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EXHIBIT 10.2
ADDITIONAL INVESTMENT RIGHT
TO PURCHASE 3,529,412 SHARES OF COMMON STOCK OF
WAVE SYSTEMS CORP.
THIS ADDITIONAL INVESTMENT RIGHT (the "Additional Investment Right")
certifies that, for value received, Capital Ventures International (the
"Holder"), is entitled, upon the terms and subject to the limitations on
exercise and the conditions hereinafter set forth, at any time beginning 5
trading days prior to and ending on the 90-day anniversary of the Closing Date
(the "Termination Date") but not thereafter, to subscribe for and purchase from
Wave Systems Corp., a Delaware corporation (the "Company"), up to 3,529,412
shares (the "Additional Investment Right Shares") of Class A Common Stock, par
value $0.01 per share, of the Company (the "Common Stock"). The purchase price
of one share of Common Stock (the "Exercise Price") under this Additional
Investment Right shall be $1.00 (100% of Market Price), subject to adjustment
hereunder.
Section 1. Definitions. Capitalized terms used and not otherwise
defined herein shall have the meanings set forth in that certain Securities
Purchase Agreement (the "Purchase Agreement"), dated July 30, 2004, among the
Company and the purchasers signatory thereto.
Section 2. Exercise.
(a) EXERCISE OF THE ADDITIONAL INVESTMENT RIGHT. Exercise of
the purchase rights represented by this Additional Investment Right may
be made at any time or times beginning 5 trading days prior to and
ending on the Termination Date by delivery to the Company of a duly
executed facsimile copy of the Notice of Exercise Form annexed hereto
(or such other office or agency of the Company as it may designate by
notice in writing to the registered Holder at the address of such
Holder appearing on the books of the Company); provided, however,
within 5 Trading Days after the date said Notice of Exercise is
delivered to the Company, the Holder shall have surrendered this
Additional Investment Right to the Company and the Company shall have
received payment of the aggregate Exercise Price of the shares thereby
purchased by wire transfer or cashier's check drawn on a United States
bank.
(b) EXERCISE LIMITATIONS.
(i) HOLDER'S RESTRICTIONS. The Holder shall not have
the right to exercise any portion of this Additional Investment
Right, pursuant to Section 2(c) or otherwise, to the extent
that after giving effect to such issuance after exercise, the
Holder (together with the Holder's affiliates), as set forth on
the applicable Notice of Exercise, would beneficially own in
excess of 9.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to such issuance.
For purposes of the foregoing sentence, the number of shares of
Common Stock beneficially owned by the Holder and its
affiliates shall include the number of shares of Common Stock
issuable upon exercise of this Additional
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Investment Right with respect to which the determination of
such sentence is being made, but shall exclude the number of
shares of Common Stock which would be issuable upon (A)
exercise of the remaining, nonexercised portion of this
Additional Investment Right beneficially owned by the Holder or
any of its affiliates and (B) exercise or conversion of the
unexercised or nonconverted portion of any other securities of
the Company (including, without limitation, any other Warrants
or Additional Investment Rights) subject to a limitation on
conversion or exercise analogous to the limitation contained
herein beneficially owned by the Holder or any of its
affiliates. Except as set forth in the preceding sentence, for
purposes of this Section 2(b), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange
Act, it being acknowledged by Holder that the Company is not
representing to Holder that such calculation is in compliance
with Section 13(d) of the Exchange Act and Holder is solely
responsible for any schedules required to be filed in
accordance therewith. To the extent that the limitation
contained in this Section 2(b) applies, the determination of
whether this Additional Investment Right is exercisable (in
relation to other securities owned by the Holder) and of which
a portion of this Additional Investment Right is exercisable
shall be in the sole discretion of such Holder, and the
submission of a Notice of Exercise shall be deemed to be such
Holder's determination of whether this Additional Investment
Right is exercisable (in relation to other securities owned by
such Holder) and of which portion of this Additional Investment
Right is exercisable, in each case subject to such aggregate
percentage limitation, and the Company shall have no obligation
to verify or confirm the accuracy of such determination. For
purposes of this Section 2(b), in determining the number of
outstanding shares of Common Stock, the Holder may rely on the
number of outstanding shares of Common Stock as reflected in
(x) the Company's most recent Form 10-Q or Form 10-K, as the
case may be, (y) a more recent public announcement by the
Company or (z) any other notice by the Company or the Company's
Transfer Agent setting forth the number of shares of Common
Stock outstanding. Upon the written or oral request of the
Holder, the Company shall within two Trading Days confirm
orally and in writing to the Holder the number of shares of
Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after
giving effect to the conversion or exercise of securities of
the Company, including this Additional Investment Right, by the
Holder or its affiliates since the date as of which such number
of outstanding shares of Common Stock was reported.
