REDCODE Codec License Agreement

PLEASE READ THIS SOFTWARE LICENSE AGREEMENT (“LICENSE”) CAREFULLY BEFORE USING THE REDCODE Codec. BY USING THE REDCODE Codec, YOU ARE AGREEING TO BE BOUND BY THE TERMS OF THIS LICENSE. IF YOU DO NOT AGREE TO THE TERMS OF THIS LICENSE, DO NOT USE THE SOFTWARE. IF YOU DO NOT AGREE TO THE TERMS OF THE LICENSE, CLICK “DISAGREE/DECLINE”.

This agreement is made and entered into as of the electronic acceptance click (CLICK AGREE), by and between Red.com, Inc. dba Red Digital Camera. (hereinafter “RED”), a Washington corporation with its principal place of business at 20302 Valencia Circle, Lake Forest, CA, and the end customer after the electronic acceptance click 1. License.

a. Grant. Subject to the terms of this Agreement, RED grants to the Customer a limited, non-exclusive, non-transferable license (the “License”) to install and use the REDCODE Codec in object code format for the Customer’s business purposes only, which shall include the right to integrate the REDCODE Codec into Customer’s production pipeline and to create plug-ins to run therewith. The REDCODE Codec may be provided with accompanying documentation (the “Documentation”). The Customer is without right to sub-license the REDCODE Codec.

b. Additional Restrictions on Use. The Customer shall maintain a record of the number and locations of installed versions of the REDCODE Codec, and shall make those records available to RED upon reasonable request. The Customer shall not make the REDCODE Codec available in any form to any person other than the Customer’s employees, agents and contractors whose job performance requires access to the REDCODE Codec. The Customer shall take appropriate action to protect the confidentiality of the REDCODE Codec and ensure that any person permitted access to the REDCODE Codec understands that it must not be disclosed or used except as permitted by this Agreement.

c. Copies. The Customer shall not copy the REDCODE Codec except as needed to: (i) install the REDCODE Codec into the Customer’ post production pipeline; (ii) load the REDCODE Codec into the computer memory for the purpose of executing the program; and (iii) make such back-up copies of the REDCODE Codec as are made in the ordinary course of the Customer’s regular back-up procedures (provided that any such copies shall include RED’s copyright and any other proprietary notices). The Customer shall not copy the Documentation except in furtherance of the License granted herein. Notwithstanding the foregoing, any copies of the REDCODE Codec or Documentation made by the Customer shall remain the property of RED; provided, however, the foregoing shall not apply to plug-ins created by the Customer or to any data processed by the REDCODE Codec in the course of the Customer’s business, both of which shall be owned by Customer.

d. Modifications; Reverse Engineering. The Customer agrees that, except as otherwise provided herein, only RED has the right to maintain, enhance or otherwise modify the REDCODE Codec. The Customer has no rights to any source code for the REDCODE Codec. The Customer agrees that it shall not cause or permit the modification, disassembly, decompilation, or reverse engineering of the REDCODE Codec or otherwise attempt to gain access to the source code to the REDCODE Codec.

2. Payment; Taxes.

a. License Fees. In consideration for the License by RED under this Agreement, the Customer understands there is currently no payment required to RED for the REDCODE Codec.

b. Taxes. if the REDCODE Codec carries a cost per software seat at some point in the future, the Customer shall, in addition to the other amounts payable under this Agreement, pay all applicable customs, duties, sales, use, value-added or other taxes (other than net income taxes), federal, state or otherwise, however designated, which are levied or imposed by reason of the transactions contemplated by this Agreement and are properly included in RED’s invoice. The Customer shall hold RED harmless from all claims and liability arising from the Customer’s failure to report or pay any taxes, duties and assessments that are the Customer’s responsibility to report and pay.

