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This Marvelous Designer License Agreement (the “Agreement”) governs the Licensee’s use of the Licensed Materials and related services provided by CLO Virtual Fashion LLC and its Affiliates (collectively, “CLO”). CLO and Licensee are sometimes referred to in this Agreement individually as a “party” and collectively as the “parties.” Pursuant to the terms and conditions of this Agreement, CLO wishes to grant to Licensee, and Licensee wishes to receive, a license to the Licensed Materials (as defined hereinafter).

1.1.IF LICENSEE HAS ENTERED INTO ANOTHER AGREEMENT WITH CLO CONCERNING SPECIFIC SERVICES, INCLUDING BUT NOT LIMITED TO ONLINE STORES SUCH AS CLO-SET CONNECT AND MD STORE OR ANY OTHER MD RELATED PLATFORM OR SOFTWARE, THEN THE TERMS OF THAT AGREEMENT CONTROLS WHERE IT CONFLICTS WITH THIS AGREEMENT.

1.2.IF LICENSEE HAS PREVIOUSLY ENTERED INTO AN END USER LICENSE AGREEMENT (“EULA”), THEN THE EULA SHALL APPLY. IF NO EULA OR ADDITIONAL LICENSE TERMS ARE PRESENTED TO AND SIGNED BY THE LICENSEE, THIS AGREEMENT SHALL APPLY.

1.3.By clicking the “I accept” button (or its equivalent), Licensee agrees to this Agreement. This Agreement becomes effective on the date the Licensee clicks the “I accept” button (“Effective Date”).

1.4.For the avoidance of doubt, if Licensee signs the Invoice or click the “I accept” button (or its equivalent) on behalf of an entity, organization, or Legal Entity, Licensee represents and warrants that Licensee is authorized to accept this Agreement on behalf of such entity or organization. If Licensee is a Legal Entity, Licensee further represents that only employees under its control and authorized by Licensee to access or use the Licensed Materials on Licensee’s behalf may install the Software or access the Services, unless otherwise agreed to in writing by CLO. Licensee will be responsible for compliance with this Agreement by any Authorized User and any other persons who may have access to the Licensed Materials through Licensee.

1.5.The license is exclusive to the Licensee identified in the relevant License Details and its Authorized Users. If Licensee’s license or related information is shared with anyone who is not an Authorized User, CLO may (i) suspend or deactivate Licensee’s license without any refund or compensation and (ii) charge additional fees to the Licensee based on any unauthorized use.

2. DEFINITIONS.

Unless otherwise defined in the main body of the Agreement, capitalized terms used in this Agreement are defined as follows:

2.1. "Affiliate" of a person or entity shall mean any entity that directly or indirectly Controls, is Controlled by, or is under common Control of such person or entity. For the purposes of this definition, "Control" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through the ownership of registered capital or voting securities, by agreement or otherwise, and includes (i) ownership directly or indirectly of fifty percent (50%) or more of the shares or other equity interests in issue or registered capital of such entity, (ii) ownership, directly or indirectly of fifty percent (50%) or more of the voting power of such Person or (iii) the power directly or indirectly to appoint a majority of the members of the board of directors or similar governing body of such entity, and the terms "Controlled" and "Controlling" shall have correlative meanings.

2.2. “Authorized User” means:

2.2.1.employees or personnel of Licensee who are under the control of and authorized by the Licensee to install or access the Licensed Materials. If applicable, Authorized User may include subcontractors, independent service providers, freelancers, and studios, provided Licensee obtains prior written consent from CLO.

2.2.2.in the context of Academic Purpose, an Authorized User shall mean to include the faculty and students of such Licensee. If applicable, Authorized User may include lecturers and external instructors, provided Licensee obtains prior written consent from CLO.

2.3. “CLO Avatars” means any avatars (i) included in the Licensed Materials or (ii) made available by CLO via CLO-SET CONNECT (accessible at https://connect.clo-set.com/) including, but not limited to, the interfaces, graphics, design, information, artwork, data, code, software, and all other elements and the derivatives thereof. For the avoidance of doubt, CLO Avatars included in the Licensed Materials constitute a part of the Licensed Materials.

2.4. “CLO Samples” means samples provided by CLO in the Licensed Materials, including, but not limited to, sample patterns and designs, modules for patterns and designs, and expressions of components and elements used in patterns and designs. CLO Samples may be modified where such Modifications are permitted by the intended functionality of the Licensed Materials.

2.5. “Brand Marks” means the trade names, trademarks, service marks, logos, domain names, and other distinctive brand features of CLO, including that of Marvelous Designer (“MD”), and of Licensee.

2.6. “Fees” means the “Monthly Subscription Fee” “Annual Subscription Fee,” or the “Perpetuals Fee,” or the “Update Fee,” or other fees as mutually agreed upon in writing by the parties, as applicable and set forth in the Invoice.

2.7. "Invoice" means the statement provided by CLO that sets forth, among other things, the order number, product, Fees, and/or License Details.

2.7.1. “License Details” refers to the license information provided to Licensee by CLO exclusively for the purpose of this Agreement. Such information is set forth in the Invoice and includes details such as the License Class, License Term, License Type, and authentication method for the Company’s License.

2.8. “Internal Business Needs” means, with respect to the Licensed Materials, the use of such materials by an Authorized User of Licensee to satisfy the internal business requirements of Licensee in the ordinary course of such business. It is expressly understood and agreed that Licensee’s Internal Business Needs do not include providing or making available the Licensed Materials to any third party, under any circumstance.

2.9. “Legal Entity” means any Licensee, corporation, limited liability Licensee, general partnership, limited partnership, limited liability partnership, proprietorship, joint venture or other forms of business organization.

2.10. “License Class” means the class of license specified by CLO for the Licensed Materials, including the following:

2.10.1. Non-Fee Based License. If the License Details identify the License Class as a “Non-Fee Based License,” Licensee may install the specified Licensed Materials designated in the License Details, and use the Trial License in accordance with the relevant Trial Purpose stipulated in Section 3.1, and if applicable, permit access to such copy of the Licensed Materials to Authorized Users. Non-Fee Based License include Personal Trial License, Student Trial License, Academic Trial License and Enterprise Trial License - each subject to separate terms and conditions.

2.10.1. Fee-Based License If the License Details identify the License Class as a “Fee-Based License,” Licensee may install the specified Licensed Materials designated in the License Details subject to the License Type to use it for Licensee’s Internal Business Needs, stipulated in Section 3.2, and permit access to such Licensed Materials to Authorized Users. Fee-Based License include Personal License, Student License, Academic License and Enterprise License - each subject to separate terms and conditions.

2.11. “License Term” means a Perpetual Term, a Monthly Subscription Term, an Annual Subscription Term, a Trial Term, any other duration stipulated in the License Details as specified in the License Details, or as otherwise agreed to in writing by CLO through an EULA - each subject to separate terms and conditions as stipulated in Section 3.

2.12. “License Type” means either Standalone license or Network license specified for the Licensed Materials - each subject to their separate terms, conditions, and authentication methods as stipulated in Section 4.

2.13. “Licensed Materials” means Software, Supplemental Materials and User Documentation (a) made available by CLO to Licensee for download, (b) electronically delivered prepackaged with this Agreement, or (c) otherwise accompanied by this Agreement, provided that (i) in the case of Software, the Software is identified in the License Details, and (ii) Licensee has paid (and continues to pay) the applicable Fees. Licensed Materials includes, without limitation, any Updates, and new versions of the Licensed Materials that CLO provides or makes available to Licensee.

2.14. “Licensee” means:

2.14.1. in the context of individual use, either

2.14.1.1. an individual, natural person (e.g. hobbyist, member of the general public, etc.) to which the Licensed Materials is exclusively licensed for personal use - and not on behalf of a Legal Entity that should be obtaining an Enterprise License under Section 3.2.4 in order to access the Licensed Materials and not on behalf of a Qualified Academic Institution that should be obtaining an Academic License in order to access the Software under Section 3.2.3; or

2.14.1.2. a One Person Company, a Sole Proprietorship, a single-member LLC that does not elect to be treated as a corporation for tax purposes (“disregarded entity”), a freelancer, a self-employed independent contractor, or similarly situated self-employee otherwise in business for oneself - as verified through independent documentation such as articles of incorporation, business registration, tax returns/filings, proof of Self-Employment Tax payment, etc. CLO retains the sole discretion to request documentation verifying entity status prior to granting access to the Licensed Materials;

2.14.2. in the context of student use, a natural, individual person who is a) enrolled at a Qualified Academic Institution to which the Licensed Materials is exclusively licensed for Student Purposes; b) aged 13 or older, and if considered a minor within the Licensee’s respective jurisdiction, is accessing the Licensed Materials under the consent and supervision of a parent, legal guardian, or other legally responsible adult. In any event, if the Licensee is a minor in its jurisdiction, Licensee shall cease the use of the Licensed Materials and shall not submit any personal information to CLO;

2.14.3. in the context of academic use, a single Qualified Academic Institution to which the Licensed Materials are exclusively licensed. CLO, in its sole discretion, retains the right to determine the eligibility of a Qualified Academic Institution;

2.14.4. in the context of enterprise use, a single Legal Entity to which the Licensed Materials is exclusively licensed. For clarification, unless otherwise mutually agreed and executed by both parties, “Licensee” refers only to a single, specifically identified Legal Entity, and does not include any Affiliate of any such Legal Entity.

2.15. “Licensee Work Product” means any original work created by Licensee using or incorporating the Software, including any modifications, derivatives, or customizations. Ownership is subject to the terms of the Agreement. Licensee Work Product shall not include any pre-existing materials or intellectual property of CLO or any third party, or any elements of the Software that were not created or modified by Licensee.

