Exhibit 4.1
CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
Between
WAVE SYSTEMS CORP.
and
JNC OPPORTUNITY FUND LTD.
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Dated as of May 30, 1997
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CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT, dated as of
May 30, 1997 (this "Agreement"), between Wave Systems Corp., a Delaware
corporation (the "Company"), and JNC Opportunity Fund Ltd., a corporation
organized and existing under the laws of the Cayman Islands (the "Purchaser").
WHEREAS, the Company desires to issue and sell to the
Purchaser and the Purchaser desires to acquire shares of the Company's Series D
Convertible Preferred Stock, par value $.01 per share (the "Preferred Stock").
IN CONSIDERATION of the mutual covenants and agreements set
forth herein and for good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1. Certain Definitions. As used in this Agreement,
unless the context requires a different meaning, the following terms have the
meanings indicated:
"Affiliate" means, with respect to any Person, any Person
that, directly or indirectly, controls, is controlled by or is under common
control with such Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with") shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities or by contract or
otherwise.
"Business Day" means any day except Saturday, Sunday and any
day which shall be a legal holiday or a day on which banking institutions in the
City of New York are authorized or required by law or other government actions
to close.
"Closing" shall have the meaning set forth in Section 2.1(b).
"Closing Date" shall have the meaning set forth in Section
2.1(b).
"Certificate of Designation" shall have the meaning set forth
in Section 2.1(a).
"Class A Common Stock" means the Company's Class A Common
Stock, par value $.01 per share.
"Class B Common Stock" means the Company's Class B Common
Stock, par value $.01 per share.
"Code" means the Internal Revenue Code of 1986, as amended,
and the rules and regulations thereunder as in effect on the date hereof.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means, collectively, the Class A Common Stock,
Class B Common Stock, any stock into which such shares may hereafter be
reclassified, and any other class of equity securities of the Company hereafter
designated as Common Stock.
"Disclosure Materials" means, collectively, the SEC Documents
and the Schedules to this Agreement furnished by or on behalf of the Company
pursuant to Section 3.1.
"Escrow Agent" means Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx &
Xxxxxx LLP.
"Escrow Agreement" means the escrow agreement, dated as of the
date hereof, by and between the Company, the Purchaser and the Escrow Agent,
substantially in the form of Exhibit E, as the same may be amended, supplemented
or otherwise modified in accordance with its terms.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, encumbrance, right of first refusal, charge or security interest of any
kind in or on such asset or the revenues or income thereon or therefrom.
"March Quarterly Report" shall have the meaning set forth in
Section 3.1(e).
"Material Adverse Effect" shall have the meaning set forth in
Section 3.1(a).
"Original Issue Date" shall mean the first issuance of any
Shares, regardless of the number of transfers of any particular Share and
regardless of the number of certificates which may be issued to evidence any
particular Share.
"Per Share Market Value" shall have the meaning set forth in
the Certificate of Designation.
"Person" means an individual or a corporation, partnership,
trust, incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or political
subdivision thereof) or other entity of any kind.
"Preferred Stock" shall have the meaning set forth in the
recitals hereto.
"Purchase Price" shall have the meaning set forth in Section
2.1(a).
"Registration Rights Agreement" means the registration rights
agreement, dated as of the date hereof, by and between the Company and the
Purchaser, substantially in the form of Exhibit B, as the same may be amended,
supplemented or otherwise modified in accordance with its terms.
"SEC Documents" shall have the meaning set forth in Section
3.1(l).
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Securities" shall have the meaning set forth in
Section 3.1(m).
"Shares" means the shares of Preferred Stock to be purchased
by the Purchaser pursuant to this Agreement.
"Side Letter Agreement" means the Agreement, dated as of the
date hereof, between the Company and the Purchaser in the form attached hereto
as Exhibit G.
"Subsequent Financing Notice" shall have the meaning set forth
in Section 4.9.
"Subsequent Sale" shall have the meaning set forth in Section
4.9.
"Subsidiaries" shall have the meaning set forth in Section
3.1(a).
"Trading Day" shall have the meaning set forth in the
Certificate of Designation.
"Transaction Documents" shall have the meaning set forth in
Section 3.1(b).
"Underlying Shares" means the shares of Class A Common Stock
issuable upon conversion of Shares in accordance with the terms hereof and the
Certificate of Designation and upon exercise of the Warrant in accordance with
the terms thereof.
"Underlying Shares Registration Statement" shall have the
meaning set forth in Section 3.1(f).
"Warrant" means the Class A Common Stock purchase Warrant of
the Company to be issued to the Purchaser on the Closing Date, substantially in
the form of Exhibit F, entitling the Purchaser to purchase up to 80,000 shares
of Class A Common Stock.
ARTICLE II
PURCHASE OF SHARES
Section 2.1. Purchase of Shares; Closing.
(a) Subject to the terms and conditions herein set forth, the
Company shall issue and sell to the Purchaser, and the Purchaser shall purchase
from the Company on the Closing Date 80,000 Shares, which shall have the
respective rights, preferences and privileges set forth in Exhibit A (the
"Certificate of Designation"), at a price per Share of $20. The "Purchase Price"
for the Shares is $1,600,000.
(b) The closing of the purchase and sale of the Shares (the
"Closing") shall take place at the offices of the Escrow Agent, 0000 Xxxxxx xx
xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, immediately following the execution
hereof, or at such other time and/or place as the Purchaser and the Company may
agree, but not until the conditions listed in Article V have been satisfied or
waived by the appropriate party. The date of the Closing is referred to herein
as the "Closing Date".
