**Exhibit 10.7**

 

Master Lease Number: TFG/SC121405

 

**MASTER LEASEAGREEMENT**

 

**THIS MASTER LEASEAGREEMENT** is made as of December 14, 2005,between **Tetra Financial Group, L.L.C.**(“Lessor”), a Utah limited liability company with a principal place of businessat 6925 Union Park Center, Suite 525, Midvale, Utah 84047, and **Sento Corporation** (“Lessee”), a Utahcorporation with a principal place of business at 420 E. South Temple, Suite 400,Salt Lake City, UT 84111.

 

**1.****                                      SCOPEOF LEASE**

 

On the terms and conditions of this Master Lease Agreement (“MasterLease”), Lessor hereby agrees to lease to Lessee, and Lessee hereby agrees tolease from Lessor the property described in the Schedule(s) executed by Lessorand Lessee in connection with this Master Lease (collectively the “Equipment”,and individually an “Item”).  The termsof each Schedule hereto are subject to any and all conditions andprovisions of this Master Lease at the time of execution of such Schedule.  Each Schedule shall constitute aseparate and independent Lease and obligation of Lessee.  In the event of a conflict between thisMaster Lease and any Schedule hereto, the language of the Schedule shallprevail.  The term “Lease” shall refer toan individual Schedule that incorporates this Master Lease.

 

**2.****                                      LEASETERM**

 

(a)                                  Theterm of the Lease shall be comprised of a Delivery Term, Acceptance Term andBase Term.  The Delivery Term for eachItem shall commence on the date the Item is delivered to Lessee and shall endon the Acceptance Date.  The AcceptanceTerm shall commence on the Acceptance Date, as set forth in the AcceptanceCertificate, and terminate on the first day of the calendar quarter followingthe Acceptance Date for the last Item to be installed (“Base Term CommencementDate”).  The Base Term of the Lease shallbegin on the Base Term Commencement Date, and shall, subject to Section 19(d) hereof,end on the last day of the month of the Base Term.  The date of acceptance (“Acceptance Date”)for any Item shall be the earlier of either (i) the date as set forth inthe Acceptance Certificate, or (ii) if Lessee does not, for any reason,sign an Acceptance Certificate the date shall be the date Lessee received theEquipment.

 

(b)                                 Inthe event Lessee requests, for its benefit, that Lessor advance payments to supplier(s)or manufacturer(s) of the Equipment (collectively “Supplier(s)”) during theperiod prior to Lessee’s delivery of the Acceptance Certificate and makeprogress payments to such Supplier(s) or otherwise reimburse Lessee fordeposits, if any, made to such Supplier(s) (all such Lessor payments andreimbursements collectively referred to as “Progress Payments”), Lessor may, inits sole discretion, accommodate such requests by Lessee, and make suchProgress Payments pursuant to the terms provided for in this Section 2(b).  Lessee shall pay to Lessor a daily pro ratarental fee from the date each Item of Equipment is delivered (such delivery tobe confirmed by Lessee) (the “Partial Acceptance Date”) through the AcceptanceDate, as defined in Section 2(a) above, calculated by multiplying theBase Lease Rate Factor specified in the applicable Schedule times theamount of such Progress Payment divided by thirty (30).  This pro rata rental fee will be billedmonthly to Lessee.  If all of theEquipment to be included in the applicable Schedule is not accepted byLessee within ninety (90) days of the date of Lessor’s execution of theapplicable Schedule (the “Funding Cut-Off Date”), Lessor may, at its solediscretion, pursue any one of the following options: (i) commence the termof any Schedule (using the Funding Cut-Off Date as the Acceptance Date)based on the portion of the Equipment that has been delivered to Lessee andpaid for by Lessor as of the Funding Cut-Off Date; (ii) extend theAcceptance Term and establish a new Funding Cut-Off Date; or (iii) demandthat the Lessee pay to Lessor a total amount equal to all Progress Paymentspaid to Supplier(s) on behalf of Lessee, plus all pro rata rentals, taxes, latefees and other payments which are due and owing under this Master Lease.  Should such demand be made by Lessor, Lesseehereby unconditionally agrees to reimburse said amounts to Lessor in fullwithin ten (10) business days of said demand, and upon receipt of saidpayment in full, Lessor shall release Lessee from further payment obligationsunder the Master Lease.  Lessor herebyreserves the right to

 

1

----

 

terminate this Acceptance Term at any time ifLessor determines, at Lessor’s sole discretion, that there has been an adversechange in Lessee’s financial condition, at which time Lessor may elect either(i), (ii), or (iii) above.

