Exhibit 10.2
PLACEMENT AGENCY
AGREEMENT
July 21, 2009
Roth Capital Partners,
LLC
24 Corporate Plaza
Newport Beach, CA 92660
Ladies and Gentlemen:
Wave Systems Corp., a Delaware
corporation (the “ Company ”), proposes, subject
to the terms and conditions herein, to issue and sell an aggregate
of up to $1,648,400 in shares (the “ Shares ”)
of its Class A Common Stock, $0.01 par value per share (the
“ Common Stock ”) and warrants to purchase
shares of Common Stock (the “ Warrants ” and,
collectively with the Shares, the “ Securities
”) in the form attached hereto as Exhibit A, directly to
various investors (collectively, the “ Investors
”). The Common Stock issuable upon exercise of the
Warrants is herein referred to as the “ Warrant Shares
.”
The Company hereby confirms its
agreement with the Placement Agent as follows:
Section 1.
Agreement to Act as Placement
Agent .
(a)
On the basis of the representations,
warranties and agreements of the Company herein contained, and
subject to all the terms and conditions of this Agreement between
the Company and Roth Capital Partners, LLC (“ Roth
Capital ”), Roth Capital shall be the Company’s
exclusive placement agent (in such capacity, the “
Placement Agent ”), on a best efforts basis, in
connection with the issuance and sale by the Company of the
Securities in the proposed takedown from a shelf registration
statement on Form S-3 (Registration Statement
No. 333-150340) (the “ Registration Statement
”), with the terms of such takedown to be subject to market
conditions and negotiations between the Company, Roth Capital and
the prospective Investors (such takedown shall be referred to
herein as the “Offering”). As compensation for
services rendered, and provided that any of the Securities are sold
to Investors in the Offering, on the Closing Date (as defined
below) of the Offering, the Company shall pay to the Placement
Agent an amount equal to (a) 6.0% and 2.0%
(non-accountable) (for a total of 8.0%) of the gross proceeds
received by the Company from the sale of the Securities; and
(b) the Placement Agent’s out-of-pocket Financial
Industry Regulatory Authority (“ FINRA
”)-related legal expenses in excess of $20,000, up to a
maximum of $7,500.
This Agreement shall not give rise
to any commitment by the Placement Agent to purchase any of the
Securities, and the Placement Agent shall have no authority to bind
the Company. The Placement Agent shall act on a best efforts
basis to solicit offers to purchase the Securities and to procure
performance by the Investors in the Securities; provided,
however that the Placement Agent does not guarantee that it
will be able to raise new capital in the prospective
Offering. The Company acknowledges that any advice given by
Roth Capital to the Company is solely for the benefit and use of
the Board of Directors of the Company and may not be used,
reproduced, disseminated, quoted or referred to, without the
Placement Agent’s prior written consent. The Placement
Agent may, with the prior written consent of the Company, retain
other brokers or dealers to act as sub-agents on its behalf in
connection with any Offering.
(b)
The term of the Placement
Agent’s exclusive engagement will be six months; however, the
Company may terminate the engagement at any time upon 5 days
written notice to the Placement Agent. Upon termination, the
Placement Agent will be entitled to collect all fees earned and, to
the extent provided herein, to be reimbursed for expenses incurred
through the date of termination. Nothing in this Agreement
shall be construed to limit the ability of the Placement Agent or
its affiliates to pursue, investigate, analyze, invest in, or
engage in investment banking, financial advisory or any other
business relationship with entities or persons other than the
Company.
Section 2.
Representations, Warranties and
Agreements of the Company .
