Exhibit
10.3


 


PROFESSIONAL
SERVICES AGREEMENT


 





This
Professional Services Agreement (“Agreement”), is entered into as of January 6, 2013 (the “Effective
Date”) by and between AllDigital, Inc., a California Corporation with its principal place of business at 220 Technology
Drive, Suite 100, Irvine, CA 92618 (“Company”) and Broadcast International, Inc., a Utah Corporation, with
its principal place of business at 7050 Union Park Center #600, Salt Lake City, Utah 84047 (“Customer”).


 


WHEREAS,
Company has particular knowledge and skills that Customer wishes to obtain in the form of certain services to be provided by Company
to Customer; and


 


WHEREAS,
Company is willing and able to perform such services for Customer on the terms and subject to the conditions set forth in this
Agreement;


 


NOW,
THEREFORE, Company and Customer agree as follows:


 


	1.		SERVICES.



 


Company
shall provide to Customer during the term of the respective Order Form the services (“Services”) described
in any Order Form attached to this Agreement or otherwise executed by both Company and Customer and identified as a Order Form
for this Agreement (an “Order Form”). Any such Order Form is incorporated in this Agreement by this reference
and made a part hereof as if set forth herein. Customer acknowledges that the Services provided under
this Agreement are nonexclusive, and nothing in this Agreement shall limit in any manner Company’s rights to market and
provide services of a similar nature or substantially similar to the Services to any other person or entity.


 


	2.		PAYMENT
                                                                              OF FEES; TAXES.



 


2.1Payment
of Fees. During the term of each Order Form, Customer shall pay to Company as compensation for the Services the fees, and any
reimbursement amounts, in the amounts and at the times set forth in Order Form attached to this Agreement and incorporated herein
by this reference. All fees and reimbursements shall be paid in U.S. dollars, without offset or deduction, to the address or the
account specified by Company, in accordance with the payment schedule set forth in the Order Form, or, if no payment schedule
is specified, no later than thirty (30) days after the date of the Company invoice. Except for Section 4.3, all fees and reimbursements
that Customer pays to Company under this Agreement shall be nonrefundable. Any and all amounts not received by Company by their
due date shall accrue interest at the rate of one and a half percent (1.5%) per month, compounded monthly, or the maximum legal
rate allowed by law, whichever is less.


 


2.2Taxes.
The fees, costs, and/or other compensation to be paid by Customer to Company with respect to the Services are exclusive of all
applicable taxes, and Customer agrees to pay all applicable federal, state, local, and foreign sales, use, value-added, alternative,
add-on minimum, transfer, property, franchise, license, excise, import, export, registration, and other taxes, duties, tariffs,
and fees associated with its receipt of the Services, but excluding any taxes on Company’s net income, capital, or gross receipts.


 


	3.		Independent
                                                                              Contractor Status



 


The
parties are independent contractors and will have no power or authority to assume or create any obligation on behalf of each other.
This Agreement will not be construed to create or imply any partnership, agency or joint venture. Without limiting the foregoing,
neither party shall be entitled to any of the rights or benefits afforded to employees of the other party, including disability
or unemployment insurance, workers’ compensation, medical insurance or any other employment benefit.


 



    	1



    	 



    







 


	4.		Term
                                                                              AND TERMINATION of Agreement



 


4.1Term.
This Agreement shall become effective as of the Effective Date of the earliest Order Form and remain in effect until terminated
in accordance with this Section 4 (the “Term”). With respect to each Order Form, unless otherwise specified
therein, upon expiration of the initial term of an Order Form, such Order Form will automatically renew for an additional three
month period unless and until either Company or Customer notifies the other party in writing of its intent to terminate such Order
Form at least thirty (30) days prior to the expiration of the then current term of such Order Form. If no initial term is specified
in each Order Form, the initial term for such Order Form shall be for a period of one (1) year. Notwithstanding anything to the
contrary, the termination of the Agreement will not apply to any Order Form then in effect and this Agreement will continue to
apply to any such Order Form as if not terminated until such time as both Company and Customer have performed all of their obligations
with respect to such Order Form or such Order Form is terminated in accordance with its terms.


 


4.2Early
Termination. This Agreement (and/or any Order Form) may be terminated immediately by either Customer or Company for breach upon
the occurrence of an Event of Default by the other party, in addition to any other termination provisions set forth in any Order
Form. An “Event of Default” for either party shall mean (i) the breach by such party of any of any term or
condition of this Agreement, inclusive of any Order Form, which breach has not been cured within 30 days after such party has
received written notice thereof; or (ii) if all or a substantial portion of the assets of such party are transferred to an assignee
for the benefit of creditors, to a receiver or to a trustee in bankruptcy, or a proceeding is commenced by or against such party
for relief under bankruptcy or similar laws and such proceeding is not dismissed within 60 days, or such party is adjudged bankrupt.


