EQUIPMENT RENTAL and SERVICE AGREEMENT
Terms & Conditions

This Equipment Rental and Service Agreement ("Agreement") and all other associated documents related to FotoKem services and/or the lease or rental of FotoKem equipment are the "Transaction Documents" and collectively are the "Contract" between the parties. FotoKem Equipment include, but are not limited to, nextLAB® on-location and/or near-location systems, non-linear editing equipment, videotape recording and playback equipment, removable storage media, portable data storage drives, cameras or network equipment (the "Equipment"). Post production and/or other services (the "Services") described in the Transaction Documents, may also include any Data Hosting and Data Transmission Services, as defined below.

DEFINITIONS.

a) "FotoKem" shall mean and refer to Foto-Kem Industries, Inc., a California corporation, owner of the Equipment and/or provider of any rental or leasing services specified in the Contract.
b) "Customer" shall mean and refer to the other party whose name appears in the Equipment Rental and Services Agreement Contract.
c) "Contract" means all Bids, orders, or other Transaction Documents pertaining to rental or lease of Equipment, which includes these Terms and Conditions, and may also include (but not be limited to) post production, Data Hosting, Data Transmission, and other FotoKem Services.
d) "Rental Lease Period" means the Contract term of the Equipment rental or lease, and/or the actual period of time from when the Equipment leaves FotoKem to the time it is returned to FotoKem.
e) "Service Period" means the contracted term of Equipment rental, or actual duration of time required to complete Contracted Services.
f) "Customer Data" shall refer to digital moving or still images, digital sound, and other data or metadata provided by Customer to FotoKem or created by Customer and recorded or stored in the Equipment.
g) "Archival Data" means high-value content data files, stored on server, data tape, or other archival media.
h) "System" means FotoKem's networks, mobile or fixed servers, the Equipment, and related hardware and software components that permit users to store, edit, copy, manipulate, and access digital data.
i) "Data Hosting Services" refers to Services provided by FotoKem and its System that facilitate the recordation, storage, upload, download and manipulation of Customer Data.
j) "Data Storage Services" means the short and/or long term storage or archive of Customer Data.
k) "Data Transmission Services" refers to Services provided by FotoKem and its System that facilitates the transmission of Customer Data via Internet, satellite, or other data transmission means.
l) "Bid" means the pricing proposal presented to Customer by FotoKem.

1. Rental/Lease Period

Customer agrees to rent/lease the Equipment from FotoKem for the contracted price and Rental/Lease Period and pursuant to the other terms and conditions stated in the rental/lease Contract. Daily, weekly, or monthly rent/lease rates specified in the rental/lease Contract shall accrue at all times during the Rental/Lease Period. The Rental/Lease Period shall start on the date and time when the Equipment leaves FotoKem premises, or on delivery of Equipment to Customer, as stated in other Transaction Documents, and shall continue with respect to each item of Equipment until the item is returned to FotoKem premises in proper working order as stated in Section 14 below. No credit against the amount of rent/lease rates that accrue shall be allowed on the basis of non use of Equipment by Customer during the Rental/Lease Period. Acceptance of the Equipment by FotoKem on its return by Customer shall not waive or prejudice any claim that FotoKem has or may have against Customer. All accumulated rent/lease payments must be paid by Customer, as stated in other Transaction Documents. No amount paid by Customer as a rent, lease payment shall be applied toward any purchase of the Equipment by Customer.

