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                                                                    EXHIBIT 10.3

                     SERIES A COMMON STOCK PURCHASE WARRANT

             TO PURCHASE 3,529,412 SHARES OF CLASS A COMMON STOCK OF

                               Wave Systems Corp.

         THIS COMMON STOCK PURCHASE WARRANT (the "WARRANT") certifies that, for
value received, Capital Ventures international (the "HOLDER"), is entitled, upon
the terms and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after the date which is six months from
the date hereof (the "INITIAL EXERCISE DATE") and on or prior to the close of
business on the first anniversary of the Initial Exercise Date (the "TERMINATION
DATE") but not thereafter, to subscribe for and purchase from Wave Systems
Corp., a Delaware corporation (the "COMPANY"), up to 3,529,412 shares (the
"WARRANT SHARES") of Class A Common Stock, par value $0.01 per share, of the
Company (the "COMMON STOCK").

         Section 1.    DEFINITIONS. Capitalized terms used and not otherwise
defined herein shall have the meanings set forth in that certain Securities
Purchase Agreement (the "Purchase Agreement"), dated July 30, 2004, among the
Company and the purchasers signatory thereto.

         Section 2.    EXERCISE.

                 (a)   EXERCISE OF WARRANT. Exercise of the purchase rights
         represented by this Warrant may be made at any time or times on or
         after the Initial Exercise Date and on or before the Termination Date
         by delivery to the Company of a duly executed facsimile copy of the
         Notice of Exercise Form annexed hereto (or such other office or agency
         of the Company as it may designate by notice in writing to the
         registered Holder at the address of such Holder appearing on the books
         of the Company); PROVIDED, HOWEVER, within 5 Trading Days of the date
         said Notice of Exercise is delivered to the Company, the Holder shall
         have surrendered this Warrant to the Company and the Company shall have
         received payment of the aggregate Exercise Price of the shares thereby
         purchased by wire transfer or cashier's check drawn on a United States
         bank.

                 (b)   EXERCISE PRICE. The Exercise Price ("EXERCISE PRICE") of
         each share of Common Stock under this Warrant shall be $1.15 (115% of
         Market Price), subject to adjustment hereunder.

                 (c)   CASHLESS EXERCISE. If at any time after six months from
         the date of issuance of this Warrant there is no effective Registration
         Statement registering the sale of the Warrant Shares to the Holder by
         the Company, then this Warrant may also be exercised at such time by
         means of a "cashless exercise" in which the Holder shall be entitled to
         receive a certificate for the number of Warrant Shares equal to the
         quotient obtained by dividing [(A-B) (X)] by (A), where:

                 (A) = the VWAP on the Trading Day immediately preceding the
                       date of such election;

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                 (B) = the Exercise Price of this Warrant, as adjusted; and

                 (X) = the number of Warrant Shares issuable upon exercise of
                      this Warrant in accordance with the terms of this Warrant
                      by means of a cash exercise rather than a cashless
                      exercise.

                 (d)   EXERCISE LIMITATIONS.

                       (i)     HOLDER'S RESTRICTIONS. The Holder shall not have
                 the right to exercise any portion of this Warrant, pursuant to
                 Section 2(c) or otherwise, and the Company shall not be
                 permitted to exercise its rights under Section 5 below to Call
                 this Warrant, to the extent that after giving effect to any
                 such issuance that would otherwise occur after such exercise,
                 the Holder (together with the Holder's affiliates), as set
                 forth on the applicable Notice of Exercise, would beneficially
                 own in excess of 9.99% of the number of shares of the Common
                 Stock outstanding immediately after giving effect to such
                 issuance. For purposes of the foregoing sentence, the number of
                 shares of Common Stock beneficially owned by the Holder and its
                 affiliates shall include the number of shares of Common Stock
                 issuable upon exercise of this Warrant with respect to which
                 the determination of such sentence is being made, but shall
                 exclude the number of shares of Common Stock which would be
                 issuable upon (A) exercise of the remaining, nonexercised
                 portion of this Warrant beneficially owned by the Holder or any
                 of its affiliates and (B) exercise or conversion of the
                 unexercised or nonconverted portion of any other securities of
                 the Company (including, without limitation, any other
                 Additional Investment Rights or Warrants) subject to a
                 limitation on conversion or exercise analogous to the
                 limitation contained herein beneficially owned by the Holder or
                 any of its affiliates. Except as set forth in the preceding
                 sentence, for purposes of this Section 2(d), beneficial
                 ownership shall be calculated in accordance with Section 13(d)
                 of the Exchange Act, it being acknowledged by Holder that the
                 Company is not representing to Holder that such calculation is
                 in compliance with Section 13(d) of the Exchange Act and Holder
                 is solely responsible for any schedules required to be filed in
                 accordance therewith. To the extent that the limitation
                 contained in this Section 2(d) applies, the determination of
                 whether this Warrant is exercisable (in relation to other
                 securities owned by the Holder) and of which a portion of this
                 Warrant is exercisable shall be in the sole discretion of such
                 Holder, and the submission of a Notice of Exercise shall be
                 deemed to be such Holder's determination of whether this
                 Warrant is exercisable (in relation to other securities owned
                 by such Holder) and of which portion of this Warrant is
                 exercisable, in each case subject to such aggregate percentage
                 limitation, and the Company shall have no obligation to verify
                 or confirm the accuracy of such determination. For purposes of
                 this Section 2(d), in determining the number of outstanding
                 shares of Common Stock, the Holder may rely on the number of
                 outstanding shares of Common Stock as reflected in (x) the
                 Company's most recent Form 10-Q or Form 10-K, as the case may
                 be, (y) a more recent public announcement by the Company or (z)
                 any other notice by the Company or the Company's Transfer Agent
                 setting forth the number

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                 of shares of Common Stock outstanding. Upon the written or oral
                 request of the Holder, the Company shall within two Trading
                 Days confirm orally and in writing to the Holder the number of
                 shares of Common Stock then outstanding. In any case, the
                 number of outstanding shares of Common Stock shall be
                 determined after giving effect to the conversion or exercise of
                 securities of the Company, including this Warrant, by the
                 Holder or its affiliates since the date as of which such number
                 of outstanding shares of Common Stock was reported.

                       (ii)    TRADING MARKET RESTRICTIONS. If the Company has
                 not obtained Shareholder Approval (as defined below), if
                 required, then the Company may not issue upon exercise of this
                 Warrant in the aggregate, in excess of 19.999% of the number of
                 shares of Common Stock outstanding on the Trading Day
                 immediately preceding the Closing Date, less any shares of
                 Common Stock issued upon conversion of or as payment of
                 interest on the Debentures or upon prior exercise of this or
                 any other Warrant issued pursuant to the Purchase Agreement
                 (such number of shares, the "ISSUABLE MAXIMUM"). If on any
                 attempted exercise of this Warrant, the issuance of Warrant
                 Shares would exceed the Issuable Maximum and the Company shall
                 not have previously obtained the vote of shareholders (the
                 "SHAREHOLDER APPROVAL"), if any, as may be required by the
                 applicable rules and regulations of the Principal Market (or
                 any successor entity) to approve the issuance of shares of
                 Common Stock in excess of the Issuable Maximum pursuant to the
                 terms hereof, then the Company shall issue to the Holder
                 requesting a Warrant exercise such number of Warrant Shares as
                 may be issued below the Issuable Maximum and, with respect to
                 the remainder of the aggregate number of Warrant Shares, this
                 Warrant shall not be exercisable until and unless Shareholder
                 Approval has been obtained.

                 (e)   MECHANICS OF EXERCISE.

                       (i)     AUTHORIZATION OF WARRANT SHARES. The Company
                 covenants that all Warrant Shares which may be issued upon the
                 exercise of the purchase rights represented by this Warrant
                 will, upon exercise of the purchase rights represented by this
                 Warrant, be duly authorized, validly issued, fully paid and
                 nonassessable and free from all taxes, liens and charges in
                 respect of the issue thereof (other than taxes in respect of
                 any transfer occurring contemporaneously with such issue). The
                 Company covenants that during the period the Warrant is
                 outstanding, it will reserve from its authorized and unissued
                 Common Stock a sufficient number of shares to provide for the
                 issuance of the Warrant Shares upon the exercise of any
                 purchase rights under this Warrant. The Company further
                 covenants that its issuance of this Warrant shall constitute
                 full authority to its officers who are charged with the duty of
                 executing stock certificates to execute and issue the necessary
                 certificates (or to authorize an uncertificated issuance to the
                 Holder via the DTC DWAC system) for the Warrant Shares upon the
                 exercise of the purchase rights under this Warrant. The Company
                 will take all such reasonable action as may be necessary to
                 assure that such Warrant Shares may be issued as provided
                 herein without violation of any applicable law or regulation,
                 or of any

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                 requirements of the Trading Market upon which the Common Stock
                 may be listed.

                       (ii)    DELIVERY OF CERTIFICATES UPON EXERCISE.
                 Certificates (or DWAC transfers) for shares purchased hereunder
                 shall be delivered to the Holder within 3 Trading Days from the
                 receipt by the Company of the Notice of Exercise Form,
                 surrender of this Warrant and payment of the aggregate Exercise
                 Price as set forth above ("WARRANT SHARE DELIVERY DATE"). This
                 Warrant shall be deemed to have been exercised on the date the
                 Exercise Price is received by the Company. The Warrant Shares
                 shall be deemed to have been issued, and Holder or any other
                 person so designated to be named therein shall be deemed to
                 have become a holder of record of such shares for all purposes,
                 as of the date the Warrant has been exercised by payment to the
                 Company of the Exercise Price and all taxes required to be paid
                 by the Holder, if any, pursuant to Section 2(e)(vii) prior to
                 the issuance of such shares, have been paid.