(ii) TRADING MARKET RESTRICTIONS. If the Company has
not obtained Shareholder Approval (as defined below), if
required, then the Company may not issue upon exercise of this
Additional Investment Right in the aggregate, in excess of
19.999% of the number of shares of Common Stock outstanding on
the Trading Day immediately preceding the Closing Date, less
any shares of Common Stock issued upon the Closing Date or upon
prior exercise of this or any other Additional Investment Right
or Warrant issued pursuant to the Purchase Agreement (such
number of shares, the "Issuable Maximum"). If on any attempted
exercise of this Additional Investment Right, the issuance of
Additional
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Investment Right Shares would exceed the Issuable Maximum and
the Company shall not have previously obtained the vote of
shareholders (the "Shareholder Approval"), if any, as may be
required by the applicable rules and regulations of the
Principal Market (or any successor entity) to approve the
issuance of shares of Common Stock in excess of the Issuable
Maximum pursuant to the terms hereof, then the Company shall
issue to the Holder requesting an Additional Investment Right
exercise such number of Additional Investment Right Shares as
may be issued below the Issuable Maximum and, with respect to
the remainder of the aggregate number of Additional Investment
Right Shares, this Additional Investment Right shall not be
exercisable until and unless Shareholder Approval has been
obtained.
(c) MECHANICS OF EXERCISE.
(i) AUTHORIZATION OF ADDITIONAL INVESTMENT RIGHT
SHARES. The Company covenants that all Additional Investment
Right Shares which may be issued upon the exercise of the
purchase rights represented by this Additional Investment Right
will, upon exercise of the purchase rights represented by this
Additional Investment Right, be duly authorized, validly
issued, fully paid and nonassessable and free from all taxes,
liens and charges in respect of the issue thereof (other than
taxes in respect of any transfer occurring contemporaneously
with such issue). The Company covenants that during the period
the Additional Investment Right is outstanding, it will reserve
from its authorized and unissued Common Stock a sufficient
number of shares to provide for the issuance of the Additional
Investment Right Shares upon the exercise of any purchase
rights under this Additional Investment Right. The Company
further covenants that its issuance of this Additional
Investment Right shall constitute full authority to its
officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates
(or to authorize an uncertificated issuance to the Holder via
the DTC DWAC system) for the Additional Investment Right Shares
upon the exercise of the purchase rights under this Additional
Investment Right. The Company will take all such reasonable
action as may be necessary to assure that such Additional
Investment Right Shares may be issued as provided herein
without violation of any applicable law or regulation, or of
any requirements of the Trading Market upon which the Common
Stock may be listed.
(ii) DELIVERY OF CERTIFICATES UPON EXERCISE.
Certificates (or DWAC transfers) for shares purchased hereunder
shall be delivered to the Holder within 3 Trading Days from the
receipt by the Company of the Notice of Exercise Form,
surrender of this Additional Investment Right and payment of
the aggregate Exercise Price as set forth above ("Additional
Investment Right Share Delivery Date"). This Additional
Investment Right shall be deemed to have been exercised on the
date the Exercise Price is received by the Company. The
Additional Investment Right Shares shall be deemed to have been
issued, and Holder or any other person so designated to be
named therein shall be deemed to have become a
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holder of record of such shares for all purposes, as of the
date the Additional Investment Right has been exercised by
payment to the Company of the Exercise Price and all taxes
required to be paid by the Holder, if any, pursuant to Section
2(c)(vii) prior to the issuance of such shares, have been paid.