 


4.3
Effect of Termination. Upon expiration or termination of this Agreement for any reason, any amounts owed to Company under
this Agreement before such termination will be immediately due and payable, and each party shall return to the other all property
(including any Confidential Information) of the other party in its possession or control. Company will promptly cease performing
all Services, and all Customer access to the Services shall be immediately suspended; provided, however, that Customer
shall be entitled to retain all work product and documents related to the Services. In the event this Agreement is terminated
as a result of a material breach of this Agreement by Company, (i) Customer shall be entitled to a pro rata refund of fees paid
based on the percent of the period remaining from the date of such termination until the next payment installment is due and (ii)
Customer shall have no obligation to make any future payments after such date of termination. In the event this Agreement is terminated
by Company as a result of an Event of Default by Customer, Customer shall continue to be obligated to make all past and future
payments, when due, as set forth in the applicable Order Form; provided, that Customer shall only be obligated to make
payments for Services actually performed by Company. The following provisions of this Agreement shall survive the termination
or expiration of this Agreement: Sections 2, 4-7, 9-10, and 12-18. The foregoing shall not limit the right of any non-breaching
party to pursue all remedies available at law or equity in connection with an Event of Default by the other party.


 


	5.		Inventions



 


Customer
agrees that all Inventions (as defined below) owned by the Company on the Effective Date or which Company makes, conceives, reduces
to practice or develops (in whole or in part, either alone or jointly with others) during Company’s work on behalf of Customer
under the Agreement shall be the sole property of Company. Customer and Company expressly agree that any such Inventions are not
“works made for hire” for purposes of the Copyright Act of 1976, as amended, and that Company shall be deemed to be
the author and owner of all such Inventions. “Inventions” means and includes any invention, discovery, improvement,
design, machine, device, apparatus, software, designs, information, know-how, composition, process, plan, idea, work of authorship,
formula, pattern, compilation, program, method, technique, improvement, development, mask works, trademarks, service marks, or
trade secrets. Customer represents and warrants that it is not and will not become a party to any agreement that would require
it to assign to any other person or entity the copyrights, patent rights or other such rights to the Inventions. Customer hereby
irrevocably assigns to the Company free of encumbrance and restrictions, all right, title and interest in and to, and hereby forever
waives and agrees never to assign, any and all right, title and interest, including Moral Rights, which Customer may have in or
with respect to any Inventions. “Moral Rights” mean any rights to claim authorship of an invention, to object
to or prevent the modification of any Invention, or to withdraw from circulation or control the publication or distribution of
any Invention, and any similar right, existing under judicial or statutory law of any country in the world, or under any treaty,
regardless of whether or not such right is denominated or generally referred to as a “moral right.” The Inventions
shall belong to the Company whether or not patent, trademark or copyright applications were or are filed thereon.


 



    	2



    	 



    




 


	6.		Confidential
                                                                               Information/ Non-Disclosure



 


6.1In
connection with this Agreement, either Company, or Company’s direct or indirect clients, on the one hand, or Customer, or
Customer’s direct or indirect clients, on the other hand, (each, a “Disclosing Party”) may have cause to furnish
or make available certain Confidential Information of the Disclosing Party to the other party (the “Receiving Party”).
The term “Confidential Information” means any materials, intellectual property, technical data, know-how or
any other information (including, without limitation, information relating to research, products, software, services, development,
inventions, methodologies, processes, engineering designs or architectures, techniques, customers, pricing, internal procedures,
business and marketing plans or strategies, finances, employees and business opportunities) disclosed by the Disclosing Party
to the Receiving Party, either directly or indirectly, in any form whatsoever (including, without limitation, in writing, in machine
readable or other tangible form, orally or visually): (i) that has been marked as confidential or proprietary; (ii) whose confidential
nature has been made known by the Disclosing Party, in writing or orally; or (iii) that due to its character, nature, or method
of transmittal, a reasonable person under like circumstances would treat as confidential.


 


6.2The
term “Confidential Information” shall not include any information that: (i) becomes available to the public through
no breach of this Agreement; (ii) was previously known by the Receiving Party without an obligation to hold it in confidence;
(iii) is received from a third party or otherwise becomes available to the Receiving Party on a non-confidential basis, from a
source other than the Disclosing Party, which the Receiving Party does not, in good faith, believe is prohibited from disclosing
such information to the Receiving Party by any obligation to the Disclosing Party or otherwise, (iv) is required by law, rule
or regulation to be disclosed, but only to the extent and for the certain purposes of such required disclosure; or (v) is authorized
in advance and in writing for release by the Disclosing Party, but only to the extent of such authorization.


 


6.3A
Disclosing Party shall have the right to correct any inadvertent failure to designate information previously provided to the Receiving
Party as Confidential Information. The Receiving Party shall from that time forward treat such information as Confidential Information.
Except as otherwise indicated in this Agreement, the terms “Disclosing Party” and “Receiving Party” include
all Affiliates of the Disclosing Party and Receiving Party, respectively. An “Affiliate” means any person,
partnership, joint venture, corporation, limited liability company, or other form of enterprise, domestic or foreign, including
without limitation subsidiaries, that directly or indirectly control, are controlled by, or are under common control of or with
either of the parties. For purposes of this Agreement, the end-user customer groups identified in the Order Form are Affiliates
of Customer.


