FLIP4MAC  SOFTWARE
LICENSE TERMS AND CONDITIONS

PLEASE READ THIS CAREFULLY BEFORE INSTALLING THE SOFTWARE.

THIS AGREEMENT STATES THE TERMS AND CONDITIONS UPON WHICH TELESTREAM, INC. (“TELESTREAM”) OFFERS TO LICENSE TO YOU (“YOU”) THE RIGHT TO USE A LIMITED NUMBER OF COPIES OF ITS FLIP4MAC SOFTWARE.  AMONG OTHER THINGS, THIS AGREEMENT CONTAINS WARRANTY DISCLAIMERS.  BY CLICKING THE ‘I ACCEPT’ BUTTON YOU ARE AGREEING TO BECOME BOUND BY THE TERMS OF THIS AGREEMENT.   IF YOU DO NOT AGREE TO THE TERMS OF THIS AGREEMENT, DO NOT CLICK ON ‘I ACCEPT,’ AND PROMPTLY RETURN THE SOFTWARE TO THE PLACE WHERE YOU OBTAINED IT FOR A FULL REFUND.

THIS AGREEMENT APPLIES TO ALL FLIP4MAC SOFTWARE PROVIDED BY TELESTREAM.  NO LICENSE IS GRANTED TO ANY OTHER TELESTREAM SOFTWARE UNDER THIS AGREEMENT.

Section 1.	Definitions.
	1.1	“Software” means any version of Telestream’s Flip4Mac software applications or software components.
	1.2	“Licensed Materials” means, collectively, the Telestream Flip4Mac Software and any related software provided by Telestream.

Section 2.	License Grants.
	2.1	Scope of Licenses.  
	 
	(a)	Software.  Telestream hereby grants You a non-exclusive, non-transferable, license to install and use the Software in machine readable (object code) form on one (1) computer operated by or for You for internal purposes only (it being understood that internal use includes use of the Software to encode media or provide services on behalf of You and/or your clients).
	(b)	Sublicenses/Resale Prohibited. The licenses granted to You in this License Agreement do not include the right to sublicense or re-sell the Licensed Materials in any manner.
	2.2	Limitations on Licenses.
	(a)	Internal Use Only.  YOU ARE NOT AUTHORIZED TO USE THE LICENSED MATERIALS FOR THE PURPOSE OF MEDIA ENCODING CONTENT IN VIOLATION OF ANY THIRD PARTY’S INTELLECTUAL PROPERTY RIGHTS.  THIS LICENSE IS FOR INTERNAL USE ONLY (IT BEING UNDERSTOOD THAT INTERNAL USE INCLUDES USE OF THE LICENSED MATERIALS TO ENCODE MEDIA OR PROVIDE SERVICES ON BEHALF OF YOU AND/OR YOUR CLIENTS.)
	(b)	Prohibited Activities.  You shall not (i) assign, transfer, lease, rent or distribute the Licensed Materials; (ii) modify or create any derivative work of the Licensed Materials; (iii) reverse assemble, decompile, reverse engineer or attempt to derive source code, the underlying ideas, algorithms, structure or organization of the Licensed Materials; (iv) copy the Software (except the single permitted back-up copy); (v) re-sell or provide the Software to a third party.	
	2.3	Ownership.  Your rights in and to the Licensed Materials are solely as set forth in Section 2.1 and do not include any rights of ownership.  You agree that, as between Telestream and You, Telestream owns all right, title and interest (including without limitation all copyright, patent, trade secret and other intellectual property rights) to the Licensed Materials. 
	2.4	Back-Up Copy.  You are permitted to make one (1) back-up or archival copy of the Software (excluding documentation) in machine readable (object code) form to support Your authorized use under this Agreement.  Such copy shall be labeled “Copy for Back-Up Use Only and Not for Resale.”  Documentation may not be copied.  All copies are the property of Telestream.
	2.5	Export Restrictions.  You shall comply with all export and re-export restrictions and regulations of the U.S. Commerce Department and other U.S. agencies and authorities. 
	2.6	Government. The Licensed Materials are a “commercial item,” as that term is defined at 48 C.F.R. 2.101 (Oct. 1995), consisting of “commercial computer software” and “commercial computer software documentation,” as such terms are used in 48 C.F.R. 12.212 (Sept. 1995). Consistent with 48 C.F.R. 12.212 and 48 C.F.R. 227.7202-1 through 227.7202-4 (June 1995), all U.S. Government end users acquire only those rights in the Licensed Materials and the documentation that are provided by this Agreement.