The Company hereby represents,
warrants and covenants to the Placement Agent as of the date
hereof, and as of the Closing Date of the Offering, as
follows:
(a)
Securities Law Filings
. The Company has filed with
the Securities and Exchange Commission (the
“Commission”) the Registration Statement, which became
effective on June 23, 2008, for the registration under the
Securities Act of 1933, as amended (the “ Act
”), of the Securities. On the date of the filing of the
Registration Statement and the date on which the Registration
Statement became effective, the Company met the requirements for
use of Form S-3 under the Act. Such registration
statement meets the requirements set forth in
Rule 415(a)(1)(x) under the Act and complies in all other
material respects with said Rule. The Company will file with
the Commission pursuant to Rule 424(b) under the Act a
supplement to the form of prospectus included in such registration
statement relating to a placement of the Securities and the plan of
distribution thereof and the Company has advised the Placement
Agent of all further material information (financial and other)
with respect to the Company to be set forth therein. Such
registration statement, including the exhibits thereto, as amended
at the date of this Agreement, is hereinafter called the “
Registration Statement ”; such prospectus, in the form
in which it appears in the Registration Statement, is hereinafter
called the “Base Prospectus”; and the supplemented form
of prospectus, in the form in which it will be filed with the
Commission pursuant to Rule 424(b), is hereinafter called a
“ Prospectus Supplement .” Any reference
herein to the Registration Statement, the Base Prospectus or the
Prospectus Supplement shall be deemed to refer to and include the
documents incorporated by reference therein (the “
Incorporated Documents ”) pursuant to Item 12 of
Form S-3 which were filed under the Securities Exchange Act of
1934, as amended (the “ Exchange Act ”), on or
before the date of this Agreement, or the issue date of the Base
Prospectus or Prospectus Supplement, as the case may be; and any
reference herein to the terms “amend,”
“amendment” or “supplement” with respect to
the Registration Statement, the Base Prospectus or the Prospectus
Supplement shall be deemed to refer to and include the filing of
any document under the Exchange Act after the date of this
Agreement and prior to the time of the Closing (as defined below),
or the issue date of the Base Prospectus or the Prospectus
Supplement, as the case may be, deemed to be incorporated therein
by reference. All references in this Agreement to financial
statements and schedules and other information which is
“contained,” “included” or
“stated” in the Registration Statement or the
Prospectus Supplement (and all other references of like import)
shall be deemed to mean and include all such financial statements
and schedules and other information which is or is deemed to be
incorporated by reference in the Registration Statement or the
Prospectus Supplement, as the case may be.
(b)
No Stop Order
. No stop order suspending the
effectiveness of the Registration Statement or the use of the Base
Prospectus or the Prospectus Supplement has been issued, and no
proceeding for any such purpose is pending or has been initiated
or, to the Company’s knowledge, is threatened by the
Commission.
(c)
Compliance with Applicable
Regulations . The
Registration Statement (and any further documents to be filed with
the Commission) contains all exhibits and schedules as required by
the Act.
Each of the Registration Statement
and any post-effective amendment thereto, at the time it became
effective, complied in all material respects with the Act and the
Exchange Act and the applicable rules and regulations of the
Commission thereunder and did not and, as amended or supplemented,
if applicable, will not, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading.
Each of the Base Prospectus and the Prospectus Supplement, as of
its respective date, complied in all material respects with the Act
and the Exchange Act and the applicable rules and regulations
of the Commission thereunder. Each of the Base Prospectus and
the Prospectus Supplement, as amended or supplemented, did not and
will not contain as of the effective date thereof any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
Incorporated Documents, when they were filed with the Commission,
conformed in all material respects to the requirements of the
Exchange Act and the applicable rules and regulations of the
Commission thereunder, and none of such documents, when they were
filed with the Commission, contained any untrue statement of a
material fact or omitted to state a material fact necessary to make
the statements therein not misleading; and any further documents so
filed and incorporated by reference in the Base Prospectus or
Prospectus Supplement prior to the Closing, when such documents are
filed with the Commission, will conform in all material respects to
the requirements of the Exchange Act and the applicable
rules and regulations of the Commission thereunder, as
applicable, and will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the
statements therein not misleading. Notwithstanding the
foregoing, the Company makes no representations or warranties as to
the information contained in or omitted from the Prospectus
Supplement or any amendment thereof or supplement thereto in
reliance upon and in conformity with information furnished in
writing to the Company by or on behalf of the Placement Agent
specifically for use in the Registration Statement or the
Prospectus Supplement. No post-effective amendment to the
Registration Statement reflecting any facts or events arising after
the effective date thereof which represent, individually or in the
aggregate, a fundamental change in the information set forth
therein is required to be filed with the Commission.