 


6.4The
Receiving Party agrees that: (a) it shall keep confidential and proprietary, not disclose to any third party, or use for its own
benefit or for the benefit (financial or otherwise) of any third party, any Confidential Information except to the extent expressly
permitted by this Agreement or to the extent required for Company to provide the Services under this Agreement; (b) it shall protect
Confidential Information from unauthorized use or disclosure with at least the same degree of care used to protect its own, or
other of its current and past clients’, confidential and proprietary information; (c) all Confidential Information, including
any permitted copies, shall remain the property of the Disclosing Party; (d) it shall restrict disclosure of the Confidential
Information to employees (including the Receiving Party and other representatives of the Receiving Party who are legally bound
to protect the Confidential Information by terms substantially similar to those included in this Agreement) of the Receiving Party
with and to the extent they have a “need to know” and otherwise not disclose to any other entity (e) it shall copy
Confidential Information only as necessary for those employees of the Receiving Party who are entitled to receive it, and that
all confidentiality notices shall be reproduced in full on all such copies; (f) if Confidential Information comprises software,
it shall not reverse engineer, decompile, or disassemble any software disclosed or provided by the Disclosing Party; and (g) it
shall promptly provide the Disclosing Party with notice of any actual or threatened breach of the terms of Section 6.


 






    	3



    	 



    





 





6.5No
patent, copyright, trademark or other proprietary right or Invention is hereby licensed, granted or otherwise transferred by this
Agreement or any disclosure hereunder, except to the extent of any express grant set forth in this Agreement, inclusive of an
Order Form, or a license to Company to use Customer’s intellectual property as reasonably required by Company in order to perform
the Services during the Term. No warranties of any kind, including without limitation, as to the accuracy or completeness of the
Confidential Information, are given with respect to the Confidential Information disclosed under this Agreement, except that each
Disclosing Party warrants that it has the authority to make the disclosures contemplated hereunder.


 


6.6The
Receiving Party agrees that within five (5) business days of the Disclosing Party’s request, all documents and other materials
which contain or embody any Confidential Information will be destroyed or delivered by the Receiving Party to the Disclosing Party.


 


6.7The
parties agree that the Confidential Information is valuable information, the unauthorized disclosure of which would cause irreparable
harm for which there may be no adequate remedy at law. The parties accordingly agree that the Disclosing Party shall be entitled,
without waiving any rights or remedies otherwise available at law, in equity or by statute, to seek injunctive relief in the event
of a breach or intended breach of this Agreement and that such relief may be obtained in any court of competent jurisdiction.


 


6.8The
Receiving Party’s confidentiality obligations hereunder shall be effective as of the date first written above and shall
continue during the term of this Agreement and for a period of three years after any expiration or termination of the Agreement
(except that personal identifying information, including social security numbers, credit card and bank account numbers and similar
information, shall be kept confidential indefinitely), or for any reasonable period thereafter to the extent the particular provisions
reasonably require continued confidentiality.


 


	7.		NON-SOLICITATION



 


During
the Term of this Agreement and for one year following the end of the latest Order Form related to this Agreement, Customer will
not directly or indirectly recruit, solicit or hire any employee or consultant of the Company, or induce or attempt to induce
any employee or consultant of the Company to terminate his or her employment or consulting arrangement with, or other cease his
or her relationship with, the Company.


 


	8.		COOPERATION
                                                                                      AND ASSISTANCE; ACCEPTABLE USE.



 


8.1Cooperation
and Assistance. Customer agrees to cooperate reasonably with Company to enable Company to perform the Services including but not
limited to: (a) providing Company with reasonable access to Customer’s personnel and information, (b) providing Company
with reasonable access to and use of Customer’s premises, computers, servers, and/or other equipment, as necessary, and
(c) timely responding to Company’s inquiries relating to its provision of Services, (d) all responsibilities expressly set
forth in any Order Form, and (e) continuing to maintain all hardware, software, licenses, Internet connection and all other materials
of any kind that it currently maintains in connection with the Services or as otherwise reasonably deemed necessary by Company
in order for Company to provide the Services. Company shall be excused from providing any of the Services during any period Customer
is in breach of this Section 8.1.


 



    	4



    	 



    

 


8.2Acceptable
Use. Customer agrees to be bound at all times by Company’s current Acceptable Use Policy (“AUP”), and
all subsequent versions that may be modified from time to time by Company, effective when posted on Company’s website (http://www.alldigital.com/aup)
or when provided to Customer (the AUP is incorporated herein by this reference and made a part of this Agreement). By signing
this Agreement, Customer represents that it has read and understood and agrees to be bound by the AUP as currently in effect at
any time during the Term.


 


	9.		LIMITED
                                                                                      WARRANTY AND LIMITATION OF LIABILITY.



