MISTY PATENT ROYALTY-FREE LICENSE AGREEMENT

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1 MISTY PATENT ROYALTY-FREE LICENSE AGREEMENT This Agreement is made and entered into this day of, 199, by and between Mitsubishi Electric Corporation, a corporation of Japan, having its principal office at 2-3, Marunouchi 2-chome, Chiyoda-ku Tokyo Japan (hereinafter referred to as Mitsubishi ), and, a corporation of, having its principal office at (hereinafter referred to as Licensee ). WITNESSETH WHEREAS, Mitsubishi filed certain patent applications (as later defined herein) relating to the MISTY, encryption algorithm developed by Mitsubishi; WHEREAS, Mitsubishi is willing to grant royalty-free licenses under such patent application and patent rights that will be granted based on such application, to promote MISTY in accordance with the terms and conditions hereunder; and, WHEREAS, Licensee desires to obtain such license from Mitsubishi; NOW, THEREFORE, in consideration of the mutual premises and covenants contained herein, Mitsubishi and Licensee agree as follows: ARTICLE 1 - DEFINITIONS For the purpose of this Agreement, the following terms shall have the following meanings: 1.1 Licensed Patent(s) shall mean the patent application listed in Exhibit A (including any division(s)), the registered patent under such application and any reissues or extensions thereof which are MISTY Essential Patents (as defined in Article 1.6, below). 1.2 MISTY Technology is the technology described in the article titled New Block Encryption Algorithm MISTY in Lecture Notes in Computer Science Vol.1267, 54-68, Fast Software Encryption (4th International Workshop, FSE 97, proceedings) published by Springer-Verlag, Germany, Compatible means having the ability to make correct unencrypted messages from encrypted messages made by MISTY Technology, and to make encrypted messages that are able to be correctly decrypted by MISTY Technology 1.4 MISTY Product shall mean any product which (a) is covered by at least one (1) issued Misty 1

2 claim of a Licensed Patent in the country in which such product or any part thereof is made, used, sold or otherwise disposed of, and (b) is fully Compatible with MISTY Technology. 1.5 Subsidiary(ies) shall mean a corporation or other entity of which a party hereto owns or controls, directly or indirectly, more than fifty percent (50%) of its voting stocks or rights; provided, however, that such corporation or other entity shall be regarded as Subsidiary(ies) only as long as such ownership or control exists. 1.6 MISTY Essential Patent shall mean any patent which is related to encryption technology including, but not limited to, encryption algorithms, and is indispensable to develop, manufacture, distribute or use the MISTY Product in any form. 1.7 MISTY Related Patent shall mean any patent which is related to encryption technology including, but not limited to, encryption algorithms, and which is not a MISTY Essential Patent, but may be required to develop, manufacture, distribute or use of the MISTY Product. 1.5 Effective Date shall mean the date of execution of this Agreement by the parties. ARTICLE 2 - GRANT OF LICENSES 2.1 Mitsubishi hereby grants to Licensee during the term of this Agreement and subject to the terms and conditions hereinbelow, a non-exclusive, non-assignable, royalty-free license under the Licensed Patent to (i) make MISTY products and (ii) use, sell, lease or otherwise distribute such Licensee s MISTY Products in all the countries of the world. 2.2 For the purpose of this Article, the license to make MISTY Products includes the right for Licensee to subcontract portions of the manufacture and/or assembly of MISTY Products to third parties and also the right of Licensee to have a third party manufacture MISTY Products for the sole account of Licensee; provided that said MISTY Products are made by such third party by using manufacturing drawings and specifications provided by Licensee which are in sufficient detail that no additional designing is required by such third party except for adoption to the production processes and standards normally used by the third party. 2.3 Licensee may sublicense its Subsidiaries under this Agreement, provided that such Subsidiaries enter into a written sublicense agreement providing that such Subsidiaries accept all the terms and conditions of this Agreement, and that Licensee agrees to be responsible for its Subsidiaries compliance with the terms and conditions of this Agreement. Upon request by Mitsubishi, Licensee shall notify Mitsubishi of the name of such Subsidiaries and provide Mitsubishi with a copy of the sublicense agreement between Licensee and such Subsidiaries. 2.4 No right to sublicense shall be granted pursuant to this Agreement except the sublicense to Misty 2