(iii) DELIVERY OF RESIDUAL ADDITIONAL INVESTMENT RIGHTS
UPON PARTIAL EXERCISE. If this Additional Investment Right
shall have been exercised in part, the Company shall, at the
time of delivery of the certificate or certificates
representing Additional Investment Right Shares, deliver to
Holder a new Additional Investment Right evidencing the rights
of Holder to purchase the unpurchased Additional Investment
Right Shares called for by this Additional Investment Right,
which new Additional Investment Right shall in all other
respects be identical with this Additional Investment Right.
(iv) RESCISSION RIGHTS. If the Company fails to
deliver to the Holder a certificate or certificates (or DWAC
transfer) representing the Additional Investment Right Shares
pursuant to this Section 2(c)(iv) by the Additional Investment
Right Share Delivery Date, then the Holder will have the right
to rescind such exercise.
(v) BUY-IN COMPENSATION. In addition to any other
rights available to the Holder, if the Company fails to deliver
to the Holder a certificate or certificates (or DWAC transfer)
representing the Additional Investment Right Shares pursuant to
an exercise on or before the Additional Investment Right Share
Delivery Date, and if after such date the Holder is required by
its broker to purchase (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of
a sale by the Holder of the Additional Investment Right Shares
which the Holder anticipated receiving upon such exercise (a
"Buy-In"), then the Company shall (1) pay in cash to the Holder
the amount by which (x) the Holder's total purchase price
(including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by
multiplying (A) the number of Additional Investment Right
Shares that the Company was required to deliver to the Holder
in connection with the exercise at issue times (B) the price at
which the sell order giving rise to such purchase obligation
was executed, and (2) at the option of the Holder, either
reinstate the portion of the Additional Investment Right and
equivalent number of Additional Investment Right Shares for
which such exercise was not honored or deliver to the Holder
the number of shares of Common Stock that would have been
issued had the Company timely complied with its exercise and
delivery obligations hereunder. For example, if the Holder
purchases Common Stock having a total purchase price of $11,000
to cover a Buy-In with respect to an attempted exercise of
shares of Common Stock with an aggregate sale price giving rise
to such purchase obligation of $10,000, under clause (1) of the
immediately preceding sentence the Company shall be required to
pay the Holder $1,000. The Holder shall provide the Company
written notice indicating the amounts payable to the Holder in
respect of the Buy-In, together with applicable confirmations
and other
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evidence reasonably requested by the Company. Nothing herein
shall limit a Holder's right to pursue any other remedies
available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company's failure to
timely deliver certificates representing shares of Common Stock
upon exercise of the Additional Investment Right as required
pursuant to the terms hereof.
(vi) NO FRACTIONAL SHARES OR SCRIP. No fractional
shares or scrip representing fractional shares shall be issued
upon the exercise of this Additional Investment Right. As to
any fraction of a share which Holder would otherwise be
entitled to purchase upon such exercise, the Company shall pay
a cash adjustment in respect of such final fraction in an
amount equal to such fraction multiplied by the Exercise Price.
(vii) CHARGES, TAXES AND EXPENSES. Issuance of
certificates for Additional Investment Right Shares shall be
made without charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such
certificate, all of which taxes and expenses shall be paid by
the Company, and such certificates shall be issued in the name
of the Holder or in such name or names as may be directed by
the Holder; provided, however, that in the event certificates
for Additional Investment Right Shares are to be issued in a
name other than the name of the Holder, this Additional
Investment Right when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly
executed by the Holder; and the Company may require, as a
condition thereto, the payment of a sum sufficient to reimburse
it for any transfer tax incidental thereto.
(viii) CLOSING OF BOOKS. The Company will not close its
stockholder books or records in any manner which prevents the
timely exercise of this Additional Investment Right, pursuant
to the terms hereof.
Section 3. Certain Adjustments.
(a) STOCK DIVIDENDS AND SPLITS. If the Company, at any time
while this Additional Investment Right is outstanding: (A) pays a stock
dividend or otherwise make a distribution or distributions on shares of
its Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock (which, for avoidance of doubt, shall
not include any shares of Common Stock issued by the Company pursuant
to this Additional Investment Right), (B) subdivides outstanding shares
of Common Stock into a larger number of shares, (C) combines (including
by way of reverse stock split) outstanding shares of Common Stock into
a smaller number of shares, or (D) issues by reclassification of shares
of the Common Stock any shares of capital stock of the Company, then in
each case the Exercise Price shall be multiplied by a fraction of which
the numerator shall be the number of shares of Common Stock (excluding
treasury shares, if any) outstanding before such event and of which the
denominator shall be the number of shares of Common Stock outstanding
after such event. Any adjustment made pursuant to this Section 3(a)
shall become effective immediately after the record date for
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the determination of stockholders entitled to receive such dividend or
distribution and shall become effective immediately after the effective
date in the case of a subdivision, combination or re-classification.