                       (iii)   DELIVERY OF NEW WARRANTS UPON PARTIAL EXERCISE.
                 If this Warrant shall have been exercised in part, the Company
                 shall, at the time of delivery of the certificate or
                 certificates representing Warrant Shares, deliver to Holder a
                 new Warrant evidencing the rights of Holder to purchase the
                 unpurchased Warrant Shares called for by this Warrant, which
                 new Warrant shall in all other respects be identical with this
                 Warrant.

                       (iv)    RESCISSION RIGHTS. If the Company fails to
                 deliver to the Holder a certificate or certificates (or DWAC
                 transfer) representing the Warrant Shares pursuant to this
                 Section 2(e)(iv) by the Warrant Share Delivery Date, then the
                 Holder will have the right to rescind such exercise.

                       (v)     BUY-IN COMPENSATION. In addition to any other
                 rights available to the Holder, if the Company fails to deliver
                 to the Holder a certificate or certificates representing the
                 Warrant Shares (or a DWAC transfer) pursuant to an exercise on
                 or before the Warrant Share Delivery Date, and if after such
                 date the Holder is required by its broker to purchase (in an
                 open market transaction or otherwise) shares of Common Stock to
                 deliver in satisfaction of a sale by the Holder of the Warrant
                 Shares which the Holder anticipated receiving upon such
                 exercise (a "Buy-In"), then the Company shall (1) pay in cash
                 to the Holder the amount by which (x) the Holder's total
                 purchase price (including brokerage commissions, if any) for
                 the shares of Common Stock so purchased exceeds (y) the amount
                 obtained by multiplying (A) the number of Warrant Shares that
                 the Company was required to deliver to the Holder in connection
                 with the exercise at issue times (B) the price at which the
                 sell order giving rise to such purchase obligation was
                 executed, and (2) at the option of the Holder, either reinstate
                 the portion of the Warrant and equivalent number of Warrant
                 Shares for which such exercise was not honored or deliver to
                 the Holder the number of shares of Common Stock that would have
                 been issued had the Company timely complied with its exercise
                 and delivery obligations hereunder. For example, if the Holder

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                 purchases Common Stock having a total purchase price of $11,000
                 to cover a Buy-In with respect to an attempted exercise of
                 shares of Common Stock with an aggregate sale price giving rise
                 to such purchase obligation of $10,000, under clause (1) of the
                 immediately preceding sentence the Company shall be required to
                 pay the Holder $1,000. The Holder shall provide the Company
                 written notice indicating the amounts payable to the Holder in
                 respect of the Buy-In, together with applicable confirmations
                 and other evidence reasonably requested by the Company. Nothing
                 herein shall limit a Holder's right to pursue any other
                 remedies available to it hereunder, at law or in equity
                 including, without limitation, a decree of specific performance
                 and/or injunctive relief with respect to the Company's failure
                 to timely deliver certificates representing shares of Common
                 Stock upon exercise of the Warrant as required pursuant to the
                 terms hereof.

                       (vi)    NO FRACTIONAL SHARES OR SCRIP. No fractional
                 shares or scrip representing fractional shares shall be issued
                 upon the exercise of this Warrant. As to any fraction of a
                 share which Holder would otherwise be entitled to purchase upon
                 such exercise, the Company shall pay a cash adjustment in
                 respect of such final fraction in an amount equal to such
                 fraction multiplied by the Exercise Price.

                       (vii)   CHARGES, TAXES AND EXPENSES. Issuance of
                 certificates for Warrant Shares shall be made without charge to
                 the Holder for any issue or transfer tax or other incidental
                 expense in respect of the issuance of such certificate, all of
                 which taxes and expenses shall be paid by the Company, and such
                 certificates shall be issued in the name of the Holder or in
                 such name or names as may be directed by the Holder; PROVIDED,
                 HOWEVER, that in the event certificates for Warrant Shares are
                 to be issued in a name other than the name of the Holder, this
                 Warrant when surrendered for exercise shall be accompanied by
                 the Assignment Form attached hereto duly executed by the
                 Holder; and the Company may require, as a condition thereto,
                 the payment of a sum sufficient to reimburse it for any
                 transfer tax incidental thereto.

                       (viii)  CLOSING OF BOOKS. The Company will not close its
                 stockholder books or records in any manner which prevents the
                 timely exercise of this Warrant, pursuant to the terms hereof.

         Section 3.    CERTAIN ADJUSTMENTS.

                 (a)   STOCK DIVIDENDS AND SPLITS. If the Company, at any time
         while this Warrant is outstanding: (A) pays a stock dividend or
         otherwise make a distribution or distributions on shares of its Common
         Stock or any other equity or equity equivalent securities payable in
         shares of Common Stock (which, for avoidance of doubt, shall not
         include any shares of Common Stock issued by the Company pursuant to
         this Warrant), (B) subdivides outstanding shares of Common Stock into a
         larger number of shares, (C) combines (including by way of reverse
         stock split) outstanding shares of Common Stock into a smaller number
         of shares, or (D) issues by reclassification of shares of the

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         Common Stock any shares of capital stock of the Company, then in each
         case the Exercise Price shall be multiplied by a fraction of which the
         numerator shall be the number of shares of Common Stock (excluding
         treasury shares, if any) outstanding before such event and of which the
         denominator shall be the number of shares of Common Stock outstanding
         after such event. Any adjustment made pursuant to this Section 3(a)
         shall become effective immediately after the record date for the
         determination of stockholders entitled to receive such dividend or
         distribution and shall become effective immediately after the effective
         date in the case of a subdivision, combination or re-classification.

                 (b)   SUBSEQUENT EQUITY SALES. If the Company or any Subsidiary
         thereof, as applicable, at any time while this Warrant is outstanding,
         shall offer, sell, grant any option to purchase or offer, sell or grant
         any right to reprice its securities, or otherwise dispose of or issue
         (or announce any offer, sale, grant or any option to purchase or other
         disposition) any Common Stock or Common Stock Equivalents entitling any
         Person to acquire shares of Common Stock, at an effective price per
         share less than the then Exercise Price (such lower price, the "BASE
         SHARE PRICE" and such issuances collectively, a "DILUTIVE ISSUANCE"),
         as adjusted hereunder (if the holder of the Common Stock or Common
         Stock Equivalents so issued shall at any time, whether by operation of
         purchase price adjustments, reset provisions, floating conversion,
         exercise or exchange prices or otherwise, or due to warrants, options
         or rights per share which is issued in connection with such issuance,
         be entitled to receive shares of Common Stock at an effective price per
         share which is less than the Exercise Price, such issuance shall be
         deemed to have occurred for less than the Exercise Price), then, the
         Exercise Price shall be multiplied by a fraction, the numerator of
         which shall be the number of shares issued and outstanding immediately
         prior to such Dilutive Issuance plus the aggregate number of shares of
         Common Stock which could be purchased in such Dilutive Issuance if such
         Dilutive Issuance were done at the Exercise Price and the denominator
         of which shall be the number of shares of Common Stock deemed
         outstanding immediately after such Dilutive Issuance. Such adjustment
         shall be made whenever such Common Stock or Common Stock Equivalents
         are issued. The Company shall notify the Holder in writing, no later
         than the business day following the issuance of any Common Stock or
         Common Stock Equivalents subject to this section, indicating therein
         the applicable issuance price, or of applicable reset price, exchange
         price, conversion price and other pricing terms.

                 (c)   PRO RATA DISTRIBUTIONS. If the Company, at any time prior
         to the Termination Date, shall distribute to all holders of Common
         Stock (and not to Holders of the Warrants) evidences of its
         indebtedness or assets or rights or warrants to subscribe for or
         purchase any security other than the Common Stock (which shall be
         subject to Section 3(b)), then in each such case the Exercise Price
         shall be adjusted by multiplying the Exercise Price in effect
         immediately prior to the record date fixed for determination of
         stockholders entitled to receive such distribution by a fraction of
         which the denominator shall be the VWAP determined as of the record
         date mentioned above, and of which the numerator shall be such VWAP on
         such record date less the then per share fair market value at such
         record date of the portion of such assets or evidence of indebtedness
         so distributed applicable to one outstanding share of the Common Stock
         as determined by

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         the Board of Directors in good faith. In either case the adjustments
         shall be described in a statement provided to the Holders of the
         portion of assets or evidences of indebtedness so distributed or such
         subscription rights applicable to one share of Common Stock. Such
         adjustment shall be made whenever any such distribution is made and
         shall become effective immediately after the record date mentioned
         above.

                 (d)   CALCULATIONS. All calculations under this Section 3 shall
         be made to the nearest cent or the nearest 1/100th of a share, as the
         case may be. For purposes of this Section 3, the number of shares of
         Common Stock outstanding as of a given date shall be the sum of the
         number of shares of Common Stock (excluding treasury shares, if any)
         outstanding.

                 (e)   NOTICE TO HOLDERS.

