SUBSCRIPTION AGREEMENT

Exhibit 10.1

SUBSCRIPTION AGREEMENT

December 24, 2008

Wave Systems Corp.
480 Pleasant Street
Lee, MA 01238

The undersigned (the " Investor ") hereby confirms its agreement with you as follows:

1.                                       This Subscription Agreement (this " Agreement ") is made as of the date set forth below between Wave Systems Corp., a Delaware corporation (the " Company "), and the Investor.

2.                                       The Company has authorized the sale and issuance to certain investors of (a) up to 456 shares of Series K Convertible Preferred Stock (the " Total Shares "), par value $0.01 per share (the " Series K Preferred Stock ") for a purchase price of $2,800 per share (the " Purchase Price ") and (b) warrants, in substantially the form attached hereto as Annex II (the " Warrants " and, collectively, with the Total Shares, the " Securities "), to purchase up to 1,140,000 shares of Class A Common Stock of the Company, par value $0.01 per share (the " Common Stock ") at an exercise price of $0.28 per share (the " Exercise Price ").  Investors will be issued Warrants to purchase 2,500 shares of Common Stock for each share of Series K Preferred Stock purchased by such Investor.  The terms of the Series K Preferred Stock will be set forth in the Certificate of Designations substantially in the form attached hereto as Annex III (the " Certificate of Designations ").

3.                                       The offering and sale of the Securities (the " Offering ") are being made pursuant to the Company’s registration statement including a base prospectus (the " U.S. Base Prospectus ") on Form S-3 (Registration No.  333-150340 ) filed with the United States Securities and Exchange Commission (the " Commission ") (which, together with all amendments or supplements thereto is referred to herein as the " Registration Statement ") and a Prospectus Supplement containing certain supplemental information regarding the Securities and terms of the Offering that will be filed with the Commission (the " Prospectus Supplement ").

4.                                       The Company and the Investor agree that the Investor will purchase from the Company and the Company will issue and sell to the Investor, for the aggregate purchase price set forth below, (a) the number of shares of Series K Preferred Stock set forth below (the " Investor Shares ") and (b) a Warrant to purchase the number of shares of Common Stock set forth below (the " Investor Warrant " and, collectively with the Investor Shares, the " Investor Securities ").  The Investor Securities shall be purchased pursuant to the Terms and Conditions for Purchase of Securities attached hereto as Annex I and incorporated herein by this reference as if fully set forth herein.

5.                                       The Investor represents that, except as set forth below, (a) it has had no position, office or other material relationship within the past three years with the Company or

any of its affiliates and (b) it has no direct or indirect affiliation or association with any NASD member.  Exceptions:

(If no exceptions, write " none. " If left blank, response will be deemed to be " none. ")

6.                                       The Investor acknowledges that, prior to or in connection with the execution and delivery of this Agreement, it has reviewed the final U.S. Base Prospectus, dated June 23, 2008 , which is a part of the Company’s Registration Statement, and the Prospectus Supplement.  THIS AGREEMENT SHALL NOT CONSTITUTE A BINDING COMMITMENT ON THE PART OF THE COMPANY UNTIL (A) THE COMPANY HAS TIMELY RECEIVED AN EXECUTED COPY OF THE COMPLETED SUBSCRIPTION AGREEMENT FROM THE INVESTOR AND (B) THE COMPANY HAS DELIVERED TO THE INVESTOR AN EXECUTED COUNTERPART SIGNATURE PAGE HERETO.  THE INVESTOR ACKNOWLEDGES THAT, AT ANY TIME PRIOR TO THE DELIVERY OF ITS EXECUTED COUNTERPART SIGNATURE PAGE, THE COMPANY MAY ELECT TO NOT ENTER INTO THIS SUBSCRIPTION AGREEMENT FOR ANY REASON.

SIGNATURE PAGE

Number of Investor Shares:                    

Price Per Investor Share:                                                               $2,800

Aggregate Purchase Price:                       

Shares of Common Stock issuable upon exercise of Investor Warrant:                            

Exercise Price of Investor Warrant:         $0.28

Please confirm that the foregoing correctly sets forth the agreement between us by signing in the space provided below for that purpose.

EXHIBIT A

WAVE SYSTEMS CORP.

INVESTOR QUESTIONNAIRE

Pursuant to Section 3 of Annex I to this Agreement, please provide us with the following information:

ANNEX I

TERMS AND CONDITIONS FOR PURCHASE OF SECURITIES

All capitalized terms not otherwise defined in this Annex I shall have the meanings ascribed thereto in the Subscription Agreement to which this Annex I is attached.

1.                                       Authorization and Sale of the Investor Securities.  Subject to the terms and conditions of this Agreement, the Company has authorized the sale of the Investor Securities.

2.                                       Agreement to Sell and Purchase the Investor Securities; Placement Agent.

2.1.                             At the Closing (as defined in Section 3.1), the Company will sell to the Investor, and the Investor will purchase from the Company, upon the terms and conditions set forth herein, the number of Investor Shares and corresponding Investor Warrants set forth on the last page of the Subscription Agreement to which these Terms and Conditions for Purchase of Investor Securities are attached as Annex I (the "Signature Page") for the aggregate purchase price therefor set forth on the Signature Page.

2.2.                             The Company proposes to enter into substantially this same form of Subscription Agreement with certain other investors (the "Other Investors") and expects to complete sales of some or all of the remaining Securities to them as part of the Offering (subject to Section 3.2(b) below).  The Investor and the Other Investors are hereinafter sometimes collectively referred to as the "Investors".  The Company may complete sales of the remaining Securities in this Offering to certain of the Other Investors without requiring such Other Investors to enter into a Subscription Agreement; such sales shall nevertheless be on the same price terms as the price terms for all of the other sales in the Offering.

2.3.                             The Investor acknowledges that the Company intends to pay Security Research Associates, Inc. (the "Placement Agent") a fee (the "Placement Fee") in respect of the sale of the Securities to the Investor pursuant to a Placement Agency Agreement (the "Placement Agreement") with the Placement Agent.  A copy of the Placement Agreement is available to the Investor upon request.

3.                                       Closings and Delivery of the Securities and Funds.

3.1.                             Closing .  The completion of the purchase and sale of the Securities (the "Closing") will occur on or before December 30, 2008 (the "Closing Date").  At the Closing: (a) the Company will deliver (by overnight courier) a certificate representing the number of shares of Seri