Wave Systems Announces New Licensing Agreement with STMicroelectronics for Additional PC Security Software

Trusted Platform Module (TPM) Solutions Target Asia Pacific OEMs / ODMs to Meet Increasing Customer Demand

Lee, MA — June 20, 2006 — Wave Systems Corp. (Nasdaq: WAVX — www.wave.com) today announced that STMicroelectronics (NYSE: STM) has enhanced its existing license agreement with Wave Systems with the addition of a license for a new suite of EMBASSY® security software from Wave Systems for bundling and distribution with ST’s Trusted Computing Group (TCG) 1.2 TPM Solution for personal computers. Under the agreement, Wave receives a per-unit royalty (similar to Wave’s existing PC OEM agreements) based on ST’s shipment volumes of products equipped with this new suite of Wave’s EMBASSY® security software technology. This royalty would be in addition to the per-unit royalty currently paid to Wave for distribution of the original EMBASSY security software licensed under the companies’ existing Master Software License and Distribution Agreement. The contract does not provide for guaranteed minimum or maximum shipped quantities or royalties.

The new software suite includes capabilities for multi-factor authentication, data protection and ID/Password management that, when bundled with Wave Systems’ EMBASSY Trust Suite capabilities already licensed for distribution by ST, offer wide-ranging desktop security capabilities for the customer. The new solution is based on ST’s latest SOC — ST19WP18 – combined with the software stack (BIOS and Windows ® drivers, Trusted Computing Group Software Stack, and Wave EMBASSY® Security Center and TCG Cryptographic Service Provider) and delivers an off-the-shelf TCG-enabled security solution for desktop and laptop PCs.  

"Our TPM sales are accelerating in the Asia Pacific market, and our customers are demanding a turn-key solution. Our new agreement with Wave Systems allows ST to provide a more complete solution, up to the applications level, for multifactor authentication-data protection as well as basic TPM capabilities from the existing license agreement, such as TPM management with Wave’s EMBASSY Security Center (ESC)," said Vincent Cousin, Manager, Digital Secure Access Business Unit, STMicroelectronics Taiwan. " We see a growing market and adoption of the TPM throughout Asia and expect our ability to sell Wave’s solution to help our position in the marketplace."

"Wave believes the OEM (Original Equipment Manufacturer) and ODM (Original Design Manufacturer) channels will be important in the long-term for the distribution of our value-added software solutions and that ST’s distribution of higher value solutions for biometrics, key management, data encryption and pin/password management will increase Wave’s reach to the customer base in the APAC region. We are pleased that STMicroelectronics is taking a leadership role in providing more alternatives to their channels," said Brian Berger, executive vice president of marketing and sales, Wave Systems. " We believe this is another important demonstration of the extensive capabilities Wave can offer to address client and server security needs, particularly in areas where there are heightened concerns over lost or stolen PC’s containing proprietary data. "

More information about STMicroelectronics products is available through www.st.com.

More information about Wave’s EMBASSY Trust Suite products is available through www.wave.com/products/ets.asp.

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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 further information about the products and their availability please contact the marketing contacts listed below :

Wave Media Contact:
Schwartz Communications
Mike Schultz/Katie Potter


Wave Investor Relations Contact
David Collins, Annette Wynter
Catalyst Global LLC

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