2.16. "Modification" means any substantial and original change by Licensee (but only to the extent permitted by the intended functionality of the Software and/or Supplemental Materials) to the substance of a CLO Sample or any change to the substance of the contents of a file containing a CLO Sample; and/or any new file that contains any part of a CLO Sample; all of which ensures that the CLO Sample is not the primary source of value and all of which possess an own degree of independent creativity through the Licensee. Modifications may not be made to Restricted CLO Samples.

2.17. “Qualified Academic Institution” means an educational institution which has been accredited by an authorized governmental agency or other recognized accrediting body, and retains such accreditations throughout the applicable License Term. IF APPLICABLE, QUALIFIED ACADEMIC INSTITUTION MAY INCLUDE HOME-BASED EDUCATIONAL PROGRAMS OR ANY OTHER ONLINE PROGRAMS FORMALLY DESIGNED TO EDUCATE STUDENTS OUTSIDE OF AN INSTITUTION RECOGNIZED BY AN ACCREDITING BODY. FOR CLARITY, ANY OTHER ONLINE PROGRAMS PREVIOUSLY ADDRESSED DO NOT INCLUDE INFORMAL ONLINE COURSES WITHOUT A CURRICULUM, INCLUDING BUT NOT LIMITED TO YOUTUBE OR ANY OTHER STREAMING PLATFORMS. CLO IN ITS SOLE DISCRETION MAY DETERMINE WHETHER LICENSEE QUALIFIES AS A QUALIFIED ACADEMIC INSTITUTION.

2.18. “Third Party Software” means the copyrighted software of third parties that are used in the Software, the use of which is acknowledged and set forth in more detail at https://www.marvelousdesigner.com/terms/oss.

2.19. “Permitted Number” means a maximum number (e.g., number of Authorized Users, number of concurrent users, number of computers, sessions, etc.) specified in the License Details applicable to a license of the Licensed Materials and to the License Type associated with such license. For clarity, the Permitted Number of concurrent users that may access the Software under Enterprise Licenses or Academic Licenses, on Licensee’s behalf is equal to the number of licenses purchased by Licensee under this Agreement.

2.20. “Restricted CLO Samples” means CLO Avatars, non-modifiable dummies (and each of their elements), pre-designed clothing, trims and accessories (including, but not limited to, buttons, shoes, headwear, socks, and gloves) included in the Licensed Materials or made available by CLO via CLO-SET CONNECT (accessible at https://connect.clo-set.com/), and any other Licensed Materials specified as “Restricted Licensed Materials” (or similar verbiage).

2.21. “Services” means the various services provided by CLO, including but not limited to Marvelous Designer virtual clothing design service (https://www.marvelousdesigner.com/), online stores including CLO-SET CONNECT and MD Store

2.22. “Software” means the proprietary computer program distributed or made available by CLO specified in the License Details.

2.23. “Supplemental Materials” means materials, other than Software and related User Documentation that are distributed or made available by CLO for use with Software. Supplemental Materials include, without limitation, CLO Samples and Restricted CLO Samples.

2.24. “Updates” means, subject to the payment or continued payment of applicable Fees, any corrections, patches, maintenance, and/or replacement of a Software version with a new Software version as and when CLO deems such Update is necessary to correct errors, remove, add or improve functionalities, and/or add service packs. Unless otherwise specified by CLO, where CLO makes Updates available to Licensee, CLO’s obligations to support the previous version of the Software shall terminate in all respects following an Update thereto. Latest version available at https://www.marvelousdesigner.com/mypage/license.

2.25. “User Documentation” means the explanatory or instructional materials for Software or Supplemental Materials.

3. LICENSE CLASS, TERM, AND CONDITIONS

3.1. Non-Fee Based License. If the License Details specifies the License Class as Non-Fee Based License, Licensee receives access to the then-current version of the Software that CLO makes available on its website. All Non-Fee Based Licenses have a fixed term specified in the License Details. If no such term is specified, the term is thirty (30) days from the date the license is delivered to the Licensee.

All Non-Fee Based Licenses are subject to the following conditions: a) no individual person or Legal Entity may sign up for (or otherwise obtain) a Non-Fee Based License more than once, regardless of the version of the Software that was accessed under such Non-Fee Based License; b) all persons or Legal Entities are expressly limited to one Non-Fee Based License; c) once a Non-Fee Based License expires, it may not be extended or renewed (unless mutually agreed upon by the parties); and d) any access to, or use of, any aspect of Software or Services beyond the scope or expiration of any Non-Fee Based License will be on a paid basis - regardless of whether the Licensee utilize the same or another account for such access or use. Notwithstanding the foregoing, each Non-Fee Based Licenses shall be subject to its relevant trial purposes as stipulated below:

3.1.1. Personal Period License. Licensee qualified under Section 2.13.1. may install the specified Licensed Materials designated in the License Details on a monthly or annual basis. The relevant Fee for the subscription shall be waived for the initial fourteen (14) days of Licensee’s subscription (“Trial Period”) and only upon the expiration of the Trial Period shall Licensee be charged in accordance with ANNEX I. During the Trial Period, Licensee shall use the license solely for the Personal Trial Period Purpose. “Personal Trial Period Purpose” means purposes of evaluation and demonstration of the capabilities of the Licensed Materials but excludes competitive analysis and any commercial, professional, or other for-profit purposes. For clarity, Personal Trial Period Purpose further excludes, but not limited to, the distribution and dissemination of all or any portion of the Licensed Materials contained therein to any third parties (e.g., legal entities, Qualified Academic Institutions.)

3.1.2. Student Trial Period. Licensee qualified under Section 2.13.2. may install the specified Licensed Materials designated in the License Details on an annual basis. During the Trial Period, Licensee shall use the license solely for the Student Trial Period Purposes. “Student Trial Period Purpose” means purposes of initial evaluation and demonstration of the capabilities of the Licensed Materials but excludes competitive analysis and any commercial, professional, or other for-profit purposes. For clarity, Student Trial Period Purpose further excludes the distribution and dissemination of all or any portion of the Licensed Materials contained therein in any form, including but not limited to, tutoring, training, and/or educating third parties.

3.1.3. Academic Trial License. Licensee qualified under Section 2.13.3. may install the specified Licensed Materials designated in the License Details and permit access to such copy of the Licensed Materials solely by an Authorized User, solely for Academic Trial License Purposes. “Academic Trial License Purpose” means purposes of evaluation and demonstration of the capabilities of the Licensed Materials but excludes competitive analysis and any commercial, professional, or other for-profit purposes in the context of academic use by an Authorized User. For clarity, Academic Trial License Purpose further excludes using the Licensed Materials for long-term educational courses.

3.1.4. Enterprise Trial License. Licensee qualified under Section 2.13.4. may install the specified Licensed Materials designated in the License Details and permit access to such copy of the Licensed Materials solely by an Authorized User, solely for Enterprise Trial License Purposes. “Enterprise Trial License Purposes” means purposes of evaluation and demonstration of the capabilities of the Licensed Materials but excludes competitive analysis and any commercial, professional, or other for-profit purposes. For clarity, Enterprise Trial License Purposes does not include making available the Licensed Materials (or work product made through the Licensed Materials) to any third party, including but not limited to, studios and/or independent contractors.

Any violation of the spirit or letter of the Section herein - as determined in the sole discretion of CLO - shall be subject to technical and legal remedies including but not limited to immediate suspension or termination (without prior notice) of the Licensed Materials.

3.2. Fee Based License.

3.2.1. Personal License. Licensee qualified under Section 2.14.1 may install the specified Licensed Materials designated in the License Details solely for a Personal Purpose.

3.2.1.1. Personal Purpose. Under a Personal license, licensee may install the specified Licensed Materials subject to the License Type, and permit access to such Licensed Materials solely by a single authorized user (a natural, individual person), and solely for its personal use if Licensee is eligible for a Personal License under Section 2.14.1.1 or solely for Licensee’s Internal Business Needs if Licensee is eligible for a Personal License under Section 2.14.1.2.

3.2.1.2. Personal Licenses are offered on a Monthly Subscription basis but may be prepaid in twelve (12) month batches for a discount, as further described on our pricing page or see ANNEX(1).

3.2.1.3. For Licensee with Personal Perpetual Subscription see ANNEX I (3).

3.2.2. Student License. Licensee qualified under Section 2.14.2 may install the specified Licensed Materials designated in the License Details solely for a Student Purpose.

3.2.2.1. Student Purpose. Under a Student License, Licensee may install the specified Licensed Materials subject to the License Type, and permit access to such Licensed Materials solely by a single Authorized User (a natural, individual person), and solely for its Student Purposes. “Student Purposes” means purposes directly related to learning, training, research and development that are part of the educational program offered by a Qualified Academic Institution. Student Purposes do not include commercial, professional or any other for-profit purpose.

3.2.2.2. Student Licenses are offered on a limited basis, subject to be prepaid in twelve (12) month batches. For further specification see ANNEX I (1).

3.2.3. Academic License. Licensee qualified under Section 2.14.3 may install the specified Licensed Materials designated in the License Details solely for an Academic Purpose.

3.2.3.1. Academic Purpose. Under an Academic License, Licensee may install the specified Licensed Materials subject to the license type, and permit access to such Licensed Materials solely by an Authorized User, solely for Academic Purposes. “Academic Purposes” means purposes directly related to learning, teaching, training, research and development teaching that are part of the instructional functions performed by a Qualified Academic Institution. Academic Purposes do not include commercial, professional or any other for-profit purposes, other than those inherently involved in the Internal Business Needs of the Qualified Academic Institution. For clarity, Licensee who solely qualify for an Academic License cannot purchase Student Licenses. CLO retains the right to solely determine Licensee’s eligibility and take any action it deems appropriate to bring Licensee into compliance.

3.2.3.2. For Licensee with Academic Annual Subscription, see ANNEX I (2).

3.2.3.3. For Licensee with Academic Perpetual Subscription, see ANNEX I (3).

3.2.4. Enterprise License. Licensee qualified under Section 2.14.4 may install the specified Licensed Materials designated in the License Details solely for an Enterprise Purpose.