(c) At the Closing, the Escrow Agent, in accordance with and
subject to the terms and conditions of the Escrow Agreement, shall, pursuant to
instructions delivered with respect thereto by the Company and the Purchaser,
deliver (i) to the Purchaser (A) one or more stock certificates representing the
Shares purchased hereunder, and (B) the Warrant, each registered in the name of
the Purchaser, (ii) to the Company the Purchase Price, less the legal fees and
disbursements contemplated in Section 7.1, in United States dollars in
immediately available funds by wire transfer to an account designated in writing
by the Company prior to the Closing and (iii) to the party entitled thereto, all
documents, instruments and writings required to have been delivered at or prior
to Closing by either the Company or the Purchaser pursuant to this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1. Representations and Warranties of the Company.
The Company hereby represents and warrants to the Purchaser as follows:
(a) Organization and Qualification. The Company is a
corporation, duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, with the requisite corporate
power and authority to own and use its properties and assets and to carry on its
business as currently conducted. The Company has no material subsidiaries other
than as set forth in the SEC Documents (collectively, the "Subsidiaries"). Each
of the Subsidiaries is a corporation, duly incorporated, validly existing and in
good standing under the laws of the jurisdiction of its incorporation, with the
full corporate power and authority to own and use its properties and assets and
to carry on its business as currently conducted. Each of the Company and the
Subsidiaries is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the case may be,
could not, individually or in the aggregate, have a material adverse effect on
the results of operations, assets, prospects, or financial condition of the
Company and the Subsidiaries, taken as a whole (a "Material Adverse Effect").
(b) Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated hereby and by the Registration Rights Agreement, the Escrow
Agreement, the Certificate of Designation, the Warrant and the Side Letter
Agreement (collectively with this Agreement, the "Transaction Documents") and to
otherwise carry out its obligations hereunder and thereunder. The execution and
delivery of each of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated thereby have been duly
authorized by all necessary action on the part of the Company. Each of the
Transaction Documents has been duly executed and delivered by the Company and
constitutes the legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the enforcement
of, creditors' rights and remedies or by other equitable principles of general
application. Neither the Company nor any Subsidiary is in violation of any of
the provisions of its respective certificate of incorporation, bylaws or other
charter documents.
(c) Capitalization. The authorized, issued and outstanding
capital stock of the Company and each of the Subsidiaries is set forth in
Schedule 3.1(c). No shares of Common Stock are entitled to preemptive or similar
rights. Except as specifically disclosed in Schedule 3.1(c), there are no
outstanding options, warrants, script rights to subscribe to, calls or
commitments of any character whatsoever relating to, or, except as a result of
the purchase and sale of the Shares and the Warrant, securities, rights or
obligations convertible into or exchangeable for, or giving any person any right
to subscribe for or acquire any shares of Common Stock, or contracts,
commitments, understandings, or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock, or
securities or rights convertible or exchangeable into shares of Common Stock. To
the knowledge of the Company, except as disclosed in the Disclosure Materials,
no Person beneficially owns (as determined pursuant to Rule 13d-3 promulgated
under the Exchange Act) or has the right to acquire by agreement with the
Company in excess of 5% of the Common Stock.
(d) Issuance of Shares and Underlying Shares. The Shares are
duly authorized and, when paid for in accordance with the terms hereof, shall be
validly issued, fully paid and nonassessable, free and clear of any Liens. The
Company has and at all times while the Shares and the Warrant are outstanding
will maintain a reserve of shares of Common Stock to enable it to perform its
conversion, exercise and other obligations under this Agreement, the Certificate
of Designation and the Warrant, which reserve shall be no less than 2,090,000
shares of Class A Common Stock. When issued in accordance with the terms hereof,
the Certificate of Designation and the Warrant (as the case may be), the
Underlying Shares will be duly authorized, validly issued, fully paid and
nonassessable, free and clear of all Liens.
(e) No Conflicts. The execution, delivery and performance of
the Transaction Documents by the Company and the consummation by the Company of
the transactions contemplated thereby do not and will not (i) conflict with or
violate any provision of its certificate of incorporation or bylaws (each as
amended through the date hereof) or (ii) conflict with, or constitute a default
(or an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company is
a party, or (iii) to the knowledge of the Company result in a violation of any
law, rule, regulation, order, judgment, injunction, decree or other restriction
of any court or governmental authority to which the Company is subject
(including Federal and state securities laws and regulations), or by which any
property or asset of the Company is bound or affected, except in the case of
each of clauses (ii) and (iii), such conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations as could not,
individually or in the aggregate, (x) adversely affect the legality, validity or
enforceability of any of the Transaction Documents, (y) have a Material Adverse
Effect or (z) adversely impair the Company's ability to perform fully on a
timely basis its obligations under the Transaction Documents. The business of
the Company is not being conducted in violation of any law, ordinance or
regulation of any governmental authority.
(f) Consents and Approvals. Neither the Company nor any
Subsidiary is required to obtain any consent, waiver, authorization or order of,
or make any filing or registration with, any court or other Federal, state,
local or other governmental authority or other Person in connection with the
execution, delivery and performance by the Company of the Transaction Documents,
except for (i) the filing of the Certificate of Designation with respect to the
Shares with the Secretary of State of Delaware, which filing shall be effected
on or prior to the Closing Date, (ii) the filing of the registration statement
covering the Underlying Shares (the "Underlying Shares Registration Statement")
with the Commission and the making of the applicable blue-sky filings under
state securities laws, each as contemplated by the Registration Rights
Agreement, and (iii) other than, in all other cases, where the failure to obtain
such consent, waiver, authorization or order, or to give or make such notice or
filing, could not, individually or in the aggregate, (x) adversely affect the
legality, validity or enforceability of any of the Transaction Documents, (y)
have a Material Adverse Effect or (z) adversely impair the Company's ability to
perform fully on a timely basis its obligations under the Transaction Documents.