 


9.1Disclaimer
of Warranty. THE SERVICES, AND ANY OTHER DATA AND MATERIALS PROVIDED IN CONNECTION WITH THIS AGREEMENT BY THE COMPANY, ARE PROVIDED
“AS IS” AND “AS AVAILABLE,” WITHOUT REPRESENTATIONS OR WARRANTIES OF ANY KIND. COMPANY, ITS LICENSORS
AND SERVICE PROVIDERS (“THIRD PARTY PROVIDERS”) MAKE NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED,
BY OPERATION OF LAW OR OTHERWISE, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT,
SECURITY OF CONNECTIONS OR DATA, OR ANY IMPLIED WARRANTIES ARISING OUT OF COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF
TRADE. COMPANY SHALL NOT BE RESPONSIBLE FOR ANY PROBLEMS WITH THE SERVICES ATTRIBUTABLE TO: (a) THE PUBLIC INTERNET INFRASTRUCTURE
OR EITHER PARTY’S ABILITY TO CONNECT TO THE INTERNET, (b) THIRD-PARTY SITES, NETWORKS, EQUIPMENT, SERVICES, OR RESOURCES,
(c) THIRD-PARTY SOFTWARE, OR (c) ANY SERVICE, SERVER OR FACILITY PROVIDED, OWNED BY OR FULLY OR PARTIALLY CONTROLLED BY CUSTOMER.


 


9.2
Limitation of Liability. EXCEPT FOR EITHER PARTY’S INDEMNIFICATION OBLIGATIONS, OR LIABILITY ARISING FROM EITHER PARTY’S
BREACH OF CONFIDENTIALITY OBLIGATIONS, OR CUSTOMER’S BREACH OF THE AUP, NEITHER PARTY (INCLUDING THIRD PARTY PROVIDERS)
WILL BE LIABLE FOR SPECIAL, INDIRECT, PUNITIVE, EXEMPLARY, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT, INCLUDING DAMAGES FOR LOST DATA, DAMAGE TO SOFTWARE OR EQUIPMENT, SERVICE INTERRUPTIONS, INABILITY TO ACCESS
DATA OR SERVICES, DENIAL OF SERVICE OR OTHER ATTACKS BY ANY THIRD PARTY, HOWEVER ARISING, EVEN IF SUCH PARTY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES. EXCEPT FOR LIABILITY ARISING FROM CUSTOMER’S BREACH OF THE AUP OR ITS PAYMENT OBLIGATIONS,
EITHER PARTY’S BREACH OF CONFIDENTIALITY OBLIGATIONS, OR EITHER PARTY’S INDEMNIFICATION OBLIGATIONS, NEITHER PARTY’S
(INCLUDING THIRD PARTY PROVIDER’S) LIABILITY ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL EXCEED THE AGGREGATE FEES
UNDER THE APPLICABLE ORDER FORM FOR THE PRECEDING TWELVE MONTHS (OR IN THE CASE OF AN EVENT IN THE FIRST TWELVE MONTHS, THE FIRST
TWELVE MONTHS).


 






    	5



    	 



    
 


	10.		INDEMNIFICATION



 


10.1
By Company. Company shall defend, indemnify and hold harmless Customer and its directors, officers, employees and Agents from
and against any third-party claim (and any damages, liabilities, or expenses arising out of such claim) that Company’s proprietary
technology infringes any intellectual property right of such third party. However, the foregoing does not apply to the extent
that the infringement is caused by any of the following: (i) the use of the Services (or related materials) by Customer in a manner
not in accordance with this Agreement or the related documentation; or (ii) where the infringement results from Customer’s use
or modification of the Services.


 


10.2
By Customer. Customer shall defend, indemnify and hold harmless Company and its directors, officers, employees and Agents from
and against: (i) any third-party claim (and any damages, liabilities, or expenses arising out of such claim) that Customer’s or
its Affiliates’ proprietary technology infringes any intellectual property right of such third party, (ii) claims that the services
or business of Customer or its Affiliates violates any law, ordinance or regulation of any jurisdiction, or (ii) any claims, liabilities,
damages or expenses arising out of a violation of the AUP by Customer or its Affiliates.


 


10.3
Procedures. The indemnifying party’s indemnification obligations under this Section are conditioned upon the indemnified
party: (a) giving prompt notice of the claim to the indemnifying party; (b) granting sole control of the defense or settlement
of the claim or action to the indemnifying party (except that indemnified party’s prior written approval will be required
for any settlement that reasonably can be expected to require a material affirmative obligation or admission of, or result in
any ongoing material liability to, the indemnified party); and (c) providing reasonable cooperation to the indemnifying party
and, at the indemnifying party’s request and expense, reasonable assistance in the defense or settlement of the claim.