                       (i)     ADJUSTMENT TO EXERCISE PRICE. Whenever the
                 Exercise Price is adjusted pursuant to this Section 3, the
                 Company shall promptly mail to each Holder a notice setting
                 forth the Exercise Price after such adjustment and setting
                 forth a brief statement of the facts requiring such adjustment.
                 If the Company issues a future priced security (as defined by
                 the rules of the Nasdaq Stock Market), the Company shall be
                 deemed to have issued Common Stock or Common Stock Equivalents
                 at the lowest possible conversion or exercise price at which
                 such securities may be converted or exercised in the case of a
                 future priced security.

                       (ii)    NOTICE TO ALLOW EXERCISE BY HOLDER. If (A) the
                 Company shall declare a dividend (or any other distribution) on
                 the Common Stock; (B) the Company shall declare a special
                 nonrecurring cash dividend on or a redemption of the Common
                 Stock; (C) the Company shall authorize the granting to all
                 holders of the Common Stock rights or warrants to subscribe for
                 or purchase any shares of capital stock of any class or of any
                 rights; (D) the approval of any stockholders of the Company
                 shall be required in connection with any reclassification of
                 the Common Stock, any consolidation or merger to which the
                 Company is a party, any sale or transfer of all or
                 substantially all of the assets of the Company, of any
                 compulsory share exchange whereby the Common Stock is converted
                 into other securities, cash or property; (E) the Company shall
                 authorize the voluntary or involuntary dissolution, liquidation
                 or winding up of the affairs of the Company; then, in each
                 case, the Company shall cause to be mailed to the Holder at its
                 last addresses as it shall appear upon the Warrant Register of
                 the Company, at least 20 calendar days prior to the applicable
                 record or effective date hereinafter specified, a notice
                 stating (x) the date on which a record is to be taken for the
                 purpose of such dividend, distribution, redemption, rights or
                 warrants, or if a record is not to be taken, the date as of
                 which the holders of the Common Stock of record to be entitled
                 to such dividend, distributions, redemption, rights or warrants
                 are to be determined or (y) the date on which such
                 reclassification, consolidation, merger, sale, transfer or
                 share exchange is expected to become effective or close, and
                 the date as of which it is expected that holders of the Common
                 Stock of record shall

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                 be entitled to exchange their shares of the Common Stock for
                 securities, cash or other property deliverable upon such
                 reclassification, consolidation, merger, sale, transfer or
                 share exchange; provided, that the failure to mail such notice
                 or any defect therein or in the mailing thereof shall not
                 affect the validity of the corporate action required to be
                 specified in such notice. The Holder is entitled to exercise
                 this Warrant during the 20-day period commencing the date of
                 such notice to the effective date of the event triggering such
                 notice

                 (f)   FUNDAMENTAL TRANSACTION. If, at any time while this
         Warrant is outstanding, (A) the Company effects any merger or
         consolidation of the Company with or into another Person, (B) the
         Company effects any sale of all or substantially all of its assets in
         one or a series of related transactions, (C) any tender offer or
         exchange offer (whether by the Company or another Person) is completed
         pursuant to which holders of Common Stock are permitted to tender or
         exchange their shares for other securities, cash or property, or (D)
         the Company effects any reclassification of the Common Stock or any
         compulsory share exchange pursuant to which the Common Stock is
         effectively converted into or exchanged for other securities, cash or
         property (in any such case, a "FUNDAMENTAL TRANSACTION"), then, upon
         any subsequent conversion of this Warrant, the Holder shall have the
         right to receive, for each Warrant Share that would have been issuable
         upon such exercise absent such Fundamental Transaction, at the option
         of the Holder, (a) upon exercise of this Warrant, the number of shares
         of Common Stock of the successor or acquiring corporation or of the
         Company, if it is the surviving corporation, and Alternate
         Consideration receivable upon or as a result of such reorganization,
         reclassification, merger, consolidation or disposition of assets by a
         Holder of the number of shares of Common Stock for which this Warrant
         is exercisable immediately prior to such event or (b) cash equal to the
         value of this Warrant as determined in accordance with the
         Black-Scholes option pricing formula (the "ALTERNATE CONSIDERATION").
         For purposes of any such exercise, the determination of the Exercise
         Price shall be appropriately adjusted to apply to such Alternate
         Consideration based on the amount of Alternate Consideration issuable
         in respect of one share of Common Stock in such Fundamental
         Transaction, and the Company shall apportion the Exercise Price among
         the Alternate Consideration in a reasonable manner reflecting the
         relative value of any different components of the Alternate
         Consideration. If holders of Common Stock are given any choice as to
         the securities, cash or property to be received in a Fundamental
         Transaction, then the Holder shall be given the same choice as to the
         Alternate Consideration it receives upon any exercise of this Warrant
         following such Fundamental Transaction. To the extent necessary to
         effectuate the foregoing provisions, any successor to the Company or
         surviving entity in such Fundamental Transaction shall issue to the
         Holder a new warrant consistent with the foregoing provisions and
         evidencing the Holder's right to exercise such warrant into Alternate
         Consideration. The terms of any agreement pursuant to which a
         Fundamental Transaction is effected shall include terms insuring that
         this Warrant (or any such replacement security) will be similarly
         adjusted upon any subsequent transaction analogous to a Fundamental
         Transaction.

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                 (g)   EXEMPT ISSUANCE. Notwithstanding the foregoing, no
         adjustments, Alternate Consideration nor notices shall be made, paid or
         issued under this Section 3 in respect of an Exempt Issuance.

         Section 4.    TRANSFER OF WARRANT.

                 (a)   TRANSFERABILITY. Subject to compliance with any
         applicable securities laws and the conditions set forth in Section 6(a)
         hereof, this Warrant and all rights hereunder are transferable, in
         whole or in part, upon surrender of this Warrant at the principal
         office of the Company, together with a written assignment of this
         Warrant substantially in the form attached hereto duly executed by the
         Holder or its agent or attorney and funds sufficient to pay any
         transfer taxes payable upon the making of such transfer. Upon such
         surrender and, if required, such payment, the Company shall execute and
         deliver a new Warrant or Warrants in the name of the assignee or
         assignees and in the denomination or denominations specified in such
         instrument of assignment, and shall issue to the assignor a new Warrant
         evidencing the portion of this Warrant not so assigned, and this
         Warrant shall promptly be cancelled. A Warrant, if properly assigned,
         may be exercised by a new holder for the purchase of Warrant Shares
         without having a new Warrant issued, if exercised in accordance with
         the terms of the Warrant.

                 (b)   DIVISION OR COMBINATION OF WARRANTS. This Warrant may be
         divided or combined with other Warrants upon presentation hereof at the
         aforesaid office of the Company, together with a written notice
         specifying the names and denominations in which new Warrants are to be
         issued, signed by the Holder or its agent or attorney. Subject to
         compliance with Section 4(a), as to any transfer which may be involved
         in such division or combination, the Company shall execute and deliver
         a new Warrant or Warrants in exchange for the Warrant or Warrants to be
         divided or combined in accordance with such notice.

                 (c)   WARRANT REGISTER. The Company shall register this
         Warrant, upon records to be maintained by the Company for that purpose
         (the "WARRANT REGISTER"), in the name of the record Holder hereof from
         time to time. The Company may deem and treat the registered Holder of
         this Warrant as the absolute owner hereof for the purpose of any
         exercise hereof or any distribution or notice to the Holder, and for
         all other purposes, absent actual notice to the contrary.

         Section 5.    CALL PROVISION. Subject to the provisions of this
Section 5, commencing on the Initial Exercise Date, and provided at such time
the Registration Statement then remains effective, if the closing bid price for
the Common Stock on the Trading Market for each of any 15 consecutive Trading
Days (the "MEASUREMENT PERIOD", which period shall not have commenced until
after the Initial Exercise Date) exceeds $1.80 (180% of the Market Price) (the
"THRESHOLD PRICE"), subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions of the Common
Stock that occur after the date of the Purchase Agreement, then the Company may,
within two Trading Days of such period, call for redemption at a price of $0.001
per Warrant) of all or any portion of this Warrant for which a Notice of
Exercise has not yet been delivered (such right, a "CALL"). To exercise this
right, the Company must deliver to the Holder an irrevocable written notice (a
"CALL NOTICE"),