 

**3.****                                      PAYMENTSOF RENT**

 

(a)                                  Lesseeshall pay as rent for use of the Equipment, aggregate rentals equal to the sumof all the Base Monthly Rental (as set forth on the Schedule) and otherpayments due under the Lease for the entire Base Term.  The Base Monthly Rental shall begin on theAcceptance Date and shall be due and payable by Lessee in advance on the firstday of each month throughout the Base Term. If the Acceptance Date does not fall on the first day of a calendarquarter, then the first rental payment shall be calculated by multiplying thenumber of days from and including the Acceptance Date to the Base TermCommencement Date by a daily rental equal to one-thirtieth (1/30) of the BaseMonthly Rental, and shall be due and payable on the Acceptance Date.  Lessee shall pay all rentals to Lessor, orits assigns, at Lessor’s address set forth above (or as otherwise directed inwriting by Lessor, or its assigns), without notice or demand.  **LESSEE SHALL NOT ABATE,SET OFF OR DEDUCT ANY AMOUNT OR DAMAGES FROM OR REDUCE ANY BASE MONTHLY RENTALOR OTHER PAYMENT DUE FOR ANY REASON.** **THIS LEASE IS NON-CANCELABLE FOR THE ENTIRE TERMOF THE BASE TERM AND ANY EXTENSION PERIODS.**

 

(b)                                 Ifany rental or other payment due under any Lease shall be unpaid after its duedate, Lessee will pay on demand, as a late charge, but not as interest, thegreater of twenty-five dollars ($25.00) or five percent (5%) of any such unpaidamount but in no event to exceed maximum lawful charges.

 

**4.****                                      TAXES**

 

Lessee shall pay to Lessor all taxes, fees, assessments and chargespaid, payable or required to be collected by Lessor, however designated, whichare levied or based on the Monthly Rental or other payment due under the Lease,or on the possession, use, operation, lease, rental, sale, purchase, control orvalue of the Equipment, including without limitation, registration and licensefees and assessments, state and local privilege or excise taxes, documentarystamp taxes or assessments, sales and use taxes, personal and other propertytaxes, and taxes or charges based on gross revenue, but excluding taxes basedon Lessor’s net income.  Lessee shallpromptly remit to Lessor all taxes in advance of their payment due date.  Lessee shall pay all penalties and interestresulting from its failure to timely remit all taxes to Lessor.  Lessee also agrees to pay all servicing costsassociated with processing and paying sales and property taxes.  Lessor shall file all required sales and usetax and personal property tax returns and reports concerning the Property withall applicable governmental agencies.

 

**5.****                                      NETLEASE**

 

Each Schedule provides for a net lease, and Lessee shall be solelyresponsible for all costs and expenses of every nature arising out of thepossession, use and operation of the Equipment. Lessee’s obligation to pay the Base Monthly Rental and all other sumsdue hereunder from Lessee to Lessor shall be absolute and unconditional andshall not be subject to any abatement, recoupment, defense, claim,counter-claim, reduction, set-off, or any other adjustment of any kind for anyreason whatsoever.  Except as expresslyprovided for herein, neither this Master Lease, nor any Schedule, shallterminate nor shall the obligations of Lessee be affected by reason of anydefect in, damage to, or any loss or destruction of the Equipment or any unitfrom any cause whatsoever, or the interference with the use thereof by anyprivate person, corporation, or government authority or as a result of any war,riot, insurrection or Act of God.  It isthe express intention of the Lessor and Lessee that all rent and other sumspayable by Lessee under the Lease shall be, and continue to be, payable in allevents throughout the term of the Lease. The Lease shall be binding upon the Lessee, its successors and permittedassigns and shall inure to the benefit of Lessor and its Assignee(s).