 


	11.		FORCE
                                                                                       MAJEURE



 


In
the event performance of this Agreement or a particular task order is prevented or interfered with by reason of acts of God, fires,
floods, epidemic, strikes, blackouts, or failures or delays of transportation or communications networks in the region generally
or any other circumstances beyond the reasonable control and without the fault or negligence of the party affected, the party
so affected, upon giving prompt notice to the other party of the circumstances causing its delay or failure to perform and of
its plans and efforts to implement a work-around solution, shall be excused from such performance on a day-to-day basis to the
extent of such prevention, restriction or interference (and the other party shall likewise be excused from performance of its
obligations on a day-to-day basis until the delay, restriction or interference has ceased), provided, however, that the party
so affected shall use its reasonable efforts to avoid or remove such causes of nonperformance and both parties shall proceed whenever
such causes are removed or cease. In the event such delay shall extend for a period which substantially and adversely impacts
the Services, and in no event more than three (3) consecutive days, then Company may terminate this Agreement without liability
upon written notice to Customer.


 


	12.		Assignment



 


Neither
party may assign this Agreement (or any of its rights under this Agreement) without the other party’s prior written consent
(which consent shall not be unreasonably withheld or delayed), and any purported attempt to do so shall be null and void; provided,
however, either party may so assign without such consent, to a successor in interest in the event of a merger, sale of all or
substantially all of the assets of such party, or consolidation provided that the surviving entity or purchaser expressly assumes
in writing the performance of all of the terms of this Agreement. Subject to the foregoing, this Agreement is binding upon, inures
to the benefit of and is enforceable by the parties hereto and their respective successors and assigns.


 



    	6



    	 



    

 


	13.		ENTIRE
                                                                                AGREEMENT



 


This
Agreement (together with the Order Forms, the AUP, and any other exhibits attached hereto or addenda/amendments made a part of
this Agreement) constitute the entire agreement between the parties with respect to the subject matter hereof, and supersede any
and all agreements or understandings, whether written or oral, between the parties with respect to such subject matter.


 


	14.		Amendments



 


Any
modification of, amendment to, or waiver of any provision of this Agreement or additional obligation assumed by either party in
connection with this Agreement shall be binding only if evidenced in writing and signed by both parties.


 


	15.		Partial
                                                                                Invalidity



 


If
any provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions will continue in full force and effect without being impaired or invalidated in any way.


 


	16.		Waiver



 


Any
forbearance, failure or delay by either party in exercising any right, power, or remedy under this Agreement shall not be deemed
a waiver and any single or partial exercise of any right, power or remedy shall not preclude the further exercise thereof.


 


	17.		NOTICES



 


Any
notices required or permitted under the terms of this Agreement or required by law must be in writing and must be (i) delivered
in person, (ii) sent by registered mail return receipt requested, or (iii) sent by overnight air courier, in each case to the
address specified below each parties respective signature on the last page of this Agreement, or such other address as may be
specified by the parties from time to time. Notices will be considered to have been given at the time
of actual delivery in person, three (3) business days after deposit in the mail, or one (1) business day after delivery to an
overnight air courier service.


 


	18.		Governing
                                                                                Law



 


This
Agreement shall be governed by and construed in accordance with the internal laws of the State of California without regard to
the conflicts of laws principles thereof. Each party hereto consents to and hereby submits to the exclusive jurisdiction and venue
of any state or federal court located in Orange County, California, in connection with any action, lawsuit, or litigation between
the parties arising out of or relating to this Agreement.


 


	19.		COMPLIANCE
                                                                                       WITH LAWS; CUSTOMER DATA AND MEDIA



 


19.1Compliance
with Law.Customer agrees to fully observe and comply with all applicable Federal, State and local laws, rules, and regulations
and orders pertaining to the its business and the business of its Affiliates and with respect to the Services.


 


19.2Data
and Media. Customer represents and warrants that it, or its Affiliates, own or have the legal right to possess and transmit or
otherwise use as they are using, all data, media and other tangible or intangible property of any kind possessed, transmitted
or otherwise used or sold in the business of Customer and its Affiliates.


 






    	7



    	 



    





 


19.3With
respect to any breach, or alleged breach, of this Section 19, Company may suspend any and all Services until such time as Company
reasonably determines that provision of the Services will not violate, or assist in the violation of, any such law, rule or regulation.


 


	20.		Counterparts



 


This
Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together
shall constitute one and the same instrument. The parties have executed this Professional Services Agreement as of the date first
written above. Signatures that are faxed and/or electronically scanned and emailed are valid.


 


	21.		PUBLICITY
                                                                                       AND REPRESENTATIONS OF AFFILIATES



 


Company
may use Customer’s name in a listing of new, representative or continuing customers in press releases, on its website, or
in other marketing materials or dissemination of information. Customer may not use Company’s name in any press releases, on its
website, or in other marketing materials or dissemination of information without the prior written consent of Company


 






    	8



    	 



    



 





IN
WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, and in consideration of the agreements contained herein,
do hereby execute this Professional Services Agreement, with each signatory warranting his or her ability to enter into this agreement
for the entity herein named as a party hereto.


 


	COMPANY:	CUSTOMER:
	 	 
	AllDigital,
    Inc	Broadcast
    International, Inc.
	 	 
	By:	/s/
    Paul Summers	By:	/s/
    James E. Solomon
	 	 	 	 
	Print
    Name:	Paul
    Summers	Print
    Name :	James
    E. Solomon
	 	 	 	 
	Title:	C.E.O	Title:	CFO


 






    	9



    	 



    





 


Order
Form


 


This
Order Form, together with the attached exhibits if any (collectively, the “Order Form”), is entered into by and between
AllDigital, Inc. (“AllDigital”), and Broadcast International, Inc. (“Customer”).