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indicating therein the portion of unexercised portion of this Warrant to which
such notice applies. If the conditions set forth below for such Call are
satisfied from the period from the date of the Call Notice through and including
the Call Date (as defined below), then any portion of this Warrant subject to
such Call Notice for which a Notice of Exercise shall not have been received
from and after the date of the Call Notice will be purchased by the Company and
cancelled at 6:30 p.m. (New York City time) on the 10th Trading Day after the
date of the Call Notice (such date, the "CALL DATE"). Any unexercised portion of
this Warrant to which the Call Notice does not pertain will be unaffected by
such Call Notice. In furtherance thereof, the Company covenants and agrees that
it will honor all Notices of Exercise with respect to Warrant Shares subject to
a Call Notice that are tendered from the time of delivery of the Call Notice
through 6:30 p.m. (New York City time) on the Call Date. The parties agree that
any Notice of Exercise delivered following a Call Notice shall first reduce to
zero the number of Warrant Shares subject to such Call Notice prior to reducing
the remaining Warrant Shares available for purchase under this Warrant. For
example, if (x) this Warrant then permits the Holder to acquire 100 Warrant
Shares, (y) a Call Notice pertains to 75 Warrant Shares, and (z) prior to 6:30
p.m. (New York City time) on the Call Date the Holder tenders a Notice of
Exercise in respect of 50 Warrant Shares, then (1) on the Call Date the right
under this Warrant to acquire 25 Warrant Shares will be automatically cancelled,
(2) the Company, in the time and manner required under this Warrant, will have
issued and delivered to the Holder 50 Warrant Shares in respect of the exercises
following receipt of the Call Notice, and (3) the Holder may, until the
Termination Date, exercise this Warrant for 25 Warrant Shares (subject to
adjustment as herein provided and subject to subsequent Call Notices). Subject
again to the provisions of this Section 5, the Company may deliver subsequent
Call Notices for any portion of this Warrant for which the Holder shall not have
delivered a Notice of Exercise. Notwithstanding anything to the contrary set
forth in this Warrant, the Company may not deliver a Call Notice or require the
cancellation of this Warrant (and any Call Notice will be void), unless, from
the beginning of the Threshold Period through the Call Date, (i) the Company
shall have honored in accordance with the terms of this Warrant all Notices of
Exercise delivered by 6:30 p.m. (New York City time) on the Call Date, (ii) the
Registration Statement shall be effective as to all Warrant Shares and (iii) the
Common Stock shall be listed or quoted for trading on the Trading Market. In
addition, the Company's right to call the Warrant shall be limited as to Holder
by the limitation on exercise set forth in Section 2(d), such that no Call shall
be valid to the extent, but only to the extent, that the Holder's exercise of
that portion of this Warrant sought to be called, would violate the condition
set forth in Section 2(d) as to such Holder. The Company's right to Call the
Warrant shall be exercised ratably among the Purchasers based on each
Purchaser's initial purchase of Common Stock pursuant to the Purchase Agreement.

         Section 6.    MISCELLANEOUS.

                 (a)   TITLE TO WARRANT. Prior to the Termination Date and
         subject to compliance with applicable laws and Section 4 of this
         Warrant, this Warrant and all rights hereunder are transferable, in
         whole or in part, at the office or agency of the Company by the Holder
         in person or by duly authorized attorney, upon surrender of this
         Warrant together with the Assignment Form annexed hereto properly
         endorsed.

                                       10
<Page>

                 (b)   NO RIGHTS AS SHAREHOLDER UNTIL EXERCISE. This Warrant
         does not entitle the Holder to any voting rights or other rights as a
         shareholder of the Company prior to the exercise hereof. Upon the
         surrender of this Warrant and the payment of the aggregate Exercise
         Price (or by means of a cashless exercise), the Warrant Shares so
         purchased shall be and be deemed to be issued to such Holder as the
         record owner of such shares as of the close of business on the later of
         the date of such surrender or payment.

                 (c)   LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT. The
         Company covenants that upon receipt by the Company of evidence
         reasonably satisfactory to it of the loss, theft, destruction or
         mutilation of this Warrant or any stock certificate relating to the
         Warrant Shares, and in case of loss, theft or destruction, of indemnity
         or security reasonably satisfactory to it (which, in the case of the
         Warrant, shall not include the posting of any bond), and upon surrender
         and cancellation of such Warrant or stock certificate, if mutilated,
         the Company will make and deliver a new Warrant or stock certificate of
         like tenor and dated as of such cancellation, in lieu of such Warrant
         or stock certificate.

                 (d)   SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or
         appointed day for the taking of any action or the expiration of any
         right required or granted herein shall be a Saturday, Sunday or a legal
         holiday, then such action may be taken or such right may be exercised
         on the next succeeding day not a Saturday, Sunday or legal holiday.

                 (e)   AUTHORIZED SHARES.

                       The Company covenants that during the period the Warrant
                 is outstanding, it will reserve from its authorized and
                 unissued Common Stock a sufficient number of shares to provide
                 for the issuance of the Warrant Shares upon the exercise of any
                 purchase rights under this Warrant. The Company further
                 covenants that its issuance of this Warrant shall constitute
                 full authority to its officers who are charged with the duty of
                 executing stock certificates to execute and issue the necessary
                 certificates (or to authorize an uncertificated issuance to the
                 Holder via the DTC DWAC system) for the Warrant Shares upon the
                 exercise of the purchase rights under this Warrant. The Company
                 will take all such reasonable action as may be necessary to
                 assure that such Warrant Shares may be issued as provided
                 herein without violation of any applicable law or regulation,
                 or of any requirements of the Trading Market upon which the
                 Common Stock may be listed.

                       Except and to the extent as waived or consented to by the
                 Holder, the Company shall not by any action, including, without
                 limitation, amending its certificate of incorporation or
                 through any reorganization, transfer of assets, consolidation,
                 merger, dissolution, issue or sale of securities or any other
                 voluntary action, avoid or seek to avoid the observance or
                 performance of any of the terms of this Warrant, but will at
                 all times in good faith assist in the carrying out of all such
                 terms and in the taking of all such actions as may be necessary
                 or appropriate to protect the rights of Holder as set forth in
                 this Warrant against impairment. Without limiting the
                 generality of the foregoing, the Company will

                                       11
<Page>

                 (a) not increase the par value of any Warrant Shares above the
                 amount payable therefor upon such exercise immediately prior to
                 such increase in par value, (b) take all such action as may be
                 necessary or appropriate in order that the Company may validly
                 and legally issue fully paid and nonassessable Warrant Shares
                 upon the exercise of this Warrant, and (c) use commercially
                 reasonable efforts to obtain all such authorizations,
                 exemptions or consents from any public regulatory body having
                 jurisdiction thereof as may be necessary to enable the Company
                 to perform its obligations under this Warrant.

                       Before taking any action which would result in an
                 adjustment in the number of Warrant Shares for which this
                 Warrant is exercisable or in the Exercise Price, the Company
                 shall obtain all such authorizations or exemptions thereof, or
                 consents thereto, as may be necessary from any public
                 regulatory body or bodies having jurisdiction thereof.

                 (f)   JURISDICTION. All questions concerning the construction,
         validity, enforcement and interpretation of this Warrant shall be
         determined in accordance with the provisions of the Purchase Agreement.

                 (g)   RESTRICTIONS. The Holder acknowledges that the Warrant
         Shares acquired upon the exercise of this Warrant, if not registered,
         will have restrictions upon resale imposed by state and federal
         securities laws.

                 (h)   NONWAIVER AND EXPENSES. No course of dealing or any delay
         or failure to exercise any right hereunder on the part of Holder shall
         operate as a waiver of such right or otherwise prejudice Holder's
         rights, powers or remedies, notwithstanding that all rights hereunder
         terminate on the Termination Date. If the Company willfully and
         knowingly fails to comply with any provision of this Warrant, which
         results in any material damages to the Holder, the Company shall pay to
         Holder such amounts as shall be sufficient to cover any reasonable
         costs and expenses including, but not limited to, attorneys' fees,
         including those of appellate proceedings, incurred by Holder in
         collecting any amounts due pursuant hereto or in otherwise enforcing
         any of its rights, powers or remedies hereunder.

                 (i)   NOTICES. Any notice, request or other document required
         or permitted to be given or delivered to the Holder by the Company
         shall be delivered in accordance with the notice provisions of the
         Purchase Agreement.

                 (j)   LIMITATION OF LIABILITY. No provision hereof, in the
         absence of any affirmative action by Holder to exercise this Warrant or
         purchase Warrant Shares, and no enumeration herein of the rights or
         privileges of Holder, shall give rise to any liability of Holder for
         the purchase price of any Common Stock or as a stockholder of the
         Company, whether such liability is asserted by the Company or by
         creditors of the Company.

                 (k)   REMEDIES. Holder, in addition to being entitled to
         exercise all rights granted by law, including recovery of damages, will
         be entitled to specific performance of its rights under this Warrant.
         The Company agrees that monetary damages would not

                                       12
<Page>

         be adequate compensation for any loss incurred by reason of a breach by
         it of the provisions of this Warrant and hereby agrees to waive the
         defense in any action for specific performance that a remedy at law
         would be adequate.

                 (l)   SUCCESSORS AND ASSIGNS. Subject to applicable securities
         laws, this Warrant and the rights and obligations evidenced hereby
         shall inure to the benefit of and be binding upon the successors of the
         Company and the successors and permitted assigns of Holder. The
         provisions of this Warrant are intended to be for the benefit of all
         Holders from time to time of this Warrant and shall be enforceable by
         any such Holder or holder of Warrant Shares.

                 (m)   AMENDMENT. This Warrant may be modified or amended or the
         provisions hereof waived with the written consent of the Company and
         the Holder.

                 (n)   SEVERABILITY. Wherever possible, each provision of this
         Warrant shall be interpreted in such manner as to be effective and
         valid under applicable law, but if any provision of this Warrant shall
         be prohibited by or invalid under applicable law, such provision shall
         be ineffective to the extent of such prohibition or invalidity, without
         invalidating the remainder of such provisions or the remaining
         provisions of this Warrant.

                 (o)   HEADINGS. The headings used in this Warrant are for the
         convenience of reference only and shall not, for any purpose, be deemed
         a part of this Warrant.

                              ********************

         IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized.

Dated: July  30, 2004

                                        WAVE SYSTEMS CORP.

