WAVE SYSTEMS CORP
EXHIBIT 10.16
<DOCUMENT>
<TYPE>EX-10.16
<SEQUENCE>8
<FILENAME>a2075132zex-10_16.txt
<DESCRIPTION>EXHIBIT 10.16
<TEXT>
<PAGE>

EXHIBIT 10.16

                                 FIRST AMENDMENT
                           TO ASSET PURCHASE AGREEMENT


         AMENDMENT TO ASSET PURCHASE AGREEMENT, dated as of October 4, 2001
(this "AGREEMENT"), by and between SignOnline, Inc., a Delaware corporation
("SELLER"), and Wave Systems Corp., a Delaware corporation ("BUYER").

         WHEREAS; Buyer and Seller have entered into an Asset Purchase Agreement
dated as of October 4, 2001 (the "Agreement"); and

         WHEREAS; Buyer and Seller desire to amend the terms of the Agreement in
accordance with the provisions set forth below.

         NOW THEREFORE; for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Buyer and Seller hereby agree as
follows:

         1. All capitalized terms not otherwise defined herein shall have the
respective meanings set forth in the Agreement.

         2. SECTION 1 of the Agreement is hereby amended to add the following
subparagraph after subparagraph (d) thereof:

         (e) All right and interest in and to the contracts and or licenses
         listed on Schedule E hereto (collectively, the "Contracts") (to be
         assumed and assigned to Buyer pursuant to the provisions of Section 365
         of the Bankruptcy Code); provided, however, that no Contract shall be
         included as an Asset if a waiver of all cure amounts is not obtained
         from the creditor thereto on or before August 23, 2001 unless Buyer
         agrees to pay such cure amounts to the applicable creditor separate and
         apart from the Purchase Price to be paid hereunder.

         3. SECTION 2 of the Agreement is hereby amended to include the
following language at the end of the only sentence provided therein: ", other
than obligations which arise after the Closing under the Contracts."

         4. SECTION 3(A) of the agreement is hereby amended to delete the figure
"$250,000.00" and replace it with the figure "$290,000.00".

         5. SECTION 3(B)(II) of the Agreement is hereby amended to delete the
figure "$250,000" and replace it with the figure "$290,000.00".

         6. SECTION 8(C) of the Agreement is hereby amended to insert
"(including without limitation Versions 1 and 1.1 of the SmartSAFE and
SmartSignature software listed on SCHEDULE A hereto)", between the phrase "to
the Assets" and the phrase ", free and clear".

         7. SECTION 8 of the Agreement is hereby amended to add the following
subparagraph after subparagraph (r):


<PAGE>

                  (s) Except as set forth on SCHEDULE 8(S) hereto, the Contracts
         are all valid and binding obligations of the third parties thereto,
         enforceable against such third parties in accordance with their
         respective terms. Except as set forth on SCHEDULE 8(S), Seller has
         fulfilled in all material respects all obligations required pursuant to
         the Contracts to have been performed by Seller prior to the Closing
         Date. Except as disclosed on SCHEDULE 8(S) hereto, no consent of any
         person is required as a condition of transferring to Buyer the rights
         of Seller under any of the Contracts. Except as set forth on SCHEDULE
         8(S), none of the rights of Seller under any of such Contracts will be
         subject to termination or modification as a result of the consummation
         of the transactions contemplated by this Agreement. Seller has provided
         to Buyer true and complete copies of all the Contracts listed on
         SCHEDULE 8(S) and all amendments and modifications thereof and all
         waivers and similar documents relating thereto.

         8. The provisions of SECTION 10 of the Agreement shall be deleted in
their entirety and replaced with the following:

         As a condition to the Buyer's and Seller's obligations, Seller must
         move for, and the Bankruptcy Court must issue, an order approving the
         sale of the Assets pursuant to this Agreement (the "SALE ORDER"). The
         Sale Order submitted upon such motion by the Seller shall be final and
         not appealable and in form and substance reasonably satisfactory to the
         Buyer, shall be approved by Buyer prior to submission of such motion
         and shall order, provide and authorize that, among other things: (i)
         the sale, transfer, and assignment of the Assets by the Seller to the
         Buyer (a) will be a legal, valid and effective transfer and assignment
         of the Assets, (b) will vest the Buyer with good title in and to the
         Assets free and clear of all liens, charges, claims, encumbrances and
         interests of any kind, nature or description, and (c) will constitute
         reasonably equivalent value and fair consideration under the relevant
         provisions of the Code and applicable state law; (ii) the transactions
         contemplated by this Agreement are undertaken by the Buyer in good
         faith as the term is used in Section 363(m) of the Bankruptcy Code and
         the protections of Section 363(m) shall apply to such transactions;
         (iii) the Seller is fully authorized and directed to assign the
         Contracts to be conveyed hereunder; (iv) the obligations to all
         non-debtor parties to all Contracts to be conveyed to the Buyer
         hereunder shall be fully enforceable by the Buyer subsequent to the
         assignment thereof, and (v) the Buyer shall be deemed not to be a
         successor of the Seller. Subject to receipt of higher and better offers
         as prescribed in the order entered by the Bankruptcy Court on August
         13, (the "PROCEDURES ORDER"), the Seller shall use reasonable efforts
         to obtain entry of the Sale Order.