3.2.4.1. Enterprise Purpose. Under an Enterprise License, Licensee may install the specified Licensed Materials subject to the License Type, and permit access to such Licensed Materials solely by Authorized Users, and solely for its Internal Business Needs. For clarity, Licensees who solely qualify for an Enterprise License cannot purchase Personal Licenses. CLO retains the right to solely determine Licensee’s eligibility and take any action it deems appropriate to bring License into compliance.

3.2.4.2. For Licensee with Enterprise Annual Subscription. see ANNEX I (2).

3.2.4.3. For Licensee with Enterprise Perpetual Subscription, see ANNEX I (3).

3.3. License Grant. Subject to and conditioned on Licensee’s continuous compliance with this Agreement, CLO grants Licensee, for the limited duration of the applicable Subscription Term for which the applicable Fees have been paid: (A) a non-exclusive, non-sublicensable, non-transferable, personal, limited license to install and/or access the Licensed Materials, in each case solely (i) within the scope of the License Class, License Type and Permitted Number specified in the License Details, and (ii) in accordance with the other terms of this Agreement; and (B) to the extent any Modification contains any CLO Sample, a worldwide, royalty-free license in respect of such CLO Sample—unless the Modification contains any CLO Avatar, in which case Sections 5.4 shall apply.

3.4. Additional Terms. Any or all of the Licensed Materials may be subject to terms that are in addition to or different from the terms set forth in this Agreement. CLO will provide such additional or different terms to Licensee, and Licensee shall promptly (but no later than 10 days after being provided with such terms) provide its consent to such terms or specify reasons for their rejection. The Software uses or contains Third Party Software which are subject to their Agreement.

3.5. Other Materials. If CLO provides or makes available to Licensee any additional materials associated with the Licensed Materials, including Updates to the Licensed Materials or any Supplemental Materials or User Documentation, (a) if there are no other terms for such additional materials, they will be subject to the same terms as the Licensed Materials; or (b) such additional materials may include or be subject to other terms in addition to or different from the terms set forth in this Agreement (including, without limitation, additional or different fees, Agreement, or restrictions on use). CLO will provide such additional or different terms to Licensee, and Licensee shall promptly (but no later than ten (10) days after being provided with such terms) provide its consent to such terms or specify reasons for their rejection.

3.6. Cancellations and Refunds. Licensee retains the right to cancel purchased Monthly Subscription, Annual Subscription, or Perpetual Subscription at any time (“Cancellation”). Unless otherwise explicitly granted by CLO, all Cancellation shall be non-refundable. CLO reserves the sole right to amend and enforce its Cancellation policies. Fees for the relevant Subscription Term shall not be charged or invoiced for the subsequent Term once Cancellation takes place. Licensee further retains access to the Licensed Materials for the remaining Term of the relevant License Subscription period after its Cancellation. For clarity, precedence of Cancellations shall not restrict or prevent the Licensee to repurchase in the future.

4. LICENSE TYPE

4.1. Standalone. Under a Standalone license—also known as a “node-locked” license—the Licensed Materials must be installed on a single computer for non-concurrent use. Specifically, because a Standalone license is tied to both a single computer and a single USER ID; the license may not be accessed from any other computer at the same time or by more than one Authorized User at a time. STANDALONE ANNUAL SUBSCRIPTION ARE ONLY OFFERED UNDER THE ONLINE AUTHENTICATION METHOD, WHEREAS STANDALONE PERPETUALS (BEFORE SALES OF SUCH LICENSES WERE DISCONTINUED ON NOVEMBER 25, 2020) USED TO BE OFFERED UNDER BOTH THE ONLINE AUTHENTICATION METHOD AS WELL AS THE OFFLINE AUTHENTICATION METHOD.

4.1.1. Standalone Online Authentication. IN ORDER FOR AN AUTHORIZED USER TO LOG-IN AND ACCESS THE LICENSED MATERIALS UNDER A STANDALONE ONLINE AUTHENTICATION LICENSE, INTERNET CONNECTION WILL BE REQUIRED IN EACH INSTANCE TO AUTHENTICATE THE AUTHORIZED USER’S USER ID AND PASSWORD. IN ORDER TO ACCESS SUCH LICENSED MATERIALS ON A DIFFERENT COMPUTER, Licensee must contact CLO to submit a request that THE STANDALONE ONLINE AUTHENTICATION LICENSE IN QUESTION BE DEACTIVATED FROM THE PREVIOUS COMPUTER AND ACTIVATED ON THE NEW COMPUTER.

4.2. Network. Under a Network license—also known as a “floating license” model—Licensee may install copies of the Licensed Materials and access the Licensed Materials on a “Networked Basis,” subject to the additional terms and conditions specific to the various authentication methods set forth below in this section. “Networked Basis” means a computing environment that includes a computer acting as a file server which allows the Licensed Materials installed on such computer to be uploaded and installed to, and operated, viewed or otherwise accessed from, other computers through a local area network (LAN) connection or other network connection, subject to the Permitted Number of computers or Permitted Number of concurrent Authorized Users, as applicable.

4.2.1. Network Online Authentication. IN ORDER FOR AN AUTHORIZED USER TO ACCESS THE LICENSED MATERIALS UNDER A NETWORK ONLINE AUTHENTICATION LICENSE, INTERNET CONNECTION WILL BE REQUIRED TO LOG-IN IN EACH INSTANCE TO AUTHENTICATE THE AUTHORIZED USER’S USER ID AND PASSWORD. Under Network Online Authentication licenses, the designated Licensed Materials may be installed locally (RATHER THAN NON-LOCALLY ON COMPUTERS CONNECTED TO A NETWORK) on as many computers of Authorized Users as necessary for Licensee’s Internal Business Needs, subject to Section 2.8; provided that the Permitted Number of Authorized Users who may access or use the Licensed Materials concurrently at any one time shall not exceed the total number of non-expired licenses provided to Licensee under this Agreement.

4.2.2. Network Offline Authentication

4.2.2.1. Software-based License Key (“SL Key”). See ANNEX II.

4.2.2.2. Hardware-based License Key (“Dongles”). See ANNEX II.

5. LIMITATION AND EXCLUSIONS

5.1. Unauthorized Uses. In addition to such other Licensee obligations specified in this Agreement, Licensee shall not (a) distribute, rent, loan, lease, sell, sublicense, transfer or otherwise provide access to all or any portion of the Licensed Materials to any person or Legal Entity except as expressly set forth in this Agreement or as expressly authorized in writing by CLO; (b) remove, alter or obscure any proprietary notices, labels or marks in the Licensed Materials; (c) decompile, disassemble or otherwise reverse engineer the Licensed Materials; (d) translate, adapt, arrange, or create derivative works based on, or otherwise extract from or modify the Licensed Materials for any purpose, provided however Licensee may make Modifications to CLO Samples where such modifications are permitted by the intended functionality of the Licensed Materials; (e) permit the Licensed Materials to be used on a service bureau, time sharing basis or otherwise; (f) distribute CLO Samples as Licensee’s work product without substantial and original material Modifications, which were independently created by the Licensee and possess its own degree of creativity through the Licensee; (g) distribute Restricted CLO Samples; or (h) otherwise use the Licensed Material for any purpose other than the intended use and functionality of the Licensed Material.

5.2. Effect of Unauthorized Use. Licensee will not engage in, and will not permit or assist any third party to engage in any of the uses or activities prohibited in or inconsistent with this Agreement (collectively, “Unauthorized Uses”). Any such Unauthorized Use, and any installation of or access to the Licensed Materials provided under this Agreement outside of the scope of the applicable license grants or otherwise not in accordance with this Agreement, constitute a breach of this Agreement. Licensee shall notify CLO promptly of any such known or suspected Unauthorized Uses or other unauthorized installation or access.

5.3. Circumvention. Licensee may not (i) utilize any equipment, device, software, or other means to (or designed to) circumvent or remove any form of technical protection used by CLO in connection with the Licensed Materials, or (ii) install or access the Licensed Materials with any product code, authorization code, serial number, or other copy-protection device not supplied by CLO. Without limitation of the generality of the foregoing, Licensee may not utilize any equipment, device, software, or other means to circumvent or remove any protection measure provided or made available by CLO for managing, monitoring or controlling installation of or access to the Licensed Materials. CLO will have no responsibility or liability whatsoever if Licensee combines or links Licensee work product or other data created with Licensed Materials with work product or other data otherwise created. In addition, Licensee will not remove, alter or obscure any such notices or limitations.

5.4. CLO`s Default Avatars.

5.4.1. Licensee shall not distribute, sell, monetize, publish, post, or otherwise disseminate any CLO Avatar (a) onto any e-commerce website or (b) as part of any advertising, marketing, or promotional media (collectively, "Disseminate"):

5.4.1.1. without the prior written consent of CLO and upon the payment of a royalty fee to CLO (in the amount of $3,000 per avatar); or

5.4.1.2. unless proper attribution is given to CLO in each instance in which an avatar is so Disseminated, pursuant to the specifications CLO provided.

5.4.2. Sample Distributions. For clarity, Licensee shall have the right to use CLO Avatars in conjunction with Modifications to send as samples to suppliers, customers, factories, and Affiliates (collectively, “Sample Distribution”) without having to comply with Section 3.4.1 provided that:

5.4.2.1. such suppliers, customers, factories, or Affiliates and their respective personnel do not gain access to any other component of the Licensed Materials by virtue of such Sample Distributions (unless such suppliers, customers, factories, or Affiliates have purchased or received from CLO their own licenses to the Licensed Materials); and

5.4.2.2. proper attribution is given to CLO in each instance of such Sample Distribution pursuant to the specifications CLO provided.