 


This
Order Form is subject to and governed by the Professional Services Agreement (the “Agreement”), entered into by AllDigital
and Customer on or prior to the effective date of this Order Form. All capitalized terms not defined in this Order Form shall
have the meanings ascribed to them in the Agreement. By executing this Order Form, the Parties agree
to be bound by the terms and conditions in this Order Form.


 


	1.		ALLDIGITAL
                                                                                      CONTACT INFORMATION.


 


AllDigital,
Inc.


220 Technology
Drive, Suite 100


Irvine,
CA 92618


Main: 949-250-0701


 


	PM
    CONTACT	 	David
    Hemingway
	MOBILE
    PHONE	 	949-463-4556
	EMAIL
    ADDRESS	 	david@alldigital.com


 


	BUSINESS
    CONTACT	 	John
    Walpuck
	MOBILE
    PHONE	 	720-324-6369
	EMAIL
    ADDRESS	 	john@alldigital.com


 


	2.		TERM
                                                                                      OF THIS ORDER FORM.


 


The “Term”
of this Order Form shall be as follows:


 


	Start
    Date (Effective Date)	 	January
    6, 2013
	End
    Date	 	Earlier
    of termination (see Section 7.D), or the six month anniversary of the Cutover Date (as defined below).


 






    	10



    	 



    
 


	3.		DISCOVERY
                                                                                      PROCESS AND TRANSITION PERIOD SERVICES


 


Immediately
upon the execution of this Order Form, AllDigital will begin to interview and work with Customer personnel, Customer’s financial
advisors, and the members of the Executive Committee of Customer’s Board of Directors (the “Executive Committee”),
and Customer shall cause each of the same to work in good faith with AllDigital, to achieve the following objectives:


 


	 	i.	Secure
    existing physical assets, and remotely backup software code and related documentation (to the extent not already performed),
    as well as other tangible and intangible assets
	 	 	 
	 	ii.	Review
    and document (to the extent required) Customer’s existing work streams, business processes, tasks, and activities, by
    function, to determine Customer inventory and baseline Customer’s existing operations
	 	 	 
	 	iii	Present
    to the Executive Committee as soon as possible a series of recommendations, anticipated savings, and timelines to further
    restructure and streamline Customer’s operations, and to finalize the scope and pricing of the Monthly Services, including
    an updated next 12 month cash-based operating model
	 	 	 
	 	iv.	Implement
    the Executive Committee approved recommendations in accordance with the timelines
	 	 	 
	 	v.	Immediately
    implement and begin to support agreed upon restructuring and operational streamlining during the Discovery Process and Transition
    Period


 


Collectively,
items i. – v. immediately above will be referred to as the “Discovery Process”. During the Discovery Process
the parties shall work together in good faith to mutually determine the specific scope of the Services set forth under Section
4 below to be provided by AllDigital to Customer (the “Monthly Services”) during the remainder of the Term of this
Agreement. The period of time between the Effective Date and the agreed upon date that AllDigital begins to perform the Monthly
Services, as mutually determined by the parties in good faith during the Discovery Process, will be referred to as the “Transition
Period”. The date that AllDigital begins to perform the finalized scope of Monthly Services will be referred to as the “Cutover
Date”.


 


	4.		MONTHLY
                                                                                      SERVICES


 


As
of the Cutover Date, AllDigital will perform the Monthly Services, working with Customer’s employees, third party vendor
partners, financial advisors, and Executive Committee designated points of contact, which Monthly Services (as mutually determined
by the parties in good faith pursuant to Section 3 above) shall include the services and duties further defined and described
below unless otherwise agreed by the parties in writing during the Discovery Process:


 


	 	i.	Management
    Support Services
	 	 	 
	 	ii.	Deal
    Desk Services
	 	 	 
	 	iii.	Platform
    Management Service
	 	 	 
	 	iv.	Operations
    Support Services
	 	 	 
	 	v.	Accounting
    Service


 


AllDigital
shall begin to provide the Monthly Services as of the Cutover Date only with the express written consent of the Executive Committee.


 



    	11



    	 



    

 


	A.		Management
                                                                                      Support Services


 


AllDigital
will provide the following general management and technical support to each of the Service areas summarized herein, as well as
the following additional services and duties for Customer and end-user customers, as applicable (collectively, “Management
Support Services”):


 


	 	i.	Implement
    an integrated business operations calendar of weekly meetings and reporting, between Customer and AllDigital personnel; such
    business operations calendar to generally include: sales pipeline updates; cash reporting, and; platform, product, and customized
    project development project status.
	 	 	 
	 	ii.	Lead
    and support joint (Customer and AllDigital) and individual Customer sales pipeline opportunities, working with Customer sales
    personnel to drive the realization or closure of each open opportunity.
	 	 	 