(g) Litigation; Proceedings. There is no action, suit, notice
of violation, proceeding or investigation pending or, to the best knowledge of
the Company, threatened against or affecting the Company or any of its
Subsidiaries or any of their respective properties before or by any court,
governmental or administrative agency or regulatory authority (Federal, state,
county, local or foreign) which (i) relates to or challenges the legality,
validity or enforceability of the Transaction Documents, Shares or Underlying
Shares, (ii) could, individually or in the aggregate, have a Material Adverse
Effect or (iii) could, individually or in the aggregate, adversely impair the
Company's ability to perform fully on a timely basis its obligations under the
Transaction Documents. The Company has provided to the Purchaser true and
complete copies of all notices received since December 27, 1997 from any stock
exchange or market on which the Common Stock is listed or quoted to the effect
that the Company is not in compliance with the listing or maintenance
requirements of such exchange, market or quotation system, as well as true and
complete copies of the responses thereto by or on behalf of the Company.
(h) No Default or Violation. Neither the Company nor any
Subsidiary (i) is in default under or in violation of any indenture, loan or
credit agreement or any other agreement or instrument to which it is a party or
by which it or any of its properties is bound, (ii) is in violation of any order
of any court, arbitrator or governmental body, or (iii) is in violation of any
statute, rule or regulation of any governmental authority, except as could not,
in any case of (i) above, individually or in the aggregate, (x) adversely affect
the legality, validity or enforceability of any of the Transaction Documents,
(y) have a Material Adverse Effect or (z) adversely impair the Company's ability
to perform fully on a timely basis its obligations under the Transaction
Documents.
(i) Certain Fees. Except for fees payable by the Company to
Xxxxxxx Capital Partners, Ltd. and to The Shemano Group, Inc., no fees or
commissions will be payable by the Company to any broker, finder, investment
banker or bank with respect to the consummation of the transactions contemplated
hereby. The Purchaser shall have no obligation with respect to such fees or with
respect to any claims made by other Persons for fees due in connection with this
transaction.
(j) Disclosure Materials. The Disclosure Materials (other than
the SEC Documents) do not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading.
(k) Private Offering. Neither the Company nor any Person
acting on its behalf has taken or will take any action (including, without
limitation, any offering of any securities of the Company under circumstances
which would require the integration of such offering with the offering of the
Shares under the Securities Act) which might subject the offering, issuance or
sale of the Shares to the registration requirements of Section 5 of the
Securities Act.
(l) SEC Documents. The Company has filed all reports required
to be filed by it under the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for the three years preceding the date hereof (or such shorter
period as the Company was required by law to file such material) (the foregoing
materials being collectively referred to herein as the "SEC Documents") on a
timely basis, or has received a valid extension of such time of filing. As of
their respective dates, the SEC Documents complied in all material respects with
the requirements of the Securities Act and the Exchange Act and the published
rules and regulations of the Commission promulgated thereunder, and none of the
SEC Documents, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the Company included
in the SEC Documents comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto. Such financial statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis during
the periods involved, except as may be otherwise indicated in such financial
statements or the notes thereto, and fairly present in all material respects the
financial position of the Company and its consolidated subsidiaries as of and
for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal
year-end audit adjustments. Since the date of the financial statements included
in the Company's Quarterly Report on Form 10-Q for the quarterly period ended
March 30, 1997 (the "March Quarterly Report"), there has been no event,
occurrence or development that could have had a Material Adverse Effect which is
not specifically disclosed in the Disclosure Materials.
(m) Seniority. No class of equity securities of the Company is
senior to the Shares in right of payment, whether upon liquidation, dissolution
or otherwise other than the Company's Series A Cumulative Redeemable Preferred
Stock, par value $.01 per share, of which, on the date hereof, 360 shares are
outstanding, the Company's Series B Preferred Stock, par value $.01 per share of
which, on the date hereof, no shares are outstanding, and the Company's Series C
Convertible Preferred Stock, par value $.01 par share, of which, on the date
hereof, 75,000 shares are outstanding (collectively, the "Senior Securities").
(n) Form S-3 Eligibility. The Company is, and at the Closing
Date will be, eligible to register securities for resale with the Commission
under Form S-3 promulgated under the Securities Act.
(o) Investment Company. The Company is not and is not an
Affiliate of an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(p) Class B Common Stock. The issued and outstanding shares of
the Class B Common Stock are restricted securities subject to Rule 144
promulgated under the Exchange Act, and the holders of such shares have no
registration rights or preemptive rights arising out of their ownership of such
shares.
Section 3.2. Representations and Warranties of the Purchaser.
The Purchaser hereby represents and warrants to the Company as follows:
(a) Organization; Authority. The Purchaser is a corporation
duly and validly existing and in good standing under the laws of the
jurisdiction of its incorporation. The Purchaser has the requisite power and
authority to enter into and to consummate the transactions contemplated hereby
and by the Registration Rights Agreement, Side Letter Agreement and the Escrow
Agreement and otherwise to carry out its obligations hereunder and thereunder.
The purchase of the Shares and the Warrant (and upon conversion or exercise
thereof (as the case may be), the Underlying Shares) by the Purchaser has been
duly authorized by all necessary action on the part of the Purchaser. Each of
this Agreement, the Registration Rights Agreement and the Escrow Agreement has
been duly executed and delivered by the Purchaser or on its behalf and
constitutes the valid and legally binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
generally and to general principles of equity.
(b) Investment Intent. The Purchaser is acquiring the Shares,
the Warrant and the Underlying Shares for its own account for investment
purposes only and not with a view to or for distributing or reselling such
Shares, Warrant or Underlying Shares or any part thereof or interest therein,
without prejudice, however, to the Purchaser's right, subject to the provisions
of this Agreement and the Registration Rights Agreement, at all times to sell or
otherwise dispose of all or any part of such Shares, Warrant or Underlying
Shares under an effective registration statement under the Securities Act and in
compliance with applicable State securities laws or under an exemption from such
registration.