2. Services and Service Period

FotoKem shall provide Services at Contracted or otherwise applicable service rates during the Service Period and pursuant to any other terms and conditions stated in the Contract including but not limited to any Terms that may be stated in attached Exhibits. Service fees as described in the Transaction Documents shall accrue at all times during the Service Period. The Service Period shall start on the date the Services are initially made available to Customer, and shall include the period of use specified in the other Transaction Documents, and shall continue with respect to each Service until that Service is terminated in accordance with the Transaction Documents. Any FotoKem personnel providing Equipment Services at Customer determined locations shall be deemed to be a representative of Customer and under Customer's direction and control while providing Services. FOTOKEM SHALL NOT HAVE LIABILITY OR RESPONSIBILITY TO CUSTOMER FOR THE ACTS OR OMISSIONS OF FOTOKEM PERSONNEL ENGAGED IN PROVIDING LOCATION SERVICES, INCLUDING WITHOUT LIMITATION ANY RESULTING PERSONAL INJURY, PROPERTY DAMAGE OR LOSS, CORRUPTION, DESTRUCTION OR PUBLICATION OF CUSTOMER DATA, WHETHER OR NOT COVERED BY CUSTOMER'S INSURANCE. FotoKem shall have the right, without liability to Customer or any third party, to refuse to perform any Service which FotoKem, in its sole discretion, believes could actually or potentially (a) expose FotoKem to a claim, or (b) expose FotoKem to public criticism, scorn, contempt or disdain, whether or not justified; or (c) be found to be, or expose FotoKem to an accusation or allegation that it is, in any way unlawful, pornographic, obscene, harassing, defamatory, disparaging, degrading, or in violation of the rights of any third party. FotoKem shall not have any obligation to make any such determination. The existence or absence of such determination is not any express or implied assurance or assertion to Customer from FotoKem with regard to such matters. However, if FotoKem determines that any such risk exists, FotoKem shall have the right, without liability on its part, to stop further Services entirely or in part.

3. Transportation

Except with respect to items of Equipment shipped by FotoKem to Customer, Customer shall be responsible to pick-up and ship Equipment and return Equipment to the FotoKem rental facility specified in the Transaction Documents. Customer shall be responsible for costs of transportation and risk of loss of Equipment in transit. If Customer requests, FotoKem may elect to ship Equipment to Customer, with any or all charges to be paid in advance, or collect, or otherwise, as FotoKem elects, and all freight and carrier insurance charges shall be paid in advance by Customer. Return shipments of Equipment by Customer to FotoKem shall be shipped prepaid, including freight and carrier insurance charges. Customer agrees that the effect of transfer of possession of Equipment to Customer or any agent of Customer or a shipping company engaged to transport Equipment to Customer shall be deemed to constitute Customer's acceptance and agreement to this Agreement, regardless of whether this Agreement was actually signed by or on behalf of Customer; provided, that the foregoing shall not impair any prior acceptance and agreement.

4. Assumption of Liability

CUSTOMER ASSUMES ALL LIABILITY UNDER COPYRIGHT, OTHER INTELLECTUAL PROPERTY LAWS AND OTHER LAWS, ARISING OUT OF THE PERFORMANCE OR NONPERFORMANCE BY FOTOKEM OF ANY SERVICES FOR CUSTOMER, ALSO INCLUDING WITHOUT LIMITATION ANY CLAIMED LIBEL, SLANDER, DEFAMATION, DISPARAGEMENT, INVASION OF PRIVACY, MISAPPROPRIATION OF PERSONALITY OR INFRINGEMENT OF PATENT, COPYRIGHT, TRADEMARK, TRADE NAME, TRADE SECRET OR OTHER PROPRIETARY RIGHT.

5. Data Hosting Services

During the Service Period for Data Hosting Services, FotoKem grants Customer and Customer's authorized users the right to access and use the System to receive and store Customer Data. The parties acknowledge that, as between the parties, all rights, title and interest in Customer Data belong to Customer and all rights, title and interest in the System belong to FotoKem. Customer and Customer's authorized users shall use the System only for Customer's own internal purposes and in accordance with any documents, terms or usage restrictions provided by FotoKem from time to time. Customer shall not sublicense or otherwise provide or permit access to the System by any third party. FOTOKEM SHALL NOT HAVE ANY RESPONSIBILITY FOR, AND CUSTOMER SHALL TAKE ALL APPROPRIATE ACTION TO MAINTAIN AND PROTECT, CUSTOMER'S USER ID's AND PASSWORDS. CUSTOMER SHALL BE LIABLE FOR ANY USE OR SECURITY BREACH ATTRIBUTABLE OR TRACEABLE TO CUSTOMER'S USER ID's OR TO CUSTOMER'S ACTS OR OMISSIONS OR USE OF THE SYSTEM. CUSTOMER SHALL BE RESPONSIBLE FOR ANY ILLEGAL USE OF THE SYSTEM TRACABLE TO CUSTOMER'S USER ID's AND MUST ASSIST FOTOKEM IN LOCATING THE ERRANT USER(S) AND PAY ALL FOTOKEM'S COSTS OF ADDRESSING SUCH ILLEGAL USE. FOTOKEM SHALL HAVE NO LIABILITY FOR ANY USE OR SECURITY BREACH ATTRIBUTABLE OR TRACEABLE TO CUSTOMER'S USER ID's OR UNAUTHORIZED ACCESS TO OR USE OF THE SYSTEM BY ANY ONE OR MORE PERSONS. FOTOKEM SHALL HAVE THE RIGHT WITHOUT LIABILITY, TO SUSPEND OR TERMINATE ACCESS TO THE SYSTEM AT ANY TIME WITHOUT NOTICE. On termination of Data Hosting Services, unless due to breach by Customer, FotoKem shall be willing to reasonably work with Customer, at Customer's expense, to transition Customer Data to an alternate system or media.