6. ALL RIGHTS RESERVED

CLO and its licensors retain title to and ownership of, and all other rights with respect to, the Licensed Materials and all copies thereof, including, without limitation, any related copyrights, trademarks, trade secrets, patents, and other intellectual property rights. Licensee has only the limited licenses granted with respect to the Licensed Materials expressly set forth in this Agreement, and Licensee has no other rights, implied or otherwise. Licensee acknowledges and agrees that the Licensed Materials are licensed, not sold, and that rights to install and/or access the Licensed Materials are acquired only under the license from CLO. Any updates to the Services or Software are also governed by this Agreement.

7. PRIVACY AND USE OF INFORMATION, CONNECTIVITY AND ACTIVATION

7.1. Privacy and Use of Information; Connectivity. For Network Online Authentication licenses, Licensee acknowledges and agrees that when the Licensed Material is installed by Licensee and connected to the Internet, CLO (and/or third parties acting on behalf of CLO) may automatically collect certain information and data of Licensee, including USER IDs, encrypted passwords, the specifications of hardware utilized by Authorized Users to access the Licensed Materials (HWIDs), and IP addresses (“Licensee Data”). The Licensee Data is used solely for purposes of user registration, activation, providing update notifications and update options, updating, validating, monitoring, installation, providing technical support, and such other purposes reasonably necessary to monitor, maintain and provide the Software. Licensee hereby consents to (i) CLO (and/or third parties acting on behalf of CLO) monitoring, maintaining, using, storing and disclosing such Licensee Data within the scope of and solely as permitted under this Agreement, including the storage of Licensee Data in data centers hosted by third party providers; and that (ii) certain aspects of the Licensed Materials require Licensee’s access to and use of content and services that are hosted on websites maintained by CLO. Accessing such content or services and use of Licensed Materials will cause Licensee’s computer, without additional notice, to connect automatically to the Internet and to communicate with CLO.

7.2. Activation and Security. Installation of and access to the Licensed Materials require, and the continued use thereof may from time to time require, remote authentication by CLO or activation codes issued by CLO. LICENSEE ACKNOWLEDGES AND AGREES THAT INSTALLATION OF AND/OR ACCESS TO LICENSED MATERIALS MAY BE DISABLED BY CLO PROTECTION MECHANISMS IF LICENSEE TRIES TO TRANSFER ALL OR A PART OF THE LICENSED MATERIALS TO ANOTHER COMPUTER, IF LICENSEE TAMPERS WITH THE TECHNICAL PROTECTION MECHANISMS OR DATE-SETTING MECHANISMS ON A COMPUTER OR IN THE LICENSED MATERIALS, IF LICENSEE USES THE LICENSED MATERIALS PAST THE APPLICABLE LICENSE TERM, OR IF LICENSEE UNDERTAKES CERTAIN OTHER ACTIONS THAT AFFECT THE SECURITY OR UNDER OTHER CIRCUMSTANCES AND THAT, IN ANY SUCH EVENT, LICENSEE’S ACCESS TO LICENSEE’S WORK PRODUCT AND OTHER DATA MAY BE AFFECTED.

8. LIMITED WARRANTY AND DISCLAIMERS

8.1. Limited Warranty. CLO warrants that, as of the date on which the Licensed Materials (and hardware media, if any, on which such Licensed Materials are contained) are delivered to Licensee and for thirty (30) days thereafter or if the License Term is shorter, such shorter period (“Warranty Period”), the Licensed Materials will provide the features and functions described in the User Documentation portion of the Licensed Materials. CLO’s entire liability and Licensee’s exclusive remedy during the Warranty Period (“Limited Warranty”) will be, with the exception of any statutory warranty or remedy that cannot be excluded or limited under law, at CLO’s option, (i) to attempt to correct or work around errors, if any, or (ii) to refund the Annual Subscription Fee paid by Licensee and terminate this Agreement or the license specific to such Licensed Materials. Such refund is subject to the return of the Licensed Materials to CLO. THE LIMITED WARRANTY SET FORTH IN THIS SECTION GIVES LICENSEE SPECIFIC LEGAL RIGHTS. LICENSEE MAY HAVE ADDITIONAL LEGAL RIGHTS UNDER LAW WHICH VARY FROM JURISDICTION TO JURISDICTION. CLO DOES NOT SEEK TO LIMIT LICENSEE’S WARRANTY RIGHTS TO ANY EXTENT NOT PERMITTED BY LAW. FOR THE AVOIDANCE OF DOUBT, CLO MAKES THE LIMITED WARRANTY SET FORTH IN THIS SECTION ONLY FOR THE LICENSED MATERIALS THAT ARE PURCHASED OR ACQUIRED THROUGH LEGAL AND VALID PROCESS AS REQUIRED IN THIS AGREEMENT.

8.2. Disclaimer.

8.2.1. EQUIPMENT. THE LICENSEE ACKNOWLEDGES THAT IN ORDER TO ACCESS THE LICENSED MATERIALS, THE LICENSEE MUST PROVIDE ALL EQUIPMENT AND SOFTWARE NECESSARY, INCLUDING BUT NOT LIMITED TO, A COMPUTER, INTERNET ACCESS, AND/OR DATA FEES. CLO SHALL NOT BE RESPONSIBLE FOR ANY FEES OR CHARGES INCURRED BY THE LICENSEE IN CONNECTION WITH ACCESSING THE SERVICES, INCLUDING BUT NOT LIMITED TO, INTERNET FEES, DATA FEES, OR ANY OTHER THIRD PARTY FEES. THE LICENSEE AGREES TO ASSUME FULL RESPONSIBILITY FOR ALL SUCH FEES AND CHARGES.

8.2.2. EXCEPT FOR THE EXPRESS LIMITED WARRANTY PROVIDED IN SECTION 8.1, AND TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, CLO, ITS AFFILIATES, LICENSORS AND THIRD PARTY PROVIDERS, OR THEIR RESPECTIVE DIRECTORS, OFFICERSA, EMPLOYEES OR AGENTS (COLLECTIVELY “CLO PARTIES”), MAKE, AND LICENSEE RECEIVES, NO WARRANTIES, REPRESENTATIONS, OR CONDITIONS OF ANY KIND, EXPRESS OR IMPLIED (INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT, OR WARRANTIES OTHERWISE IMPLIED BY STATUTE OR FROM A COURSE OF DEALING OR USAGE OF TRADE) WITH RESPECT TO ANY LICENSED MATERIALS.

8.2.3. LICENSEE EXPRESSLY AGREE THAT ITS USE OF, OR INABILITY TO USE, THE LICENSED MATERIALS IS AT ITS SOLE RISK. CLO WILL HAVE NO LIABILITY WHATSOEVER AS A RESULT OF LOSS OR DAMAGE TO CONTENT, OR FAILURE TO STORE OR ENCRYPT CONTENT. THE LICENSED MATERIALS AND ANY CONTENT APPEARING ON THE SERVICES, INCLUDING USER CONTENT, AND LICENSED MATERIALS, ARE PROVIDED ON AN "AS IS" AND "AS AVAILABLE" BASIS. WITHOUT LIMITING THE FOREGOING, TO THE FULLEST EXTENT PERMITTED BY LAW, CLO PARTIES MAKES NO REPRESENTATIONS, WARRANTIES, CONDITIONS OR OTHER TERMS OF ANY KIND, EITHER EXPRESS OR IMPLIED, ABOUT THE SERVICES OR LICENSED MATERIALS. CLO DISCLAIMS ANY WARRANTIES OF TITLE OR IMPLIED WARRANTIES, CONDITIONS OR OTHER TERMS OF NON-INFRINGEMENT, MERCHANTABILITY, QUIET ENJOYMENT OR FITNESS FOR A PARTICULAR PURPOSE, OTHER THAN THOSE WARRANTIES WHICH ARE INCAPABLE OF EXCLUSION, RESTRICTION OR MODIFICATION UNDER THE LAWS APPLICABLE TO THIS AGREEMENT.

8.2.4. EXCEPT AS SPECIFIED IN SECTION 8.1, ANY STATEMENTS OR REPRESENTATIONS ABOUT THE LICENSED MATERIALS AND THEIR FEATURES OR FUNCTIONALITY IN THE LICENSED MATERIALS OR ANY COMMUNICATION WITH LICENSEE ARE FOR INFORMATION PURPOSES ONLY, AND DO NOT CONSTITUTE A WARRANTY, REPRESENTATION, OR CONDITION. WITHOUT LIMITING THE FOREGOING, CLO DOES NOT WARRANT: (a) THAT THE OPERATION OR OUTPUT OF THE LICENSED MATERIALS WILL BE UNINTERRUPTED, ERROR-FREE, SECURE, ACCURATE, RELIABLE, OR COMPLETE; (b) THAT ERRORS WILL BE CORRECTED BY CLO OR ANY THIRD PARTY; OR (c) THAT CLO OR ANY THIRD PARTY WILL RESOLVE ANY PARTICULAR SUPPORT REQUEST OR THAT SUCH RESOLUTION WILL MEET LICENSEE’S REQUIREMENTS OR EXPECTATIONS. NOTHING IN THE FOREGOING RESTRICTS THE EFFECT OF WARRANTIES OR CONDITIONS WHICH MAY BE IMPLIED BY LAW WHICH CANNOT BE EXCLUDED, RESTRICTED OR MODIFIED NOTWITHSTANDING A CONTRACTUAL RESTRICTION TO THE CONTRARY.

8.2.5. THE SOFTWARE MAY BE SUBJECT TO OTHER LIMITATIONS, DISCLAIMERS OR WARRANTIES SET FORTH IN AN APPLICABLE EULA. IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF SUCH EULA AND THIS AGREEMENT, THE EULA SHALL CONTROL WITH RESPECT TO SUCH SOFTWARE ONLY. SUCH SOFTWARE IS WARRANTED, IF AT ALL, ONLY ACCORDING TO THE TERMS OF THE APPLICABLE EULA.

