EXHIBIT 99.2
WAVE SYSTEMS CORP.
SUBSCRIPTION AGREEMENT
Redwave plc
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Ladies and Gentlemen:
Pursuant to a Share Purchase Agreement, dated 19 June, 2002 (the "SHARE
PURCHASE Agreement"), between Wave Systems Corp., a Delaware corporation (the
"COMPANY"), Redwave plc (the "PURCHASER") and GlobalWave Group plc ("GROUP"),
the Company desires to issue and sell to Redwave plc (the "PURCHASER"), and the
Purchaser desires to purchase from the Company, the Consideration Shares
referred to in the Share Purchase Agreement. Capitalized terms used herein
without definition shall have the meanings assigned to such terms in the Share
Purchase Agreement.
1. ISSUANCE. Subject to and upon the terms and conditions hereof and in the
Share Purchase Agreement, the Purchaser agrees to purchase from the Company, and
subject to and upon the terms and conditions set forth in this Agreement and the
Share Purchase Agreement and in reliance upon the representations and warranties
made by the Purchaser, the Company agrees to issue and sell to the Purchaser,
the Consideration Shares.
2. INVESTMENT REPRESENTATIONS OF THE PURCHASER. The Purchaser hereby
delivers to the Company an Investment Representations Certificate in the form of
EXHIBIT A attached hereto (a "PURCHASER'S CERTIFICATE").
3. RELIANCE. The Purchaser acknowledges that the Company and its officers,
directors, employees, and agents are relying on the truth and accuracy of the
representations and warranties contained in the Purchaser's Certificate
delivered in connection with the offering of the Consideration Shares for sale
to the Purchaser without having first registered the Consideration Shares under
the Securities Act of 1933, as amended. The Purchaser represents and warrants
that all representations, warranties, statements and certifications made in the
Purchaser's Certificate are true, correct and complete as of the date hereof.
All representations, warranties, and covenants contained in this Agreement and
in the Purchaser's Certificate shall survive the acceptance of this Agreement
and the issuance of the Consideration Shares. Notwithstanding the foregoing,
however, no representation, warranty, acknowledgment, or agreement made herein
or in the Purchaser's Certificate by the Purchaser shall in any manner be deemed
to constitute a waiver of any rights granted to the Purchaser under federal or
state securities laws.
4. CONSENT TO USE OF INFORMATION. The Purchaser hereby consents to the
utilization by the Company, as necessary in connection with dealings with any
governmental and regulatory authorities, of any information supplied to the
Company by the Purchaser or by its representatives in connection with the offer
and sale of the Consideration Shares, and agrees to supply any additional
information reasonably requested by any such authority.
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5. REGISTRATION RIGHTS. As soon as reasonably practicable but in any case
not later than sixty days after the date set for Completion in accordance with
the terms of the Share Purchase Agreement (and assuming receipt by the Company
from the Purchaser of all information reasonably requested by the Company in
connection with such filing), the Company will prepare and file with the
Securities and Exchange Commission a registration statement on Form S-1 (the
"REGISTRATION STATEMENT"), covering the resale by the Purchaser of the
Consideration Shares and will use its best endeavours to deal with any enquiries
or questions raised by the SEC thereon in an expedient and timely manner.
6. NOTICE TO PURCHASER. Correspondence and notices to the Purchaser should
be sent to the addresses listed below in the signature page to this Agreement
until such time as the Purchaser shall notify the Company, in writing, of a
different address to which such correspondence and notices are to be sent.
Written notice to any party may be delivered by any means reasonably calculated
to be effective, including by facsimile or electronic mail.
7. MISCELLANEOUS.
(a) The Purchaser agrees that this Agreement is not transferable or
assignable.
(b) The Purchaser agrees that, except as expressly permitted by any
applicable state law, the Purchaser may not cancel, terminate or
revoke this Agreement or any agreement of the Purchaser made hereunder
and this Agreement shall survive the death or legal disability of the
Purchaser and shall be binding upon the Purchaser's heirs, executors,
administrators, successors and assigns.
(c) This Agreement, including the exhibits hereto, constitutes the entire
Agreement among the parties hereto with respect to the subject matter
hereof and may be amended only by a writing executed by all parties.
(d) Headings are for convenience only and are not deemed to be part of
this Agreement.
(e) This Agreement may be executed in multiple counterparts, each of which
shall be deemed an original but all of which together shall constitute
one and the same instrument. In making proof of this Agreement, it
shall not be necessary to produce or account for more than one such
counterpart.
(f) This Agreement and the rights and obligations of the parties hereunder
shall be enforced, governed and construed in all respects in
accordance with the internal substantive laws of the State of Delaware
(without reference to principles of conflicts or choice of law that
would cause the application of the internal laws of any other
jurisdiction).