6. Data Storage Services

Customer acknowledges responsibility to purge all Customer data from rental Equipment system storage prior to return of Equipment to FotoKem. After return of Equipment to FotoKem, FotoKem anticipates purging any remaining Customer Data from Equipment system storage. FOTOKEM SHALL NOT BE LIABLE FOR DELAY IN PURGING DATA, INCOMPLETE PURGING, OR FAILURE TO PURGE, EVEN IF SOME OR ALL DATA REMAINS ON EQUIPMENT AT TIME OF SUBSEQUENT RENTAL TO OTHER RENTAL CUSTOMER. If Customer requests that FotoKem store Customer Data for a period of time following the return of rental Equipment, FotoKem shall charge Customer short-term data storage charges at FotoKem's then current rates, which may change from time to time. As of March 1, 2013 the rate was fifty cents ($ .50) per Gigabyte of data, per day. Should Customer Contract with FotoKem for long-term data archiving Services, Customer acknowledges its responsibility to maintain duplicate copies of Archival Data in alternate locations to ensure proper back-up. Customer also acknowledges Customer's responsibility to maintain any insurance deemed necessary on Archived Data. IN NO EVENT, EVEN IF IN BREACH OF THIS AGREEMENT, SHALL FOTOKEM BE LIABLE FOR DELETION, LOSS, DESTRUCTION, CORRUPTION, RELEASE OF, EXPOSURE OF, DISCLOSURE OF OR OTHER MISUSE OF, OR DELAY IN ABILITY TO ACCESS CUSTOMER DATA RECEIVED, RECORDED OR STORED IN EQUIPMENT, OR STORED OR ARCHVIVED BY FOTOKEM, WHETHER OR NOT AT CUSTOMER REQUEST.

7. System Use

In connection with accessing and using the System, Customer agrees: (a) not to use, or allow use of, the System or Data Hosting Services in contravention of any federal, state, local, foreign or other law or rules; and (b) not to introduce into the System any code, routine or software not specifically authorized, in writing, by FotoKem, or collect information about the System or its users. Customer agrees not to modify, adapt or make derivative works of all or any part of the System or reverse engineer all or any part of the System, or attempt to do so. Customer assumes full responsibility for the integrity of Customer Data, and to ensure that Customer computer(s) and/or other device(s) interfacing with the System protect, prevent and/or counteract computer viruses, trojan horses, malware, spyware or other problems passed from or through one device to another. Customer will be responsible to cover the cost of repair, replacement or correction of any such problem introduced to the Equipment and/or System as a result of Customer's use.