(b) CALCULATIONS. All calculations under this Section 3 shall
be made to the nearest cent or the nearest 1/100th of a share, as the
case may be. For purposes of this Section 3, the number of shares of
Common Stock outstanding as of a given date shall be the sum of the
number of shares of Common Stock (excluding treasury shares, if any)
outstanding.
(c) NOTICE TO HOLDERS.
(i) ADJUSTMENT TO EXERCISE PRICE. Whenever the
Exercise Price is adjusted pursuant to this Section 3, the
Company shall promptly mail to each Holder a notice setting
forth the Exercise Price after such adjustment and setting
forth a brief statement of the facts requiring such adjustment.
(ii) NOTICE TO ALLOW EXERCISE BY HOLDER. If (A) the
Company shall declare a dividend (or any other distribution) on
the Common Stock; (B) the Company shall declare a special
nonrecurring cash dividend on or a redemption of the Common
Stock; (C) the Company shall authorize the granting to all
holders of the Common Stock rights or warrants to subscribe for
or purchase any shares of capital stock of any class or of any
rights; (D) the approval of any stockholders of the Company
shall be required in connection with any reclassification of
the Common Stock, any consolidation or merger to which the
Company is a party, any sale or transfer of all or
substantially all of the assets of the Company, of any
compulsory share exchange whereby the Common Stock is converted
into other securities, cash or property; (E) the Company shall
authorize the voluntary or involuntary dissolution, liquidation
or winding up of the affairs of the Company; then, in each
case, the Company shall cause to be mailed to the Holder at its
last addresses as it shall appear upon the Additional
Investment Right Register of the Company, at least 20 calendar
days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a
record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is
not to be taken, the date as of which the holders of the Common
Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the
date on which such reclassification, consolidation, merger,
sale, transfer or share exchange is expected to become
effective or close, and the date as of which it is expected
that holders of the Common Stock of record shall be entitled to
exchange their shares of the Common Stock for securities, cash
or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange;
provided, that the failure to mail such notice or any defect
therein or in the mailing thereof shall not affect the validity
of the corporate action required to be specified in such
notice. The Holder is entitled to exercise this Additional
Investment Right during
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the 20-day period commencing the date of such notice to the
effective date of the event triggering such notice
Section 4. TRANSFER OF THIS ADDITIONAL INVESTMENT RIGHT.
(a) TRANSFERABILITY. Subject to compliance with any
applicable securities laws and the conditions set forth in Section 5(a)
hereof, this Additional Investment Right and all rights hereunder are
transferable, in whole or in part, upon surrender of this Additional
Investment Right at the principal office of the Company, together with
a written assignment of this Additional Investment Right substantially
in the form attached hereto duly executed by the Holder or its agent or
attorney and funds sufficient to pay any transfer taxes payable upon
the making of such transfer. Upon such surrender and, if required, such
payment, the Company shall execute and deliver a new Additional
Investment Right or Additional Investment Rights in the name of the
assignee or assignees and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the
assignor a new Additional Investment Right evidencing the portion of
this Additional Investment Right not so assigned, and this Additional
Investment Right shall promptly be cancelled. An Additional Investment
Right, if properly assigned, may be exercised by a new holder for the
purchase of Additional Investment Right Shares without having a new
Additional Investment Right issued, if exercised in accordance with the
Additional Investment Right.
(b) COMBINATION OR DIVISION OF ADDITIONAL INVESTMENT RIGHTS.
This Additional Investment Right may be divided or combined with other
Additional Investment Rights upon presentation hereof at the aforesaid
office of the Company, together with a written notice specifying the
names and denominations in which new Additional Investment Rights are
to be issued, signed by the Holder or its agent or attorney. Subject to
compliance with Section 4(a), as to any transfer which may be involved
in such division or combination, the Company shall execute and deliver
a new Additional Investment Right or Additional Investment Rights in
exchange for the Additional Investment Right or Additional Investment
Rights to be divided or combined in accordance with such notice.