Section 3.	Audit Permitted.
	Telestream shall have the right, upon reasonable prior notice to You and during Your normal business hours, to audit Your use of the Licensed Materials and to inspect Your records related to any copies of the Software, or portions thereof, made by You.

Section 4.	Technical Support and Maintenance.
	Except as may be provided in a separate agreement between Telestream and You, if any, Telestream is under no obligation to maintain or support the Software and Telestream has no obligation to furnish you with any further assistance, documentation, software, update, upgrades, or information of any nature or kind.  

Section 5.	Confidentiality.
	5.1	Confidentiality. Telestream considers the Licensed Materials to contain valuable trade secrets of Telestream.  Except as expressly set forth above, You  agree to use reasonable efforts not to disclose or otherwise make available the Licensed Materials to any third parties and not to use the Licensed Materials other than for the purposed authorized by this Agreement.  This obligation shall continue after any termination of this Agreement.  You shall return all Licensed Materials promptly upon the request of Telestream or upon any termination of this Agreement.
	5.2	Equitable Remedy.  You acknowledge that due to the unique nature of Telestream’s Confidential Information, Telestream will not have an adequate remedy in money or damages in the event of any unauthorized use or disclosure of Telestream’s Confidential Information.  In addition to any other remedies that may be available in law, in equity or otherwise, Telestream shall be entitled to obtain any injunctive relief that may be appropriate to prevent such unauthorized use or disclosure.
	5.3	Term of Nondisclosure Obligations.  Your obligations set forth in this Section 5 will survive for a period of five (5) years after the termination of this Agreement, and will bind Your representatives, successors and assigns, if any; provided, however, that such obligations will terminate with respect to any Confidential Information which becomes available for unrestricted public use through no fault of You.

Section 6.	Disclaimer of Warranties.
	TELESTREAM WARRANTS THAT THE SOFTWARE WILL OPERATE IN SUBSTANTIAL CONFORMANCE WITH ITS SPECIFICATIONS AS SET FORTH IN THE APPLICABLE PRODUCT USER'S GUIDE/PUBLISHED SPECIFICATIONS/PRODUCT DESCRIPTION.  NO OTHER WARRANTY, EXPRESS OR IMPLIED, IS MADE WITH RESPECT TO THE SOFTWARE, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS AND THOSE ARISING FROM A COURSE OF DEALING OR USAGE OF TRADE.   NO WARRANTY IS MADE THAT USE OF THE LICENSED MATERIALS WILL BE ERROR FREE OR UNINTERRUPTED, THAT ANY ERRORS OR DEFECTS IN THE LICENSED MATERIALS WILL BE CORRECTED, OR THAT THE LICENSED MATERIALS' FUNCTIONALITY WILL MEET YOUR REQUIREMENTS.

Section 7.	Indemnification.
	7.1	By Telestream. 
	(a)	Limitations. Telestream shall have no obligation to You with respect to any action based on (i) the combination, operation or use of the Licensed Materials with other products or content not furnished by Telestream where the Licensed Materials otherwise would not themselves be infringing; (ii) use of other than a current unaltered version or release of the Licensed Materials, provided that such version or release had been available to You on commercially reasonable terms, or (iii) the infringement or alleged infringement of a third party’s rights by use of the Licensed Materials with content not owned by or properly licensed to You.
	(b)	Options.  If any of the Licensed Materials become, or in the opinion of Telestream may become, the subject of a claim of infringement, Telestream may, at its option:  (i) procure for You the right to use such Licensed Materials free of any liability; (ii) replace or modify such Licensed Materials to make them noninfringing; or (iii) remove such Licensed Materials, or any part thereof, from the scope of this Agreement.  Telestream shall not be liable for any costs or expenses incurred by You in connection with any potential claim of infringement without its prior written authorization.
	THE FOREGOING STATES THE SOLE AND EXCLUSIVE LIABILITY OF TELESTREAM FOR ANY INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS.
	7.2	By You.  You, at Your own expense, shall defend Telestream, and its officers, directors, employees, representatives and agents, against any action brought against such person based upon use of the Licensed Materials or based upon or related to content posted to the Internet, Your Intranet, or elsewhere using the Licensed Materials, and shall pay all settlements entered into and damages awarded against You and/or Telestream (including reasonable attorneys’ fees) to the extent based on such action.  
	7.3	Procedure.  All indemnification obligations under this Section 7 shall be subject to the following requirements: (a) the indemnified party shall provide the indemnifying party with prompt written notice of any claim; (b) the indemnified party shall permit the indemnifying party to assume and control the defense of any action; and (c) the indemnified party shall not enter into any settlement or compromise of any claim without the indemnifying party’s prior written consent.  In addition, the indemnified party may, at its own expense, participate in the defense of any claim.