3 the Subsidiaries set forth in Article This Agreement does not grant any right or license, under any intellectual property rights of Mitsubishi other than the Licensed Patent, and no other right or license is to be implied by or inferred from any provision of this Agreement or by the conduct of the parties except as expressly provided in this Agreement; in particular, this Agreement does not grant any right with regard to copyright in the article mentioned in Section Mitsubishi shall not have any obligation to provide Licensee with any technical assistance, technical training nor other technical services. ARTICLE 3-LICENSEE S OBLIGATIONS 3.1 Licensee shall make commercially reasonable efforts to develop and distribute MISTY Products. 3.2 Upon Mitsubishi s request, Licensee shall report in writing the name of Licensee s MISTY Products, whether Licensee sell such MISTY Product constantly, and the purpose of Licensee s commercial use of MISTY Product, if any. 3.3 Licensee shall conduct tests of its MISTY Product prior to its shipment and confirm that such MISTY Product are fully Compatible with MISTY Technology as set forth in Sections 1.3 and 1.4. Licensee shall not distribute any MISTY Products that are not fully Compatible. 3.4 Licensee agrees to place on each MISTY Product a description as set forth in Exhibit B that indicates that it is a MISTY Product, unless Licensee otherwise obtains prior written consent of Mitsubishi; provided, however, that Licensee is prohibited from placing the description on a product that is deemed not to be fully Compatible pursuant to Sections 1.3 and 1.4. Mitsubishi may at its sole discretion amend the description set forth in Exhibit B from time to time. 3.5 If Licensee s use of the description set forth in the Article 3.3 is enjoined, Licensee shall be under no further obligation to place such description on any MISTY Product. 3.6 Licensee shall not use any trademark of Mitsubishi or any marks, signs or symbols similar to or resembling any trademark or trade names of Mitsubishi except as expressly set forth herein. Nothing in this Agreement shall be construed as granting a license to use the word MISTY as a trademark or part of a trademark for any of Licensee s products. 3.7 Licensee shall immediately notify Mitsubishi in writing of any actual or threatened infringement of the Licensed Patents, which may come to Licensee s attention. ARTICLE 4-ASSERTION OF RIGHTS 4.1 Licensee agrees that it will not assert directly or indirectly any MISTY Essential Patent Misty 3

4 owned or substantially controlled directly or indirectly by Licensee against Mitsubishi, its Subsidiaries or its customers, to the extent that Mitsubishi, its Subsidiaries and customers practice such MISTY Essential Patents solely for the purpose of designing, making, having made or distributing MISTY Product. Provided however, if Mitsubishi or its Subsidiary assert their MISTY Essential Patents against Licensee, Licensee shall have a right to assert MISTY Essential Patents owned or substantially controlled directly or indirectly by Licensee against such assertor. This Section shall survive the termination or expiration of this Agreement for the life of the MISTY Essential Patents owned or substantially controlled directly or indirectly by Licensee. 4.2 Unless prevented by law or contractual obligation to a third party, upon request by Mitsubishi, Licensee will enter into negotiation with Mitsubishi for agreements under which Licensee will sell its MISTY Products to Mitsubishi and allow Mitsubishi to distribute them. 4.3 Upon request by either party, the parties will enter into negotiation to license either party s MISTY Related Patents under terms to be negotiated. ARTICLE 5 - TERM AND TERMINATION 5.1 This Agreement shall become effective on the Effective Date and shall continue in full force and effect until the expiration of the last to expire of the Licensed Patent or any extension, renewal or reissue thereof. 5.2 Mitsubishi may terminate this Agreement immediately if: (a) Licensee fails to perform or comply with this Agreement or any provision hereof and does not remedy such failure within thirty (30) days following the dispatch of the notice of such failure from Mitsubishi; provided, however, that Mitsubishi need not give such notice in the event of Licensee s breach of Section 12.1 as stated in Subsection (g) of this Section; (b) Licensee enters into voluntary or involuntary bankruptcy or insolvency, or ceases to make payments to its creditors; (c) Licensee liquidates its business relating to the MISTY Products, or makes or causes to be made, an assignment of its assets or business, whether in whole or in part, for the benefit of its creditors; (d) a receiver or trustee is appointed to take over or administer or conduct all or a substantial part of the business or property of Licensee; (e) the other party is dissolved or liquidated; (f) Licensee does not sell any of its MISTY Products nor use MISTY Products for commercial purpose within five (5) years from the Effective Date or the registration Misty 4