(d)
Reports and Documents,
etc . There are no
documents required to be filed with the Commission in connection
with the transaction contemplated hereby that (x) have not
been filed as required pursuant to the Act or (y) will not be
filed within the requisite time period. There are no
contracts or other documents required to be described in the
Prospectus Supplement, or to be filed as exhibits or schedules to
the Registration Statement, which have not been described or filed
as required.
(e)
Offering Materials Furnished to
the Placement Agent . The Company has delivered, or will as
promptly as practicable deliver, to the Placement Agent complete
conformed copies of the Registration Statement and of each consent
and certificate of experts filed as a part thereof, and conformed
copies of the Registration Statement (without exhibits) and the
Base Prospectus and the Prospectus Supplement, as amended or
supplemented, in such quantities and at such places as the
Placement Agent reasonably requests.
(f)
Distribution of Offering
Material . The
Company has not distributed and will not distribute, prior to the
Closing Date, any offering material in connection with the offering
and sale of the Securities other than the Base Prospectus and the
Prospectus Supplement or the Registration Statement and copies of
the documents incorporated by reference therein. For the
avoidance of doubt, any other material prepared and distributed
solely by the Placement Agent is not deemed to be distributed by
the Company for purposes of this paragraph (f).
(g)
The Placement Agency
Agreement . This
Agreement has been duly authorized, executed and delivered by, and
is a valid and binding agreement of, the Company, enforceable
against the Company in accordance with its terms, except as rights
to indemnification and contribution hereunder
may be limited by applicable law and
except as the enforcement hereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by
general equitable principles.
(h)
Authorization of the Securities . The Securities have
been duly authorized for issuance and sale, and the Shares, when
issued and delivered by the Company to the Investors against
payment therefor pursuant to this Agreement, will be validly
issued, fully paid and nonassessable. The Warrant Shares have
been duly authorized and reserved for issuance pursuant to the
terms of the Warrants, and the Warrant Shares, when issued by the
Company upon the valid exercise of the Warrants and payment of the
exercise price, will be duly issued, fully paid and
nonassessable.
(i)
No Material Adverse Change . Subsequent to the
respective dates as of which information is given in the Base
Prospectus and in any Prospectus Supplement: (i) there
has been no material adverse change or effect, or any development
that could reasonably be expected to result in a material adverse
change or effect, in the condition, financial or otherwise, or in
the earnings, business, operations or prospects of the Company and
the Subsidiaries (as defined below) taken as a whole (any such
change or effect, where the context so requires, is called a
“ Material Adverse Change ” or a “
Material Adverse Effect ”); (ii) the Company and
the Subsidiaries have not incurred any material liability or
obligation, indirect, direct or contingent, not in the ordinary
course of business nor entered into any material transaction or
agreement not in the ordinary course of business; and
(iii) there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of capital stock
or repurchase or redemption by the Company of any class of capital
stock.
(j)
Independent Accountants . KPMG LLP, which has
expressed its opinion with respect to the financial statements
(which term as used in this Agreement includes the related notes
and schedules thereto) and supporting schedules filed with the
Commission as a part of the Registration Statement and incorporated
by reference in the Prospectus Supplement, is an independent
registered public accounting firm as required by the Act and the
Exchange Act.
(k)
Preparation of the Financial Statements . The
financial statements filed with the Commission as a part of the
Registration Statement or included or incorporated by reference in
the Base Prospectus or Prospectus Supplement present fairly the
financial position of the Company and its consolidated Subsidiaries
as of and at the dates indicated and the results of their
operations and cash flows for the periods specified therein.
