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Software Tools License Agreement

MATHSTAR, INC. ("MATHSTAR") PROVIDES ACCESS TO ITS SOFTWARE DEFINED BELOW TO YOU ("LICENSEE") SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THIS SOFTWARE LICENSE AGREEMENT (THE "AGREEMENT"). AS USED IN THIS AGREEMENT, "LICENSEE," "YOU" AND "YOUR" REFER TO THE PERSON AND OR ENTITY USING THE SOFTWARE.

BEFORE INSTALLING AND USING THIS SOFTWARE, CAREFULLY READ THE TERMS AND CONDITIONS OF THIS AGREEMENT. BY CLICKING THE "AGREE" BUTTON OR BY INSTALLING OR USING THE SOFTWARE, YOU INDICATE THAT YOU ACCEPT AND AGREE TO BE BOUND BY THE TERMS AND CONDITIONS OF THIS AGREEMENT. IF YOU DO NOT AGREE TO THESE TERMS AND CONDITIONS, DO NOT INSTALL OR USE THE SOFTWARE. IF YOU HAVE ALREADY PURCHASED THE SOFTWARE, PROMPTLY RETURN THE SOFTWARE TO MATHSTAR FOR A REFUND. IF YOU HAVE OBTAINED THIS SOFTWARE AS AN UPDATE, THE TERMS OF THIS AGREEMENT WILL GOVERN YOUR USE OF THE SOFTWARE.

1. LICENSE

a. Software. "Software" shall mean the computer program in machine-readable object code form together with any Updates, Improvements, new versions and releases (if any) as may, from time to time, be provided to you for the MathStar design tools for use in the development of MathStar's "Field Programmable Object Array devices," including logic design, simulation, physical design and generation of a load image. Unless otherwise indicated, "Software" includes "Evaluation Software" (as hereinafter defined).

b. License Grant. Subject to the provisions of the Agreement, MathStar hereby grants Licensee a limited, non-exclusive, revocable, non-transferable right to install and use the Software, in object code form only, and related documentation solely for the purpose of developing designs for MathStar Field Programmable Object Array devices ("License"). Licensee shall have no right to use the Software or documentation to develop designs for non-MathStar devices and products. The License may not be sublicensed, assigned or commercially distributed or shared with any third party without the prior written consent of MathStar. In the event MathStar grants Licensee the right to transfer its copy of the Software to a third party, Licensee agrees that the end user shall be required to accept the terms and conditions of this Agreement. Licensee shall further certify to MathStar in writing that it has not retained any copies of the Software. MathStar reserves all rights not expressly granted in this Agreement and Licensee shall have no rights or interests in the Software except as provided under this Agreement.

c. Restrictions on Use of Software. Licensee shall not except as specifically set forth herein: (i) copy, distribute, reproduce, rent, lend, loan, lease or sublicense any portion of the Software; (ii) translate, adapt, modify, alter, combine the Software with other software, or prepare derivative works based in whole or in part on the Software; (iii) transmit the Software over a network, by telephone, or electronically using any means; or (iv) reverse engineer, decompile, disassemble, reproduce, translate, or otherwise reduce the Software to a human-perceivable form. Licensee may make one copy of the Software for Licensee's backup or archival purposes. Licensee agrees to maintain appropriate records of the number and location of all copies of the Software and make such records available upon MathStar's request. Licensee further agrees to reproduce all copyright and other proprietary notices on all copies of the Software in the same form and manner that such copyright and other proprietary notices are originally included on the Software.

2. OWNERSHIP OF SOFTWARE

The Software contains proprietary and copyright protected material and, in its human-perceivable form, contains trade secrets and other intellectual property rights exclusively owned by MathStar. MathStar shall retain all rights, title, and interest in and to the Software, including any Updates, Improvements, new versions and releases including any patents, copyrights, trade secrets, circuit layouts, mask works and other intellectual property rights related thereto. Unless otherwise agreed on a case-by-case basis, Licensor will own all rights in any copy, translation, modification, adaptation, or derivation of the Software. Licensee acknowledges and agrees that it will not take any action inconsistent with such ownership. This Agreement does not grant Licensee rights to any patents, copyrights, trade secrets, trade names, trademarks (whether registered or unregistered), or any other rights or licenses with respect to the Software. If Licensee creates any derivative works in violation of this Agreement, based in whole or in part on the Software, MathStar shall be the lawful owner of all such derivative work(s) and any proceeds or profits derived therefrom. Licensee agrees to maintain the secrecy of the contents of the Software and implement adequate safeguards to prevent and protect the contents of the Software from unauthorized use or disclosure.