 

2

----

 

**6.****                                      USE;INSTALLATION; ALTERATIONS; RETURNS**

 

(a)                                  Upondelivery of the Equipment to Lessee, Lessee shall pay all transportation,installation, rigging, packaging and insurance charges with respect to theEquipment.  In the case of a sale andleaseback transaction, Lessee shall, upon the request of Lessor, certify thedate the Equipment was first put into use. Lessee will provide the required electric current and a suitable placeof installation for the Equipment with all appropriate facilities as specifiedby the manufacturer.  No cards, tapes,disks, data cells or other input/output and storage media may be used by Lesseeto operate any Equipment unless it meets the specifications of themanufacturer.  Lessee agrees that it willnot install, or permit the installation of, the Equipment without Lessor’sconsent.

 

(b)                                 Lesseeshall at all times keep the Equipment in its sole possession and control.  The Equipment shall not be moved from thelocation stated in the Schedule without the prior written consent ofLessor.  Lessee shall cause the Propertyto be installed, used, operated and, at the termination of the Lease, ifapplicable, removed (i) in accordance with any applicable manufacturer’smanuals or instructions; (ii) by competent and duly qualified personnelonly; and (iii) in accordance with applicable governmentalregulations.  Lessee shall comply withall applicable laws, regulations, requirements, rules and orders, allmanufacturers’ instructions and warranty requirements, and with the conditionsand requirements of all policies or insurance with respect to the Equipment andthe Lease.

 

 (c)                               Lessee may not affix orinstall any accessory, feature, equipment or device to the Equipment or makeany improvement, upgrade, modification, alteration or addition to the Equipment(“Improvements”) that will detrimentally affect the Equipment’s end of BaseTerm residual value without first obtaining the written consent of Lessor,which consent shall not be unreasonably withheld.  Any such Improvements shall be made at Lessee’sexpense and shall not interfere with the normal and satisfactory operation ormaintenance of the Equipment.  UnlessLessor shall otherwise agree in writing, all such Improvements shall be andbecome the property of Lessor upon their attachment to the Equipment or, at theoption of the Lessee, shall be removed by Lessee at the termination of theLease and the Equipment restored at Lessee’s expense to its original conditionwith the acceptance of reasonable wear and tear only.  Removal of any Improvements shall beperformed by the manufacturer, at the sole expense of Lessee.  Any Improvements leased by Lessee from Lessorshall be under a separate Schedule.  TheImprovements shall not be placed in service by Lessee prior to acquisition byLessor, and Lessee shall execute and deliver any document necessary to vesttitle to such Improvements in Lessor.

 

(d)                                 TheEquipment consists solely of personal property and not fixtures.  The Equipment is removable from and is notessential to the premises at which the Equipment is located.  The Equipment is and shall remain personalproperty during the term of the Lease notwithstanding that any portion thereofmay in any manner become affixed, attached to or located on real property orany building or improvement thereon. Lessee shall not affix or attach any of the Equipment to any realproperty in any manner which would change its nature from that of personalproperty to real property or to a fixture or permit such to occur.  Lessee shall not permit the Equipment tobecome an accession to other goods or a fixture to or part of any realproperty.  Upon Lessor’s request, Lesseewill obtain and deliver to Lessor a lien waiver in a form satisfactory toLessor, from all persons not a party hereto who might claim an interest, lienor other claim in the Equipment.

 

(e)                                  Subjectto Section 19(d) hereof, Lessee shall, at the termination of theLease, at its expense, de-install, pack and return the Equipment to Lessor atsuch location as shall be designated by Lessor in the same operating order,repair, condition and appearance as of the Acceptance Date, reasonable wear andtear excepted, with all current engineering changes prescribed by themanufacturer of the Equipment or a maintenance contractor approved by Lessorincorporated in the Equipment.  Until thereturn of the Equipment to Lessor, Lessee shall be obligated to pay the BaseMonthly Rental and all other sums due under the Lease.  Upon redelivery to Lessor, Lessee shall

 

3

----

 

arrange and pay for such repairs as arenecessary for the manufacturer of the Equipment to accept the Equipment under amaintenance contract at its then standard rates.