3. Ownership.

a. Title. RED or its licensors own and retain all proprietary rights, including all patent, copyright, trade secret, trademark and other intellectual property rights, in and to the REDCODE Codec and any corrections, bug fixes, enhancements, updates or other modifications to the REDCODE Codec, created by RED (or its licensors); provided, however, the foregoing shall not apply to plug-ins created by the Customer or to any data processed by the REDCODE Codec in the course of the Customer’s business, both of which shall be owned by Customer. The REDCODE Codec was developed in part by use of Kakadu software. Except as explicitly set forth in this Agreement or in another agreement between RED and the Customer, the Customer has no right to any such corrections, bug fixes, enhancements, updates or other modifications. The Customer acknowledges that the License granted under this Agreement does not provide the Customer with title to or ownership of the REDCODE Codec, but only a right of limited use under the terms and conditions of this Agreement. The Customer shall not knowingly take any action that would subject the REDCODE Codec to claims, liens or encumbrances.

b. Transfers. Except as otherwise provided in this Agreement, under no circumstances shall the Customer sell, license, sub-license, publish, display, distribute, assign or otherwise transfer to a third party the REDCODE Codec or any copy thereof, in whole or in part, without RED’s prior written consent.

4. Confidential Information.

The Customer agrees that the REDCODE Codec and Documentation may contain confidential information, including trade secrets, know-how, and other information that is the exclusive property of RED (the “Confidential Information”); provided, however, the term “Confidential Information” shall not include any information or material: (i) that is already known to the Customer before disclosure by RED; (ii) that is developed through the independent efforts of the Customer; (iii) that is or subsequently becomes available to the general public other than through a breach of this Agreement; or (iv) that the Customer rightfully receives from a third party without restriction as to confidentiality or use. During the period this Agreement is in effect, and at all times after its termination, the Customer and its employees, contractors and agents shall maintain the confidentiality of the Confidential Information and shall not sell, license, sub-license, publish, display, distribute, disclose or otherwise make the Confidential Information available to any third party nor use such Confidential Information except as authorized by this Agreement. The Customer shall not disclose any such Confidential Information concerning the REDCODE Codec or Documentation to persons who are not employees, contractors or agents of the Customer without the prior written consent of RED. The Customer agrees that it will take appropriate action by instruction, agreement, or otherwise to notify its employees, contractors and agents with respect to the use, protection, and security of RED’s Confidential Information. The Customer agrees to immediately notify RED if the Customer becomes aware of unauthorized disclosure or use of the REDCODE Codec or Documentation by the Customer’s employees, contractors or agents, and shall assist RED in remedying such unauthorized use or disclosure.

5. Limited Warranty.

a. Scope of Limited Warranty. RED warrants to the Customer that for a period of ninety (90) days from delivery of the REDCODE Codec, the REDCODE Codec will substantially perform in accordance with the Documentation for the REDCODE Codec. b. Sole Remedy. RED’s sole and exclusive liability and the Customer’s sole and exclusive remedy under this limited warranty shall be, at RED’s election, to provide program services that attempt through reasonable efforts to correct any material program defects discovered within the ninety (90)-day warranty period or to replace the defective Software. The above remedies are available only if RED is promptly notified in writing, within the warranty period, upon discovery of the defects by the Customer and RED’s examination of the REDCODE Codec discloses that such defects exist. This limited warranty shall not apply if the REDCODE Codec has been: (i) altered or modified; (ii) subjected to negligence, computer, or electrical malfunction; or (iii) used, adjusted, installed, or operated other than in accordance with instructions furnished by RED, or with an application or in an environment other than that intended or recommended by RED.

c. Disclaimer of Any Other Warranty. EXCEPT FOR THE EXPRESS, LIMITED WARRANTY STATED ABOVE, NEITHER RED OR ITS LICENSORS PROVIDES WARRANTIES, EITHER EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, WITH RESPECT TO THE REDCODE , DOCUMENTATION, OR ANY OTHER ACCOMPANYING MATERIAL. RED AND ITS LICENSORS SPECIFICALLY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT.

