Windowsand Windows PhonePublisher Application Development Agreement

This Windows and Windows PhonePublisher Application Development Agreement (the “Agreement”) is between Microsoft Corporation, a Washington corporation (“Microsoft”) and Crackle, Inc., a Delaware corporation(“Publisher”). This Agreement will be effective on February 11, 2014 (the “Effective Date”).

Addresses and contacts for notices

Microsoft / Publisher
Attention: David Catzel / Attention:Young Song, Businesss Development, Sony Pictures Television
Address: One Microsoft Way
Redmond, WA 98052 / Address: 10202 W. Washington Blvd.
Harry Cohn Building
Culver City, CA 90232-3195
United States of America
Phone Number: (425) 882 8080 / Phone Number:(323) 788-0103
Fax Number: / Fax Number:
E-mail: / E-mail:
Finance E-mail: / Finance E-mail:
Legal Contact:
Mary Ellen Curtas
One Microsoft Way
Redmond, WA 98052
(425) 703-2082
/ Legal Contact:
Crackle, Inc.
10202 W. Washington Blvd.
Culver City, CA 90232
Attn: EVP, Corporate Legal
Fax: (310) 244-2169
With a copy to:
c/o Sony Pictures Entertainment Inc.
10202 W. Washington Blvd.
Culver City, CA 90232
Attn: General Counsel
Fax: (310) 244-0510

Agreed and accepted

Microsoft / Publisher
Signature: / Signature:
Name: / Name:
Title: / Title:
Date: / Date:

Terms and Conditions

SECTION 1Purpose

Microsoft will provide fundingfor the design and development of Publisher’s Application(s)that Publisher submits to the Windows Store and that is certified on the Windows Store.

SECTION 2Definitions

(a)“Affiliate” is any legal entity that owns, is owned by, or is commonly owned with a party. “Own” means having more than 50% ownership or the right to direct the management of the entity.

(b)“Application(s)”means Publisher’ssoftware application(s) that are developed for or ported to Windowsor Windows Phone operating system.

(c)“Confidential Information” means non-public information, know-how, and trade secrets in any form, that:

(1)Are designated as being confidential; or

(2)A reasonable person knows or reasonably should understand to be confidential.

The following types of information, however marked, are not Confidential Information. Information that:

(i)Is, or becomes, publicly available without a breach of this Agreement;

(ii)Was lawfully known to the receiver of the information without an obligation to keep it confidential;

(iii)Is received from another source who can disclose it lawfully and without an obligation to keep it confidential;

(iv)Is independently developed; or

(v)Is a comment or suggestion one party volunteers about the other’s business, products or services.

Confidential Information also includes the terms and conditions of this Agreement.

(d)“Intellectual Property Rights” means patents, utility models, design patents, designs (whether or not capable of registration), chip topography rights, database rights and other like protection, copyrights, trademarks, services marks, trade dress, trade names, trade secrets, inventions and/or any other industrial and/or intellectual property rights, and applications, divisions, continuations, renewals, re-exams and reissues thereof.

(e)“Windows Store” means a Microsoft forum through which users may browse, download, and purchase applications for use on Windows devices.

(f)“Windows Phone Store” meansa Microsoft forum through which users may browse, download, and purchase applications for use on Windows Phone devices.

SECTION 3Publisher obligations

(a)Application(s). The following shall be considered Application(s) for purposes of this Agreement:

(1)The Crackle Windows 8 application to be refreshed for Windows 8.1

(b)Publisher shall design and develop theApplication for the WindowsStore as specified below in accordance with Windows Store Guidelines. Publisher will register as a publisher in the Windows Store and or Windows Phone Store and will make its Application(s) available therein pursuant to the requirements for such registration, submission and certification.