8. Risk of Unauthorized Access

Customer acknowledges that despite efforts, if any, that FotoKem may make seeking to inhibit unauthorized access to the System and Customer Data, risk of unauthorized access exist. FOTOKEM SHALL HAVE NO OBLIGATION TO SUCCEED IN PREVENTING UNAUTHORIZED ACCESS OR PUBLICATION OF CUSTOMER DATA. ANY EFFORTS FOTOKEM MAKES, OR ATTEMPTS, TO PREVENT UNAUTHORIZED ACCESS SHALL BE DEEMED TO BE ONLY FOR FOTOKEM'S OWN BENEFIT TO ACCOMPLISH FOTOKEM'S BUSINESS PURPOSES AND SHALL NOT BE FOR THE BENEFIT OF CUSTOMER AND SHALL NOT IMPLY OR IMPOSE AN OBLIGATION TO HAVE PERFORMED SUCH EFFORTS PROPERLY OR TO ANY STANDARD OF CARE, OR TO UNDERTAKE OR IMPLEMENT OTHER OR FURTHER EFFORTS. Customer also acknowledges that unencrypted transmissions through the Internet are inherently unsecure, and assumes all risks associated with any transmission of data via the Internet, regardless of the lack of, or use of, appropriate security measures. IN NO EVENT, SHALL FOTOKEM BE LIABLE FOR UNATHORIZED ACCESS TO CUSTOMER DATA VIA ANY INTERNET PROTOCOL (IP) DELIVERY; (a) FOR INTENTIONAL OR ACCIDENTAL OR OTHER LAWFUL OR UNLAWFUL ACT(S) OF CRACKER(S) OR HACKER(S) OR OTHER UNAUTHORIZED ACCESS; (b) FOR USE OR MISUSE OF CUSTOMER DATA BY UNAUTHORIZED PARTIES; (c) FOR LOST OR CORRUPTED OR DESTROYED CUSTOMER DATA; (d), FOR DOWNTIME OR SLOWDOWN OF SERVICE; (e) FOR RELEASE, EXPOSURE OR COMPROMISE OF CONFIDENTIAL DATA; (f) FOR INABILITY TO ACCESS OR DELAY IN ACCESSING THE SYSTEM WHETHER VIA IP OR OTHERWISE.

9. Risk of Data Loss

Customer acknowledges that the intrinsic value of the Customer Data exceeds and bears no relationship to the nature of this Agreement, and thus FOTOKEM, WHETHER OR NOT IN ACCORD WITH GENERAL PRACTICE AND INDUSTRY CUSTOM, SHALL HAVE NO RESPONSIBILITY FOR USE, MISUSE, UNAUTHORIZED ACCESS, CORRUPTION, LOSS, DAMAGE, DESTRUCTION, RELEASE OR PUBLICATION OF CUSTOMER DATA FROM ANY CAUSE WHATSOEVER, INCLUDING WITHOUT LIMITATION, CULPABLE ACT OR OMISSION OF FOTOKEM PERSONNEL, ERROR, OMISSION OR FAILURE IN, OR THE UNAVAILABILITY OR INTERRUPTION OF, THE EQUIPMENT, ACTION OF OUTSIDE PARTIES, OR FROM CUSTOMER'S USE OF THE EQUIPMENT OR SYSTEM. WITHOUT LIMITING THE GENERALITY OF THE PRECEDING SENTENCE, FOTOKEM SHALL NOT BE LIABLE FOR ANY DAMAGE OR COST INCURRED IN THE FORM OF OR AS THE RESULT OF LOST CUSTOMER DATA RESULTING IN DAMAGE TO OR LIABILITY OF CUSTOMER TO OTHER PERSON OR ENTITY, LOST PROFIT OR LOST REVENUE, COST OF RECOVERING DATA, COST OF SUBSTITUTE DATA OR COVER, CLAIM BY THIRD PARTIES, OR OTHER SIMILAR COSTS RELATED TO POTENTIAL LOSS OF DATA, IN THE USE OF THE EQUIPMENT OR SYSTEM.

10. Risks of Equipment Loss

Customer assumes all risk of loss of Equipment, whether or not covered by Customer insurance, during the "Risk Period." The Risk Period starts when Equipment leaves FotoKem premises and ends as to items of Equipment when FotoKem acknowledges receipt of those items. Customer's responsibility shall include, but not be limited to, risk of loss of Equipment while in transit as well as at all other locations during the Risk Period. Customer shall, at Customer's cost and expense, during the entire Risk Period, keep and maintain the Equipment in at least as good condition and repair as when the item left FotoKem's premises. If any item of Equipment is destroyed, damaged, lost or stolen during the Risk Period, Customer shall be liable to FotoKem for (a) the repair cost (if FotoKem in its sole discretion deems it economically feasible to repair damaged Equipment) or (b) the full replacement cost, if FotoKem's remedy under the foregoing subpart (a) is inapplicable, in each case without adjustment for betterment or depreciation of that Equipment. The replacement or repair cost of the Equipment shall be determined by the actual cost incurred by FotoKem to replace or repair the Equipment. Regardless of whether covered by insurance, Customer shall be responsible for the daily rental of each item of destroyed, damaged, lost or stolen Equipment and the Rental Period shall continue with respect to each such item of Equipment until the damaged Equipment has been repaired (if FotoKem deems repair to be feasible) or the destroyed, damaged, lost or stolen equipment has been replaced. If FotoKem supplies a replacement item for any Equipment which is destroyed, damaged, lost or stolen, Customer shall also pay (at FotoKem discretion) rent on the replacement item from the date it leaves FotoKem premises, through the end of the Rental Period.