6. Infringement.

Notwithstanding the foregoing, RED shall defend or settle, at its own expense, any action against the Customer based upon a claim that the REDCODE Codec infringes any patent, copyright, trademark, trade secret or any other right of a third party. In addition, RED will indemnify the Customer against and pay such damages or costs that are finally awarded against the Customer attributable to such claim, provided the Customer (i) promptly notifies RED in writing of any such action, and (ii) gives RED all reasonable information and assistance (at RED’s expense and excluding time spent by Customer’s employees). Should the REDCODE Codec become, or in the opinion of RED is likely to become the subject of such an infringement claim, RED may, at its option, (i) procure for the Customer the right to use the REDCODE Codec free of any liability; (ii) replace or modify, in whole or in part, the REDCODE Codec to make it non-infringing; or (iii) remove the REDCODE Codec, or the infringing part thereof, and refund the aggregate payments paid by the Customer, less an amount equal to 35% of the Fee for such Software for each complete year of use., only if the software becomes a purchased product in the future and the customer paid for the REDCODE Codec. RED assumes no liability hereunder to the extent a claim arises from: (i) use of other than an unaltered release of the REDCODE Codec; or (ii) the combination, operation, or use of the REDCODE Codec with non-RED programs or data if such infringement would have been avoided by the combination, operation, or use of the REDCODE Codec with other programs or data. SECTION 6 SETS FORTH RED’S ENTIRE LIABILITY AND OBLIGATION AND THE CUSTOMER’S SOLE REMEDY FOR ANY CLAIM OF INFRINGEMENT OF PATENT, COPYRIGHT, TRADEMARK, TRADE SECRET OR OTHER INTELLECTUAL PROPERTY RIGHTS.

7. Limitation of Liability.

In no event shall RED’s liability under this Agreement for damages outside the scope of Section 5 and Section 6 above exceed the amount paid to RED by the Customer pursuant to this Agreement. Customer further agrees that, except as provided above, NEITHER RED OR ITS LICENSORS WILL BE LIABLE FOR ANY LOST PROFITS, LOSS OF DATA, OR COSTS OF PROCUREMENT FOR SUBSTITUTE GOODS OR SERVICES, OR FOR ANY CLAIM OR DEMAND AGAINST THE CUSTOMER BY ANY OTHER PARTY. IN NO EVENT WILL RED OR ITS LICENSORS BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, SPECIAL, INDIRECT, OR EXEMPLARY DAMAGES ARISING OUT OF THIS AGREEMENT, HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE), EVEN IF THEYHAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE CUSTOMER ACKNOWLEDGES THAT THE AMOUNTS PAYABLE HEREUNDER ARE BASED IN PART ON THESE LIMITATIONS, AND FURTHER AGREES THAT THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.

8. Term and Termination.

a. Effective Date and Term. This Agreement and the License granted hereunder shall be effective as of the Effective Date set forth at the beginning of this Agreement and shall continue in perpetuity unless terminated as set forth in this Section 8.

b. Termination. Either party shall have the right to terminate this Agreement and the License granted herein in the event: (i) the other party fails to comply with any of the terms and conditions of this Agreement and such default has not been cured within thirty (30) days after written notice to the other party; (ii) the other party (A) terminates or suspends its business, (B) becomes subject to any bankruptcy or insolvency proceeding under Federal or state statute, (C) becomes insolvent or subject to direct control by a trustee, receiver or similar authority, or (D) has closed or liquidated, voluntarily or otherwise, and such action or proceeding (as listed in (A) – (D)) has not been reversed or dismissed within sixty (60) days; or (iii) upon 60 day written notice by either party without cause.

c. Effect of Termination. The obligations of RED and the Customer in Sections 3, 4, 6, 7, 8 and 9 shall survive termination of this Agreement. Within five (5) days after termination of this Agreement, the Customer shall return to RED or destroy, at Customer’s expense, the REDCODE Codec and Documentation, including all copies thereof (other than back-up copies made in the ordinary course of the Customer’s back-up procedures, which shall not be used in contravention of this Agreement), and deliver to RED a certification in writing and signed by an officer of the Customer that the REDCODE Codec and all copies thereof have been returned or destroyed. Nothing contained herein limits any other remedies that RED or the Customer may have for a default by the other party, nor relieve either party of any of its obligations incurred prior to such termination.

