Wave Systems On Winning Team for U.S. Army Contract

Lee, MA — December 22, 2005 — Wave Systems Corp. (NASDAQ:WAVX) announced today that the company has teamed with NCI Information Systems, Inc., a wholly owned subsidiary of NCI, Inc. (NASDAQ:NCIT — www.nciinc.com ), in connection with a Total Engineering and Integration Services (TEIS) contract awarded to NCI Information Systems, Inc. by the United States Army Information Systems Engineering Command (USAISEC).

Under the TEIS contract, NCI Information Systems, Inc. is to provide information systems engineering and information technology support to the USAISEC, and other federal agencies worldwide. This indefinite delivery/ indefinite quantity (ID/IQ) program has a five-year period of performance, containing a base year and four, one-year option periods, with a total ceiling value of $804 million. The teaming agreement envisions that Wave will supply its computing solutions products, subject to the completion of a subcontract (and related task orders) to be entered into between Wave and NCI Information Systems, Inc.  

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About Wave Systems Corp.

Wave is a pioneer in hardware-based PC security that provides software to help solve critical enterprise PC security challenges such as data protection, strong authentication, network access control and the management of these enterprise functions.  Wave is a founding member of the Trusted Computing Group (TCG), a consortium of more than 100 companies that forged open standards for hardware security.  Wave’s EMBASSY® line of client- and server-side software leverages and manages the security functions of the TCG’s industry standard hardware security chip, the Trusted Platform Module (TPM) as well as hard drives that comply with TCG’s “Opal” self-encrypting drive (SED) standard.  Self-encrypting drives are a growing segment of the data protection market, offering increased security and better performance than most existing software-based encryption solutions.  TPMs are standard equipment on many enterprise-class PCs shipping today and have shipped on an estimated 300 million PCs worldwide.  Using TPMs and/or SEDs and Wave software, enterprises can substantially and cost-effectively strengthen their current security solutions.  Visit http://www.wave.com for more information.

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Under the Private Securities Litigation Reform Act of 1995. This press release may contain forward-looking information within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), including all statements that are not statements of historical fact regarding the intent, belief or current expectations of the company, its directors or its officers with respect to, among other things: (i) the company’s financing plans; (ii) trends affecting the company’s financial condition or results of operations; (iii) the company’s growth strategy and operating strategy; and (iv) the declaration and payment of dividends. The words "may," "would," "will," "expect," "estimate," "anticipate," "believe," "intend" and similar expressions and variations thereof are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the company’s ability to control, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors.

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For more information please contact:

Wave Media Contact:
Michael Wheeler
Wave Systems Corp.
413-243-7029
mwheeler@wave.com
Wave Investor Relations Contact
Joe Jaffoni
Catalyst Global LLC
212-924-9800
wavx@catalyst-ir.com

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