The supporting exhibits and schedules included in the Registration
Statement, if any, present fairly the information required to be
stated therein subject to the normal year-end adjustments which are
not expected to be material in amount. The assumptions used
in preparing the pro forma financial statements, if any, provide a
reasonable basis for presenting the significant effects
attributable to the transactions or events described therein, any
related pro forma adjustments comply with Regulation G and give
appropriate effect to the assumptions, and the pro forma columns
and reconciliations therein reflect the proper application of
adjustments to the corresponding historical financial
statements. Such financial statements and supporting
schedules, if any, have been prepared in conformity with generally
accepted accounting principles as applied in the United States
(“ GAAP ”), as applicable, applied on a
consistent basis throughout the periods involved, except as may be
expressly stated in the related notes thereto and comply in all
material respects with the Act, the Exchange Act and the applicable
rules and regulations of the Commission thereunder. No
other financial statements or supporting schedules or exhibits are
required by the Act or the rules and regulations of the
Commission thereunder to be included in the Registration Statement
or the Prospectus Supplement.
(l)
Incorporation and Good Standing . Each of the Company
and its subsidiaries set forth in Exhibit B hereto (the
“ Subsidiaries ”) has been duly organized and is
validly existing and, as applicable, is a corporation in good
standing under the laws of its jurisdiction of incorporation with
full corporate power
and authority to own its properties
and other assets and conduct its business as described in the
Prospectus Supplement, and is duly qualified or licensed to do
business as a foreign corporation and, as applicable, is in good
standing under the laws of each jurisdiction which requires such
qualification or license, except where the failure to be so
qualified or in good standing would not have a Material Adverse
Effect.
(m)
Capitalization and Other Capital Stock Matters . The
authorized, issued and outstanding capital stock of the Company is
as set forth in the Registration Statement and in each Prospectus
Supplement (other than for issuances after the dates thereof, if
any, pursuant to employee benefit plans described in any Prospectus
Supplement or upon exercise of outstanding options or warrants
described in any Prospectus Supplement). The Securities
conform in all material respects to the description thereof
contained in the Base Prospectus and the Prospectus
Supplement. As of June 30, 2009, there were 67,417,834
shares of common stock outstanding. Since June 30, 2009,
the Company has not issued any securities other than
(i) Common Stock of the Company pursuant to the exercise of
previously outstanding options in connection with the
Company’s employee stock purchase and option plans (the
“ Plans ”), outstanding warrants and other
outstanding obligations, (ii) options granted pursuant to the
Plans in the ordinary course of business consistent with past
practice, in each case as disclosed in the Base Prospectus and each
Prospectus Supplement, and (iii) 3,448,042 shares of
Class A common stock and warrants to purchase 1,724,024 shares
of Class A common stock pursuant to a Prospectus Supplement
dated July 16, 2009. All the issued and outstanding
shares of the capital stock of the Company and the Subsidiaries
have been duly authorized and validly issued, are fully paid and
nonassessable and have been issued in compliance, in all material
respects, with federal and state securities laws, as
applicable. Except as set forth in the Base Prospectus and
each Prospectus Supplement, all of the outstanding shares of
capital stock of the Subsidiaries are owned, directly or
indirectly, by the Company. None of the outstanding shares of
capital stock of the Company or any Subsidiary were issued in
violation of any preemptive rights, rights of first refusal or
other similar rights to subscribe for or purchase securities.
There are no authorized or outstanding options, warrants,
preemptive rights, rights of first refusal or other rights to
purchase, or equity or debt securities convertible into or
exchangeable or exercisable for, any capital stock of the Company
or any Subsidiary other than those described in the Base Prospectus
and each Prospectus Supplement. The description of the
Company’s stock option, stock bonus and other stock plans or
arrangements, and the options, warrants or other rights granted
thereunder, set forth in the Base Prospectus and the Prospectus
Supplement accurately and fairly presents the information required
by the Act to be shown with respect to such plans, arrangements,
options and rights. Except as set forth in the Base
Prospectus or in any Prospectus Supplement, the Company does not
have any subsidiaries or own directly or indirectly any of the
capital stock or other equity or long-term debt securities or have
any equity interest in any other person.