                                        By:/s/ Gerard T. Feeney
                                           --------------------
                                           Name: Gerard T. Feeney
                                           Title: Chief Financial Officer

                                       13
<Page>

                               NOTICE OF EXERCISE

TO:      WAVE SYSTEMS CORP.

         (1)   The undersigned hereby elects to purchase ________ Warrant Shares
of the Company pursuant to the terms of the attached Warrant (only if exercised
in full), and tenders herewith payment of the exercise price in full, together
with all applicable transfer taxes, if any.

         (2)   Payment shall take the form of (check applicable box):

                       / / in lawful money of the United States; or

                       / / the cancellation of such number of Warrant Shares as
                       is necessary, in accordance with the formula set forth in
                       subsection 3(d), to exercise this Warrant with respect to
                       the maximum number of Warrant Shares purchasable pursuant
                       to the cashless exercise procedure set forth in
                       subsection 3(d).

         (3)   Please issue a certificate or certificates representing said
Warrant Shares in the name of the undersigned or in such other name as is
specified below:

                           _______________________________

The Warrant Shares shall be delivered to the following:

                           _______________________________

                           _______________________________

                           _______________________________

                                             [PURCHASER]

                                             By:
                                                --------------------------
                                                Name:
                                                Title:

                                             Dated:
                                                    --------------------

<Page>

                                 ASSIGNMENT FORM

                    (TO ASSIGN THE FOREGOING WARRANT, EXECUTE
                   THIS FORM AND SUPPLY REQUIRED INFORMATION.
                 DO NOT USE THIS FORM TO EXERCISE THE WARRANT.)

         FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to

_______________________________________________ whose address is

_______________________________________________________________

_______________________________________________________________

                                           Dated: ______________, _______

                           Holder's Signature:
                                              ------------------------
                           Holder's Address:
                                              ------------------------

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

Signature Guaranteed:  ___________________________________________

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.<Page>

                                                                    EXHIBIT 10.4

                     SERIES B COMMON STOCK PURCHASE WARRANT

              TO PURCHASE 882,353 SHARES OF CLASS A COMMON STOCK OF

                               Wave Systems Corp.

         THIS COMMON STOCK PURCHASE WARRANT (the "WARRANT") certifies that, for
value received, Capital Ventures International (the "HOLDER"), is entitled, upon
the terms and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after the date which is one year from
the date hereof (the "INITIAL EXERCISE DATE") and on or prior to the close of
business on the 18 month anniversary of the Initial Exercise Date (the
"TERMINATION DATE") but not thereafter, to subscribe for and purchase from Wave
Systems Corp., a Delaware corporation (the "COMPANY"), up to 882,353 shares (the
"WARRANT SHARES") of Class A Common Stock, par value $0.01 per share, of the
Company (the "COMMON STOCK").

         Section 1.    DEFINITIONS. Capitalized terms used and not otherwise
defined herein shall have the meanings set forth in that certain Securities
Purchase Agreement (the "PURCHASE AGREEMENT"), dated July 30, 2004, among the
Company and the purchasers signatory thereto.

         Section 2.    EXERCISE.

                 (a)   EXERCISE OF WARRANT. Exercise of the purchase rights
         represented by this Warrant may be made at any time or times on or
         after the Initial Exercise Date and on or before the Termination Date
         by delivery to the Company of a duly executed facsimile copy of the
         Notice of Exercise Form annexed hereto (or such other office or agency
         of the Company as it may designate by notice in writing to the
         registered Holder at the address of such Holder appearing on the books
         of the Company); PROVIDED, HOWEVER, within 5 Trading Days of the date
         said Notice of Exercise is delivered to the Company, the Holder shall
         have surrendered this Warrant to the Company and the Company shall have
         received payment of the aggregate Exercise Price of the shares thereby
         purchased by wire transfer or cashier's check drawn on a United States
         bank.

                 (b)   EXERCISE PRICE. The Exercise Price ("EXERCISE PRICE") of
         each share of Common Stock under this Warrant shall be $1.30 (130% of
         Market Price), subject to adjustment hereunder.

                 (c)   CASHLESS EXERCISE. If at any time after one year from the
         date of issuance of this Warrant there is no effective Registration
         Statement registering the sale of the Warrant Shares to the Holder by
         the Company, then this Warrant may also be exercised at such time by
         means of a "cashless exercise" in which the Holder shall be entitled to
         receive a certificate for the number of Warrant Shares equal to the
         quotient obtained by dividing [(A-B) (X)] by (A), where:

                 (A) = the VWAP on the Trading Day immediately preceding the
                       date of such election;

<Page>

                 (B) = the Exercise Price of this Warrant, as adjusted; and

                 (X) = the number of Warrant Shares issuable upon exercise of
                       this Warrant in accordance with the terms of this Warrant
                       by means of a cash exercise rather than a cashless
                       exercise.

                 (d)   EXERCISE LIMITATIONS.

                       (i)     HOLDER'S RESTRICTIONS. The Holder shall not have
                 the right to exercise any portion of this Warrant, pursuant to
                 Section 2(c) or otherwise, to the extent that after giving
                 effect to such issuance after exercise, the Holder (together
                 with the Holder's affiliates), as set forth on the applicable
                 Notice of Exercise, would beneficially own in excess of 9.99%
                 of the number of shares of the Common Stock outstanding
                 immediately after giving effect to such issuance. For purposes
                 of the foregoing sentence, the number of shares of Common Stock
                 beneficially owned by the Holder and its affiliates shall
                 include the number of shares of Common Stock issuable upon
                 exercise of this Warrant with respect to which the
                 determination of such sentence is being made, but shall exclude
                 the number of shares of Common Stock which would be issuable
                 upon (A) exercise of the remaining, nonexercised portion of
                 this Warrant beneficially owned by the Holder or any of its
                 affiliates and (B) exercise or conversion of the unexercised or
                 nonconverted portion of any other securities of the Company
                 (including, without limitation, any other Additional Investment
                 Rights or Warrants) subject to a limitation on conversion or
                 exercise analogous to the limitation contained herein
                 beneficially owned by the Holder or any of its affiliates.
                 Except as set forth in the preceding sentence, for purposes of
                 this Section 2(d), beneficial ownership shall be calculated in
                 accordance with Section 13(d) of the Exchange Act, it being
                 acknowledged by Holder that the Company is not representing to
                 Holder that such calculation is in compliance with Section
                 13(d) of the Exchange Act and Holder is solely responsible for
                 any schedules required to be filed in accordance therewith. To
                 the extent that the limitation contained in this Section 2(d)
                 applies, the determination of whether this Warrant is
                 exercisable (in relation to other securities owned by the
                 Holder) and of which a portion of this Warrant is exercisable
                 shall be in the sole discretion of such Holder, and the
                 submission of a Notice of Exercise shall be deemed to be such
                 Holder's determination of whether this Warrant is exercisable
                 (in relation to other securities owned by such Holder) and of
                 which portion of this Warrant is exercisable, in each case
                 subject to such aggregate percentage limitation, and the
                 Company shall have no obligation to verify or confirm the
                 accuracy of such determination. For purposes of this Section
                 2(d), in determining the number of outstanding shares of Common
                 Stock, the Holder may rely on the number of outstanding shares
                 of Common Stock as reflected in (x) the Company's most recent
                 Form 10-Q or Form 10-K, as the case may be, (y) a more recent
                 public announcement by the Company or (z) any other notice by
                 the Company or the Company's Transfer Agent setting forth the
                 number of shares of Common Stock outstanding. Upon the written
                 or oral request of the Holder, the Company shall within two
                 Trading Days confirm orally and in writing

                                        2
<Page>

                 to the Holder the number of shares of Common Stock then
                 outstanding. In any case, the number of outstanding shares of
                 Common Stock shall be determined after giving effect to the
                 conversion or exercise of securities of the Company, including
                 this Warrant, by the Holder or its affiliates since the date as
                 of which such number of outstanding shares of Common Stock was
                 reported.

                       (ii)    TRADING MARKET RESTRICTIONS. If the Company has
                 not obtained Shareholder Approval (as defined below), if
                 required, then the Company may not issue upon exercise of this
                 Warrant in the aggregate, in excess of 19.999% of the number of
                 shares of Common Stock outstanding on the Trading Day
                 immediately preceding the Closing Date, less any shares of
                 Common Stock issued upon conversion of or as payment of
                 interest on the Debentures or upon prior exercise of this or
                 any other Warrant issued pursuant to the Purchase Agreement
                 (such number of shares, the "ISSUABLE MAXIMUM"). If on any
                 attempted exercise of this Warrant, the issuance of Warrant
                 Shares would exceed the Issuable Maximum and the Company shall
                 not have previously obtained the vote of shareholders (the
                 "SHAREHOLDER APPROVAL"), if any, as may be required by the
                 applicable rules and regulations of the Principal Market (or
                 any successor entity) to approve the issuance of shares of
                 Common Stock in excess of the Issuable Maximum pursuant to the
                 terms hereof, then the Company shall issue to the Holder
                 requesting a Warrant exercise such number of Warrant Shares as
                 may be issued below the Issuable Maximum and, with respect to
                 the remainder of the aggregate number of Warrant Shares, this
                 Warrant shall not be exercisable until and unless Shareholder
                 Approval has been obtained.

                 (e)   MECHANICS OF EXERCISE.