Publisher Application / Description of Deliverables / Due on or before
Crackle Windows 8.1 Application 1
Milestone 1 – First Build / The first build is a usable build where the minimum feature set has been implemented and the Application is connected to services. While the final feature set will be agreed upon between the parties in writing, the Win 8.1 code port will include
•Adding variable tile sizes
•New snap mode and Free form resolutions
•New SearchTextBox
Estimated time: 2-4 weeks / First build to be reviewed by April 25th, 2014
Milestone 2 – Final Beta / The final beta is code complete and ready for final QA. While the final feature set will be agreed upon between the parties in writing, the final beta feature set will include
•Variable tile sizes
•New snap mode
•New SearchTextBox
Estimated time: 1-2 weeks / Final beta to be reviewed on May 9th, 2014
Milestone 3 – Application Quality Review / AFT/Design Review: The build has been submitted to AFT and/or Design Review and any “Must Fixed” issues are resolved before Milestone 4. / May 13th, 2014
Milestone 4 – Application Certification, In Store / The Application has been submitted to the Windows Store, received certification and is available for public download.
Estimated time: 1 week / May 16th, 2014

(c)Marketing and Promotion. Publisher agrees to use commercially reasonable efforts to market and promote the availability of the Application in various mediums in Publisher’s sole discretion.

SECTION 4Microsoft obligations

As complete and final payment (1)for deliverablesthat have been completed and delivered by Publisher and accepted by Microsoft,and (2) for Publisher’s satisfaction of all other obligations under this Agreement, Microsoft shall pay Publisher as set forth below. The amounts shall include all taxes and other costs. Payment will be subject to Microsoft’s standard payment policies and procedures.

Publisher Application / Not to Exceed Payment Amount
Crackle Windows 8.1 / $18,000 total in two payments
Payment 1 upon February 14, 2014 (project start date) / $9,000
Payment 2 upon certification / $9,000

SECTION 5Intellectual property

Any Microsoft software necessary to develop the Application(s) must be obtained via Microsoft’s standard commercial distribution channels. No Microsoft software is provided under this Agreement. The use of any Microsoft software will be subject to the license agreement(s) for that software. Subject to the ownership and other rights of Microsoft in any functionality, developer tools, and /or underlying platforms leveraged by the Application(s), Microsoft does not claim any Intellectual Property Rights in any Application arising from the fact that Publisher creates the Application under this Agreement and Publisher shall own all Intellectual Property Rights in the Application.

SECTION 6Term and termination

(a)Term.The term of this Agreement starts on the Effective Date and endson June 30, 2014(the “Term”) unless terminated earlier by either party according to Section 6(b) (Termination for breach) below.

(b)Termination for breach.

(1)Either party may suspend performance and/or terminate this Agreementupon written notice at any time if the other party is in material breach of any material warranty, term, condition or covenant of this Agreement, and fails to cure that breach within 30 days after written notice thereof.

(2)Either party may terminate this Agreementimmediatelyfor cause andwithout notice if the other party breaches Section 7 (Confidentiality)or infringesthatparty’s intellectual property rights.

(c)Survival.Sections 7(Confidentiality),8 (Representations and warranties),9(Indemnification),10 (Limitation of liability), and 11 (Miscellaneous) will survive expiration or termination of this Agreement.

SECTION 7Confidentiality

If the parties have an existing nondisclosure agreement, then that agreement applies to information exchanges. If not, then the following applies:

(a)Neither party will disclose the other’s Confidential Information to third parties. Each party will use such information only for purposes of this business relationship. Each party agrees to take reasonable steps to protect the other’s Confidential Information.

(b)Each party may disclose the other’s Confidential Information to Affiliates, employees, and contractors. If disclosed, the disclosing party remains responsible for any unauthorized use or disclosure. These disclosures may be made only on a need-to-know basis, subject to the obligations of this section.

SECTION 8Representations and warranties

(a)Each partyrepresents and warrants that:

(1)Ithas the right, power and authority to enter into this Agreement and perform according to its terms;

(2)This Agreement is a legal and valid obligation binding upon it and enforceable according to its terms;

(3)Theperformance of its obligations will not breach any agreements with a third party; and

(4)It will comply with all laws, statutes and regulations applicable to its activities and performance under this Agreement.