(n)
Stock Exchange Listing . The Common Stock is
registered under the Exchange Act and is lised on the NASDAQ
Capital Market (“ NASDAQ ”), and the Company has
taken no action designed to, or likely to have the effect of
terminating the registration of the Common Stock under the Exchange
Act or suspending from trading the Common Stock from NASDAQ, nor
has the Company received any information suggesting that the
Commission or FINRA is contemplating terminating or suspending such
registration or quotation.
(o)
No Transfer Taxes or Other Fees . There are no
transfer taxes or other similar fees or charges under United States
law or the laws of any state or any political subdivision thereof,
required to be paid in connection with the execution and delivery
of this Agreement or the issuance and sale by the Company of the
Securities.
(p)
No Price Stabilization or Manipulation . The Company
has not taken and will not take, directly or indirectly, any action
designed to or that could reasonably be expected to cause or result
in stabilization or manipulation of the price of the Common Stock
to facilitate the sale or resale of the Securities.
(q)
Blue Sky; FINRA
Matters. The
Securities have been or will be qualified for sale under the
securities laws of such jurisdictions (United States and foreign)
as the Placement Agent and the Investors determine, or are or will
be exempt from the qualification and broker-dealer requirements of
such jurisdictions.
Any certificate signed by an officer
of the Company and delivered to the Placement Agent in connection
herewith or in connection with the Offering shall be deemed to be a
representation and warranty by the Company to the Placement Agent
as to the matters set forth therein.
Section 3.
Delivery and Payment
.
On July 22, 2009 (the “
Closing Date ”), each of the Investors will remit by
wire transfer to an account designated by the Company an amount
equal to the aggregate purchase price for the Securities purchased
by such Investor as set forth on the signature page to the
Subscription Agreement (each a “ Subscription
Agreement ”) entered into between the Company and each of
the Investors. At 10:00 a.m., California time or at such
other time on the Closing Date as may be agreed upon by the Company
and the Placement Agent, the Company shall deliver to each Investor
(i) the Shares purchased by such Investor via the Depository
Trust Company’s (“ DTC ”) Deposit or
Withdrawal at Custodian system via the DTC instructions set forth
on the signature page of such Investor’s Subscription
Agreement and (ii) the Warrants in physical, certificated form
to the address set forth on the signature page of such
Investor’s Subscription Agreement, such Shares and Warrants
to be registered in such name or names as designated by the
Investor on the signature page to the Subscription
Agreement. The closing of the takedown (the “
Closing ”) shall take place at the Company’s
principal executive offices or at the offices of the
Company’s legal counsel. All actions taken at the
Closing shall be deemed to have occurred simultaneously.
Section 4.
Covenants of the
Company .
The Company further covenants and
agrees with the Placement Agent as follows:
(a)
Registration Statement
Matters . During
the period beginning on the date hereof and ending at the time of
the Closing (such period being referred to herein as the “
Prospectus Delivery Period ”), the Company agrees to
advise the Placement Agent promptly after it receives notice
thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to
the Prospectus Supplement or any amended Prospectus Supplement has
been filed and to furnish the Placement Agent with copies thereof;
to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus Supplement;
to advise the Placement Agent, promptly after it receives notices
thereof (i) of any request by the Commission to amend the
Registration Statement or to amend or supplement the Prospectus
Supplement or for additional information and (ii) of the
issuance by the Commission, of any stop order suspending the
effectiveness of the Registration Statement or any post-effective
amendment thereto or any order directed at any Incorporated
Document or any amendment or supplement thereto or any order
preventing or suspending the use of the Base Prospectus or the
Prospectus Supplement or any amendment or supplement thereto or any
post-effective amendment to the Registration Statement, of the
suspension of the qualification of the Securities for offering or
sale in any jurisdiction, of the institution or threatened
institution of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus Supplement or for additional
information; and, in the event of the issuance of any stop order or
of any order preventing or suspending the use of the Base
Prospectus or Prospectus Supplement or suspending any