(c) Purchaser Status. At the time the Purchaser was offered
the Shares and the Warrant, it was, and at the date hereof, it is, and at the
Closing Date, it will be, an "accredited investor" as defined in Rule 501(a)
under the Securities Act.
(d) Experience of Purchaser. The Purchaser, either alone or
together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Shares and the
Warrant, and has so evaluated the merits and risks of such investment.
(e) Ability of Purchaser to Bear Risk of Investment. The
Purchaser is able to bear the economic risk of an investment in the Shares and
the Warrant and, at the present time, is able to afford a complete loss of such
investment.
(f) Prohibited Transactions. Neither the Shares nor the
Warrant are being acquired, directly or indirectly, with the assets of any
"employee benefit plan", within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended.
(g) Access to Information. The Purchaser acknowledges receipt
of the Disclosure Materials and further acknowledges that it or its
representatives have been afforded (i) the opportunity to ask such questions as
it has deemed necessary of, and to receive answers from, representatives of the
Company concerning the terms and conditions of the offering of the Shares and
the Warrant and the merits and risks of investing in the Shares and the Warrant;
(ii) access to information about the Company and the Company's financial
condition, results of operations, business, properties and management sufficient
to enable it to evaluate its investment in the Shares and the Warrant; and (iii)
the opportunity to obtain such additional information which the Company
possesses or can acquire without unreasonable effort or expense that is
necessary to make an informed investment decision with respect to the Shares and
the Warrant and to verify the accuracy and completeness of the information
contained in the Disclosure Materials.
(h) Reliance. The Purchaser understands and acknowledges that
(i) the Shares and the Warrant are being offered and sold, and the Underlying
Shares are being offered, to it without registration under the Securities Act in
a private placement that is exempt from the registration provisions of the
Securities Act and (ii) the availability of such exemption depends in part on,
and that the Company will rely upon the accuracy and truthfulness of, the
foregoing representations and the Purchaser hereby consents to such reliance.
The Company acknowledges and agrees that the Purchaser makes
no representation or warranty with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 3.2.
ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES
Section 4.1. Transfer Restrictions. If the Purchaser should
decide to dispose of any of the Shares or any portion of the Warrant to be
purchased by it hereunder (and upon conversion or exercise (as the case may be)
thereof, any Underlying Shares), the Purchaser understands and agrees that it
may do so only pursuant to an effective registration statement under the
Securities Act or pursuant to an available exemption from the registration
requirements thereof. In connection with any transfer of any Shares or the
Warrant other than pursuant to an effective registration statement or to the
Company, the Company may require that the transferor of such Shares or Warrant
provide to the Company an opinion of counsel experienced in the area of United
States securities laws selected by the transferor, the form and substance of
which opinion shall be reasonably satisfactory to the Company, to the effect
that such transfer does not require registration of such Shares or Warrant under
the Securities Act or any state securities laws.
The Purchaser agrees to the imprinting, so long as is required
by the provisions of this Section 4.1, of the following legend on certificates
representing the Shares, the Warrant and the Underlying Shares:
NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION
UNDER REGULATION D PROMULGATED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS.
The legend set forth above shall be removed upon the
conversion of Shares or the exercise of the Warrant (as the case may be)
represented by such certificate at any time after the Underlying Shares
Registration Statement has been declared effective under the Securities Act or,
if no Underlying Shares Registration Statement is then effective, if in the
opinion of counsel to the Company experienced in the area of United States
securities laws such legend is no longer required under applicable requirements
of the Securities Act (including judicial interpretations and pronouncements
issued by the staff of the Commission). The certificates representing the
Shares, the Warrant and the Underlying Shares shall also bear any other legends
required by applicable Federal or state securities laws, which legends shall be
removed when not required in accordance with this Section 4.1. The Company
agrees that it will provide the Purchaser, upon request, with a substitute stock
certificate or certificates or Warrant (as the case may be), free from such
legend at such time as such legend is no longer applicable. The Purchaser agrees
that, in connection with any transfer of Shares, the Warrant or Underlying
Shares by it pursuant to an effective registration statement under the
Securities Act, it will comply with all prospectus delivery requirements of the
Securities Act. The Company makes no representation, warranty or agreement as to
the availability of any exemption from registration under the Securities Act
with respect to any resale of Shares, the Warrant or Underlying Shares.
Section 4.2. Stop Transfer Instruction. The Purchaser agrees
that the Company shall be entitled to make a notation on its records and give
instructions to any transfer agent of the Company in order to implement the
restrictions on transfer set forth in Section 4.1 above.
Section 4.3. Furnishing of Information. For so long as the
Purchaser owns Shares or Underlying Shares, the Company covenants to timely file
(or obtain valid extensions in respect thereof) all reports required to be filed
by the Company after the date hereof pursuant to Section 13(a) or 15(d) of the
Exchange Act and to promptly furnish the Purchaser with true and complete copies
of all such filings. If the Company is not at the time required to file reports
pursuant to such sections, it will prepare and furnish to the Purchaser annual
and quarterly financial statements, together with a discussion and analysis of
such financial statements in form and substance substantially similar to those
that would otherwise be required to be included in reports required by Section
13(a) or 15(d) of the Exchange Act in the time period that such filings would
have been required to have been made under the Exchange Act.
Section 4.4. Use of Disclosure Materials. The Company consents
to the use of the Disclosure Materials, and any amendments and supplements
thereto, by the Purchaser in connection with resales of the Shares or the
Underlying Shares other than pursuant to an effective registration statement.
Section 4.5. Issuance of Senior Securities. For so long
as the Purchaser shall own Shares, the Company shall not issue any Senior
Securities.
Section 4.6. Blue Sky Laws. In accordance with the
Registration Rights Agreement, the Company shall qualify the Shares and the
Underlying Shares under the securities or Blue Sky laws of such jurisdictions as
the Purchaser may request and continue such qualification at all times through
the third anniversary of the Closing Date; provided, however, that neither the
Company nor its Subsidiaries shall be required in connection therewith to
qualify as a foreign corporation where they are not now so qualified.