	 	iii.	Review
    existing sales incentive compensation plans and other accountability and/or performance metrics, and implement changes as
    agreed upon by the Executive Committee.
	 	 	 
	 	iv.	Implement
    and enforce pre-approval and other cash controls to strengthen management control over travel and other general and administrative
    expenditures
	 	 	 
	 	v.	Assist
    in the renegotiation, restructuring, and other conversion of outstanding accounts payable, leases, network services, and vendor
    contracts, and other liabilities.
	 	 	 
	 	vi.	Manage
    and support 3rd party vendor partners who provide services to Customer
	 	 	 
	 	vii.	Perform
    and support human resources related functions, activities, tasks, and compliance
	 	 	 
	 	viii.	Manage
    in-house customary contract question and issues that arise in the ordinary course of business.


 


	B.		Deal
                                                                                      Desk Services


 


AllDigital
will provide the following services and duties related to customer proposal preparation, profitability and pricing analysis, as
well as proposal technical and business reviews and approvals, prior to end-user customer submission (collectively, “Deal
Desk Services”):


 


	 	i.	Implement
    proposal development, review and approval processes to ensure each new customer proposal, or existing customer upsell or upgrade
    proposal, adheres to such processes.
	 	 	 
	 	ii.	Perform
    gross margin estimated profitability and pricing analyses to accompany each proposal
	 	 	 
	 	iii.	Ensure
    technical and business review of each proposal





 


	C.		Platform
                                                                                      Management Services


 


AllDigital
will provide the following services and duties related to CodecSys and Content Management System (“CMS”) platform
development and management (collectively, “Platform Management Services”):


 


	 	i.	Review
    existing proof of concept (“PoC”), laboratory testing, and other CodecSys requirements feedback against Customer’s
    existing roadmap, specifications documentation, and for overall reasonableness.
	 	 	 
	 	ii.	Baseline
    and inventory existing development efforts against sales pipeline opportunities, as well as the results of Section 3.D.i.
    immediately above.



 






    	12



    	 



    



 


	 	 	 
	 	iii.	Implement
    agreed upon action plans and timelines (e.g., 30 days) to convert existing PoC and laboratory testing to paying customers,
    or bring closure to such activities.
	 	 	 
	 	iv.	Work
    with existing Customer personnel to further baseline, prioritize, and support the continued development of the CodecSys and
    CMS platforms in accordance with a revised (mutually agreed upon) roadmap and functional specifications.
	 	 	 
	 	v.	Lead
    and support project management functions related to customized integration and development services projects.
	 	 	 
	 	vi.	Manage,
    support and lead the development of test plans, quality assurance testing, and quality control feedback loops to ensure product
    and platform development efforts meet documented specifications and requirements.


 


	D.	Operations
    Support Services


 


Provide
services and duties related to resource management, security management, network management, systems administration and engineering
support, technical and customer support, and information technology support (collectively, “Operations Support Services”),
working with Customer’s third party vendor partners, and individually, as applicable. Examples of such services and duties
include:


 


	 	i.	Provide
    quality of service monitoring, alerting, and email system management services (collectively, “Resource Management Services”).
	 	 	 
	 	ii.	Manage,
    maintain and update (active and passive) operational and diagnostic monitoring (i.e., service checks) related to database,
    application and mail servers
	 	 	 
	 	iii.	Manage
    alert notification for end-user customers in accordance with agreed upon: (a) primary points of contact, (b) escalation contacts,
    (c) business rules, and (d) security protocol
	 	 	 
	 	iv.	Provide
    network and system security services (collectively, “Security Management Services”) as applicable for Customer
    and end-user customer.
	 	 	 
	 	v.	Perform
    the daily, weekly, quarterly, monthly, etc. activities, tasks, and assessments set forth in accordance with industry practices,
    existing security standards, and contractual requirements.
	 	 	 
	 	vi.	Perform
    daily monitoring and review of quality of service monitoring results for specific security service checks.
	 	 	 
	 	vii.	Support,
    as applicable, the implementation of GR Security (“GRSEC”) Role-based Access Control (“RBAC”) practices,
    policies, and software updates to restrict user access to applications and programs generally at the operating system level.




 





	 	 	 
	 	viii.	Provide
    production network management and managed network security services (collectively, “Network Management Services”)
    for Customer and end-user customers, working with Customer third party vendor partners as applicable.
	 	 	 
	 	ix.	Provide
    applicable and contractual customer support services for end-user customers in accordance with service level requirements.
	 	 	 