                       (i)     AUTHORIZATION OF WARRANT SHARES. The Company
                 covenants that all Warrant Shares which may be issued upon the
                 exercise of the purchase rights represented by this Warrant
                 will, upon exercise of the purchase rights represented by this
                 Warrant, be duly authorized, validly issued, fully paid and
                 nonassessable and free from all taxes, liens and charges in
                 respect of the issue thereof (other than taxes in respect of
                 any transfer occurring contemporaneously with such issue). The
                 Company covenants that during the period the Warrant is
                 outstanding, it will reserve from its authorized and unissued
                 Common Stock a sufficient number of shares to provide for the
                 issuance of the Warrant Shares upon the exercise of any
                 purchase rights under this Warrant. The Company further
                 covenants that its issuance of this Warrant shall constitute
                 full authority to its officers who are charged with the duty of
                 executing stock certificates to execute and issue the necessary
                 certificates (or to authorize an uncertificated issuance to the
                 Holder via the DTC DWAC system) for the Warrant Shares upon the
                 exercise of the purchase rights under this Warrant. The Company
                 will take all such reasonable action as may be necessary to
                 assure that such Warrant Shares may be issued as provided
                 herein without violation of any applicable law or regulation,
                 or of any requirements of the Trading Market upon which the
                 Common Stock may be listed.

                                        3
<Page>

                       (ii)    DELIVERY OF CERTIFICATES UPON EXERCISE.
                 Certificates (or DWAC transfers) for shares purchased hereunder
                 shall be delivered to the Holder within 3 Trading Days from the
                 receipt by the Company of the Notice of Exercise Form,
                 surrender of this Warrant and payment of the aggregate Exercise
                 Price as set forth above ("WARRANT SHARE DELIVERY DATE"). This
                 Warrant shall be deemed to have been exercised on the date the
                 Exercise Price is received by the Company. The Warrant Shares
                 shall be deemed to have been issued, and Holder or any other
                 person so designated to be named therein shall be deemed to
                 have become a holder of record of such shares for all purposes,
                 as of the date the Warrant has been exercised by payment to the
                 Company of the Exercise Price and all taxes required to be paid
                 by the Holder, if any, pursuant to Section 2(e)(vii) prior to
                 the issuance of such shares, have been paid.

                       (iii)   DELIVERY OF NEW WARRANTS UPON PARTIAL EXERCISE.
                 If this Warrant shall have been exercised in part, the Company
                 shall, at the time of delivery of the certificate or
                 certificates representing Warrant Shares, deliver to Holder a
                 new Warrant evidencing the rights of Holder to purchase the
                 unpurchased Warrant Shares called for by this Warrant, which
                 new Warrant shall in all other respects be identical with this
                 Warrant.

                       (iv)    RESCISSION RIGHTS. If the Company fails to
                 deliver to the Holder a certificate or certificates (or DWAC
                 transfer) representing the Warrant Shares pursuant to this
                 Section 2(e)(iv) by the Warrant Share Delivery Date, then the
                 Holder will have the right to rescind such exercise.

                       (v)     BUY-IN COMPENSATION. In addition to any other
                 rights available to the Holder, if the Company fails to deliver
                 to the Holder a certificate or certificates representing the
                 Warrant Shares (or a DWAC transfer) pursuant to an exercise on
                 or before the Warrant Share Delivery Date, and if after such
                 date the Holder is required by its broker to purchase (in an
                 open market transaction or otherwise) shares of Common Stock to
                 deliver in satisfaction of a sale by the Holder of the Warrant
                 Shares which the Holder anticipated receiving upon such
                 exercise (a "BUY-IN"), then the Company shall (1) pay in cash
                 to the Holder the amount by which (x) the Holder's total
                 purchase price (including brokerage commissions, if any) for
                 the shares of Common Stock so purchased exceeds (y) the amount
                 obtained by multiplying (A) the number of Warrant Shares that
                 the Company was required to deliver to the Holder in connection
                 with the exercise at issue times (B) the price at which the
                 sell order giving rise to such purchase obligation was
                 executed, and (2) at the option of the Holder, either reinstate
                 the portion of the Warrant and equivalent number of Warrant
                 Shares for which such exercise was not honored or deliver to
                 the Holder the number of shares of Common Stock that would have
                 been issued had the Company timely complied with its exercise
                 and delivery obligations hereunder. For example, if the Holder
                 purchases Common Stock having a total purchase price of $11,000
                 to cover a Buy-In with respect to an attempted exercise of
                 shares of Common Stock with an aggregate sale price giving rise
                 to such purchase obligation of $10,000, under

                                        4
<Page>

                 clause (1) of the immediately preceding sentence the Company
                 shall be required to pay the Holder $1,000. The Holder shall
                 provide the Company written notice indicating the amounts
                 payable to the Holder in respect of the Buy-In, together with
                 applicable confirmations and other evidence reasonably
                 requested by the Company. Nothing herein shall limit a Holder's
                 right to pursue any other remedies available to it hereunder,
                 at law or in equity including, without limitation, a decree of
                 specific performance and/or injunctive relief with respect to
                 the Company's failure to timely deliver certificates
                 representing shares of Common Stock upon exercise of the
                 Warrant as required pursuant to the terms hereof.

                       (vi)    NO FRACTIONAL SHARES OR SCRIP. No fractional
                 shares or scrip representing fractional shares shall be issued
                 upon the exercise of this Warrant. As to any fraction of a
                 share which Holder would otherwise be entitled to purchase upon
                 such exercise, the Company shall pay a cash adjustment in
                 respect of such final fraction in an amount equal to such
                 fraction multiplied by the Exercise Price.

                       (vii)   CHARGES, TAXES AND EXPENSES. Issuance of
                 certificates for Warrant Shares shall be made without charge to
                 the Holder for any issue or transfer tax or other incidental
                 expense in respect of the issuance of such certificate, all of
                 which taxes and expenses shall be paid by the Company, and such
                 certificates shall be issued in the name of the Holder or in
                 such name or names as may be directed by the Holder; PROVIDED,
                 HOWEVER, that in the event certificates for Warrant Shares are
                 to be issued in a name other than the name of the Holder, this
                 Warrant when surrendered for exercise shall be accompanied by
                 the Assignment Form attached hereto duly executed by the
                 Holder; and the Company may require, as a condition thereto,
                 the payment of a sum sufficient to reimburse it for any
                 transfer tax incidental thereto.

                       (viii)  CLOSING OF BOOKS. The Company will not close its
                 stockholder books or records in any manner which prevents the
                 timely exercise of this Warrant, pursuant to the terms hereof.

         Section 3.    CERTAIN ADJUSTMENTS.

                 (a)   STOCK DIVIDENDS AND SPLITS. If the Company, at any time
         while this Warrant is outstanding: (A) pays a stock dividend or
         otherwise make a distribution or distributions on shares of its Common
         Stock or any other equity or equity equivalent securities payable in
         shares of Common Stock (which, for avoidance of doubt, shall not
         include any shares of Common Stock issued by the Company pursuant to
         this Warrant), (B) subdivides outstanding shares of Common Stock into a
         larger number of shares, (C) combines (including by way of reverse
         stock split) outstanding shares of Common Stock into a smaller number
         of shares, or (D) issues by reclassification of shares of the Common
         Stock any shares of capital stock of the Company, then in each case the
         Exercise Price shall be multiplied by a fraction of which the numerator
         shall be the number of shares of Common Stock (excluding treasury
         shares, if any) outstanding

                                        5
<Page>

         before such event and of which the denominator shall be the number of
         shares of Common Stock outstanding after such event. Any adjustment
         made pursuant to this Section 3(a) shall become effective immediately
         after the record date for the determination of stockholders entitled to
         receive such dividend or distribution and shall become effective
         immediately after the effective date in the case of a subdivision,
         combination or re-classification.

                 (b)   SUBSEQUENT EQUITY SALES. If the Company or any Subsidiary
         thereof, as applicable, at any time while this Warrant is outstanding,
         shall offer, sell, grant any option to purchase or offer, sell or grant
         any right to reprice its securities, or otherwise dispose of or issue
         (or announce any offer, sale, grant or any option to purchase or other
         disposition) any Common Stock or Common Stock Equivalents entitling any
         Person to acquire shares of Common Stock, at an effective price per
         share less than the then Exercise Price (such lower price, the "BASE
         SHARE PRICE" and such issuances collectively, a "DILUTIVE ISSUANCE"),
         as adjusted hereunder (if the holder of the Common Stock or Common
         Stock Equivalents so issued shall at any time, whether by operation of
         purchase price adjustments, reset provisions, floating conversion,
         exercise or exchange prices or otherwise, or due to warrants, options
         or rights per share which is issued in connection with such issuance,
         be entitled to receive shares of Common Stock at an effective price per
         share which is less than the Exercise Price, such issuance shall be
         deemed to have occurred for less than the Exercise Price), then, the
         Exercise Price shall be multiplied by a fraction, the numerator of
         which shall be the number of shares issued and outstanding immediately
         prior to such Dilutive Issuance plus the aggregate number of shares of
         Common Stock which could be purchased in such Dilutive Issuance if such
         Dilutive Issuance were done at the Exercise Price and the denominator
         of which shall be the number of shares of Common Stock deemed
         outstanding immediately after such Dilutive Issuance. Such adjustment
         shall be made whenever such Common Stock or Common Stock Equivalents
         are issued. The Company shall notify the Holder in writing, no later
         than the business day following the issuance of any Common Stock or
         Common Stock Equivalents subject to this section, indicating therein
         the applicable issuance price, or of applicable reset price, exchange
         price, conversion price and other pricing terms.