9. Miscellaneous.

a. Assignment. All the terms and provisions of this Agreement are binding for the benefit of the parties to this Agreement and to their respective heirs, successors, assigns and legal representatives. The Customer shall not, without RED’s prior written consent, assign or otherwise transfer the REDCODE Codec or this Agreement to anyone, including any third party, except as part of the sale of all or any portion of the Customer’s business pursuant to any merger, consolidation or reorganization. RED is entitled to assign this Agreement to a successor of all or substantially all of its relevant assets without restriction.

b. Entire Agreement. This Agreement represents the entire agreement between the parties, and supersedes all prior agreements and understandings with respect to the matters covered herein. This Agreement may only be amended by a written agreement signed by both parties. The Customer agrees that it has not entered into this Agreement based on any representations other than those contained herein.

c. Delays. Neither party shall be in default for a failure to fulfill its obligations under this Agreement due to a cause or causes beyond its reasonable control.

d. Law Governing and Jurisidiction This Agreement shall in all respects be governed by the laws of the State of California, without reference to its principles of conflicts of laws. Exclusive jurisdiction for any dispute arising from the terms and conditions of this Agreement shall be Orange County, California.

e. Severability. If any of the provisions of this Agreement are held to be invalid under any applicable statute or rule of law, they are, to that extent, deemed omitted.

f. Waiver. The waiver of one breach or default, or any delay in exercising any rights, shall not constitute a waiver of any subsequent breach or default.

g. Notices. All notices permitted or required under this Agreement shall be in writing and shall be delivered in person or mailed by first class, email, registered or certified mail, postage prepaid, to the address of the party specified in this Agreement or such other address as either party may specify in writing. Such notice is deemed to have been given upon receipt.

h. U.S. Government Restricted Rights. If this Software is being licensed by the U.S. Government, the REDCODE Codec and related documentation is commercial computer software and documentation developed exclusively at private expense; and (a) if acquired by or on behalf of a civilian agency, shall be subject to the terms of this computer software license as specified in 48 C.F.R. 12.212 of the Federal Acquisition Regulations and its successors; and (b) if acquired by or on behalf of units of the Department of Defense (“DOD”) shall be subject to the terms of this commercial computer software license as specified in 48 C.F.R. 227.7202-2, DOD FAR Supplement and its successors.

i. Export Law Assurances. The Customer understands that the REDCODE Codec and Documentation are subject to export control laws and regulations. CUSTOMER MAY NOT DOWNLOAD OR OTHERWISE EXPORT OR RE-EXPORT THE REDCODE Codec, THE DOCUMENTATION, ANY UNDERLYING INFORMATION OR TECHNOLOGY EXCEPT IN FULL COMPLIANCE WITH ALL UNITED STATES AND OTHER APPLICABLE LAWS AND REGULATIONS. IN PARTICULAR, BUT WITHOUT LIMITATION, NONE OF THE REDCODE Codec, THE DOCUMENTATION, ANY UNDERLYING INFORMATION OR TECHNOLOGY MAY BE DOWNLOADED OR OTHERWISE EXPORTED OR RE- EXPORTED: (i) INTO (OR TO A NATIONAL OR RESIDENT OF) CUBA, IRAQ, LIBYA, NORTH KOREA, IRAN OR SYRIA; OR (ii) TO ANYONE ON THE U.S. TREASURY DEPARTMENT’S LIST OF SPECIALLY DESIGNATED NATIONALS OR THE U.S. COMMERCE DEPARTMENT’S TABLE OF DENIAL ORDERS. THE CUSTOMER HEREBY AGREES TO THE FOREGOING AND REPRESENTS AND WARRANTS THAT THE CUSTOMER IS NOT LOCATED IN, OR UNDER CONTROL OF, OR A NATIONAL OR RESIDENT OF ANY SUCH COUNTRY, OR ON ANY SUCH LIST.