<Page>

                             DEMAND PROMISSORY NOTE

$ 713,320.00                                                   FEBRUARY 27, 2001

              FOR VALUE RECEIVED, the undersigned, PETER J. SPRAGUE, an
individual currently residing at 399 Undermountain Road, Lenox, MA (the
"BORROWER"), hereby unconditionally promises to pay to the order of WAVE SYSTEMS
CORP., a Delaware corporation with offices at 480 Pleasant Street, Suite A-200,
Lee, MA 01238 (the "LENDER"), to such account or at such place as the Lender may
from time to time designate, in lawful money of the United States of America and
in immediately available funds, the principal amount of $ 713,320.00 ON DEMAND.

              The Borrower further agrees to pay interest in like money and in
such manner on the unpaid principal amount hereof from time to time outstanding,
from the date hereof until the maturity date specified above, at a rate per
annum equal to 1% percent over the prime interest rate. Interest as aforesaid
shall be payable ON DEMAND. The Borrower shall, ON DEMAND, pay interest on any
overdue principal hereof and, to the extent permitted by applicable law, overdue
interest thereon, for each day from the date payment thereof was due to the date
of actual payment, at a rate per annum equal to 1% percent over the prime
interest rate. Interest shall be calculated on the basis of a year of 365 days
for the actual number of days elapsed.

              ANYTHING TO THE CONTRARY NOTWITHSTANDING, THE ENTIRE OUTSTANDING
PRINCIPAL BALANCE OF THIS NOTE AND ALL ACCRUED AND UNPAID INTEREST THEREON SHALL
BE DUE AND PAYABLE ON FEBRUARY 27, 2002. This Note may be prepaid in whole or
from time to time in part without penalty.

              The Borrower hereby waives diligence, demand, presentment,
protest, notice of dishonor and any other notice with respect to this Note. No
omission or delay by the Lender in exercising any right or power under this Note
shall impair the exercise of any such right or power or be construed to be a
waiver of any default or to be an acquiescence therein, and any single or
partial exercise of any such right or power shall not preclude any other or
future exercise thereof. No waiver shall be valid unless in writing and signed
by the waiving party, and then only to the extent therein specified.

              In the event that any one or more of the provisions of this Note
are deemed to be invalid, illegal or otherwise unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions shall not in
any manner be affected or impaired thereby.

              No modification, amendment or other revision of the provisions of
this Note shall be binding unless in writing and signed by the Lender and the
Borrower.

<Page>

              In the event the Lender shall refer this Note to an attorney for
collection, the Borrower agrees to pay, in addition to unpaid principal and
interest, all of the costs and expenses incurred in attempting or effecting
collection hereunder, including reasonable attorneys fees, whether or not suit
is instituted.

              THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                                        BORROWER:

                                        ------------------------------------
                                            PETER J. SPRAGUE

                                        WAVE SYSTEMS CORP.:

                                        ------------------------------------
                                            GERARD T. FEENEY

<Page>

                                     ALLONGE

                                       TO

                             DEMAND PROMISSORY NOTE

              Affixed to the Demand Promissory Note, dated February 27, 2001,
issued by Peter J. Sprague to Wave Systems Corp.

                                                  Dated as of February 27,  2002

                           ---------------------------

       Reference is hereby made to the Demand Promissory Note, dated as of
February 27, 2001 (the "Note"), issued by Peter J. Sprague (the "Borrower")
payable to the order of Wave Systems Corp. (the "Holder"). Capitalized terms
used and not otherwise defined herein shall have the meanings attributed thereto
in the Note.

                         The Company and the Holder hereby agree to amend the
Note as follows:

       The third paragraph of the Note is hereby amended and restated to read
in its entirety as follows:

                         ANYTHING TO THE CONTRARY NOTWITHSTANDING, THE ENTIRE
       OUTSTANDING PRINCIPAL BALANCE OF THIS NOTE AND ALL ACCRUED AND UNPAID
       INTEREST THEREON SHALL BE DUE AND PAYABLE ON FEBRUARY 27, 2003. This
       note may be prepaid in whole or from time to time without penalty.

       This Allonge shall be attached to the Note, made a part thereof and
read and construed as a single instrument with such Note. Except as hereby
amended, the Note shall continue in full force and effect. All terms and
conditions of the Note are hereby ratified and confirmed in all respects.

       IN WITNESS WHEREOF, the Company and the Holder have each caused this
Allonge to be signed in its name by its duly authorized officer as of the day
and year first set forth above.

<Page>

                                        BORROWER
                                        By:
                                            -------------------------------
                                            Peter J. Sprague

                                        WAVE SYSTEMS CORP.

                                        By: -------------------------------