Section 4.7. Integration. The Company shall not, and shall use
its best efforts to ensure that, no Affiliate shall sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Shares, the Warrant or the Underlying Shares in a manner
that would require the registration under the Securities Act of the sale of the
Shares, the Warrant or Underlying Shares to the Purchaser.
Section 4.8. Solicitation Materials. The Company shall not (i)
distribute any offering materials in connection with the offering and sale of
the Shares, the Warrant or Underlying Shares other than the Disclosure Materials
and any amendments and supplements thereto prepared in compliance herewith or
(ii) solicit any offer to buy or sell the Shares, the Warrant or Underlying
Shares by means of any form of general solicitation or advertising.
Section 4.9. Right of First Refusal; Subsequent Regulations;
Certain Corporate Actions. (a) The Company shall not, directly or indirectly,
without the prior written consent of the Purchaser, offer, sell, grant any
option to purchase, or otherwise dispose (or announce any offer, sale, grant any
option to purchase or other disposition) of any of its or its Affiliates equity
or equity-equivalent securities at a price which is, on the face thereof, or
implied therein, less than the market price or fair market value for such
securities (a "Subsequent Sale") for a period of 180 days after Closing Date,
except (i) the granting of options to employees, officers and directors, and the
issuance of shares upon exercise of options granted, under any stock option plan
heretofore or hereinafter duly adopted by the Company, (ii) shares issued upon
exercise of any currently outstanding warrants and upon conversion of any
currently outstanding convertible preferred stock disclosed in Schedule 3.1(c),
and (iii) shares of Common Stock issued upon conversion of Shares or exercise of
the Warrant in accordance herewith and the Certificate of Designation or the
Warrant, as the case may be, unless (A) the Company delivers to the Purchaser a
written notice (the "Subsequent Financing Notice") of its intention to effect
such Subsequent Financing, which Subsequent Financing Notice shall describe in
reasonable detail the proposed terms of such Subsequent Financing and the amount
of proceeds intended to be raised thereunder and (B) the Purchaser shall not
have notified the Company by 5:00 p.m. (Eastern Time) on the third Business Day
after its receipt of the Subsequent Financing Notice of its willingness to enter
into good faith negotiations to provide as promptly as is commercially
practicable (or to cause its sole designee to provide) financing to the Company
on substantially the terms set forth in the Subsequent Financing Notice. If the
Purchaser shall fail to notify the Company of its intention to enter into such
negotiations within such time period, or if the Purchaser shall fail to actually
close such financing within 10 Business Days after such notice, the Company may
effect the Subsequent Financing substantially upon the terms and to the Persons
(or Affiliates of such Persons) set forth in the Subsequent Financing Notice;
provided, that the Company shall provide the Purchaser with a second Subsequent
Financing Notice, and the Purchaser shall again have the right of first refusal
set forth above in this paragraph (a), if the Subsequent Financing subject to
the initial Subsequent Financing Notice shall not have been consummated for any
reason on the terms set forth in such Subsequent Financing Notice within 60
Business Days after the date of the initial Subsequent Financing Notice with the
Person (or an Affiliate of such Person) identified in the Subsequent Financing
Notice. The provisions of this Section 4.9 shall not apply to any financing by
the Company with a strategic partner (including without limitation any company
which is involved in computer hardware, including peripherals, or software
manufacturing, design, development, marketing and sales, content providers,
Internet document transmission, data broadcast systems, and electronic commerce
applications), including without limitation Creative Technology Ltd. A strategic
partner does not include entities in the business of acquiring private placement
securities for investment purposes only.
(b) Except Underlying Shares to be registered in accordance
with the Registration Rights Agreement, the Company may not register for resale
any securities of the Company for a period of not less than 60 Trading Days
after the date that the Underlying Shares Registration Statement is declared
effective by the Commission. Any days that the Purchaser is unable to sell
Underlying Shares under the Underlying Shares Registration Statement shall be
added to such 60 Trading Day period.
(c) As long as there are Shares outstanding, the Company shall
not and shall cause the Subsidiaries not to, without the consent of the
Purchaser, (i) amend its certificate of incorporation, bylaws or other charter
documents so as to adversely affect any rights of the Purchaser; (ii) split,
combine or reclassify its outstanding capital stock; (iii) declare, authorize,
set aside or pay any dividend or other distribution with respect to the Common
Stock; (iv) repay, repurchase or offer to repay, repurchase or otherwise acquire
shares of its Common Stock; or (v) enter into any agreement with respect to any
of the foregoing.
Section 4.10. Purchaser Ownership of Common Stock. The
Purchaser may not use its ability to convert Shares hereunder or under the terms
of the Certificate of Designation or to exercise the Warrant to the extent that
such conversion or exercise would result in the Purchaser owning more than 4.9%
of the outstanding shares of the Common Stock. The Company shall, promptly upon
its receipt of a Conversion Notice tendered by the Purchaser (or its designee)
under the Certificate of Designation and upon an exercise of any portion of the
Warrant, notify the Purchaser of the number of shares of Common Stock
outstanding on such date and the number of Underlying Shares which would be
issuable to the Purchaser (or its designee, as the case may be) if the
conversion or exercise requested in such Conversion Notice or exercise notice
were effected in full, whereupon, notwithstanding anything to the contrary set
forth in the Certificate of Designation or the Warrant, the Purchaser shall
revoke such conversion or exercise to the extent that it determines that such
conversion or exercise would result in the Purchaser owning in excess of 4.9% of
such outstanding shares of Common Stock.
Section 4.11. Listing of Underlying Shares. The Company shall
take all steps necessary to cause the Underlying Shares to be approved for
listing in The Nasdaq National Market (and each other national securities
exchange or market on which the Common Stock is then listed) no later than the
first day after which shares may be converted hereunder by the Purchaser, and
shall provide to the Purchaser evidence of such listing and shall maintain the
listing of its Common Stock on such exchange.