(g) The Purchaser agrees to provide such information and to execute and
deliver such documents as reasonably may be necessary to comply with
any and all laws and ordinances to which the Company is subject and in
order to verify any of the information provided by or representations
or warranties made by the Purchaser to the Company.
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(h) The Purchaser acknowledges that if he, she or it is a domiciliary of
any state whose "blue sky laws" or other local securities laws require
a restriction on transferability of securities, he, she or it will
comply with such restrictions.
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IN WITNESS WHEREOF, the following parties have executed this Subscription
Agreement as of this 24th day of July, 2002.
PURCHASER:
REDWAVE PLC
BY:
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Name:
Title:
Address:
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Facsimile:
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COMPANY:
WAVE SYSTEMS CORP.
BY:
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Name:
Title:
EXHIBIT A
[FORM OF PURCHASER'S CERTIFICATE]
INVESTMENT REPRESENTATIONS CERTIFICATE
Reference is hereby made to that certain Subscription Agreement, of even
date herewith (the "AGREEMENT") by and between Wave Systems Corp., a Delaware
corporation (the "COMPANY"), Redwave plc (the "PURCHASER") and GlobalWave Group
plc ("Group"). Capitalized terms used herein without definition shall have the
respective meanings assigned to them in the Agreement.
In connection with the issuance of Consideration Shares to the Purchaser,
the Purchaser hereby represents, warrants and certifies as follows:
(a) That the Purchaser is acquiring the Consideration Shares pursuant to
the Share Purchase Agreement for the Purchaser's own account for
investment and not with a view to the distribution thereof. The
Purchaser acknowledges and agrees that unless and until the
Consideration Shares are registered under the Securities Act, the
Purchaser will not sell or otherwise dispose of all or any portion of
the Consideration Shares, otherwise than pursuant to registration
under the Securities Act or under Rule 144 promulgated thereunder. In
conformity herewith, the Purchaser agrees that the certificate(s) for
all Consideration Shares which may be issued to the Purchaser shall
bear the following legend:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF, IN
WHOLE OR IN PART, OTHER THAN PURSUANT TO REGISTRATION UNDER SAID
ACT OR IN CONFORMITY WITH THE LIMITATIONS OF RULE 144."
The Purchaser acknowledges that the Purchaser was informed by the
Company that unless and until such Consideration Shares are registered
for sale by the Purchaser under the Securities Act, they must be held,
and the economic risk of the investment must be borne, unless an
exemption from such registration is available.
(b) That the Purchaser has adequate means of providing for his, her or its
current needs and personal contingencies, that the Purchaser has no
need now, and anticipates no need in the foreseeable future, to sell
the Consideration Shares, and the Purchaser currently has sufficient
financial liquidity to afford a complete loss of his, her or its
investment in the Company.
(c) That all information that the Purchaser has provided (or will provide)
concerning the Purchaser and the Purchaser's financial position, is
correct and complete as of the date set forth below (or will be
correct and complete as of the date provided) and, if there should be
any material change in such information prior to the Purchaser's
having made his, her or its investment in the Company, the Purchaser
will immediately provide such information to the Company.
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(d) That the Purchaser has received and carefully reviewed descriptive
materials and memoranda relating to the Company and any other
materials relating thereto that the Purchaser has requested.
(e) That the Purchaser has had an opportunity to ask questions of and
receive answers from the authorized representatives of the Company,
and to review any relevant documents and records concerning the
business of the Company and the terms and conditions of this
investment, and that any such questions have been answered to the
Purchaser's full satisfaction.
(f) That no person or entity, other than the Company or its authorized
representatives, has offered the Consideration Shares to the
Purchaser.
(g) That the Purchaser has such knowledge and experience in financial and
business matters that he, she or it is capable of evaluating the
merits and risks of an investment in the Company, or the Purchaser and
his, her or its financial and investment advisors together have such
knowledge and experience in financial and business matters that the
Purchaser is capable of evaluating the merits and risks of an
investment in the Company.
(h) That it has been called to the Purchaser's attention in connection
with his, her or its investment in the Company that such investment is
speculative in nature and involves a high degree of risk.
(i) That the Purchaser understands that no federal or state agency
(including the Securities and Exchange Commission) has passed upon or
made any recommendation or endorsement of an investment in the
Consideration Shares.
(j) That the Purchaser will notify the Company immediately, and in any
event prior to the date this Agreement is accepted by the Company, if
any event occurs that would materially and adversely affect any of the
representations or warranties contained herein.
(k) That the Purchaser is an "accredited investor" as such term is defined
in Rule 501 of SEC promulgated under the Securities Act
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IN WITNESS WHEREOF, this Investment Representations Certificate has been
duly executed and delivered as of the date first above written.
REDWAVE PLC
By:
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Title:
Date:
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