9. LIMITATION OF LIABILITY

9.1. Limitation on Type and Amount of Liability.

9.1.1. IN THE CONTEXT OF LICENSEE DEFINED UNDER SECTION 2.14.1 AND 2.14.2, IN NO EVENT WILL CLO PARTIES BE LIABLE FOR ANY INDIRECT, SPECIAL, PUNITIVE, INCIDENTAL, OR CONSEQUENTIAL DAMAGES HOWEVER CAUSED, AND UNDER ANY THEORY OF LIABILITY EVEN IF CLO WAS PREVIOUSLY ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN THE EVENT ANY CLAIM RELATING TO THE PERFORMANCE OR NON-PERFORMANCE BY CLO PURSUANT TO THIS AGREEMENT, OR IN ANY OTHER WAY CONCERNING THE LICENSED MATERIALS, THE ACTUAL DAMAGES TO WHICH LICENSEE MAY BE ENTITLED SHALL BE LIMITED TO THE FEES, IF ANY, PAID BY THE LICENSEE FOR THE USE OF THE LICENSED MATERIALS IN THE 180 DAY PERIOD PRECEDING LICENSEE’S CLAIM AND IF LICENSEE HAS NOT PAID ANY AMOUNTS DURING THAT TIME PERIOD, LICENSEE ACKNOWLEDGES THAT ITS SOLE REMEDY SHALL BE TO CEASE USING THE LICENSED MATERIALS AND TERMINATE ITS ACCOUNT. FOR CLARITY, IF LICENSEE IS A CALIFORNIA RESIDENT, LICENSEE WAIVE CALIFORNIA CIVIL CODE §1542, WHICH SAYS: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

9.1.2. IN THE CONTEXT OF LICENSEE DEFINED UNDER SECTION 2.14.3 AND 2.14.4, IN NO EVENT WILL CLO PARTIES HAVE ANY LIABILITY (DIRECTLY OR INDIRECTLY) FOR ANY INCIDENTAL, SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES (INCLUDING BUT NOT LIMITED TO LOSS OF PROFITS, USE, REVENUE, DATA OR BUSINESS OPPORTUNITY; OR FOR BUSINESS INTERRUPTION) REGARDLESS OF THE LEGAL THEORY FOR SEEKING SUCH DAMAGES OR OTHER LIABILITY. IN ADDITION, THE CUMULATIVE LIABILITIES OF CLO AND ITS SUPPLIERS ARISING OUT OF OR RELATING TO ANY LICENSED MATERIALS OR SERVICES WILL NOT EXCEED THE TOTAL AMOUNT PAID BY LICENSEE FOR SUCH LICENSED MATERIALS.

9.2. Application of and Basis for Limitations.

9.2.1. THE LIMITATIONS OF LIABILITY IN THIS SECTION WILL APPLY TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW TO ANY DAMAGES OR OTHER LIABILITY ARISING OUT OF OR RELATING TO THIS AGREEMENT, HOWEVER CAUSED AND REGARDLESS OF THE THEORY OF LIABILITY, WHETHER DERIVED FROM CONTRACT, TORT (INCLUDING, WITHOUT LIMITATION, NEGLIGENCE) OR OTHERWISE, EVEN IF CLO HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LIABILITY AND REGARDLESS OF WHETHER THE LIMITED REMEDIES AVAILABLE HEREUNDER FAIL OF ITS ESSENTIAL PURPOSE.

9.2.2. CLO PARTIES DO NOT ENDORSE AND ARE NOT RESPONSIBLE FOR THE ACCURACY OR RELIABILITY OF ANY OPINION, ADVICE OR STATEMENT, NOR FOR ANY OFFENSIVE, DEFAMATORY, OBSCENE OR ILLEGAL POSTING OR CONDUCT, ON THE SERVICES, INCLUDING, WITHOUT LIMITATION, BY ANYONE OTHER THAN AUTHORIZED CLO EMPLOYEES WHILE ACTING IN THEIR OFFICIAL CAPACITIES.

9.3. Third-Party Merchants & Providers. THE SERVICES MAY ENABLE LICENSEE TO ORDER AND RECEIVE PRODUCTS, INFORMATION AND SERVICES FROM THIRD PARTIES THAT ARE NOT OWNED OR OPERATED BY CLO. THE PURCHASE, PAYMENT, WARRANTY, GUARANTEE, DELIVERY, MAINTENANCE, AND ALL OTHER MATTERS CONCERNING THE MERCHANDISE, SERVICES OR INFORMATION, OPINION OR ADVICE ORDERED OR RECEIVED FROM SUCH BUSINESSES ARE SOLELY BETWEEN LICENSEE AND SUCH THIRD PARTIES. CLO DOES NOT ENDORSE, WARRANT, OR GUARANTEE SUCH PRODUCTS, INFORMATION, OR SERVICES, AND ARE NOT LIABLE FOR THE ACCURACY, COMPLETENESS, OR USEFULNESS OF SUCH INFORMATION OR THE QUALITY OF AVAILABILITY OF SUCH PRODUCTS OR SERVICES. CLO WILL NOT BE A PARTY TO OR IN ANY WAY BE RESPONSIBLE FOR MONITORING ANY TRANSACTION BETWEEN LICENSEE AND THIRD-PARTY PROVIDERS OF SUCH PRODUCTS, SERVICES, OR INFORMATION, OR FOR ENSURING THE CONFIDENTIALITY OF LICENSEE’S CREDIT CARD INFORMATION. ANY SEPARATE CHARGES OR OBLIGATIONS LICENSEE INCURS IN ITS DEALINGS WITH THESE THIRD PARTIES ARE ITS RESPONSIBILITY AND ARE NOT PART OF THE FEE, IF ANY, CHARGED FOR THE SERVICES. IN ADDITION, THE SERVICES MAY PROMPT LICENSEE TO ESTABLISH AN ACCOUNT WITH A THIRD PARTY NOT OWNED OR OPERATED BY CLO. THE AGREEMENT AND UNDERSTANDING WITH ANY SUCH THIRD PARTY IS SOLELY BETWEEN LICENSEE AND SUCH THIRD PARTY. CLO WILL NOT BE A PARTY TO OR IN ANY WAY RESPONSIBLE FOR SUCH AGREEMENT WITH A THIRD-PARTY. ANY DISPUTES LICENSEE MAY ENCOUNTER WITH SUCH THIRD PARTIES SHALL BE SETTLED SOLELY BETWEEN LICENSEE AND SUCH THIRD PARTY.

10. TERM AND TERMINATION

10.1. Term. This Agreement shall be effective from the Effective Date and shall act in accordance with the License Term.

10.1.1. License Term. Each license under this Agreement, with respect to each specified set of Licensed Materials covered by this Agreement, will become effective as of the latest to occur of (i) upon delivery of the specific Licensed Materials if the license in question is purchased pursuant to License Details executed by the parties, or (b) the starting date of License Term specified in the License Details.

10.1.2. With respect to any Licenses purchased by Licensee under this Agreement, CLO’s corresponding obligations to Licensee under this Agreement during the applicable Term are conditioned upon Licensee’s payment of the applicable Fee for that Term, as set forth in the Invoice.

10.2. Termination or Suspension. Each of CLO or Licensee may terminate this Agreement and Licensee’s license as to Licensed Materials if the other party is in breach of this Agreement and fails to cure such breach within twenty (20) days after written notice of the breach; however, if Licensee is in breach of Section 3 or Section 5, CLO may terminate this Agreement and Licensee’s license to Licensed Materials immediately, without prior or further notice to Licensee. In addition, CLO may, as an alternative to termination, suspend Licensee’s license to the Licensed Materials and/or other CLO obligations or Licensee rights under this Agreement, if Licensee fails to pay the applicable Fees to CLO or otherwise fails to comply with the provisions of this Agreement or other terms relating to any such license or other associated materials. CLO may also terminate this Agreement if Licensee becomes subject to bankruptcy proceedings, becomes insolvent, or makes an arrangement with Licensee’s creditors. This Agreement will terminate automatically without further notice or action by CLO if Licensee goes into liquidation. Each CLO or Licensee may terminate this Agreement for convenience, upon sixty (60) days prior written notice; provided that the Agreement shall not terminate until all then-active Subscription Terms of all prepaid Annual Subscription issued hereunder expire.

10.3. Effect of Termination of Agreement or License. Upon termination or expiration of this Agreement, the licenses granted hereunder will terminate and Licensee will not be able to access or retrieve any content associated with the account. Any Annual Subscription not so renewed expires at the end of the applicable License Term. Upon termination or expiration of any license granted to Licensee: (a) Licensee must cease all use of the Licensed Materials to which such license applies and uninstall all copies of the Licensed Materials; (b) at CLO’s request, Licensee agrees to destroy or return to CLO all the Licensed Materials; and (c) CLO reserves the right to require Licensee to show satisfactory proof that all copies of the Licensed Materials have been uninstalled and, if so requested by CLO, destroyed or returned to CLO.

10.4. Survival. Sections 2, 4, 5, 6, 7, 8, 9, 10 and 11 will survive any termination or expiration of this Agreement.

11. CONFIDENTIALITY

11.1. Confidentiality. In the course of performance of this Agreement and/or as part of discussions leading up to this Agreement, one party and/or its Affiliate (the “Disclosing Party”) may disclose or may have already disclosed to the other party (and/or its Affiliate), or received or will receive from the other party (and/or its Affiliate) (the “Receiving Party”) information relating to the subject matter of this Agreement and the Disclosing Party’s business (including, without limitation, pricing information, information related to MD’s software), which information shall be considered to be the Disclosing Party`s "Confidential Information" - whether disclosed or received, directly or indirectly, before or after the Effective Date, in oral, written, or any other format or media whatsoever. The Receiving Party agrees that it will take and apply the same steps and protection levels to protect the confidentiality of the Disclosing Party’s Confidential Information as it takes to protect its own proprietary and confidential information. The Receiving Party shall protect and keep confidential and shall not use, publish or otherwise disclose to any third party, except as contemplated by this Agreement or with the Disclosing Party’s prior written consent, the Disclosing Party`s Confidential Information during and after the term of this Agreement. Notwithstanding the foregoing, Licensee agrees and acknowledges that CLO may share Licensee’s Confidential Information to third party contractors for the exclusive purpose of providing services to Licensee in relation to this Agreement; provided that CLO shall remain fully liable for acts and omissions of any such contractor in breach of this Agreement. For purposes of this Agreement, Confidential Information shall not include such information that:

(a) was known to the Receiving Party at the time of disclosure of it to the Receiving Party by the Disclosing Party hereunder; or

(b) was generally available to the public or was otherwise part of the public domain at the time of disclosure or became generally available to the public or otherwise part of the public domain after disclosure other than through any act or omission of the Receiving Party in breach of this Agreement; or

(c) became known to the Receiving Party after disclosure from a source that had a lawful right to disclose such information to others; or

(d) was independently developed by the Receiving Party where such independent development can be established by written documentation.