(b)Disclaimer. EXCEPT AS PROVIDED HEREIN, EACH PARTYEXPRESSLY DISCLAIMS ALL OTHER EXPRESS, IMPLIED,OR STATUTORY WARRANTIES. THIS INCLUDESTHE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, AND NON-INFRINGEMENT. ANY SOFTWARE, SERVICES AND/OR TECHNOLOGIES PROVIDED BY EITHER PARTY ARE PROVIDED STRICTLY “AS IS” AND “WITH ALL FAULTS” AND WITHOUT WARRANTIES OF ANY KIND. THESE DISCLAIMERS ALSO APPLY TO EACH PARTY’S AFFILIATES.

SECTION 9Indemnification

Publisherwill indemnify, defend, and hold Microsoft and its officers, directors, employees, contractors, Affiliates, and agents harmless from any and all claims,suits, demands,costs, liabilities, expenses,and damages (including reasonable attorneys’ costs and fees) (collectively, “Claim”) related to thePublisher’s breach of this Agreement or breach of any third party Intellectual Property Rights or other proprietary right.

When seeking indemnification, Microsoftwillpromptly:

(a)Notify Publisher in writing of any such Claim;

(b)AllowPublisher to assume sole control of the defense or settlement of such Claim with counsel of its choice; and

(c)Give Publisher all necessary information and assistance (as it mayreasonably request and at its sole expense) to defend and settle such Claim.

Microsoftmay retain counsel of its choosingand participate in the defense or settlement of any Claim at its sole expense. The indemnifying party will not settle or resolve any such Claim without the indemnified party’s prior written consent. Such consentwill not be unreasonably withheld.

SECTION 10Limitation of liability

(a)Limitation of liability. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES (INCLUDING THEIR AFFILIATES AND SUPPLIERS) LIMIT THEIR LIABILITY FOR ANY CLAIMS UNDER THIS AGREEMENT TO THE TOTAL VALUE OF ANY FUNDS PAID OR CREDITED HEREUNDER. THIS LIMITATION IS SUBJECT TO THE EXCEPTIONS UNDER SECTION 10(C) (EXCEPTIONS) BELOW.

(b)Exclusion of damages. TO THE MAXIMUM EXTENT PERMITTED BY LAW, NEITHER PARTY NOR ANY OF ITS AFFILIATES OR SUPPLIERS WILL BE LIABLE FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE, SPECIAL, OR EXEMPLARY DAMAGES ARISING OUT OF OR THAT RELATE IN ANY WAY TO THIS AGREEMENT OR ITS PERFORMANCE. THIS EXCLUSION WILL APPLY REGARDLESS OF THE LEGAL THEORY UPON WHICH ANY CLAIM FOR SUCH DAMAGES IS BASED, WHETHER THE PARTIES HAD BEEN ADVISED OF THE POSSIBLITY OF SUCH DAMAGES, WHETHER SUCH DAMAGES WERE REASONABLY FORESEEABLE, OR WHETHER APPLICATION OF THE EXCLUSION CAUSES ANY REMEDY TO FAIL OF ITS ESSENTIAL PURPOSE.

(c)Exceptions. THE LIMITATION OF LIABILITY AND EXCLUSION OF DAMAGES WILL NOT APPLY TO PUBLISHER’S OBLIGATIONS TO INDEMNIFY MICROSOFT OR TO EITHER PARTY’S LIABILITY FOR BREACH OF ITS CONFIDENTIALITY OBLIGATIONS OR VIOLATION OF THE OTHER PARTY’S INTELLECTUAL PROPERTY RIGHTS UNDER THIS AGREEMENT.

SECTION 11Miscellaneous

(a)Non-exclusivity.This Agreement is non-exclusive. Either party may develop, use, distribute, promote or support software, services, or technology offerings similar to or competing with ones that are the subject of this Agreement. Either party may enter into activities with others regarding such competing offerings.

(b)Relationship.The parties are independent contractors. This Agreement does not create an employer-employee relationship, partnership, joint venture, or agency relationship and does not create a franchise. Neither party nor any of its representatives may make any representation, warranty, or promise on the other party’s behalf.