3. ERROR CORRECTIONS AND UPDATES

MathStar agrees to provide Licensee with error corrections, bug fixes, patches or other updates ("Updates") and technical support for the Software, subject to MathStar's sole discretion and in accordance with MathStar's release schedule, for the term of the License (either three (3) months or twelve (12) months, as the case may be). MathStar may, in its sole discretion, provide Updates for Evaluation Software, but is not obligated to do so.

4. IMPROVEMENTS TO SOFTWARE

Licensee may, from time to time, request that MathStar incorporate certain features, enhancements, and modifications (collectively "Improvements") into the Software. Licensee acknowledges and agrees that all such Improvements shall be exclusively owned by MathStar, and that MathStar may charge Licensee additional fees for the Improvements. MathStar may, in its sole discretion, undertake to develop and distribute Improvements for the Software, which Licensee will have the option of purchasing for an additional fee.

5. LICENSE FEES

Licensee acknowledges that unless the Software is provided by MathStar on a complimentary evaluation basis ("Evaluation Software"), the use of the Software by Licensee shall be subject to payment of a license fee that will be invoiced by MathStar. Licensee agrees to pay all invoices in full within thirty (30) days.

6. TAXES AND OTHER CHARGES

Licensee shall be responsible for paying any (i) sales, use, excise, value-added, or other tax or governmental charges imposed on the licensing or use of the hereunder, (ii) freight, insurance and installation charges, and (iii) import or export duties or like charges.

7. TERM AND TERMINATION

Subject to payment in full of the license fee (except in the case of Evaluation Software) and the limitations contained in this Agreement, the License granted under this Agreement begins on the date of delivery of the Software and will continue for a term of three (3) months or twelve (12) months, as the case may be, for the Software, unless terminated as provided hereunder. The License term for Evaluation Software will expire ninety (90) days from the date of delivery of the Evaluation Software or upon the lapse of the MathStar-provided license file, whichever occurs sooner. The License for Evaluation Software is non-renewable. If you elect to renew the License for the Software, you must contact MathStar or its authorized sales representative and/or distributors regarding any additional fees and terms and conditions that may be required to renew this License.

Licensee may terminate this License by notifying MathStar in writing of Licensee's intent to terminate this License and by destroying all copies of the Software. In the event this License is terminated by Licensee, Licensee acknowledges that it shall not be entitled to a refund of the license fees paid by Licensee to use the Software. This License will terminate immediately without notice from MathStar if you fail to comply with any of the terms and conditions of this Agreement. Upon termination of this License for any reason, you agree to destroy all copies of the Software, except for one copy that may be retained only for modifying and debugging any designs created during the term of the License.

8. PROTECTION OF CONFIDENTIAL INFORMATION

Licensee acknowledges and agrees that the Software contains valuable confidential proprietary information including trade secrets, know-how and other intellectual property rights exclusively owned by MathStar. Licensee agrees at all times during and after termination of this Agreement for any reason, to maintain the confidentiality of the Software, including any flow charts, logic diagrams, user manuals and screens and all other proprietary and confidential information received hereunder from MathStar. You agree not to sell, license, publish, display, distribute, disclose or otherwise make available the Software or any information contained in the Software to any third party other than to Licensee's employees and to contractors located on Licensee's premises that have a need to know such protected information. You represent to MathStar that you maintain a system of confidentiality consistent with industry standards to protect your own confidential business information including written agreements with employees and that the Software will be protected by at least the same security measures. You may not disclose the results of any benchmarking of the Software or use such results for competing software development activities without prior written permission from MathStar.

9. U.S. GOVERNMENT RESTRICTED RIGHTS

The Software may only be licensed to and used by the U.S. Government subject to prior approval by MathStar. In the event this Software is acquired by a U.S. Government agency, any use and disclosure of the Software by the U.S. Government shall be subject to the minimum Restricted Rights provided by FAR Sections 52-227-14 and 52-227-19 or DFARS Section 252.227-7013, as applicable. If the Software is acquired by a military agency, all use and disclosure of the Software shall be subject to the restrictions set forth at DFARS 252.227-7013.