5 date of the first Licensed Patent, whichever is later. Provided that Mitsubishi shall make negotiation, of which Mitsubishi shall have right to final decision, for termination under this Sub-section (f) with Licensee prior to such termination; or (g) Licensee breaches Section The rights and remedies under this Section 5.2 shall not be exclusive and can be exercised in addition to any other rights and remedies provided by law or under this Agreement. 5.3 The provisions of Article 4.1(as provided therein), and Articles 6, 7, 8, 9, 12 and 13 shall survive any termination or expiration of this Agreement. ARTICLE 6 - WARRANTY 6.1 ALL EXPRESS OR IMPLIED REPRESENTATIONS AND WARRANTIES, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT, ARE HEREBY DISCLAIMED. 6.2 MITSUBISHI MAKES NO WARRANTIES OF ANY KIND REGARDING (a) THE LICENSED PATENT, ITS VALIDITY, OR THE PATENTABILITY OF THE INVENTION CLAIMED THEREIN; (b) MISTY TECHNOLOGY AS DEFINED IN SECTION 1.2; OR (c) THE DECIPHERABILITY OR INDECIPHERABILITY OF DATA ENCODED BY A MISTY PRODUCT. 6.3 MITSUBISHI DISCLAIMS ANY AND ALL WARRANTIES AGAINST INFRINGEMENT OF THIRD PARTY PATENTS, TRADEMARKS, COPYRIGHTS, AND OTHER INTELLECTUAL PROPERTY RIGHTS.. ARTICLE 7.- LIMITATION OF LIABILITY 7.1 IN NO EVENT WILL MITSUBISHI BE LIABLE FOR ANY DAMAGES IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT (WHETHER DIRECT, INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL OR PUNITIVE ), NO MATTER WHAT THEORY OF LIABILITY, EVEN IF THE EXCLUSIVE REMEDIES PROVIDED FOR IN THIS AGREEMENT FAIL OF THEIR ESSENTIAL PURPOSE AND EVEN IF MITSUBISHI HAS BEEN ADVISED OF THE POSSIBILITY OR PROBABILITY OF SUCH DAMAGES. 7.2 Mitsubishi shall have no liability whatsoever to Licensee or any other person for or on account of any injury, loss or damage sustained by or any other liability incurred by or imposed upon Licensee or any other person arising out of or in connection with (a) the manufacture, use, sale, lease or otherwise distribution of any MISTY Product, or the Misty 5

6 practice of the Licensed Patent; or (b) the manufacture, use, sale, lease or otherwise distribution of MISTY Products by Licensee or Licensee s customers in any manner that directly or indirectly violates the laws or regulations of any country. ARTICLE 8 - INDEMNIFICATION 8.1 Licensee shall defend and indemnify Mitsubishi from any and all claims brought against Mitsubishi by third parties, and shall hold Mitsubishi harmless from all corresponding damages, liabilities, costs and expenses, (including reasonable attorneys fees) incurred by Mitsubishi arising out of or in connection with Licensee s manufacture, use, sale, lease or otherwise distribution or Licensee s customers use of Licensee s MISTY Products; provided that Mitsubishi gives notice of the claim from such third parties promptly to Licensee and gives Licensee sole control of and authority for the defense and settlement of the claim. ARTICLE 9. - ASSIGNMENT 9.1 This Agreement shall inure to the benefit of, and be binding upon the parties hereto and their respective successors and assigns. This Agreement or any right or duty hereunder shall not be assigned by either party to any third party without the prior written consent of the other party which shall not be unreasonably withheld. Any assignment without such consent shall be null and void. ARTICLE 10 - INCONTESTABILITY 10.1 Should Licensee initiate or join with another in any action to invalidate any claims of the Licensed Patents or contest the validity or scope of any such claims, such action shall constitute an election by Licensee to terminate this Agreement to the extent such termination is permitted by applicable law. ARTICLE 11 - NOTICES 11.1 All notices, requests, demands and other communications pursuant to this Agreement or in connection therewith shall be in writing and shall be sent by telecopier, cable or registered air mail, postage prepaid, addressed to the party to be notified. Notice will be deemed to be received five (5) days after the date of mailing; provided that in the event notice is giving by telecopier or cable, notice shall be deemed to be received upon receipt of said telecopier or cable, provided, further, that said telecopier or cable shall be followed by a letter confirming the contents of said telecopier or cable which shall be mailed within five (5) days after the sending of the telecopier or cable to which it relates. The notices Misty 6