11. Customer Representation and Warranty

Customer represents and warrants that Customer is the sole owner, or the duly authorized representative of all owners, of the Customer Data used with the Equipment or System and all intellectual property contained in or represented by the Customer Data and that Customer's use thereof shall not involve any libel, slander, defamation, disparagement, invasion of privacy, misappropriation of personality or infringement of patent, copyright, trademark, trade name, trade secret or other violation of law or right of any person or entity.

12. Additional Disclaimers

Customer agrees that the Equipment and/or System is not a consumer good for purpose of federal or state warranty laws. FOTOKEM MAKES NO WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE EQUIPMENT, SYSTEM, OR ANY SERVICES PROVIDED TO CUSTOMER, INCLUDING BUT NOT LIMITED TO ANY EXPRESS OR IMPLIED WARRANTY OR REPRESENTATION AS TO PERFORMANCE, DESIGN, MERCHANTABILITY, SUITABILITY, SECURITY, RELIABILITY OR FITNESS FOR PARTICULAR PURPOSE OF THE EQUIPMENT, SYSTEM, OR SERVICES, OR THAT THE SYSTEM WILL OPERATE FREE OF DISRUPTION OR ERROR. THERE ARE NO WARRANTIES THAT EXTEND BEYOND THE DESCRIPTION ON THE FACE HEREOF.

13. Liability Limitations

FOTOKEM SHALL NOT BE LIABLE TO CUSTOMER, WHETHER IN CONTRACT, TORT, UNDER ANY WARRANTY, OR OTHERWISE, FOR INCIDENTAL, CONSEQUENTIAL, OR SPECIAL DAMAGES. UNDER NO CIRCUMSTANCE SHALL FOTOKEM'S LIABILITY OR CUSTOMER'S REMEDY FOR DAMAGES OR OTHER CLAIM AGAINST FOTOKEM (WHETHER RELATED TO THE EQUIPMENT, SYSTEM OR ANY SERVICES) EXCEED THE AMOUNT OF RENT/LEASE AND/OR SERVICE FEES ACTUALLY PAID TO FOTOKEM BY CUSTOMER UNDER THIS AGREEMENT FOR THE PARTICULAR PORTION OF THE EQUIPMENT, SYSTEM OR SERVICES AND FOR THE PARTICULAR TIME PERIOD INVOLVED. FOTOKEM SHALL NOT BE RESPONSIBLE FOR DELAY OR FAILURE IN PERFORMANCE RESULTING FROM ACTS OR CIRCUMSTANCES BEYOND FOTOKEM'S CONTROL, INCLUDING WITHOUT LIMITATION ACT OF GOD, STRIKE OR OTHER LABOR DISPUTE, RIOT, ACT OF WAR, TERRORISM, MALFUNCTION OF PORTIONS OF THE INTERNET OR ANOTHER NETWORK, GOVERNMENT REGULATION, COMMUNICATION LINE FAILURE, POWER FAILURE, EQUIPMENT FAILURE, FIRE, WEATHER, EARTHQUAKE OR OTHER DISASTER, ACT OF THIRD PARTIES INCLUDING BUT NOT LIMITED TO ANY HACKERS OR ANY OTHER INCIDENT, CONDITION, CIRCUMSTANCE OR EVENT THAT DISRUPTS FOTOKEM'S ABILITY TO PERFORM.