10. EXPORT RESTRICTIONS

Licensee acknowledges that the Software is subject to U.S. export control laws, including the U.S. Export Administration Act and its associated regulations, and may be subject to export or import regulations in other countries. Licensee agrees to comply strictly with all such regulations and acknowledges that it has the responsibility to obtain licenses to export, re-export, or import the Software.

11. LIMITED WARRANTY

MathStar warrants that for a period of ninety (90) days from the date the Software is delivered to you, the media on which the Software is furnished will be free of defects in materials and workmanship, under normal usage. MathStar's entire liability to you, and your exclusive remedy under this warranty, will be for MathStar, at its option, and subject to the return of the defective Software, to either replace the Software or to refund the applicable license fee paid to use the Software. The warranty referred to in this Section 11 does not apply to Evaluation Software.

12. DISCLAIMER OF WARRANTY

EXCEPT FOR THE LIMITED WARRANTY PROVIDED IN SECTION 11, MATHSTAR AND ITS AGENTS, OFFICERS, DIRECTORS, EMPLOYEES, SUCCESSORS, ASSIGNS, AND AFFILIATES PROVIDE THIS SOFTWARE, DOCUMENTATION, AND INFORMATION "AS IS WITH ALL FAULTS" WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED AND EXPRESSLY DISCLAIMS ANY IMPLIED WARRANTIES OF TITLE, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT. MATHSTAR DOES NOT WARRANT THAT THE SOFTWARE IS FREE OF VIRUSES OR OTHER HARMFUL COMPONENTS OR WILL OPERATE IN AN UNINTERRUPTED OR ERROR-FREE MANNER, THAT THE FUNCTIONS CONTAINED IN THE SOFTWARE WILL FUNCTION WITH OTHER SOFTWARE OR HARDWARE, OR WITHIN A SYSTEM, OR THAT THE SOFTWARE AND OTHER MATERIALS SUPPLIED PURSUANT TO THIS AGREEMENT FULFILL ANY OF LICENSEE'S PARTICULAR PURPOSES OR NEEDS.

13. LIMITATION OF LIABILITY

To the maximum extent permitted by applicable law and regardless of whether any remedy fails of its essential purpose, in no event shall MathStar or its agents, officers, directors, employees, successors, assigns, or affiliates be liable to Licensee or any other person for any special, indirect, incidental, consequential, or punitive damages, including, but not limited to, any lost profits, lost time, lost savings, lost data, lost confidential or other information, or for business interruption, for any matter arising from or relating to this Agreement, Software, including, without limitation, Licensee's use, misuse or inability to use the Software or any third party software available in conjunction with or through the Software including any changes to or inaccessibility of the Software.

14. MISCELLANEOUS

a. Entire Agreement. This Agreement constitutes the entire Agreement between Licensee and MathStar related to the Software and supersedes any and all prior and contemporaneous oral or written understandings between Licensee and MathStar relating to the subject matter hereof.

b. Modification and Waiver. No purported amendment, modification, or waiver of any provision hereof shall be binding unless set forth in a writing signed by both parties (in the case of amendments and modifications) or by the party to be charged thereby (in the case of waivers). Any waiver shall be limited to the circumstance or event specifically referenced in the written waiver document and shall not be deemed a waiver of any other term of this Agreement or of the same circumstance or event upon any recurrence thereof. Delay or failure to exercise any right or remedy shall not be deemed the waiver of that right or remedy.

c. Assignment. This Agreement and all rights of Licensee hereunder shall not be assignable without the prior written consent of MathStar.

d. Severability. If any part of this Agreement shall be determined to be invalid or unenforceable by a court of competent jurisdiction or by any other legal constituted body having the jurisdiction to make such determination, the remainder of this Agreement shall remain in full force and effect.

e. Governing Law and Jurisdiction. This Agreement shall be governed by the laws of the State of Oregon. The Oregon state courts of Washington County, Oregon (or, if there is exclusive federal jurisdiction, the United States District Court for the District of Oregon) shall have exclusive jurisdiction and venue over any dispute arising out of this Agreement, and Licensee hereby consents to the jurisdiction of such courts.

f. Specific Performance. Licensee agrees that breach of this Agreement by Licensee will cause MathStar irreparable harm for which there is no adequate remedy of law and, without limiting whatever other rights and remedies MathStar may have under this Agreement, MathStar is entitled to the remedy of specific performance to enforce this Agreement and Licensee consents to the issuance of an order by a court of competent jurisdiction requiring the specific performance of this Agreement by Licensee.

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