7 shall be sent to the following addresses: In the case of Mitsubishi: Mitsubishi Electric Corporation Attention: In the case of Licensee: Attention: or to such other address as the party may from time to time notify the other. ARTICLE 12- GOVERNMENTAL REQUIREMENTS 12.1 Licensee agrees that it will not make, use, sell, lease or otherwise distribute its MISTY Products and will not practice the Licensed Patent in any manner that directly or indirectly violates the laws or regulations of any country, including but not limited to any and all export and import control laws and regulations, and acknowledges that it has the sole responsibility to obtain such licenses to export, re-export or import the MISTY Products as may be required. Any breach of this provision constitutes material breach of this Agreement.12.2 Nothing in this Agreement warrants that MISTY Product manufactured in one country or area can be exported from such country or area. Mitsubishi shall have no obligation to cooperate with Licensee regarding to Licensee s obedience to laws and regulations under Section 12.1 ARTICLE 13 - MISCELLANEOUS 13.1 Licensee hereby authorizes Mitsubishi to identify Licensee as a licensee of the Licensed Patent in advertising prepared by or on behalf of Mitsubishi for the Licensed Patent or products incorporating the invention claimed therein This Agreement shall be construed, governed, interpreted and applied in accordance with the laws of Japan Any dispute arising out of or relating to this Agreement shall be settled by discussion between the parties. In the case that the parties cannot settle any dispute including, but not limited to, a dispute with regard to money damages for breach of this Agreement, the Misty 7

8 parties submit to the jurisdiction of the Tokyo District Court of Japan with respect to such disputes. Notwithstanding the foregoing, Licensee agrees and acknowledges that Licensee s breach or threatened breach of this Agreement will cause irreparable injury to MITSUBISHI and that, in addition to any other remedies that may be available, in law, in equity or otherwise, Mitsubishi shall be entitled to obtain injunctive relief against threatened breach of this Agreement or the continuation of any such breach by Licensee in any competent court This Agreement constitutes the full and complete understanding between the parties with respect to the subject matter hereof and supersedes all prior representations and agreements between the parties with regard to the subject matter hereof. It shall not be varied or modified by any oral agreement, representation or otherwise except by a written instrument duly executed by the parties hereto The provisions of this Agreement are severable, and in the event that any provisions of this Agreement shall be determined to be invalid or unenforceable under any controlling body of law, such invalidity or unenforceability shall not in any way affect the validity or enforceability of the remaining provisions hereof The failure of either party to assert a right hereunder or to insist upon compliance with any terms and conditions of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such terms and conditions by the other party In case performance of this Agreement is prevented because of laws, both present and future, of any government having jurisdiction over the parties hereto, or orders, regulations, directions or requests of any such government, or any department, agency or corporation thereof, or war, strike, fire, acts of God or other cause beyond control of either or both of parties hereto, the party concerned shall notify the other party of the occurrences, and appropriate and proper measures will be taken pursuant to mutual agreements of the parties hereto. Neither party shall be liable for non-performance of this Agreement while such condition exists In no event is Mitsubishi obligated to offer technical assistance or training for Licensee s design, manufacture, test, sales or other action regarding MISTY Product. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers or representatives on the day and year first above written. Mitsubishi Electric Corporation Licensee: Misty 8

9 By: By: Name: Name: Title: Title: Misty 9

10 Exhibit A Licensed Patents Patent or Application No. Date of Application Misty 10

11 Exhibit B MISTY Description (to be determined) In Japan This product contains the MISTY, encryption algorithm developed by MITSUBISHI ELECTRIC CORPORATION. In Other Countries This product contains the encryption algorithm developed by MITSUBISHI ELECTRIC CORPORATION. Misty 11

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