Section 4.12. Purchaser's Rights if Trading in Common Stock is
Suspended. In the event that at any time within the three-year period after the
Closing Date trading in the shares of the Common Stock is suspended on the
principal market or exchange for such shares (other than as a result of the
suspension of trading in securities on such market or exchange generally or
temporary suspensions pending the release of material information) for more than
three days or if the shares of Common Stock are delisted from the Nasdaq
National Market, unless immediately therewith the Common Stock is listed for
trading in the Nasdaq SmallCap Market, in which event the provisions of this
Section 4.13 shall apply to a listing on the Nasdaq SmallCap Market, at the
Purchaser's option exercisable by written notice to the Company, the Company
shall repurchase all Shares and all Underlying Shares then held by such
Purchaser, at an aggregate purchase price equal to (A) the product of the
average Per Share Market Value for the five Trading Days immediately preceding
the day of such notice multiplied by the number of shares of Common Stock into
which the Shares to be purchased are then convertible (or in the case of
Underlying Shares, the number of Underlying Shares to be purchased), plus (B)
interest on such amount accruing from the 7th day after such notice at the rate
of 15% per annum.
Section 4.13. No Violation of Applicable Law. Notwithstanding
any provision of this Agreement to the contrary, if any redemption of Shares or
Underlying Shares otherwise required under this Agreement, the Registration
Rights Agreement or the Certificate of Designation would be prohibited by the
relevant provisions of the Delaware General Corporation Law, such redemption
shall be effected as soon as it is permitted under such law; provided, however,
that, interest payable by the Company with respect to any such redemption shall
continue to accrue in accordance with Section 4.12 during any such period.
Section 4.14. Redemption Restrictions. Notwithstanding any
provision of this Agreement to the contrary, if any redemption of Shares or
Underlying Shares otherwise required under this Agreement would be prohibited in
the absence of consent from any lender of the Company or of any Subsidiary, or
by the holders of any class of securities of the Company, the Company shall use
its best efforts to obtain such consent as promptly as practicable after the
redemption is required. Interest payable by the Company with respect to any such
redemption shall continue to accrue in accordance with Section 4.12 until such
consent is obtained. Nothing contained in this Section shall be construed as a
waiver by the Purchaser of any rights it may have by virtue of any breach of any
representation or warranty of the Company herein as to the absence of any
requirement to obtain any such consent.
Section 4.15. Notice of Breaches. Each of the Company and the
Purchaser shall give prompt written notice to the other of any breach of any
representation, warranty or other agreement contained in this Agreement or in
the Registration Rights Agreement, as well as any events or occurrences arising
after the date hereof and prior to the Closing Date, which could reasonably be
likely to cause any representation or warranty or other agreement of such party,
as the case may be, contained herein or therein to be incorrect or breached as
of such Closing Date. However, no disclosure by either party pursuant to this
Section shall be deemed to cure any breach of any representation, warranty or
other agreement contained herein or in the Registration Rights Agreement.
Neither the Company, any Subsidiary nor the Purchaser will take, or agree to
commit to take, any action that is intended to make any representation or
warranty of the Company or the Purchaser, as the case may be, contained herein
or in the Registration Rights Agreement inaccurate in any respect at the Closing
Date.
Notwithstanding the generality of the foregoing, the Company
shall promptly notify the Purchaser of any notice or claim (written or oral)
that it receives from any lender of the Company to the effect that the
consummation of the transactions contemplated by any of the Transaction
Documents violates or would violate any written agreement or understanding
between such lender and the Company, and the Company shall promptly furnish by
facsimile to the holders of the Shares a copy of any written statement in
support of or relating to such claim or notice.
Section 4.16. Conversion Procedures. Exhibit D attached hereto
sets forth the procedures with respect to the conversion of the Shares,
including the forms of conversion notice to be provided upon conversion,
instructions as to the procedures for conversion, the form of legal opinion, if
necessary, that shall be rendered to the Company's transfer agent and such other
information and instructions as may be reasonably necessary to enable the
Purchaser to exercise its right of conversion smoothly and expeditiously.
ARTICLE V
CONDITIONS PRECEDENT TO CLOSING
Section 5.1. Conditions Precedent to Obligations of the
Purchaser. The obligation of the Purchaser to purchase the Shares and the
Warrant is subject to the satisfaction or waiver by the Purchaser, at or prior
to the Closing, of each of the following conditions:
(a) Legal Opinion. The Purchaser shall have received the
legal opinion, addressed to it and dated the Closing Date, of Xxxxxx, Xxxxxx-
Xxxxxxx, Colt & Mosle, counsel for the Company, substantially in the form of
Exhibit C;
(b) Accuracy of the Company's Representations and Warranties.