                 (c)   PRO RATA DISTRIBUTIONS. If the Company, at any time prior
         to the Termination Date, shall distribute to all holders of Common
         Stock (and not to Holders of the Warrants) evidences of its
         indebtedness or assets or rights or warrants to subscribe for or
         purchase any security other than the Common Stock (which shall be
         subject to Section 3(b)), then in each such case the Exercise Price
         shall be adjusted by multiplying the Exercise Price in effect
         immediately prior to the record date fixed for determination of
         stockholders entitled to receive such distribution by a fraction of
         which the denominator shall be the VWAP determined as of the record
         date mentioned above, and of which the numerator shall be such VWAP on
         such record date less the then per share fair market value at such
         record date of the portion of such assets or evidence of indebtedness
         so distributed applicable to one outstanding share of the Common Stock
         as determined by the Board of Directors in good faith. In either case
         the adjustments shall be described in a statement provided to the
         Holders of the portion of assets or evidences of indebtedness so
         distributed or such subscription rights applicable to one share of
         Common Stock.

                                        6
<Page>

         Such adjustment shall be made whenever any such distribution is made
         and shall become effective immediately after the record date mentioned
         above.

                 (d)   CALCULATIONS. All calculations under this Section 3 shall
         be made to the nearest cent or the nearest 1/100th of a share, as the
         case may be. For purposes of this Section 3, the number of shares of
         Common Stock outstanding as of a given date shall be the sum of the
         number of shares of Common Stock (excluding treasury shares, if any)
         outstanding.

                 (e)   NOTICE TO HOLDERS.

                       (i)     ADJUSTMENT TO EXERCISE PRICE. Whenever the
                 Exercise Price is adjusted pursuant to this Section 3, the
                 Company shall promptly mail to each Holder a notice setting
                 forth the Exercise Price after such adjustment and setting
                 forth a brief statement of the facts requiring such adjustment.
                 If the Company issues a future priced security (as defined by
                 the rules of the Nasdaq Stock Market), the Company shall be
                 deemed to have issued Common Stock or Common Stock Equivalents
                 at the lowest possible conversion or exercise price at which
                 such securities may be converted or exercised in the case of a
                 future priced security.

                       (ii)    NOTICE TO ALLOW EXERCISE BY HOLDER. If (A) the
                 Company shall declare a dividend (or any other distribution) on
                 the Common Stock; (B) the Company shall declare a special
                 nonrecurring cash dividend on or a redemption of the Common
                 Stock; (C) the Company shall authorize the granting to all
                 holders of the Common Stock rights or warrants to subscribe for
                 or purchase any shares of capital stock of any class or of any
                 rights; (D) the approval of any stockholders of the Company
                 shall be required in connection with any reclassification of
                 the Common Stock, any consolidation or merger to which the
                 Company is a party, any sale or transfer of all or
                 substantially all of the assets of the Company, of any
                 compulsory share exchange whereby the Common Stock is converted
                 into other securities, cash or property; (E) the Company shall
                 authorize the voluntary or involuntary dissolution, liquidation
                 or winding up of the affairs of the Company; then, in each
                 case, the Company shall cause to be mailed to the Holder at its
                 last addresses as it shall appear upon the Warrant Register of
                 the Company, at least 20 calendar days prior to the applicable
                 record or effective date hereinafter specified, a notice
                 stating (x) the date on which a record is to be taken for the
                 purpose of such dividend, distribution, redemption, rights or
                 warrants, or if a record is not to be taken, the date as of
                 which the holders of the Common Stock of record to be entitled
                 to such dividend, distributions, redemption, rights or warrants
                 are to be determined or (y) the date on which such
                 reclassification, consolidation, merger, sale, transfer or
                 share exchange is expected to become effective or close, and
                 the date as of which it is expected that holders of the Common
                 Stock of record shall be entitled to exchange their shares of
                 the Common Stock for securities, cash or other property
                 deliverable upon such reclassification, consolidation, merger,
                 sale, transfer or share exchange; PROVIDED, that the failure to
                 mail such notice or any

                                        7
<Page>

                 defect therein or in the mailing thereof shall not affect the
                 validity of the corporate action required to be specified in
                 such notice. The Holder is entitled to exercise this Warrant
                 during the 20-day period commencing the date of such notice to
                 the effective date of the event triggering such notice

                 (f)   FUNDAMENTAL TRANSACTION. If, at any time while this
         Warrant is outstanding, (A) the Company effects any merger or
         consolidation of the Company with or into another Person, (B) the
         Company effects any sale of all or substantially all of its assets in
         one or a series of related transactions, (C) any tender offer or
         exchange offer (whether by the Company or another Person) is completed
         pursuant to which holders of Common Stock are permitted to tender or
         exchange their shares for other securities, cash or property, or (D)
         the Company effects any reclassification of the Common Stock or any
         compulsory share exchange pursuant to which the Common Stock is
         effectively converted into or exchanged for other securities, cash or
         property (in any such case, a "FUNDAMENTAL TRANSACTION"), then, upon
         any subsequent conversion of this Warrant, the Holder shall have the
         right to receive, for each Warrant Share that would have been issuable
         upon such exercise absent such Fundamental Transaction, at the option
         of the Holder, (a) upon exercise of this Warrant, the number of shares
         of Common Stock of the successor or acquiring corporation or of the
         Company, if it is the surviving corporation, and Alternate
         Consideration receivable upon or as a result of such reorganization,
         reclassification, merger, consolidation or disposition of assets by a
         Holder of the number of shares of Common Stock for which this Warrant
         is exercisable immediately prior to such event or (b) cash equal to the
         value of this Warrant as determined in accordance with the
         Black-Scholes option pricing formula (the "ALTERNATE CONSIDERATION").
         For purposes of any such exercise, the determination of the Exercise
         Price shall be appropriately adjusted to apply to such Alternate
         Consideration based on the amount of Alternate Consideration issuable
         in respect of one share of Common Stock in such Fundamental
         Transaction, and the Company shall apportion the Exercise Price among
         the Alternate Consideration in a reasonable manner reflecting the
         relative value of any different components of the Alternate
         Consideration. If holders of Common Stock are given any choice as to
         the securities, cash or property to be received in a Fundamental
         Transaction, then the Holder shall be given the same choice as to the
         Alternate Consideration it receives upon any exercise of this Warrant
         following such Fundamental Transaction. To the extent necessary to
         effectuate the foregoing provisions, any successor to the Company or
         surviving entity in such Fundamental Transaction shall issue to the
         Holder a new warrant consistent with the foregoing provisions and
         evidencing the Holder's right to exercise such warrant into Alternate
         Consideration. The terms of any agreement pursuant to which a
         Fundamental Transaction is effected shall include terms insuring that
         this Warrant (or any such replacement security) will be similarly
         adjusted upon any subsequent transaction analogous to a Fundamental
         Transaction.

                 (g)   EXEMPT ISSUANCE. Notwithstanding the foregoing, no
         adjustments, Alternate Consideration nor notices shall be made, paid or
         issued under this Section 3 in respect of an Exempt Issuance.

                                        8
<Page>

         Section 4.    TRANSFER OF WARRANT.

                 (a)   TRANSFERABILITY. Subject to compliance with any
         applicable securities laws and the conditions set forth in Section 5(a)
         hereof, this Warrant and all rights hereunder are transferable, in
         whole or in part, upon surrender of this Warrant at the principal
         office of the Company, together with a written assignment of this
         Warrant substantially in the form attached hereto duly executed by the
         Holder or its agent or attorney and funds sufficient to pay any
         transfer taxes payable upon the making of such transfer. Upon such
         surrender and, if required, such payment, the Company shall execute and
         deliver a new Warrant or Warrants in the name of the assignee or
         assignees and in the denomination or denominations specified in such
         instrument of assignment, and shall issue to the assignor a new Warrant
         evidencing the portion of this Warrant not so assigned, and this
         Warrant shall promptly be cancelled. A Warrant, if properly assigned,
         may be exercised by a new holder for the purchase of Warrant Shares
         without having a new Warrant issued, if exercised in accordance with
         the terms of the Warrant.

                 (b)   DIVISION OR COMBINATION OF WARRANTS. This Warrant may be
         divided or combined with other Warrants upon presentation hereof at the
         aforesaid office of the Company, together with a written notice
         specifying the names and denominations in which new Warrants are to be
         issued, signed by the Holder or its agent or attorney. Subject to
         compliance with Section 4(a), as to any transfer which may be involved
         in such division or combination, the Company shall execute and deliver
         a new Warrant or Warrants in exchange for the Warrant or Warrants to be
         divided or combined in accordance with such notice.

                 (c)   WARRANT REGISTER. The Company shall register this
         Warrant, upon records to be maintained by the Company for that purpose
         (the "WARRANT REGISTER"), in the name of the record Holder hereof from
         time to time. The Company may deem and treat the registered Holder of
         this Warrant as the absolute owner hereof for the purpose of any
         exercise hereof or any distribution or notice to the Holder, and for
         all other purposes, absent actual notice to the contrary.