         9. SECTION 19 of the Agreement shall be amended to delete the phrase
"except for the terms of that certain Bid Proposal entered into between the
Buyer and the Seller on August __, 2001."

         10. The Agreement shall be amended to include the following "SECTION
25" after SECTION 24 thereof:

         SECTION 25. TERMINATION. This Agreement may be terminated at any time
prior to the Closing:

         (a) by either the Buyer or the Seller, if the Closing shall not have
         occurred by October 1, 2001 (including, without limitation, because any
         condition precedent set forth in Section 11 of the hereof has not been
         fulfilled as of October 1, 2001); PROVIDED, HOWEVER, that the right to
         terminate under this Section 25(a) shall not be available to the Buyer
         or the Seller if its failure to fulfill any obligation under this
         Agreement shall have been the cause of, or shall have resulted in, the
         failure of the Closing to occur on or prior to such date;


<PAGE>

         (b) by either the Buyer or the Seller, if the Bankruptcy Court does not
         issue the Sale Order or an order contemplated by Section 10 hereof on
         or before September 20, 2001;

         (c) by either the Buyer or the Seller, if the Sale Order does not
         become a Final Order by October 1, 2001;

         (d) by the Buyer, if the Seller refuses or otherwise fails to perform
         its obligation to consummate the Transactions if, after the conclusion
         of the auction conducted by the Bankruptcy Court pursuant to the
         Procedures Order, the Buyer is selected as the highest and best bidder;

         (e) by Seller, if the Buyer refuses or otherwise fails to perform its
         obligation to consummate the Acquisition if, after the conclusion of
         the auction conducted by the Bankruptcy Court, the Buyer is selected as
         the highest and best bidder;

         (f) by either the Buyer or the Seller, if the Bankruptcy Court or any
         other court or governmental authority shall have issued any order,
         decree or ruling or taken any other action restraining, enjoining or
         otherwise prohibiting the Transactions and such order, decree, ruling
         or other action shall have become final and nonappealable; or

         (g) by the mutual written consent of the Buyer and the Seller.

         11. The Schedules to the Agreement shall be modified to include
SCHEDULE E and SCHEDULE 8(S) attached hereto.

         IN WITNESS WHEREOF, the parties hereto have executed this Amendment to
the Agreement as of the date first above written.


         WAVE SYSTEMS CORP.


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


         SIGNONLINE, INC.


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


             [SIGNATURE PAGE - AMENDMENT TO ASSET PURCHASE AGREEMENT


<PAGE>

                                   SCHEDULE E

                                    CONTRACTS

Conveyance and License Agreement dated as of September 29, 2000, by and between
Maximus, Inc. and SignOnline, Inc. ("SignOnline") (as amended pursuant to
Addendum 1 thereto dated December 12, 2000)

Conveyance and License Agreement, dated as of March 9, 2000, by and between
SignOnline and 3-G International, Inc.;

Memoranda of Understanding, dated as of July 24, 2000, September 15, 2000 and
September 25, 2000, by and between SignOnline and 3GI Maximus.

Consulting Services Agreement, dated July 25, 2000, by and between Archon
Technologies, Inc. and SignOnline, Inc. and that certain Statement of Work dated
July 16, 2001 entered into between Archon and SignOnline in connection
therewith.


<PAGE>

                                  SCHEDULE 8(S)

Each of the Contracts require a consent to be transferred.

By letter of August 20, 2001 provided to Seller by Buyer, Archon Technologies,
Inc. ("Archon) has consented to the transfer of its Contracts. By letter of
August 23, 2001 provided to Seller by Buyer, Maximus has consented to the
transfer of its Contracts.

The total monetary amount owed to Archon as of July 12, 2001 under the Contracts
was $150,538.17

The total monetary amount owed to Maximus as of July 12,2001 under the Contracts
was $169,306.76


</TEXT>
</DOCUMENT>
