Rainbow Technologies and SOFTBANK COMMERCE Team to Accelerate Deployment of iKey 1000 Security Token in PocketPC 2002 Environments

Software Development Agreement Pioneers a New Market of PocketPC Security Solutions for Industry’s Leading USB Authentication Token

IRVINE, Calif., USA and TOKYO, JAPAN. July 16, 2002 – Rainbow Technologies, Inc. (Nasdaq: RNBO), a leading technology provider of high-performance security solutions for the Internet and eCommerce, and SOFTBANK COMMERCE CORP., a leading distributor of IT-related products, services and solutions in the broadband environment, today announced the joint development of a software driver that allows Rainbow’s iKey 1000 USB authentication token to secure data and applications on PocketPC 2002 devices running Microsoft Windows CE. The new software drivers, for the first time, allow PocketPC 2002 devices to leverage the same, powerful two-factor authentication and portable security hardware used with notebook computers and desktop clients in corporate environments.

SOFTBANK COMMERCE, a master distributor of Rainbow Technologies products in Japan, shall exercise all rights relating to the Microsoft Windows CE and PocketPC 2002 software driver worldwide. SOFTBANK COMMERCE will develop the security solution market by effectively using its powerful vendor network, and will license the software driver to PDA manufacturers, software developers and solution providers worldwide, to develop and provide PocketPC Security Solutions and PDA security solutions using Rainbow’s iKey 1000 and the device’s USB connection.

“SOFTBANK COMMERCE’s aggressive strategy to expand and extend the security solution market for PDAs and PocketPCs will accelerate deployment of our iKey 1000 in these new terminal devices which previously could not take advantage of hardware-based security technologies,” said Humphrey Chan, Vice President of Asia Pacific, Rainbow Technologies, Inc. “We will work closely with SOFTBANK COMMERCE CORP. to help them achieve strong growth for our security component product lines in the rapidly growing security market.”

“Our relationship with Rainbow reinforces our strategy to develop innovative security solutions,” said Yasushi Okamura, Executive Vice President and CTO, SOFTBANK COMMERCE CORP. “As increasing numbers of companies introduce the PDA or PocketPC as a new terminal device to conduct business transactions in broadband network environments, the need for authenticating users, companies and transactions will become a significant requirement for these organizations. Rainbow’s iKey is the world’s leading USB authentication token and is well suited to provide these new devices with exceptional two-factor security.”

Rainbow Technologies and SOFTBANK COMMERCE expect to ship thousands of iKey1000 USB keys by implementing more than a dozen application solutions for PocketPC security solutions within nine months.

Rainbow Technologies Inc. and Rainbow Technologies, K.K. (a joint venture of Rainbow Technologies and SOFTBANK EC HOLDINGS CORP. in Japan) will collaborate with SOFTBANK COMMERCE in developing the fast-growing wireless security market and in distributing iKey1000 for PocketPC Security Solutions.

About iKey
Rainbow’s iKey is the industry’s leading family of USB-based Web authentication tokens, and is available in two products series – the iKey 1000 for Windows 2000 environments and the iKey 2000 for PKI and high-assurance environments. IDC recently recognized the iKey as the world’s leading USB authentication token and anticipates the market for USB authentication tokens will grow from $6 million in 2000 to about $276.6 million by 2005.

About Rainbow Technologies, Inc.
Founded in 1984, Rainbow Technologies is a leading provider of proven information security solutions for mission-critical data and applications used in business, organization and government computing environments. With headquarters in Irvine, Calif., Rainbow maintains offices and authorized distributors throughout the world. For more information, visit the Web site at www.rainbow.com.

CORP., serves as the master distributor of Rainbow’s security products in Japan since July 2001. The Company has inherited the original business of SOFTBANK CORP. as a leading distributor of IT-related products, services & solutions in the broadband environment with annual revenue of approximately ¥277 Billion JPY for fiscal year 2001 and has been profitable since its inception. The Company represents more than 4,000 hardware and software vendors throughout the world for the Japanese market and provides some 10,000 IT wholesalers and system integrators with distribution channels to more than 34,000 outlets in Japan. For more information, see the company’s website at www.sb-commerce.co.jp/

Rainbow Technologies and CryptoSwift are trademarks of Rainbow Technologies, Inc. All other company and product names are trademarks of their respective organizations.

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Certain information included in our Annual Report on Form 10-K and other materials filed with the Securities and Exchange Commission (“SEC”) (as well as information included in oral statements or other written statements made or to be made by the Company) contain statements relating to the following: dependence upon existing and new product offerings, competition, intellectual property and licensing, future growth, rapid technological and market change, manufacturing and sourcing risks, Internet infrastructure and regulation, the inclusion of network security functionality in hardware or system software, international operations, among others. These conditions involve important factors that could cause actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of the Company. Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. Statements made in this document that are not purely historical are forward-looking statements, including any statements as to beliefs, plans, expectations, or intentions regarding the future. The Company assumes no obligation to update information concerning its expectations.

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