    	13



    	 



    






 


	 	x.	Provide
    network security and troubleshooting support for end-user customers, such troubleshooting support means managing firewalls,
    opening ports for new services; adding new customer IP addresses; and; block access from attacking sources.
	 	 	 
	 	xi.	Perform
    systems administration support tasks that require super user privileges such as managing root access to designated systems,
    as well as maintaining, updating and managing access control, and directory structures.
	 	 	 
	 	xii.	Provide
    debugging and troubleshooting support for certain end-user customers.
	 	 	 
	 	xiii.	Serve
    as primary Lightweight Directory Access Protocol (“LDAP”) administrator, ensuring proper authentication, root
    access, activity logs, and LDAP replication (i.e., backup) in accordance with business rules and access lists provided by
    Customer and/or end-user customers.
	 	 	 
	 	xiv.	Manage
    Super User Do (“SUDO”) administrator privileges by server / system; privileges means the ability to delete directories
    and manage accesses.
	 	 	 
	 	xv..	Provide
    24/7 systems administration and engineering support services as applicable for Customer infrastructure and end-user customers
    (e.g., implement OS updates and patches; troubleshooting support services; respond to system and network attacks and compromises;
    respond to alerts related to Resource Management Services)


 


	E.		Accounting
                                                                                      Services


 


Provide
the following general accounting services and duties as applicable:


 


	 	i.	Compile,
    review, generate and submit monthly service billings to end-user customers from Customer’s accounting system.
	 	 	 
	 	ii..	Perform
    collections follow up on all past due accounts receivable in conjunction with weekly cash reporting (see Management Support
    Services above), provided that any matter in which litigation is advisable in AllDigital’s reasonable judgment
    shall not be handled by AllDigital and shall be referred to the Executive Committee
	 	 	 
	 	iii.	Input
    accounts payable invoices, accruals, and other accounting related data into Customer’s accounting system for financial
    reporting purposes.
	 	 	 
	 	iv.	Work
    with Customer’s third party auditor to prepare for and support upcoming annual and quarterly SEC reporting.
	 	 	 
	 	v..	Perform
    other related general accounting services and functions


 


	5.		RESPONSIBILITIES.


 


A.
    AllDigital and Customer Joint Responsibilities.
In addition to any individual or other obligations set forth under the Agreement or this Order Form, AllDigital and Customer each
shall:


 


	i.		Support
                                                                               a weekly or otherwise regularly scheduled status
                                                                               call with Customer designated contact personnel
                                                                               to report and discuss: business status, sales pipeline
                                                                               and cash updates, and other applicable matters


 


B.
     AllDigital Responsibilities. In addition
to any other obligations set forth under the Agreement or this Order Form, AllDigital shall:


 


	i.		Provide
                                                                               the Services set forth in this Order Form.


 



    	14



    	 



    

 


C.     
Customer Responsibilities. In addition to any
other obligations set forth under the Agreement or this Order Form, Customer shall:





 


	i.		Designate
                                                                               Executive Committee member(s) and financial advisor
                                                                               personnel, with decision-making authority, to serve
                                                                               as the principal points of contact throughout the
                                                                               Term.


 


	6.	SERVICE
    FEES.


 


Customer
shall pay the following Service Fees for the Services:


 


	Item	Fees(1)
	Discovery
    Process & Transition Period Services	$60,000
    for the initial 30 day period
	Monthly
    Services(2)	$
    TBD


 


	 	(1)	See
    General & Billing Notes for any specialized payment terms applicable to this Order Form.
	 	(2).	TBD
    during the Discovery Process and Transition Period; see Section 3 of this Order Form; in any event, the amount paid to AllDigital
    shall be less than the anticipated monthly savings to be realized by Customer


 


	7.	GENERAL
    AND BILLING NOTES


 


A.
     Discovery Process & Transition Period Services: Customer shall provide AllDigital with
an advance payment of $60,000 for the initial 30 day period of the Discovery Process & Transition Period Services, immediately
upon the execution of this Order Form. Any subsequent payments for the remainder of the Discovery Process & Transition Period
Services shall be mutually agreed upon.


 
 


B.     Monthly
Services Payments. Billing and payments for the Monthly Services, beyond the Discovery Process & Transition Period, shall
occur on a 30-day cycle beginning on the first day of the month following the Cutover Date. Payments for the Monthly Services
shall be due in advance, i.e., no later than the first day of each monthly period. Payment for the Monthly Services from the Cutover
Date to the end of the first month of such Services shall be pro-rated and due prior to beginning the Services.


 
 


C.     Travel
Expenses. All fees stated in this Order Form do not include any reasonable travel, living and other out-of-pocket expenses
incurred by AllDigital in connection with the Services (“Travel Expenses”). Customer shall reimburse AllDigital for
all such Travel Expenses but only to the extent that such expenses have been approved by Customer in advance and in writing and
provided that AllDigital submits documentary proof of such expenses.


 
 


D.     Order
Form Expiration / Termination.: At any time during the Term, either party may terminate this Order Form upon 30 days advance
written notice.



 



    	15



    	 



    

 


BY
SIGNING BELOW, the Parties agree to be bound by the terms of this Order Form.


 


	AllDigital,
    Inc	 	Broadcast
    International, Inc.
	 	 	 
	Signature:	/s/	 	Signature:	/s/
	 	 	 	 	 
	Name:	Paul
    Summers	 	Name
    :	James
    E. Solomon
	 	 	 	 	 
	Title:	CEO	 	Title:	CFO
	 	 	 	 	 
	Date:	January
    6, 2013	 	Date:	January
    6, 2013


 



    	16