Wave Systems and NTT DATA Complete Agreement to Distribute EMBASSY® Technology and Services in Japan

Lee, MA, USA and Tokyo, Japan — July 5, 2006 — Wave Systems Corp. (Nasdaq: WAVX — www.wave.com) announced today that it has executed a software reseller agreement with NTT DATA Corporation (TOKYO: 9613.T) of Japan, a leading systems integrator. Pursuant to the agreement NTT DATA will be authorized to resell and provide support services for Wave’s EMBASSY® Trust Suite technology and solutions for the trusted computing market in Japan, including financial services, government, health care and consumer market segments. Financial details of the agreement were not disclosed. The agreement does not provide for guaranteed minimum or maximum shipped quantities or royalties.

Wave’s EMBASSY software is designed to support the next generation, security chip hardware called the Trusted Platform Module (TPM). The TPM standard was developed by an industry standards body called the Trusted Computing Group (TCG) www.trustedcomputinggroup.org. The computer industry has shipped tens of millions of PCs embedded with TPM chips, and Wave’s EMBASSY technology is designed to be compatible with all commercially available TPMs. When used with a TPM chip, Wave’s EMBASSY trusted computing solutions enable a number of features, including network policy management, data protection, password protection, strong authentication — including machine, biometric and smart card authentication of a user’s personal computer to a server — and encrypted email.

"We are very pleased to solidify our relationship with Wave Systems through the execution of this software reseller agreement," said Noritaka Ogawa, Director, Mobile & IC Media Service Unit, Business Solutions Sector, NTT DATA. "We see a growing business opportunity to deliver quality secure solutions, with Trusted Computing, in Japan. Wave’s products, along with NTT Data’s Solutions, provide enterprise-wide complete security for the business customer. The combined capabilities from NTT Data and products from Wave Systems, provide the Japanese market standards based security that satisfies the requirements for both government and commercial customers."

Steven Sprague, president and CEO, Wave Systems, commented, "Japan represents a substantial market opportunity for Wave’s trusted computing solutions, and NTT DATA, the leading IT services provider in Japan, is the ideal partner for Wave in this market. We are delighted to forge this alliance with NTT DATA and to help their customers address daily personal computer security challenges such as identity, data theft, phishing and insecure passwords. We are currently enhancing Japanese language functionality and support of our solutions to meet our partner’s specifications, and we anticipate the rollout of our product offering through NTT DATA later this year."

More information on Wave’s EMBASSY secure software is available at www.wave.com.

About NTT DATA Corporation
NTT DATA traces its roots back to 1967, to the establishment of the Data Communications Bureau within Nippon Telegraph and Telephone Public Corporation (present-day NTT). The Bureau sustained consistent growth based on system development, building, operation, and maintenance across a broad front, ranging from nation wide systems that formed the cornerstones of society to a multiplicity of corporate network systems. In 1988 it began a new chapter in its story when it became NTT DATA Corporation.

Today, NTT DATA has grown into a group comprising 100 subsidiaries and affiliates. It possesses comprehensive strengths and has the best track record of any system integrator in Japan. It harnesses these many strengths to engage in business that is in keeping with its two priority management policies: “Enhancing the Competitiveness of the System Integration Business” and “Creating New Businesses.”

In an information network society, it is not enough simply to increase business efficiency and make daily life more convenient. NTT DATA is committed to using IT to shape the affluent society of the future, a place where information can be accessed at any time and in any place. For more information about NTT DATA, visit http://www.nttdata.co.jp/en/index.html.

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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, Inc.
Mike Schultz/Katie Potter


Wave Investor Relations Contact
David Collins
Catalyst Global LLC

Japan Market Contact:
Wave Systems
Richard Shuck — VP APAC


Michihiko Yoden
Mobile & IC Media Service Unit
Business Solutions Sector
NTT DATA Corporation
Phone: +81-50-5546-8337

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