one action or proceeding, the
Company shall not be responsible for the fees and expenses of more than one
separate law firm or individual attorney in any one jurisdiction for all
Indemnified Persons.

 

Any dispute arising out of
this Agreement shall be resolved in an arbitration conducted pursuant to the rules of
the National Association of Securities Dealers, Inc. in New York, NY.

 

Please confirm that the
foregoing is in accordance with your understanding by signing and returning to
us the enclosed copy of this Agreement, which shall become a binding agreement
upon our receipt. We are delighted to accept this engagement and look forward
to working with you on this assignment.

 

Very truly yours,

Brian G. Swift, Chairman and CEO

 

Agreement Confirmed by:

 

	
  Security Research
  Associates, Inc.

  	
   

  	
  Wave Systems Corp.

  
	
  80 E. Sir Francis Drake Boulevard, Suite 3F

  	
   

  	
  480 Pleasant Street

  
	
  Larkspur, CA 94939

  	
   

  	
  Lee, MA 01238

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ David N. Olson

  	
   

  	
  By:

  	
  /s/ Gerard T. Feeney

  
	
   

  	
  David N. Olson

  	
   

  	
  Mr. Gerard T. Feeney

  
	
   

  	
  Managing Director

  	
   

  	
  Chief Financial Officer

  
	
  Date: 10/29/08

  	
   

  	
  Date: 10/29/08

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00148-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00148-of-00352.parquet"}]]