14. Indemnification

Customer shall use the Equipment and/or System at Customer's own risk and expense. Customer assumes full and sole responsibility and liability for injuries (including without limitation death) to any person or property resulting from the use or possession of the Equipment. FotoKem shall not be liable for, and Customer shall indemnify, defend and hold FotoKem and FotoKem's shareholders, directors, officers, affiliated entities, employees, and agents harmless from and against, any and all actual threatened claims (whether made by Customer, or third party), and any costs incurred or other damages suffered by or threatened against FotoKem, whether in whole or in part, out of or in connection with any of the following: (a) Customer's Contract, possession, operation or other use of the Equipment or the condition of the Equipment (including without limitation latent defects) or of any instructions or lack thereof; (b) performance of the Services, including without limitation (i) claims regarding acts or omissions of FotoKem personnel (which, Customer acknowledges, shall be deemed to be under Customer's direction and control as provided in Sections 2 & 4), and (ii) claims for personal injury and property damage arising in connection with any Services; (c) negligent or willful act or omission of Customer or Customer's personnel, whether in connection with use or misuse of the System or creation or use of any Customer Data or otherwise, also including without limitation any related property damage or personal injury (also including but not limited to libel, slander, defamation, invasion, of privacy, misappropriation of personality or infringement of patent, copyright, trademark, trade name, trade secret or other proprietary right, whether of FotoKem or any third party); (d) Security breach or other activity associated with Customer's user IDs and passwords for the System; (e) misuse of System, including without limitation as provided in Section 7; (f) infringement of any third party intellectual property right; (g) misuse, loss, damage or destruction of Customer Data as provided in Section 15; (h) breach by Customer of any covenant, warranty or representation; and (i) protection or enforcement by FotoKem of rights under the Contract.

15. Limit of Liability

FOTOKEM SHALL NOT BE LIABLE TO CUSTOMER OR TO ANY OTHER PERSON OR ENTITY FOR ANY COST, EXPENSE, LOSS OF PROFIT, LOSS OF BUSINESS, INTERRUPTION OF BUSINESS, OR FOR OTHER DIRECT, INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL, OR OTHER DAMAGE, COST, LOSS OR EXPENSE OF ANY KIND, WHETHER UNDER THIS AGREEMENT OR OTHERWISE, EVEN IF FOTOKEM WAS ADVISED OF THE POSSIBILITY OF THAT DAMAGE, COST, LOSS OR EXPENSE. FOTOKEM SHALL NOT BE LIABLE FOR ANY REPRESENTATION OR WARRANTY MADE BY CUSTOMER, ANY AGENT OF CUSTOMER OR ANY OTHER PERSON OR ENTITY.

16. Equipment Use and Operation

Customer shall allow the Equipment and/or System to be used only by duly qualified technicians employed by Customer and only for the usual uses of the Equipment or System. FotoKem makes no warranty or representation as to capabilities or any other qualification or aspect of any technician or service provider, even if identified or suggested by FotoKem. Customer shall investigate and make Customer's own determination whether to engage the services of any technician or service provider. FotoKem shall not be responsible in any way for any aspect of services performed by, or failures of performance by, any technician or service provider, even if suggested or identified by FotoKem. Customer shall keep the Equipment in Customer's sole custody and shall not permit the Equipment to be used in violation of any law or of rights of any individual or entity. Customer shall not install or uninstall software, modify or service the Equipment without the written consent of FotoKem. Customer shall not permit the Equipment to be (a) used in any location deemed inappropriate by FotoKem, or (b) removed from the contiguous United States (the 48 contiguous states) without FotoKem's prior written consent, which consent may be granted or withheld in FotoKem's sole discretion.

17. Inspection

Customer agrees to grant FotoKem representatives physical access to Equipment for inspection upon FotoKem request, regardless of location. At FotoKem's discretion, Customer agrees to facilitate and allow remote internet enabled system inspection while Equipment is in use, regardless of any question of confidentiality by Customer.

18. Ownership Notices

Customer acknowledges that FotoKem is the sole owner of the Equipment. Customer shall not remove any tag or nameplate on the Equipment indicating FotoKem's ownership. Customer shall keep the Equipment free of all pledges, levies, liens and encumbrances not created by FotoKem. Customer shall not permit any person or entity to file or publish a UCC-1 or other financing statement purporting to encompass all or any part of the Equipment. FotoKem shall have the right, and Customer hereby authorizes FotoKem to file, publish and post UCC-1's, other forms of financing statements and other public notices indicating FotoKem's ownership of the Equipment.

