Wave Systems Announces its Introduction of the EMBASSY® Endpoint Enforcer Supported by Juniper Networks, Meetinghouse and Nortel

Wave to Demonstrate New Network Security Product at Interop Las Vegas 2006

Lee, MA and Las Vegas, NV — May 2, 2006 — Wave Systems Corp. (NASDAQ:WAVX www.wave.com) today announced its introduction of the "EMBASSY® Endpoint Enforcer," a new Wave network security product that is designed to enable third party applications and services to make informed network access decisions by providing protected access to client security metrics. The EMBASSY Endpoint Enforcer can be accessed with Trusted Network Connect (TNC) API’s and has successfully passed interoperability testing with the leading TNC solution providers. The EMBASSY Endpoint Enforcer supports the hardware security features provided by TPM security chips currently shipping in millions of personal computers.

Wave will demonstrate the EMBASSY Endpoint Enforcer using the industry-standard Trusted Network Connect (TNC) architecture by delivering platform integrity services on a PC equipped with a Trusted Platform Module (TPM). This demonstration, which shows the EMBASSY Endpoint Enforcer working with products from Juniper Networks, Inc., Meetinghouse and Nortel, will be conducted during the Interop Las Vegas, 2006 Conference, Tuesday, May 2 through Thursday, May 4 in the Mandalay Bay Convention Center, Las Vegas, Nevada at the Trusted Computing Group (TCG) Booth #2140.

TNC is a security architecture promoted by the Trusted Computing Group (TCG) designed to improve the security policy compliance of clients during the network connection process. TNC establishes a level of network access based on the configuration and integrity of the client. Network administrators implementing TNC solutions expect to have fewer security problems, lower support costs and less downtime caused by poorly configured or infected client systems. Wave Systems has developed the EMBASSY Endpoint Enforcer based upon an upcoming interface specification from TNC known as Platform Trust Service (IF-PTS).

The TNC specification was developed by a TCG subgroup of more than 60 networking and technology industry companies representing client and network security; switches, routers, and hubs; systems and systems management; and operating systems.

Advanced technologies for network access control improve the enforcement of network security policies to reduce system compromises, downtime and data loss. IT departments benefit as endpoints, applications and network equipment work together to efficiently manage security. Choosing TNC with the EMBASSY Endpoint Enforcer is designed to add value by (1) allowing users to use many favored platforms, virus software and security appliances, (2) enabling IT departments to choose among a variety of interoperable solutions, and (3) allowing users to employ an open standard approach that reduces complexity of integration with the use of these open API’s from the TCG. The end objective is a healthier and more secure network at a lower total cost of ownership.

“Wave’s EMBASSY Endpoint Enforcer represents a significant milestone toward realizing the promise of the TNC standards," said Steve Hanna, co-chair of the Trusted Network Connect Sub-Group in the Trusted Computing Group and Distinguished Engineer at Juniper Networks. "The hardware-based security of the Trusted Platform Module with Trusted Network Connect interfaces provides one of the stronger assurances of endpoint integrity available today. EMBASSY Endpoint Enforcer technology adds hardware-based security to Juniper’s Unified Access Control solution, creating a system that is based on pure standards implementations and that enforces access control policies while maintaining compatibility with existing customer networks."

"We are pleased to lead a community of application security and network equipment vendors that have actively participated in the development of the TNC specification with our AEGIS endpoint security management solution. Our objective is to provide enterprise IT administrators with the security framework to defend their networks from breaches while enabling them to leverage their existing and future investments in hardware and software infrastructures," said Anthony Delli Colli, VP, Sales & Marketing of Meetinghouse. "To further our industry support of TNC, Meetinghouse and Wave Systems have successfully tested the interoperability of our AEGIS SecureConnect software with Wave’s EMBASSY® Trust Suite and we are excited to demonstrate our mutual compliance to the TNC specification at the Interop conference."

"A consistent, industry-wide approach to data and network security is critical to our customers, both enterprises and service providers," said Steve Slattery, president, Enterprise Solutions and Packet Networks, Nortel. "Confirming interoperability of key security appliances with Wave Systems and our other fellow TCG members continues Nortel’s aggressive efforts to promote a common approach to securing converged networks."

"We are pleased to have integrated Wave’s EMBASSY Endpoint Enforcer to be compatible with solutions provided by these industry leaders in the networking marketplace. The capabilities in the EMBASSY Endpoint Enforcer comprise the industry’s first solution designed to provide TNC products with the highly powerful authentication capabilities of a TPM," said Brian Berger, Wave’s executive vice president, marketing and sales. "EMBASSY® products are designed to deliver key capabilities allowing the network system to implement policies for access and authentication of users and machines as well as important integrity capabilities for the collection of data necessary to determine the health of a particular PC prior to network access."

Wave also offers EMBASSY® Trust Suite (ETS), the EMBASSY® Key Management Server (EKMS), and the EMBASSY® Authentication Server (EAS), which are designed to deliver improved trusted computing features for enterprise and government markets. These features include network policy management, data protection, and strong authentication using biometrics, smart cards, and TPMs.

For more information about Wave’s products and services, please visit www.wave.com.

About Meetinghouse

Meetinghouse is the leading supplier of advanced standards-based 802.1X network security solutions for providing mutual authentication on wired Ethernet and Wi-Fi networks. Meetinghouse supports a wide selection of operating systems and authentication methods to provide enterprises with maximum flexibility for Endpoint Security. For additional information, visit www.mtghouse.com.

About Nortel

Nortel is a recognized leader in delivering communications capabilities that enhance the human experience, ignite and power global commerce, and secure and protect the world’s most critical information. Our next-generation technologies, for both service providers and enterprises, span access and core networks, support multimedia and business-critical applications, and help eliminate today’s barriers to efficiency, speed and performance by simplifying networks and connecting people with information. Nortel does business in more than 150 countries. For more information, visit Nortel on the Web at www.nortel.com. For the latest Nortel news, visit www.nortel.com/news.

Wave Logo

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.

Safe Harbor for Forward Looking Statements

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.

All brands are the property of their respective owners.

For more information please contact:

Wave Media Contact:
Michael Schultz/Tom Bain
Wave Systems Corp.

Kate Biddle

Wave Investor Relations Contact
David Collins, Richard Land
Catalyst Global LLC

Stay up-to-date on news relating to Wave. Join our email list by putting your email address in the space below.