 

(f)                                    Inthe event the Equipment includes Software, the following shall apply: (i) Lesseeshall possess and use the Software in accordance with the terms and conditionsof any License agreement entered into with the owner/vendor/licensor of suchSoftware and shall not breach the License (at Lessor’s written request, Lesseeshall provide a complete copy of the License to Lessor); (ii) Lesseeagrees that Lessor has an interest in the License and Software due to itspayment of the price thereof and is an assignee or third-party beneficiary ofthe License; (iii) as due consideration for Lessor’s payment of the priceof the License and Software and for providing the Software to Lessee at a leaserate (as opposed to a debt rate), Lessee agrees that Lessor is leasing (and notfinancing) the Software to Lessee; (iv) except for the original price paidby Lessor, Lessee shall, at its own expense, pay promptly when due allservicing fees, maintenance fees, update and upgrade costs, modification costs,and all other costs and expenses relating to the License and Software andmaintain the License in effect during the term of the Lease; and (v) theSoftware shall be deemed Equipment for all purposes under the Lease.

 

(g)                                 Withregard to Software, at the expiration or earlier termination of any Lease, orupon demand by Lessor upon the occurrence of an Event of Default (hereinafterdefined) under the Lease, Lessee shall (i) delete from its systems allSoftware then installed; (ii) destroy all copies or duplicates of theSoftware which were not returned to Lessor; and (iii) cease using theSoftware altogether.  Upon its receiptfrom Lessee, Lessor shall be responsible to destroy the Software or render itunusable, or to return the Software to the owner/vendor/licensor so that Lesseeshall not be in breach of any software license, and Lessor indemnifies Lesseefor all costs, damages or expenses including reasonable attorney fees incurredby Lessee as a result of Lessor’s failure to comply with the foregoingprovision.

 

**7.****                                      REPAIRSAND MAINTENANCE**

 

Lessee shall promptly pay all costs, expenses and obligations of everykind and nature incurred in connection with the use, maintenance, servicing,repair or operation of the Equipment which may arise or be payable during thelease term of such Equipment hereunder, except as specifically provided herein,and shall keep the Equipment in as good repair, condition and working order aswhen delivered to Lessee hereunder, reasonable wear and tear from the properuse thereof alone excepted, and shall furnish any and all parts, mechanisms anddevices required to keep the Equipment in such good repair, condition andworking order, at the expense of Lessee, and in addition will permit themanufacturer to make all free-of-charge engineering changes, all so that theEquipment will remain acceptable to the manufacturer for maintenance.  Without limiting the foregoing, Lessee shall,during the continuance of this Lease, at its own expense, make appropriatearrangements for maintenance of each item of Equipment, including, withoutlimitation with respect to each item of Equipment, entering into and maintainingin force a contract with the manufacturer of the Equipment or other person orentity approved in writing by Lessor covering at least prime shift maintenance.

 

**8.****                                      OWNERSHIPAND INSPECTION**

 

(a)                                  TheEquipment shall, at all times, be the sole and exclusive property of Lessor orits assigns.  Except as otherwiseprovided herein, Lessee shall have no right or property interest therein,except for the right to use the Equipment in the normal operation of itsbusiness at the Equipment Location. Lessee represents that the Lease is intended to be a “finance lease” andnot a “lease intended as security” as those terms are used in the UniformCommercial Code; and that the Lease is intended to be a “true lease” as theterm is commonly used under the Internal Revenue Code of 1986 as amended.

 

(b)                                 Lessor shall bepermitted to display notice of its ownership on the Equipment by means of asuitable stencil, label or plaque affixed thereto, and Lessee shall not permittheir removal or concealment.  Lesseeshall keep the

 

4

----

 

Equipment free from anymarking or labeling which might be interpreted as a claim of ownership byLessee or any party other than Lessor.  Lessee shall immediately notify Lessor in writing concerning the detailsof any damage or loss to the Equipment, including any damage or loss arisingfrom the alleged or apparent improper manufacture, functioning or operation ofthe Equipment.