19. Insurance

Customer shall obtain and maintain insurance coverage from one or more insurance carriers, as FotoKem approves, and deems adequate to insure; (a) the replacement value of the Equipment; and (b) for injuries to persons or property that may result from Services or use or possession of the Equipment, but in no event shall Customer obtain less than: (i) Commercial General Liability Coverage containing broad form, occurrence based coverage for bodily injury, personal injury and property damage claims arising out of Customer's operations, naming Foto-Kem Industries, Inc. as insured, with limits of one million dollars ($1,000,000) per occurrence; and (ii) Property Insurance Coverage for all Equipment rented or leased by Customer including without limitation under the Contract, coverage for Equipment in transit, written on a replacement cost basis without deduction for depreciation, with limits of one million dollars ($1,000,000), naming Foto-Kem Industries, Inc. as "Loss Payee." Insurance shall not contain any "unattended or unlocked vehicle" exclusion. All insurance coverage required by this Section shall contain a waiver of subrogation in favor of FotoKem, and shall be written in U.S. dollars by a United States carrier with a financial strength rating by A.M. Best Company (or comparable insurance rating agency) of not less than B++ and, if FotoKem has consented to the Equipment leaving the United States (which consent is not effective unless given in writing), shall be written on a world-wide basis, including coverage for transit. The policy shall state that the insurer shall provide FotoKem with at least thirty (30) days advance written notice of cancellation or reduction or increase in coverage or other material change. (iii) Nothing in this Section 18 is intended to imply that the coverages required are in any sense sufficient for Customer's purposes.

20. Proof of Insurance

Customer shall furnish proof satisfactory to FotoKem of all coverage required under Section 19 prior to receiving any Equipment. However delivery of Equipment without FotoKem's receipt of such proof is not a waiver of the requirements of Section 19. Proof of coverage shall be in at least the form of a Certificate of Insurance issued by Customer's Insurance Agent with respect to each policy and containing the following information and otherwise meeting the following requirements: (a) the Certificate Holder shall be Foto-Kem Industries, Inc. 2801 W. Alameda Ave., Burbank, CA 91505; (b) Foto-Kem Industries, Inc. shall be named on the liability coverage required in Section 19 and as Loss Payee in the property coverage required under Section 19 and shall be set forth in the Certificate; (c) the name, address and phone number of the Insurance Agent shall be stated in the Certificate; (d) Customer shall appear in the Certificate as Named Insured; (e) the Insurance Company affording coverage must be identified in each Certificate; (f) the deductible, if any, shall be indicated (but Customer is responsible for the deductible portion of the loss and any portion of the loss in excess of the applicable limits); (g) the Certificate shall specify that coverage will apply until the Equipment is returned to FotoKem in proper working order; and (h) the Certificate shall be signed by an authorized representative or agent of the Insurance Company.

21. Customer to Insure Customer Data

CUSTOMER ACKNOWLEDGES AND AGREES THAT FOTOKEM IS NOT OBLIGATED TO OBTAIN INSURANCE FOR OR ON BEHALF OF CUSTOMER, AND/OR CUSTOMER DATA OR THE EQUIPMENT AND THAT CUSTOMER SHALL BE SOLELY RESPONSIBLE TO INSURE AGAINST ALL INSURABLE RISKS INCLUDING WITHOUT LIMITATION DAMAGE TO OR DESTRUCTION OF CUSTOMER DATA AND/OR EQUIPMENT, WHETHER CAUSED BY CULPABLE ACT OR OMISSION OF FOTOKEM OR FOTOKEM PERSONNEL OR OTHERWISE. FOTOKEM SHALL IN NO EVENT BE LIABLE FOR ANY LOSS OR DAMAGE, WHETHER OR NOT SUCH LOSS OR DAMAGE WAS, OR COULD HAVE BEEN, COVERED BY INSURANCE. FOTOKEM SHALL IN NO EVENT BE LIABLE FOR ANY LOSS OR DAMAGE RESULTING FROM LOST CUSTOMER DATA.