(c)Publicity. Neither party will make any public statement related to this Agreement without the other party’s prior written consent (which will not be unreasonably withheld or delayed).

(d)Notices. Notices may be provided either by electronic or physical mail. The person(s) identified on the first page of this Agreement will receive notices on behalf of their respective company (if applicable). Either party may change the persons to whom notices will be sent by giving notice to the other.

(e)Arbitrationand governing law.The laws of the State of New Yorkgovern this Agreement. All actions or proceedings arising in connection with, touching upon or relating to this Agreement, the breach thereof and/or the scope of the provisions of this Section shall be submitted to JAMS (“JAMS”) for final and binding arbitration under its Comprehensive Arbitration Rules and Procedures if the matter in dispute is over $250,000 or under its Streamlined Arbitration Rules and Procedures if the matter in dispute is $250,000 or less, to be held in Los Angeles County, California, before a single arbitrator who shall be a retired judge, in accordance with California Code of Civil Procedure §§ 1280 et seq. The arbitrator shall be selected by mutual agreement of the parties or, if the parties cannot agree, then by striking from a list of arbitrators supplied by JAMS. The arbitration shall be a confidential proceeding, closed to the general public. The arbitrator shall assess the cost of the arbitration against the losing party. In addition, the prevailing party in any arbitration or legal proceeding relating to this Agreement shall be entitled to all reasonable expenses (including, without limitation, reasonable attorney’s fees). Notwithstanding the foregoing, the arbitrator may require that such fees be borne in such other manner as the arbitrator determines is required in order for this arbitration clause to be enforceable under applicable law.] The arbitrator shall issue a written opinion stating the essential findings and conclusions upon which the arbitrator’s award is based. The arbitrator shall have the power to enter temporary restraining orders and preliminary and permanent injunctions. Neither party shall be entitled or permitted to commence or maintain any action in a court of law with respect to any matter in dispute until such matter shall have been submitted to arbitration as herein provided and then only for the enforcement of the arbitrator’s award; provided, however, that prior to the appointment of the arbitrator or for remedies beyond the jurisdiction of an arbitrator, at any time, either party may seek pendentelite relief in a court of competent jurisdiction in Los Angeles County, California or, if sought by Publisher, such other court that may have jurisdiction over Microsoft, without thereby waiving its right to arbitration of the dispute or controversy under this section. Notwithstanding anything to the contrary herein, Microsoft hereby irrevocably waives any right or remedy to seek and/or obtain injunctive or other equitable relief or any order with respect to, and/or to enjoin or restrain or otherwise impair in any manner, the production, distribution, exhibition or other exploitation of any motion picture, production or project related to Publisher, its parents, subsidiaries and affiliates, or the use, publication or dissemination of any advertising in connection with such motion picture, production or project.

(f)Attorneys’ fees.If either Microsoft or Publisher employs attorneys to enforce any rights arising out of or relating to this Agreement, the prevailing party will be entitled to recover its reasonable attorneys' fees, costs, and other expenses, including the costs and fees incurred on appeal or in a bankruptcy or similar action.

(g)Waiver and severability.A party’s delay or failure to exercise any right or remedy will not result in a waiver of that or any other right or remedy. If any court of competent jurisdiction determines that any provision of this Agreement is illegal, invalid, or unenforceable, the remaining provisions will remain in full force and effect.

(h)Assignment. Either party may assign this Agreement to an Affiliate. If either party assigns this Agreement, it must notify the other in writing. Any other assignment requires prior written approval of the other party.

(i)Integration and modification.

(1)Entire agreement.This Agreement is the entire agreement between the parties regarding its subject matter. It replaces all prior agreements, communications, and representations between the parties regarding its subject matter.

(2)Amendment.This Agreement may be changed only by an amendment signed by both parties.

(j)Counterparts.The parties may execute this Agreement in counterparts. Each counterpart will be deemed an original and all counterparts will constitute one agreement binding both parties. Facsimile signatures will be considered binding.

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Windows and Windows Phone Publisher Application Development Agreement