11.2. Permitted Disclosure. Notwithstanding the foregoing, the Receiving Party may disclose Confidential Information of the Disclosing Party and/or the terms and conditions of this Agreement pursuant to a subpoena or other court process only (i) after having given the Disclosing Party prompt notice of the Receiving Party`s receipt of such subpoena or other process and (ii) after the Receiving Party has given the Disclosing Party a reasonable opportunity to oppose such subpoena or other process or to obtain a protective order. Confidential Information of the Disclosing Party in the custody or control of the Receiving Party shall be promptly returned or destroyed upon the earlier of (i) the Disclosing Party`s written request or (ii) termination of this Agreement.

12. GENERAL PROVISIONS

12.1. Publicity. Each party may use the other party’s Brand Mark in connection with this Agreement only as permitted in the Agreement. Licensee may state publicly that it is a CLO customer and display CLO’s Brand Mark in accordance with this Agreement. CLO may (a) state that Licensee is a CLO customer and (b) include Licensee’s name or Brand Mark in a list of CLO customers or users on the CLO website and other marketing or promotional materials. Any use of a party’s Brand Mark will inure to the benefit of the party holding proprietary rights to that Brand Mark. A party may revoke the other party’s right to use its Brand Mark with written notice to the other party and a reasonable period to stop the use. Notwithstanding the foregoing, neither party may disclose the specific terms of this Agreement or issue a public statement or press release regarding this Agreement without the prior written consent of the other party.

12.2. Notices. Notices in connection with this Agreement by either party will be in writing and will be sent by electronic mail to the email address set forth on the Signature Page hereto. Notices will be effective one (1) business day after written confirmation via an email from the Receiving Party of its receipt of such notice; except that, if the sender of the initial email notice has not received such written confirmation of receipt from the Receiving Party within three (3) business days of the initial email notice being sent, the sender can resend such notice by other means, and as soon as the notice is resent, the effective date of the notice will be deemed to be the date on which the initial email notice was sent. In each case, the notice must specifically reference that the notice is given under this Agreement.

12.3. Legal Notices. Licensee hereby consents to service of process being effected on Licensee by email sent to the address provided by Licensee to CLO if so permitted by applicable law.

12.4. Indemnification.

12.4.1. Licensee will defend, indemnify and hold harmless CLO, its Affiliates and their respective officers, directors, agents and employees (the “CLO Indemnified Parties”) from and against any and all claims, actions, liabilities, damages, losses, costs and expenses, including reasonable attorneys’ fees and costs (each a “Claim”), arising from, asserted to, arise from, or related in any way to:

(a). breach or alleged breach of confidentiality or of its obligations under Section 11;

(b). violation (including any alleged violations) of applicable anti-corruption laws;

(c). damages to real or tangible personal property and/or bodily injury or death to any person arising out of or in connection with this Agreement except to the extent that such damages, injury or death were caused by the gross negligence or willful misconduct of the CLO Indemnified Parties;

(d). any proceeding brought against any CLO Indemnified Party for any violation of legally protected rights of any third parties, including but not limited to, patents, copyright, trade secret, unfair competition, or any and all other Claims arising out of the use by CLO and/or any other information furnished by or created by Licensee in connection to this Agreement; and/or

(e). breach of its Unauthorized Uses obligations under Section 5.

12.5. Equitable Remedies. Licensee acknowledges that the rights granted and obligations made under these Terms are unique and irreplaceable, and that any breach or anticipatory breach by Licensee will cause irreparable harm to CLO, which cannot be fully compensated by monetary damages alone. As such, CLO shall be entitled to seek injunctive or other equitable relief without the obligation of posting a bond or proving actual damages. By agreeing to these Terms, Licensee irrevocably waives its right to seek injunctive or other equitable relief, or to enjoin or restrain the operation of the Services, the use of any advertising or other materials issued in connection with the Services, or the exploitation of any content or material used or displayed through the Services. Licensee agrees that its sole remedy for any breach of these Terms shall be limited to monetary damages, to the extent permitted by law and these Terms.

12.6. Governing Law and Jurisdiction.

12.6.1. IN THE CONTEXT OF LICENSEE DEFINED UNDER SECTION 2.14.1 AND 2.14.2, any claim or cause of action arising out of or related to use of the Services or these Terms must be filed within one (1) year after such claim or cause or action arose regardless of any statutes or law to the contrary. In the event any such claim or cause of action is not filed within such a one (1) year period, such claim or cause of action are forever barred.

12.6.2. For any claim (excluding claims for injunctive or other equitable relief) where the total amount of the award sought is less than $10,000, the party requesting relief shall resolve the dispute in a cost effective manner through binding non-appearance-based arbitration. The party requesting relief shall initiate such arbitration through an established alternative dispute resolution ("ADR") provider mutually agreed upon by the parties. The ADR provider and the parties must comply with the following rules: (a) the arbitration shall be conducted by telephone, online and/or be solely based on written submissions, and the specific manner shall be chosen by the party initiating the arbitration; (b) all aspects of the arbitration shall be conducted in the English language; (c) the arbitration shall not involve any personal appearance by the parties or witnesses unless otherwise mutually agreed by the parties; and (d) any judgment on the award rendered by the arbitrator shall be final and may be entered in any court of competent jurisdiction.

12.6.3. All claims Licensee brings against CLO must be resolved in accordance with this Section. All claims filed or brought contrary to this Section shall be considered improperly filed. Should Licensee file a claim contrary to this Section, CLO shall be entitled to recover attorneys` fees and costs up to $2,000, provided that CLO has notified Licensee in writing of the improperly filed claim, and Licensee has failed to promptly withdraw the claim.

12.6.4. IN THE CONTEXT OF LICENSEE DEFINED UNDER SECTION 2.14.1 AND 2.14.2, in the event of any dispute, controversy, claim, question or disagreement (a “Claim”) arising out of or related to this Agreement or the breach thereof, any issue that arises under this Agreement, prior to taking any other dispute resolution measure, the parties agree to attempt to resolve the dispute amicably and informally to help get the parties to a resolution and control costs for both parties. The parties agree to make a good-faith effort to negotiate any dispute between the parties for at least thirty (30) calendar days (“Informal Resolution”). If the parties fail to resolve such Claim amicably, any Claim arising out of or related to this Agreement shall be subject to the exclusive governing law, jurisdiction and venue of the state of New York County, New York and the federal courts located in the Southern District of New York, without recourse to the principles of conflicts of laws. The United Nations Convention on Contracts for the International Sale of Goods (CISG) and the Uniform Computer Information Transactions Act (UCITA) shall not apply to this Agreement. Notwithstanding the foregoing, nothing in the foregoing will prevent CLO from bringing an action for infringement of intellectual property rights in any country where such infringement is alleged to occur.

12.7. No Assignment. Licensee may not assign this Agreement or any rights or obligations hereunder without CLO`s prior written consent, which may be withheld in CLO`s sole and absolute discretion. Any unauthorized assignment by Licensee will be void.

12.8. CLO and Affiliates. For the purposes of this paragraph, “Affiliate” means any entity that directly or indirectly controls, is controlled by, or is under common control with CLO. Licensee acknowledges and agrees that CLO may arrange to have its Affiliates engage in activities in connection with this Agreement, provided that CLO (and not such Affiliates) will remain subject to the obligations under this Agreement. Licensee acknowledges and agrees that CLO may assign or subcontract any of its rights or obligations under this Agreement.

12.9. Changes to Terms and Services. Licensee acknowledges that CLO has been, is, and will be constantly making changes to the Services. These changes include modifications to features, functions or abilities of any element of the Services. All descriptions, images, references, features, content, specifications, products and prices of products and services described or depicted on the Services, are subject to change (including availability) at any time without notice. CLO reserves the right to modify, amend, update, or change the terms of this Agreement and its Services, in whole or in part, at any time and without prior notice to the Licensee. The Licensee agrees that it is its responsibility to review the Agreement periodically to be aware of any changes and/or updates. CLO will notify the Licensee of any changes to this Agreement via email, in-Service notice, or any other means of communication. Continued use of the Services after any changes shall constitute acceptance of such changes. CLO further reserves the right to modify or discontinue any aspect or feature of the Service, with or without notice to the Licensee. CLO reserves the right to modify pricing or institute new charges for access to or use of the Services at any time, provided that notice is given to Licensee no less than thirty (30) days in advance. Licensee is responsible for regularly reviewing pricing information provided by CLO. Licensee’s continued use of the Services or failure to terminate its account within the thirty (30) day notice period shall be deemed an acceptance of the modified pricing terms.