22. Repossession by FotoKem

If Customer fails to pay any Equipment rent or lease payment when due, or otherwise breaches any term, covenant or condition, or if Customer is or becomes subject to any proceeding which FotoKem considers may result in seizure of the Equipment, or if a proceeding in bankruptcy, receivership or insolvency is instituted by or against Customer or any property of Customer, or if for other reason FotoKem becomes insecure with regard to Lessee's possession or use of the Equipment, or on or following the end of the Rental/Lease Period, then FotoKem shall in any such case have the right to enter the premises where the Equipment is or is believed to be located and retake possession of the Equipment, with or without notice to Customer, and in each case without liability to Customer for any damages incurred by Customer as a result of the action. By taking possession of the Equipment pursuant to this Section, FotoKem shall be deemed to have ended the Rental Lease Period (if it had not already ended) and shall be deemed not to have waived or otherwise prejudiced any other right, claim or remedy that FotoKem has or may have against Customer.

23. Confidentiality

Customer shall not disclose the Bid terms and pricing or the discussions and negotiations that occurred between FotoKem and Customer regarding the Contract to any third party, unless disclosure is required by law, and shall not disparage FotoKem, the Services, the Equipment, or any of FotoKem's directors, officers or employees or FotoKem's successors or assigns. FotoKem acknowledges that some Customer Data may be confidential and proprietary to Customer. Any breach of confidentiality by FotoKem shall be subject to the limitations of remedies in the Contract.

24. Final Agreement

The Contract represented by the Transaction Documents is the final, complete and exclusive expression of the agreement between Customer and FotoKem with respect to its subject matter. In any conflict between any term or condition of this Equipment Rental and Services Agreement and any other Transaction Document, this Equipment Rental and Services Agreement shall control, unless the Transaction Documents include an Override Agreement, in which event the Override Agreement shall control to the extent of the conflict between any term or condition of the Override Agreement and any term or condition of any other Transaction Document. No covenant, warranty, representation or other term and condition, whether express or implied (including without limitation any representations or warranties made by any agent or representative of FotoKem or Customer), which are not set forth in writing in the Contract shall bind FotoKem. The Contract cannot be modified except by the written agreement of FotoKem and Customer. The parties agree that the Contract has been entered into in the State of California and shall be interpreted under and governed by the internal laws of the State of California applicable to contracts made and to be performed entirely within California, without reference to or regard for any conflicts of law principles, notwithstanding that one or both parties to this Agreement may be domiciled or the Equipment may be located in another state. Customer shall not have any right to assign any rights to delegate any of its obligations under the Contract and any attempted or purported assignment or delegation by Customer shall be deemed to be void and of no effect. No third party is contemplated or intended to have any rights under the Contract, except to the extent of any rights that are separately and expressly created by FotoKem for the benefit of a third party. As exceptions: (a) with regard to the indemnification provisions in this Agreement, the various persons and entities as to whom this Agreement provides for indemnification, shall be deemed to be third party beneficiaries with the right to enforce the indemnification, defense and hold harmless provisions even though such persons have not signed this Agreement; and (b) provisions in this Agreement for the benefit of FotoKem, such as disclaimers of warranties and limitations of liability, shall be deemed to encompass and benefit FotoKem and FotoKem's shareholders, directors, officers, employees, agents and affiliated entities. The provisions of this Agreement reflect a balancing of economic interests and shall be interpreted and construed according to their fair meanings and not strictly for or against any party.

25. Acceptance

The Agreement will become binding on Customer's signing the Bid included as one of the Transaction Documents. By indicating acceptance in the foregoing manner, Customer agrees, represents and warrants that Customer has read, understands and agrees to be bound by the Terms and Conditions of the Contract between Customer and FotoKem; provided that without impairing or otherwise affecting any earlier acceptance, Customer's acceptance of any goods or services provided pursuant to the Contract or transfer of possession of Equipment to Customer or any agent of Customer or a shipping company engaged to transport Equipment to Customer as provided in Section 3, also constitutes Customer's acceptance of the Contract, and Customer agrees to be bound by the Terms and Conditions of the Agreement.


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