Section 8.	Limitation of Liability.
	TELESTREAM’S TOTAL LIABILITY UNDER THIS AGREEMENT OR FOR BREACH OF THIS AGREEMENT SHALL BE LIMITED TO THE AMOUNT OF LICENSE FEES PAID BY YOU DURING THE PREVIOUS TWELVE (12) MONTHS, IF ANY.  IN NO EVENT SHALL TELESTREAM OR ANY LICENSOR OF TELESTREAM BE LIABLE FOR COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR TECHNOLOGY, LOSS OF PROFITS, OR FOR ANY INDIRECT, SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES, HOWEVER CAUSED, WHETHER FOR BREACH OF WARRANTY, BREACH OF CONTRACT, REPUDIATION OF CONTRACT, NEGLIGENCE OR OTHERWISE.

Section 9.	Term and Termination.
	This Agreement is effective until terminated.  Except for Sections 1, 2.2, 2.3, 3.3, 5, 6, 7, 8, 9.1 and 10, as well as any payment obligations, which shall survive any termination of this Agreement, this Agreement shall continue until Your breach of this Agreement.  Upon termination, all licenses granted in this Agreement shall terminate and You agree not to use the Licensed Materials for any purpose whatsoever and to return to Telestream or destroy any copy of the Licensed Materials within its possession, as instructed by Telestream.  This remedy shall be in addition to any other remedies available to Telestream.

Section 10.	General Provisions.
	10.1	Relationship of the Parties. Nothing in this Agreement is to be construed as creating an agency, partnership, or joint venture relationship between Telestream and You.
	10.2	Entire Agreement.  This Agreement, represents the entire agreement between Telestream and You with respect to the subject matter hereof and shall supersede all prior agreements and communications of the parties, oral or written.
	10.3	Amendment and Waiver.  No amendment to, or waiver of, any provision of this Agreement shall be effective unless in writing and signed by both parties.  The waiver by any party of any breach or default shall not constitute a waiver of any different or subsequent breach or default.
	10.4	Governing Law, Arbitration and Jurisdiction.  Any dispute or claim arising out of or in connection with this Agreement, except for a dispute or claim arising from the provisions of Section 2.3 (Ownership) or 5 (Confidentiality) above, will be finally settled by binding arbitration in Nevada County, California in accordance with the then-current Commercial Arbitration Rules of the American Arbitration Association by one arbitrator appointed in accordance with such rules.  The arbitrator shall apply California law, without reference to rules of conflicts of law or rules of statutory arbitration, to the resolution of any dispute.  Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.  Notwithstanding the foregoing, the parties may apply to any court of competent jurisdiction for preliminary or interim equitable relief, or to compel arbitration in accordance with this paragraph, without breach of this arbitration provision.  The United Nations Convention on Contracts for the Sale of Goods does not apply to this Agreement.
	10.5	Prevailing Party.  The prevailing party in any legal action brought by one party against the other and arising out of this Agreement shall be entitled, in addition to any other rights and remedies it may have, to reimbursement for its expenses, including court and arbitration costs, as well as reasonable attorneys' fees.
	10.6	Successors and Assigns. This Agreement and the licenses granted hereunder may not be assigned by You, by operation of law or otherwise, without the prior written consent of Telestream.  This Agreement shall be binding upon, and inure to the benefit of, the permitted successors and assigns of each party.
	10.7	Notices.  All notices, requests, consents and other communications which are required or permitted hereunder shall be in writing, and shall be delivered by registered U.S. mail, postage prepaid (effective three (3) days after mailing) or sent by facsimile or electronic mail, with a confirmation copy simultaneously sent by U.S. mail, postage prepaid (effective upon transmission), at the addresses provided by the other party in writing.  If such notice is to Telestream, it shall be addressed to: Controller, 848 Gold Flat Rd, Suite 1, Nevada City, CA  95959, Facsimile (530) 470-1301.  Notice of change of address shall be given in the same manner as other communications.
	10.8	Severability.  If any provision of this Agreement is held to be invalid, illegal or unenforceable for any reason, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

11/01/04