12.10. Open Source Software and Other Software. The Software may include Third Party Software, including open source software, that is subject to separate license terms and notices. Licensee acknowledges and agrees that all Third Party Software and related intellectual property rights are owned by its respective licensors and remain subject to their own license terms and conditions. Licensee’s use of any Third Party Software is subject to both these Terms and any applicable third-party license terms and restrictions, including any end user license agreement. Notwithstanding any conflicting terms in Third Party Software licenses, the warranty disclaimer and liability limitation provisions in these Terms shall also apply to such Third Party Software. Certain components of the Software and Third Party Software may be made available as Open-Source Components, subject to separate end user license agreements. Nothing in these Terms shall limit Licensee’s rights under or grant Licensee rights that supersede the terms and conditions of any applicable open source license for such components. For further specification see https://www.marvelousdesigner.com/terms/oss

12.11. Severability. If and to the extent any provision of this Agreement is held illegal, invalid, or unenforceable in whole or in part under applicable law, such provision or such portion thereof will be ineffective as to the jurisdiction in which it is illegal, invalid, or unenforceable to the extent of its illegality, invalidity, or unenforceability and will be deemed modified to the extent necessary to conform to applicable law so as to give the maximum effect to the intent of the parties. The illegality, invalidity, or unenforceability of such provision in that jurisdiction will not in any way affect the legality, validity, or enforceability of such provision or any other provision of this Agreement in any other jurisdiction.

12.12. No Waiver. No term or provision of this Agreement will be considered waived, and no breach excused, unless such waiver is in writing signed on behalf of the party against which the waiver is asserted. No waiver (whether express or implied) will constitute consent to, waiver of, or excuse of any other, different, or subsequent breach. For clarity, CLO’s failure to exercise or enforce any right or provisions of this Agreement shall not operate as a waiver of such right or provision. The section titles in this Agreement are for convenience only and have no legal or contractual effect.

12.13. Audits. Licensee agrees that CLO has the right to require an audit (electronic or otherwise) of the Licensed Materials and the installation thereof and access thereto. As part of any such audit, CLO or its authorized representative will have the right, on at least ten (10) days’ prior notice to Licensee, to inspect Licensee’s records, systems and facilities to verify that the use of any and all of the Licensed Materials is in conformance with this Agreement. Licensee will provide full cooperation to enable any such audit. If CLO determines that Licensee’s use is not in conformity with the Agreement, Licensee will obtain immediately and pay for valid license(s) to bring Licensee’s use into compliance with this Agreement and other applicable terms and pay the reasonable costs of the audit. In addition to such payment rights, CLO reserves the right to seek any other remedies available at law or in equity, whether under this Agreement or otherwise.

12.14. Language. The English language version of this Agreement is legally binding in case of any inconsistencies between the English version and any translations.

12.15. Force Majeure. CLO will not be liable for any loss, damage or penalty resulting from delays or failures in performance resulting from acts of God, supplier delays, strikes, work stoppages, computer failure or power blackouts or malfunction of utility or data loss and any such circumstances beyond its reasonable control which cause interruption, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes, epidemics, pandemics and other causes beyond CLO’s reasonable control.

12.16. Export Control. Licensee acknowledges and agrees that the Licensed Materials are subject to compliance with United States and other applicable country export control and trade sanctions laws, rules and regulations (collectively, “Export Control Laws”). Licensee understands that the requirements and restrictions of the Export Control Laws as applicable to Licensee may vary depending on the Licensed Materials provided under this Agreement and may change over time. Licensee shall be solely responsible for (i) determining the precise controls applicable to the Licensed Materials, and (ii) complying with the Export Control Laws and monitoring any modifications to them.

12.17. Entire Agreement. This Agreement and any other terms referenced in this Agreement constitute the entire agreement between the parties with respect to the subject matter hereof (subject to any separate EULA). No Click-Through Agreement embedded in any of Licensee’s supplier or vendor portals, or invoice or payment processing systems, processes, or forms shall be binding upon CLO, even if use thereof requires an affirmative “acceptance” of such Click-Through Agreement before access or use of those portals, systems, processes, or forms are permitted. All such Click-Through Agreements shall be of no force or effect and are hereby rejected by the parties in their entirety. Any modifications to this Agreement will be invalid unless agreed to in a writing signed by an authorized representative of CLO and Licensee. If the parties have executed a mutual non-disclosure agreement prior to this Agreement, the mutual non-disclosure agreement shall remain in effect and Section 11 shall not apply.

ANNEX I - MONTHLY SUBSCRIPTION, ANNUAL SUBSCRIPTION AND PERPETUAL

1. Monthly Subscription. When Licensee purchases a Personal, Student, or Enterprise License on a Monthly Subscription basis, Licensee will receive access to the then-current version of the Licensed Materials that CLO makes available online on its website, subject to the payment of the applicable Monthly Subscription Fee.

1.1. Updates. The right to receive Updates is included in the Monthly Subscription Fee or prepaid in twelve (12) months batches.

1.2. Monthly Subscription Term. The Subscription Term of a Monthly Subscription is one (1) calendar month. (“Monthly Subscription Term” or “Term”).

1.3. Auto-Renewals. Monthly Subscription Terms renew automatically, unless Licensee cancels the subscription. Licensee will be obligated to pay the corresponding Monthly Subscription Fees for any and all Monthly Subscription Terms that are renewed, unless the Monthly Subscription is subject to Cancellation.

1.4. Limited Renewals for Student Licenses. Student License is offered on a limited basis. Licensee may purchase one (1) Student License within forty-eight (48) months from the date of its initial purchase. For clarity, the Licensee shall then be entitled to purchase a total of two (2) Student Licenses within four (4) years.

2. Annual Subscription. When Licensee purchases an Academic or Enterprise License on an Annual Subscription basis, Licensee will receive access to the then-current, non-perpetual version of the Licensed Materials that CLO makes available online on its website, subject to the payment of the applicable Annual Subscription Fee (set forth in the License Details).

2.1. Initial Term. Any Annual Subscription listed in the License Details and purchased contemporaneously with the execution of this Agreement will commence as of the latest to occur of (i) the Effective Date of this Agreement or (ii) upon delivery of the specific Licensed Materials, and will continue for the period of twelve (12) months thereafter (“Initial Term”).

2.2. Renewal Term. Unless otherwise agreed to in writing by the parties, the twelve (12) month renewal term following either the Initial Term or a previous Renewal Term. For clarity, the Initial Term or previous Renewal Term may either be a full twelve (12) month term or a prorated term. No Renewal Term shall become effective unless CLO provides Invoice and is purchased by Licensee. Any Licenses under an Annual Subscription basis that are not renewed, expire at the end of the applicable License Term and become subject to Section 10 herein.

2.3. The Initial Term and any subsequent Renewal Terms are collectively referred to herein as the “License Term,” ‘Term,” “Annual Subscription,” “Subscription Term,” or “Annual Subscription Term”.

3. Perpetual Subscription. When Licensee purchases a Personal, Academic, or Enterprise License on a Perpetual Subscription basis, Licensee receive access to the then current version of the Licensed Materials that CLO makes available on CLO’s downloadable archive. Perpetual Subscriptions are subject to the payment of a one-time Perpetual Subscription Fee, and/or the applicable Update Fees (set forth in the License Details).

3.1. Discontinued. As of November 25, 2020, and the release of Version 10 of the Marvelous Designer Software, CLO no longer offers Perpetual Subscriptions for purchase. For any previously purchased Perpetual Subscription, CLO will continue to make available Updates subject to the payment of additional Fees— up to Version 12 of the Software (i.e. up to approximately two to three years after Perpetual Subscriptions are discontinued). Alternatively, any previously purchased Perpetual Subscriptions may be traded-in for an Annual Subscription upon the payment of the applicable Update Fee, where the Annual Subscription Fee for such Annual Subscription will be waived of for the Initial Term and first Renewal Term only. However, notwithstanding any other provision of these Terms, CLO has no obligation to provide any Updates, support (technical or otherwise) or license installers to Licensee or any customer or Authorized User for any Software that is more than three (3) versions of the Software behind the latest version.

3.2. Updates. Licensee is not required to purchase any Updates, but any such Update to the Licensed Materials subject to a Perpetual Subscription requires the payment of additional Update Fees in addition to the one-time Perpetual Subscription Fee:

3.3. Updates for Recent Versions. For Updates to a version of the Software that is less than three (3) versions behind the then-current version, the Update Fee shall be:

3.3.1. Twenty-five percent (25%) of the Perpetual Subscription Fee, if the version of the Software being Updated is the version immediately preceding the then-current version; or

3.3.2. Forty percent (40%) of the Perpetual Subscription Fee, if the version of the Software being Updated is two or three versions behind the then-current version.

3.4. Updates for Significantly Older Versions. For any Update to a version of the Software that is more than three (3) versions behind the then-current version, Licensee must purchase a new Annual Subscription in order to access the latest version of the Software.

3.5. Trade-In Option for Personal Perpetual Subscriptions.

3.5.1. Upon the payment of the applicable Update Fee as set forth in License Details, Licensee may trade in any previously purchased Perpetual Subscription, up to three (3) versions behind the latest version of the Software (up to Version 12 of the Software), for an Annual Subscription. In such case the Annual Subscription Fee for the initial Term (i.e. for Subscription Year 1) shall be waived. However, if Licensee chooses to renew any such Annual Subscription for subsequent Renewal Terms after the expiration of the Initial Term (i.e., for Subscription Year 2 and beyond), Licensee shall be responsible for payment of the full Annual Subscription Fee to CLO for each Renewal Term. It is important to note that all Trade-Ins are final and Licensee shall have no right to revert to or retrieve previously traded-in perpetual subscriptions.

3.6. Trade-In Option for Existing Enterprise Perpetual Subscriptions for the MD Software.

3.6.1. Upon the payment of the applicable Update Fees as set forth above, any previously purchased Enterprise Perpetual Subscriptions for the MD Software – up to three (3) versions behind the latest version of the Software, up to Version 12 of the Software – may be traded in for an Annual Subscription for which the Annual Subscription Fee for the first two consecutive terms will be waived.

3.6.2. If Licensee desires to renew any such Annual Subscription for any subsequent Renewal Term after the expiration of the first Renewal Term, the full Annual Subscription Fee will become due and payable for any such subsequent Renewal Term.