(c) ADDITIONAL INVESTMENT RIGHT REGISTER. The Company shall
register this Additional Investment Right, upon records to be
maintained by the Company for that purpose (the "Additional Investment
Right Register"), in the name of the record Holder hereof from time to
time. The Company may deem and treat the registered Holder of this
Additional Investment Right as the absolute owner hereof for the
purpose of any exercise hereof or any distribution or notice to the
Holder, and for all other purposes, absent actual notice to the
contrary.
Section 5. Miscellaneous.
(a) TITLE TO THE ADDITIONAL INVESTMENT RIGHT. Prior to the
Termination Date and subject to compliance with applicable laws and
Section 4 of this Additional Investment Right, this Additional
Investment Right and all rights hereunder are transferable, in whole or
in part, at the office or agency of the Company by the Holder in
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person or by duly authorized attorney, upon surrender of this
Additional Investment Right together with the Assignment Form annexed
hereto properly endorsed.
(b) NO RIGHTS AS SHAREHOLDER UNTIL EXERCISE. This Additional
Investment Right does not entitle the Holder to any voting rights or
other rights as a shareholder of the Company prior to the exercise
hereof. Upon the surrender of this Additional Investment Right and the
payment of the aggregate Exercise Price, the Additional Investment
Right Shares so purchased shall be and be deemed to be issued to such
Holder as the record owner of such shares as of the close of business
on the later of the date of such surrender or payment.
(c) LOSS, THEFT, DESTRUCTION OR MUTILATION OF ADDITIONAL
INVESTMENT RIGHT. The Company covenants that upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Additional Investment Right or any
stock certificate relating to the Additional Investment Right Shares,
and in case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to it (which, in the case of the Additional
Investment Right, shall not include the posting of any bond), and upon
surrender and cancellation of such Additional Investment Right or stock
certificate, if mutilated, the Company will make and deliver a new
Additional Investment Right or stock certificate of like tenor and
dated as of such cancellation, in lieu of such Additional Investment
Right or stock certificate.
(d) SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or
appointed day for the taking of any action or the expiration of any
right required or granted herein shall be a Saturday, Sunday or a legal
holiday, then such action may be taken or such right may be exercised
on the next succeeding day not a Saturday, Sunday or legal holiday.
(e) AUTHORIZED SHARES.
The Company covenants that during the period the Additional
Investment Right is outstanding, it will reserve from its
authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of the Additional Investment
Right Shares upon the exercise of any purchase rights under
this Additional Investment Right. The Company further covenants
that its issuance of this Additional Investment Right shall
constitute full authority to its officers who are charged with
the duty of executing stock certificates to execute and issue
the necessary certificates (or authorize an uncertificated
issuance to the Holder via the DTC DWAC system) for the
Additional Investment Right Shares upon the exercise of the
purchase rights under this Additional Investment Right. The
Company will take all such reasonable action as may be
necessary to assure that such Additional Investment Right
Shares may be issued as provided herein without violation of
any applicable law or regulation, or of any requirements of the
Trading Market upon which the Common Stock may be listed.
Except and to the extent as waived or consented to by the
Holder, the Company shall not by any action, including, without
limitation, amending its certificate of incorporation or
through any reorganization, transfer of assets, consolidation,
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merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Additional Investment
Right, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such
actions as may be necessary or appropriate to protect the
rights of Holder as set forth in this Additional Investment
Right against impairment. Without limiting the generality of
the foregoing, the Company will (a) not increase the par value
of any Additional Investment Right Shares above the amount
payable therefor upon such exercise immediately prior to such
increase in par value, (b) take all such action as may be
necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable Additional
Investment Right Shares upon the exercise of this Additional
Investment Right, and (c) use commercially reasonable efforts
to obtain all such authorizations, exemptions or consents from
any public regulatory body having jurisdiction thereof as may
be necessary to enable the Company to perform its obligations
under this Additional Investment Right.
Before taking any action which would result in an adjustment in
the number of Additional Investment Right Shares for which this
Additional Investment Right is exercisable or in the Exercise
Price, the Company shall obtain all such authorizations or
exemptions thereof, or consents thereto, as may be necessary
from any public regulatory body or bodies having jurisdiction
thereof.