         Section 5.    MISCELLANEOUS.

                 (a)   TITLE TO WARRANT. Prior to the Termination Date and
         subject to compliance with applicable laws and Section 4 of this
         Warrant, this Warrant and all rights hereunder are transferable, in
         whole or in part, at the office or agency of the Company by the Holder
         in person or by duly authorized attorney, upon surrender of this
         Warrant together with the Assignment Form annexed hereto properly
         endorsed.

                 (b)   NO RIGHTS AS SHAREHOLDER UNTIL EXERCISE. This Warrant
         does not entitle the Holder to any voting rights or other rights as a
         shareholder of the Company prior to the exercise hereof. Upon the
         surrender of this Warrant and the payment of the aggregate Exercise
         Price (or by means of a cashless exercise), the Warrant Shares so
         purchased shall be and be deemed to be issued to such Holder as the
         record owner of such shares as of the close of business on the later of
         the date of such surrender or payment.

                                        9
<Page>

                 (c)   LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT. The
         Company covenants that upon receipt by the Company of evidence
         reasonably satisfactory to it of the loss, theft, destruction or
         mutilation of this Warrant or any stock certificate relating to the
         Warrant Shares, and in case of loss, theft or destruction, of indemnity
         or security reasonably satisfactory to it (which, in the case of the
         Warrant, shall not include the posting of any bond), and upon surrender
         and cancellation of such Warrant or stock certificate, if mutilated,
         the Company will make and deliver a new Warrant or stock certificate of
         like tenor and dated as of such cancellation, in lieu of such Warrant
         or stock certificate.

                 (d)   SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or
         appointed day for the taking of any action or the expiration of any
         right required or granted herein shall be a Saturday, Sunday or a legal
         holiday, then such action may be taken or such right may be exercised
         on the next succeeding day not a Saturday, Sunday or legal holiday.

                 (e)   AUTHORIZED SHARES.

                       The Company covenants that during the period the Warrant
                 is outstanding, it will reserve from its authorized and
                 unissued Common Stock a sufficient number of shares to provide
                 for the issuance of the Warrant Shares upon the exercise of any
                 purchase rights under this Warrant. The Company further
                 covenants that its issuance of this Warrant shall constitute
                 full authority to its officers who are charged with the duty of
                 executing stock certificates to execute and issue the necessary
                 certificates (or authorize an uncertificated issuance to the
                 Holder via the DTC DWAC system) for the Warrant Shares upon the
                 exercise of the purchase rights under this Warrant. The Company
                 will take all such reasonable action as may be necessary to
                 assure that such Warrant Shares may be issued as provided
                 herein without violation of any applicable law or regulation,
                 or of any requirements of the Trading Market upon which the
                 Common Stock may be listed.

                       Except and to the extent as waived or consented to by the
                 Holder, the Company shall not by any action, including, without
                 limitation, amending its certificate of incorporation or
                 through any reorganization, transfer of assets, consolidation,
                 merger, dissolution, issue or sale of securities or any other
                 voluntary action, avoid or seek to avoid the observance or
                 performance of any of the terms of this Warrant, but will at
                 all times in good faith assist in the carrying out of all such
                 terms and in the taking of all such actions as may be necessary
                 or appropriate to protect the rights of Holder as set forth in
                 this Warrant against impairment. Without limiting the
                 generality of the foregoing, the Company will (a) not increase
                 the par value of any Warrant Shares above the amount payable
                 therefor upon such exercise immediately prior to such increase
                 in par value, (b) take all such action as may be necessary or
                 appropriate in order that the Company may validly and legally
                 issue fully paid and nonassessable Warrant Shares upon the
                 exercise of this Warrant, and (c) use commercially reasonable
                 efforts to obtain all such authorizations, exemptions or
                 consents from any public regulatory body

                                       10
<Page>

                 having jurisdiction thereof as may be necessary to enable the
                 Company to perform its obligations under this Warrant.

                       Before taking any action which would result in an
                 adjustment in the number of Warrant Shares for which this
                 Warrant is exercisable or in the Exercise Price, the Company
                 shall obtain all such authorizations or exemptions thereof, or
                 consents thereto, as may be necessary from any public
                 regulatory body or bodies having jurisdiction thereof.

                 (f)   JURISDICTION. All questions concerning the construction,
         validity, enforcement and interpretation of this Warrant shall be
         determined in accordance with the provisions of the Purchase Agreement.

                 (g)   RESTRICTIONS. The Holder acknowledges that the Warrant
         Shares acquired upon the exercise of this Warrant, if not registered,
         will have restrictions upon resale imposed by state and federal
         securities laws.

                 (h)   NONWAIVER AND EXPENSES. No course of dealing or any delay
         or failure to exercise any right hereunder on the part of Holder shall
         operate as a waiver of such right or otherwise prejudice Holder's
         rights, powers or remedies, notwithstanding that all rights hereunder
         terminate on the Termination Date. If the Company willfully and
         knowingly fails to comply with any provision of this Warrant, which
         results in any material damages to the Holder, the Company shall pay to
         Holder such amounts as shall be sufficient to cover any reasonable
         costs and expenses including, but not limited to, attorneys' fees,
         including those of appellate proceedings, incurred by Holder in
         collecting any amounts due pursuant hereto or in otherwise enforcing
         any of its rights, powers or remedies hereunder.

                 (i)   NOTICES. Any notice, request or other document required
         or permitted to be given or delivered to the Holder by the Company
         shall be delivered in accordance with the notice provisions of the
         Purchase Agreement.

                 (j)   LIMITATION OF LIABILITY. No provision hereof, in the
         absence of any affirmative action by Holder to exercise this Warrant or
         purchase Warrant Shares, and no enumeration herein of the rights or
         privileges of Holder, shall give rise to any liability of Holder for
         the purchase price of any Common Stock or as a stockholder of the
         Company, whether such liability is asserted by the Company or by
         creditors of the Company.

                 (k)   REMEDIES. Holder, in addition to being entitled to
         exercise all rights granted by law, including recovery of damages, will
         be entitled to specific performance of its rights under this Warrant.
         The Company agrees that monetary damages would not be adequate
         compensation for any loss incurred by reason of a breach by it of the
         provisions of this Warrant and hereby agrees to waive the defense in
         any action for specific performance that a remedy at law would be
         adequate.

                 (l)   SUCCESSORS AND ASSIGNS. Subject to applicable securities
         laws, this Warrant and the rights and obligations evidenced hereby
         shall inure to the benefit of and

                                       11
<Page>

         be binding upon the successors of the Company and the successors and
         permitted assigns of Holder. The provisions of this Warrant are
         intended to be for the benefit of all Holders from time to time of this
         Warrant and shall be enforceable by any such Holder or holder of
         Warrant Shares.

                 (m)   AMENDMENT. This Warrant may be modified or amended or the
         provisions hereof waived with the written consent of the Company and
         the Holder.

                 (n)   SEVERABILITY. Wherever possible, each provision of this
         Warrant shall be interpreted in such manner as to be effective and
         valid under applicable law, but if any provision of this Warrant shall
         be prohibited by or invalid under applicable law, such provision shall
         be ineffective to the extent of such prohibition or invalidity, without
         invalidating the remainder of such provisions or the remaining
         provisions of this Warrant.

                 (o)   HEADINGS. The headings used in this Warrant are for the
         convenience of reference only and shall not, for any purpose, be deemed
         a part of this Warrant.

                              ********************

         IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized.

Dated:  July  30, 2004

                                       WAVE SYSTEMS CORP.

                                       By: /s/ Gerard T. Feeney
                                           --------------------
                                           Name: Gerard T. Feeney
                                           Title: Chief Financial Officer

                                       12
<Page>

                               NOTICE OF EXERCISE

TO:      WAVE SYSTEMS CORP.

         (1)   The undersigned hereby elects to purchase ________ Warrant Shares
of the Company pursuant to the terms of the attached Warrant (only if exercised
in full), and tenders herewith payment of the exercise price in full, together
with all applicable transfer taxes, if any.

         (2)   Payment shall take the form of (check applicable box):

                       / / in lawful money of the United States; or

                       / / the cancellation of such number of Warrant Shares as
                       is necessary, in accordance with the formula set forth in
                       subsection 3(d), to exercise this Warrant with respect to
                       the maximum number of Warrant Shares purchasable pursuant
                       to the cashless exercise procedure set forth in
                       subsection 3(d).

         (3)   Please issue a certificate or certificates representing said
Warrant Shares in the name of the undersigned or in such other name as is
specified below:

                           _______________________________

The Warrant Shares shall be delivered to the following:

                           _______________________________

                           _______________________________

                           _______________________________

                                                [PURCHASER]

                                                By:
                                                   -------------------------
                                                   Name:
                                                   Title:

                                                Dated:
                                                       -------------------

<Page>

                                 ASSIGNMENT FORM

                    (TO ASSIGN THE FOREGOING WARRANT, EXECUTE
                   THIS FORM AND SUPPLY REQUIRED INFORMATION.
                 DO NOT USE THIS FORM TO EXERCISE THE WARRANT.)

         FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to

_______________________________________________ whose address is

_____________________________________________________________________

_____________________________________________________________________

                                              Dated:  ______________, _______

                           Holder's Signature:
                                               -------------------------
                           Holder's Address:
                                               -------------------------

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

Signature Guaranteed:  ___________________________________________

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.

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