3.6.3. All Trade-Ins are final - without the possibility of reverting to, or retrieving, any Perpetual Subscription that are traded in.

3.6.4. If Licensee elects to Trade-In an existing Perpetual Subscription, Licensee must Trade-In all of its existing Perpetual Subscriptions at the same time, or none at all.

ANNEX II - NETWORK OFFLINE AUTHENTICATION

1. Software-based License Key (“SL Key”).

1.1. “SL Key” means a software-based, virtual license key that is used to authenticate a valid license to the Licensed Materials.

1.2. The SL Key authentication method is available for Annual Subscription. The SL Key method is also available for certain Perpetual Subscriptions that are Updated to the latest version of the Software; provided that the Perpetual Subscription in question is eligible for an Update under this Agreement and that the applicable Update Fee is paid.

1.3. In ORDER FOR AN AUTHORIZED USER TO ACCESS THE LICENSED MATERIALS UNDER THE SL KEY METHOD, INTERNET CONNECTION AND FILE TRANSFER MAY BE REQUIRED IN THE FIRST INSTANCE OF INSTALLING AND ACTIVATING THE SOFTWARE ON THE FILE SERVER FROM WHICH THE LICENSED MATERIALS WILL BE ACCESSED ON THE COMPUTERS OF AUTHORIZED USERS, ON A NETWORKED BASIS.

1.4. UNDER THE SL KEY METHOD, THE DESIGNATED LICENSED MATERIALS MAY BE INSTALLED ON AS MANY COMPUTERS OF AUTHORIZED USERS AS NECESSARY FOR LICENSEE’S INTERNAL BUSINESS NEEDS SUBJECT TO SECTION 2.8; provided that the such computers are connected to the file server through Permitted Number of Authorized Users who may access or use the Licensed Materials concurrently at any one time shall not exceed the total number of non-expired licenses provided to Licensee under this Agreement.

1.5. FOR REFERENCE, CLO PROVIDES INSTRUCTIONS ON HOW TO ACTIVATE AND INSTALL LICENSES UNDER THE SL KEY METHOD ON ITS WEBSITE. AS OF THE EFFECTIVE DATE, THE LATEST INSTRUCTIONS CAN BE FOUND AT:

https://marvelousdesigner.zendesk.com/hc/en-us/articles/900002538043-Requesting-Network-Software-License-activation-First-Time-installation.

1.6. REISSUING AN SL KEY. IF AN SL KEY NEEDS TO BE REISSUED DUE TO NO FAULT OF CLO, CLO WILL REISSUE AN SL KEY PROVIDED THAT LICENSEE PAYS CLO THE FOLLOWING: (A) ONE HUNDRED DOLLARS PLUS (B) ONE HUNDRED DOLLARS MULTIPLIED BY THE NUMBER OF SL KEY COPIES THAT ARE BEING REISSUED (COLLECTIVELY, THE “REISSUE FEE”). IF, HOWEVER, AN SL KEY NEEDS TO BE REISSUED DUE TO THE FAULT OF CLO, CLO WILL REISSUE AN SL KEY AT NO COST TO LICENSEE. FOR THE AVOIDANCE OF DOUBT, NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, CLO HAS NO RESPONSIBILITY WHATSOEVER TO REISSUE AN SL KEY (UNLESS LICENSEE PAYS OF THE APPLICABLE REISSUE FEE) FOR ANY SL KEY THAT NEEDS TO BE REISSUED DUE TO A LOSS OF FILES ASSOCIATED WITH THE FILE TRANSFER PROCESS OR DUE TO ANY PROBLEM WITH THE SERVER ON WHICH THE SL KEY IS INSTALLED.

1.7. REHOSTING. “REHOST” MEANS TO MOVE AN SL KEY FROM ONE PHYSICAL DEVICE OR VIRTUAL ENVIRONMENT TO ANOTHER. FOR ANY SL KEYS THAT WERE ISSUED TO AUTHENTICATE LICENSES FOR A VERSION OF THE SOFTWARE THAT IS NOT THE LATEST VERSION AT THE TIME OF THE REHOST REQUEST, CLO SHALL REHOST AN SL KEY UPON THE REASONABLE REQUEST OF LICENSEE, PROVIDED THAT LICENSEE PAYS CLO THE FOLLOWING: TWO HUNDRED DOLLARS PER SL KEY (THE “REHOST FEE”). IN SUCH EVENT, CLO SHALL ONLY BE RESPONSIBLE FOR REHOSTING THE SL KEY TO THE EXTENT REHOSTING IS TECHNICALLY FEASIBLE AND PERMITTED UNDER THE H2H FILE TRANSFER METHOD. FOR ANY SL KEYS THAT WERE ISSUED TO AUTHENTICATE LICENSES FOR A VERSION OF THE SOFTWARE THAT IS THE LATEST VERSION AT THE TIME OF THE REHOST REQUEST, CLO SHALL REHOST AN SL KEY AT NO COST TO LICENSEE, UPON THE REASONABLE REQUEST OF LICENSEE.

2. Hardware-based License Key (“Dongles”)

2.1.Also known as Hardware-based License Key (“HL Key”) or Hardware-Against-Software-Piracy Key (“HASP Key”), “Dongle” means a physical USB device that is used to authenticate a valid license to the Licensed Materials.

2.2.The Dongle method of authentication is available for Perpetual Subscriptions only (which are no longer offered for sale as of November 25, 2020).

2.3. Under the Dongle method, Licensee must install the designated Licensed Materials on a single file server computer and permit access to such Licensed Materials to Authorized Users in Licensee’s network, subject to the Permitted Number of concurrent Authorized Users. Dongles are tied to a specific USER ID, but not to a specific computer.

2.4. IF A DONGLE IS DAMAGED, DESTROYED, MISPLACED, OR OTHERWISE BECOMES IMPAIRED OR UNUSABLE DUE TO NO FAULT OF CLO, CLO WILL PROVIDE A REPLACEMENT DONGLE, BUT ONLY UPON PAYMENT BY LICENSEE OF THE FOLLOWING: (A) IN THE CASE WHERE SUCH DONGLE IS DAMAGED, DESTROYED, IMPAIRED OR UNUSABLE (AND RETURNED TO CLO), THE ACTUAL REPLACEMENT COST OF SUCH DONGLE, AND (B) IN ALL OTHER CASES, THE FEE PAID BY LICENSEE FOR THE LICENSE EMBODIED IN THE REPLACED DONGLE.

2.5. IF A REPLACED DONGLE IS SUBSEQUENTLY FOUND AND/OR IS USABLE, LICENSEE SHALL PROMPTLY SHIP THE REPLACED DONGLE BACK TO CLO. NO REFUNDS ARE PROVIDED EVEN IF A REPLACED DONGLE IS SUBSEQUENTLY FOUND. IF LICENSEE REQUESTS A REPLACEMENT DONGLE, LICENSEE IS AUTHORIZED TO USE ONLY THE REPLACEMENT DONGLE AND NOT THE REPLACED DONGLE

2.6. IN ADDITION TO ANY OTHER RIGHTS CLO MAY HAVE WITH RESPECT TO REPLACED DONGLES, ANY USE OF A REPLACED DONGLE BY LICENSEE AFTER RECEIVING A REPLACEMENT DONGLE WILL RESULT IN THE AUTOMATIC TERMINATION OF THE CORRESPONDING LICENSE (WITHOUT REFUNDS) TO USE THE LICENSED MATERIALS.

2.7. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, CLO HAS NO RESPONSIBILITY WHATSOEVER TO REPLACE (OR PROVIDE WHATEVER SUPPORT) FOR ANY DONGLES THAT WERE ISSUED TO AUTHENTICATE LICENSES FOR A VERSION OF THE SOFTWARE THAT IS MORE THAN THREE (3) VERSIONS BEHIND THE LATEST VERSION OF THE SOFTWARE WE MAKE AVAILABLE ONLINE.

3. SL Key and Dongle Methods Require Separate Networks. The SL Key authentication method does not operate on the same network and file server as the Dongle authentication method. Accordingly, Annual Subscription Network Offline Licenses (under the SL Key method) and Perpetual Network Offline Licenses (under the Dongle method) cannot be accessed by Licensee’s Authorized Users from the same network or file server—unless the authentication method for any such Perpetual Network Offline Licenses are switched from the Dongle method to the SL Key method pursuant to the C2V-V2C File Transfer method set forth below.

4. Key Conversion Fee. For the avoidance of doubt, in order for Licensee to change the authentication method for any licenses from the Dongle method to the SL Key method, Licensee must pay the following: (1) one hundred dollars multiplied by the number of SL Key copies plus (2) one hundred dollars (collectively, the “Key Conversion Fee”).

5. Customer-to-Vendor and Vendor-to-Customer File Transfer (“C2V-V2C File Transfer”).

5.1. The C2V-V2C File Transfer method can be used by Licensees who have existing Perpetual Subscriptions under the Dongle method (A) to update Licensee’s account information, product type, and/or the number of licenses—all without changing Dongles themselves; or (B) to change authentication methods from the Dongle method to the SL Key method--in which case (i) Licensee must pay the Key Conversion Fee, (ii) the Dongle must be returned to CLO, (iii) such Dongle shall then be treated in the same manner as a “Replaced Dongle” as that term is used elsewhere in this Agreement, and (iv) the SL Key method shall be treated as the “Replacement Dongle” as that term is used elsewhere in this Agreement.

5.2. Under the C2V-V2C File Transfer method, Licensee is able to manually activate the Software after the applicable files are transferred between Licensee and CLO under a process outlined on CLO’s website. As of the Effective Date, the latest instructions are available athttps://marvelousdesigner.zendesk.com/hc/en-us/articles/360037030012-License-Key-Update-With-Dongle. As of the Effective Date, the C2V-V2C File Transfer method is only available on Windows PCs.