(f) JURISDICTION. All questions concerning the construction,
validity, enforcement and interpretation of this Additional Investment
Right shall be determined in accordance with the provisions of the
Purchase Agreement.
(g) NONWAIVER AND EXPENSES. No course of dealing or any delay
or failure to exercise any right hereunder on the part of Holder shall
operate as a waiver of such right or otherwise prejudice Holder's
rights, powers or remedies, notwithstanding that all rights hereunder
terminate on the Termination Date. If the Company willfully and
knowingly fails to comply with any provision of this Additional
Investment Right, which results in any material damages to the Holder,
the Company shall pay to Holder such amounts as shall be sufficient to
cover any reasonable costs and expenses including, but not limited to,
attorneys' fees, including those of appellate proceedings, incurred by
Holder in collecting any amounts due pursuant hereto or in otherwise
enforcing any of its rights, powers or remedies hereunder.
(h) NOTICES. Any notice, request or other document required
or permitted to be given or delivered to the Holder by the Company
shall be delivered in accordance with the notice provisions of the
Purchase Agreement.
(i) LIMITATION OF LIABILITY. No provision hereof, in the
absence of any affirmative action by Holder to exercise this Additional
Investment Right or purchase Additional Investment Right Shares, and no
enumeration herein of the rights or privileges of Holder, shall give
rise to any liability of Holder for the purchase price of any Common
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Stock or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the Company.
(j) REMEDIES. Holder, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will
be entitled to specific performance of its rights under this Additional
Investment Right. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it
of the provisions of this Additional Investment Right and hereby agrees
to waive the defense in any action for specific performance that a
remedy at law would be adequate.
(k) SUCCESSORS AND ASSIGNS. Subject to applicable securities
laws, this Additional Investment Right and the rights and obligations
evidenced hereby shall inure to the benefit of and be binding upon the
successors of the Company and the successors and permitted assigns of
Holder. The provisions of this Additional Investment Right are intended
to be for the benefit of all Holders from time to time of this
Additional Investment Right and shall be enforceable by any such Holder
or holder of Additional Investment Right Shares.
(l) AMENDMENT. This Additional Investment Right may be
modified or amended or the provisions hereof waived with the written
consent of the Company and the Holder.
(m) SEVERABILITY. Wherever possible, each provision of this
Additional Investment Right shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of
this Additional Investment Right shall be prohibited by or invalid
under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder
of such provisions or the remaining provisions of this Additional
Investment Right.
(n) HEADINGS. The headings used in this Additional Investment
Right are for the convenience of reference only and shall not, for any
purpose, be deemed a part of this Additional Investment Right.
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IN WITNESS WHEREOF, the Company has caused this Additional Investment
Right to be executed by its officer thereunto duly authorized.
Dated: July 30, 2004
WAVE SYSTEMS CORP.
By:/s/ Gerard T. Feeney
--------------------
Name: Gerard T. Feeney
Title: Chief Financial Officer
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NOTICE OF EXERCISE
TO: WAVE SYSTEMS CORP.
Section 6. The undersigned hereby elects to purchase ________
Additional Investment Right Shares of the Company pursuant to the terms of the
attached Additional Investment Right (only if exercised in full), and tenders
herewith payment of the exercise price in full, together with all applicable
transfer taxes, if any.
Section 7. Please issue a certificate or certificates representing
said Additional Investment Right Shares in the name of the undersigned or in
such other name as is specified below:
_______________________________
The Additional Investment Right Shares shall be delivered to the following:
_______________________________
_______________________________
_______________________________
[PURCHASER]
By:
------------------------
Name:
Title:
Dated:
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ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, the foregoing Additional Investment Right and all
rights evidenced thereby are hereby assigned to
_______________________________________________ whose address is
____________________________________________________________
____________________________________________________________
Dated: ______________, _______
Holder's Signature:
--------------------------
Holder's Address:
--------------------------
--------------------------
Signature Guaranteed: ______________________________________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Additional Investment Right, without alteration or
enlargement or any change whatsoever, and must be guaranteed by a bank or trust
company. Officers of corporations and those acting in a fiduciary or other
representative capacity should file proper evidence of authority to assign the
foregoing Additional Investment Right.