The representations and warranties of the Company contained herein and in the
Registration Rights Agreement shall be true and correct in all material respects
as of the date when made and as of the Closing Date as though made at that time;
(c) Performance by the Company. The Company shall have
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by the Transaction Documents to be performed,
satisfied or complied with by the Company at or prior to the Closing;
(d) No Injunction. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction which prohibits the consummation of any of the transactions
contemplated by the Transaction Documents;
(e) No Material Adverse Effect. Since the date of the
financial statements included in the March Quarterly Report, no event which in
the judgment of the Purchaser has or could have a Material Adverse Effect and no
material adverse change in the financial condition or business of the Company
shall have occurred which is not disclosed in the Disclosure Materials;
(f) No Prohibitions. The purchase of and payment for the
Shares and the Warrant (and upon conversion thereof, the Underlying Shares)
hereunder (i) shall not be prohibited or enjoined (temporarily or permanently)
by any applicable law or governmental regulation and (ii) shall not subject the
Purchaser to any penalty, or in its judgment, other onerous condition under or
pursuant to any applicable law or governmental regulation that would materially
reduce the benefits to the Purchaser of the purchase of the Shares, the Warrant
or the Underlying Shares (provided, however, that such regulation, law or
onerous condition was not in effect in such form at the date of this Agreement);
(g) Company Certificates. The Purchaser shall have received a
certificate, dated the Closing Date, signed by the Secretary or an Assistant
Secretary of the Company and certifying (i) that attached thereto is a true,
correct and complete copy of (A) the Company's Restated Certificate of
Incorporation, as amended to the date thereof, (B) the Company's By-Laws, as
amended to the date thereof, and (C) resolutions duly adopted by the Board of
Directors of the Company authorizing the execution and delivery of the
Transaction Documents and the issuance and sale of the Shares, the Warrant and
the Underlying Shares and (ii) the incumbency of officers executing the
Transaction Documents;
(h) Registration Rights Agreement, Side Letter Agreement
and Escrow Agreement. The Company shall have executed and delivered to the
Escrow Agent the Registration Rights Agreement, Side Letter Agreement and the
Escrow Agreement;
(i) No Suspensions of Trading in Common Stock. Trading in the
Common Stock shall not have been suspended by the Commission or the Nasdaq
National Market or any other national securities exchange or market on which the
Common Stock is listed or quoted (except for any suspension of trading of
limited duration at the direction of the Company solely to permit dissemination
of material information regarding the Company);
(j) Listing of Common Stock. The Common Stock shall have
at all times between the date hereof and the Closing Date been, and on the
Closing Date be, listed for trading on the Nasdaq National Market;
(k) Delivery of Stock Certificates and the Warrant. The
Company shall have delivered to the Escrow Agent the stock certificate(s)
representing the Shares and the Warrant, each registered in the name of the
Purchaser, each in form satisfactory to the Escrow Agent and the Purchaser;
(l) Shares of Common Stock. On the Closing Date, the Company
shall have duly reserved for issuance to the Purchaser 2,090,000 Underlying
Shares;
(m) Certificate of Designation. The Certificate of Designation
shall have been duly filed by the Secretary of State of Delaware, and the
Company shall have delivered proof of such filing to the Escrow Agent,
reasonably satisfactory to it; and
(n) Form S-3 Eligibility. The Company shall be eligible to
register securities for resale under Form S-3 promulgated under the Securities
Act.
Section 5.2. Conditions Precedent to Obligations of the
Company. The obligation of the Company to issue and sell the Shares and the
Warrant hereunder is subject to the satisfaction or waiver by the Company, at or
prior to the Closing, of each of the following conditions:
(a) Accuracy of the Purchaser's Representations and
Warranties. The representations and warranties of the Purchaser contained herein
shall be true and correct in all material respects as of the date when made and
as of the Closing Date as though made at that time;
(b) Performance by the Purchaser. The Purchaser shall have
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by this Agreement, the Registration Rights
Agreement, the Side Letter Agreement and the Escrow Agreement to be performed,
satisfied or complied with by it at or prior to the Closing;
(c) No Prohibitions. The sale of the Shares and the Warrant
(and upon conversion or exercise (as the case may be) thereof, the Underlying
Shares) hereunder (i) shall not be prohibited or enjoined (temporarily or
permanently) by any applicable law or governmental regulation and (ii) shall not
subject the Company to any penalty, or in its judgment, any other onerous
condition under or pursuant to any applicable law or governmental regulation
that would materially reduce the benefits to the Company of the sale of Shares,
the Warrant or the Underlying Shares to the Purchaser (provided, however, that
such regulation, law or onerous condition was not in effect in such form at the
date of this Agreement); and
(d) No Injunction. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court of governmental authority of competent
jurisdiction which prohibits the consummation of any of the transactions
contemplated by the Transaction Documents.
ARTICLE VI
TERMINATION
Section 6.1. Termination by Mutual Consent. This Agreement may
be terminated at any time prior to Closing by the mutual consent of the Company
and the Purchaser.
Section 6.2. Termination by the Company or the Purchaser. This
Agreement may be terminated prior to Closing by either the Company or the
Purchaser, by giving written notice of such termination to the other party, if:
(a) there shall be in effect any statute, rule, law or
regulation that prohibits the consummation of the Closing or if the consummation
of the Closing would violate any non-appealable final judgment, order, decree,
ruling or injunction of any court of or governmental authority having competent
jurisdiction; or
(b) there shall have been an amendment to Regulation D or an
interpretive release promulgated or issued thereunder, which, in the judgment of
the terminating party, would materially adversely affect the transactions
contemplated by the Transaction Documents.
Section 6.3. Termination by the Company. This Agreement may be
terminated prior to Closing by the Company, by giving written notice of such
termination to the Purchaser, if the Purchaser has materially breached any
representation, warranty, covenant or agreement contained in this Agreement, the
Registration Rights Agreement or the Side Letter Agreement and such breach is
not cured within one business day following receipt by the Purchaser of notice
of such breach.
Section 6.4. Termination by the Purchaser. This Agreement may
be terminated prior to Closing by the Purchaser, by giving written notice of
such termination to the Company, if:
(a) the Company has breached any representation, warranty,
covenant or agreement contained in this Agreement, the Registration Rights
Agreement or the Side Letter Agreement and such breach is not cured within one
business day following receipt by the Company of notice of such breach;
(b) there has occurred a material adverse change in the
business or financial condition of the Company or an event since the date of the
financial statements included in the March Quarterly Report which, in the
Purchaser's judgment has or could have a Material Adverse Effect and which is
not disclosed in the Disclosure Materials;
(c) trading in the Common Stock has been suspended by the
Commission or the Nasdaq National Market or other national securities exchange
or market on which the Common Stock is listed or quoted; or
(d) the Common Stock shall have failed to be listed for
trading on the Nasdaq National Market or on the Nasdaq SmallCap Market.
ARTICLE VII
MISCELLANEOUS
Section 7.1. Fees and Expenses. Each party shall pay the fees
and expenses of its advisers, counsel, accountants and other experts, if any,
and all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement, except as
set forth in the Registration Rights Agreement and except that the Company shall
reimburse the Purchaser $10,000 for its legal fees and disbursements. The
Company shall pay all stamp and other taxes and duties levied in connection with
the issuance of the Shares and the Warrant (and upon conversion or exercise
thereof (as the case may be), the Underlying Shares) pursuant hereto. The
Purchaser shall be responsible for its own tax liability that may arise as a
result of the investment hereunder or the transactions contemplated by this
Agreement.
Section 7.1. Entire Agreement; Amendments. This Agreement,
together with the Exhibits and Schedules hereto, and each of the other
Transaction Documents contain the entire understanding of the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters.
Section 7.2. Notices. Any notice or other communication
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been received (a) upon hand delivery (receipt acknowledged) or
delivery by telex (with correct answer back received), telecopy or facsimile
(with transmission confirmation report) at the address or number designated
below (if delivered on a business day during normal business hours where such
notice is to be received), or the first business day following such delivery (if
delivered other than on a business day during normal business hours where such
notice is to be received) or (b) on the second business day following the date
of mailing by express courier service, fully prepaid, addressed to such address,
or upon actual receipt of such mailing, whichever shall first occur. The
addresses for such communications shall be:
If to the Company: Wave Systems Corp.
000 Xxxxxxxx Xxxxxx
Xxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxx Xxxxxx Hatch
With copies to: Xxxxxx, Xxxxxx-Xxxxxxx,
Colt & Mosle
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxxx
If to the Purchaser: JNC Opportunity Fund Ltd.
Olympia Capital (Cayman) Ltd.
c/o Olympia Capital (Bermuda) Ltd.
Xxxxxxxx Xxxxx
00 Xxxx Xxxxxx
Xxxxxxxx XX00
Xxxxxxx
Facsimile No.: (000) 000-0000
Attn: Xxxxxx Xxxxx
with copies to: Encore Capital Management, L.L.C.
00000 Xxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxx Xxxx
- and -
Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx
& Xxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxx X. Xxxxx
or such other address as may be designated in writing hereafter, in the same
manner, by such person.
Section 7.3. Amendments; Waivers. No provision of this
Agreement may be waived or amended except in a written instrument signed, in the
case of an amendment, by both the Company and the Purchaser, or, in the case of
a waiver, by the party against whom enforcement of any such waiver is sought. No
waiver of any default with respect to any provision, condition or requirement of
this Agreement shall be deemed to be a continuing waiver in the future or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right accruing to it thereafter.
Section 7.4. Headings. The headings herein are for convenience
only, do not constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof.
Section 7.5. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties and their successors and
permitted assigns. Neither the Company nor the Purchaser may assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the other, except that the Purchaser may assign its rights hereunder
and under the Registration Rights Agreement to an Affiliate or managed fund
thereof, provided, that such assignee demonstrates to the reasonable
satisfaction of the Company its satisfaction of the representations and
warranties set forth in Section 3.2 herein. The assignment by a party of this
Agreement or any rights hereunder shall not affect the obligations of such party
under this Agreement.
Section 7.6. No Third-Party Beneficiaries. This Agreement is
intended for the benefit of the parties hereto and their respective permitted
successors and assigns and is not for the benefit of, nor may any provision
hereof be enforced by, any other person.
Section 7.7. Governing Law. This Agreement shall be governed
by and construed and enforced in accordance with the internal laws of the State
of New York without regard to the principles of conflicts of law thereof.
Section 7.8. Survival. The representations and warranties of
the Company and the Purchaser contained in Article III and the agreements and
covenants of the parties contained in Article IV and this Article VII shall
survive the Closing (or any earlier termination of this Agreement) and any
conversion of Shares or exercise of the Warrant hereunder.
Section 7.9. Counterpart Signatures. This Agreement may be
executed in two or more counterparts, all of which when taken together shall be
considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party, it
being understood that both parties need not sign the same counterpart. In the
event that any signature is delivered by facsimile transmission, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) the same with the same force and effect as if
such facsimile signature page were an original thereof.
Section 7.10. Publicity. The Company and the Purchaser shall
consult with each other in issuing any press releases or otherwise making public
statements with respect to the transactions contemplated hereby and neither
party shall issue any such press release or otherwise make any such public
statement without the prior written consent of the other, which consent shall
not be unreasonably withheld or delayed, except that no prior consent shall be
required if such disclosure is required by law, in which such case the
disclosing party shall provide the other party with prior notice of such public
statement.
Section 7.11 Severability. In case any one or more of the
provisions of this Agreement shall be invalid or unenforceable in any respect,
the validity and enforceability of the remaining terms and provisions of this
Agreement shall not in any way be affecting or impaired thereby and the parties
will attempt to agree upon a valid and enforceable provision which shall be a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.
Section 7.12. Remedies. In addition to being entitled to
exercise all rights provided herein or granted by law, including recovery of
damages, the Purchaser will be entitled to specific performance of the
obligations of the Company under this Agreement and the Company will be entitled
to specific performance of the obligations of the Purchaser hereunder with
respect to the subsequent transfer of Shares and the Underlying Shares. Each of
the Company and the Purchaser agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of any breach of its obligations
described in the foregoing sentence and hereby agrees to waive in any action for
specific performance of any such obligation the defense that a remedy at law
would be adequate.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first indicated above.
WAVE SYSTEMS CORP.
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chairman
JNC OPPORTUNITY FUND LTD.
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxx X. Xxxxx
Title: Director
Exhibit D
[To be provided by Company prior to the Closing]