 

(c)           LESSEE SHALL KEEP THE EQUIPMENT ANDLESSEE’S INTEREST UNDER ANY LEASE FREE AND CLEAR OF ALL LIENS AND ENCUMBRANCES(EXCEPT THOSE CREATED BY LESSOR), AND SHALL NOT ASSIGN THE LEASE OR ANY OF ITSRIGHTS UNDER THE LEASE OR SUBLEASE ANY OF THE EQUIPMENT OR GRANT ANY RIGHTS TOTHE EQUIPMENT, EXCEPT THOSE PERMITTED IN WRITING BY LESSOR OR ITS ASSIGNS.   No permitted assignment or sublease shallrelieve Lessee of any of its obligations hereunder, and Lessee agrees to payall costs and expenses Lessor may incur in connection with any permitted assignmentor sublease.  Subject to the terms ofthis Lease, this Lease and each Schedule inure to the benefit of, and arebinding upon, the successors and assigns of Lessee, and, without limiting theforegoing, shall bind all persons who become bound as a “new debtor” (asdefined in the Uniform Commercial Code) to this Lease and any Schedule.  All representations, warranties, covenantsand indemnities of Lessee made or agreed to in the Lease or in any certificatesdelivered in connection therewith shall survive the expiration, termination orcancellation of the Lease for any reason.

 

(d)                                 Uponreasonable notice to Lessee, Lessor or its agents or assigns shall have accessto the Equipment at all reasonable times for the purpose of inspecting theEquipment and for any other purposes contemplated by the Lease, subject to thereasonable security requirements of Lessee.

 

**9.****                                      ASSIGNMENT**

 

(a)                                  Lessormay sell, assign or otherwise transfer all or any part of its right, title andinterest in and to the Lease and Equipment to a third-party (“Assignee”) eitheroutright or as security for loans.  Anysuch Assignee may assume all of the rights and obligations of Lessor inconnection with the Equipment or any Schedules sold, assigned or otherwisetransferred, in which case Lessor shall be relieved therefrom.  To the extent of any such assumption ofobligations, all references to Lessor herein shall hereafter mean suchAssignee.

 

(b)                                 Uponnotice of any such assignment and instruction from Lessor, Lessee shall pay itsBase Monthly Rental and other payments and perform its other obligations underthe Lease to the Assignee (or to any party designated by Assignee).  Lessee’s obligations under the Lease withrespect to Assignee shall be absolute and unconditional and not be subject toany abatement, reduction, recoupment, defense, offset or counterclaim for anyreason, alleged or proven, including, but not limited to, defect in theEquipment, the condition, design, operation or fitness for use of the Equipmentor any loss or destruction or obsolescence of the Equipment or any part, theprohibition or other restrictions against Lessee’s use of the Equipment, theinterference with such use by any person or entity, any failure by Lessor toperform any of its obligations contained in the Lease, and insolvency orbankruptcy or Lessor, or for any such cause.

 

(c)                                  Uponrequest of Lessor, Lessee shall submit documents and certificates as may bereasonably required by Assignee to secure and complete such transfer orassignment, including, but not limited to, any documents required herein.  Lessee shall, if requested, restate toAssignee the representations, warranties and covenants contained in the Lease(upon which Lessee acknowledges Assignee may rely), and shall make such otherrepresentations, warranties and covenants to Assignee as may be reasonablyrequired to give effect to the assignment. Lessee authorizes Lessor’s assigns to file UCC-1 financing statements orprecautionary filings as Lessor or its assigns deem necessary.  Lessor’s assigns are authorized to take anymeasures necessary to protect their interest in the Equipment.

 

5

----

 

**10.****                               WARRANTY;LIMITATION OF LIABILITY**

 

(a)                                  Lesseeacknowledges that Lessor is not the manufacturer of the Equipment nor themanufacturer’s agent nor a dealer therein. The Equipment is of a size, design,capacity, description and manufacture selected by the Lessee.  Lessee is satisfied that the Equipment issuitable and fit for its purposes. LESSEE AGREES THAT LESSOR HAS NOT MADE AND DOES NOT MAKE ANY WARRANTY ORREPRESENTATION WHATSOEVER, EXPRESS OR IMPLIED, AS TO THE EQUIPMENT, INCLUDING,WITHOUT LIMITATION, ANY WARRANTY OR REPRESENTATION AS TO:  (i) THE DESCRIPTION, CONDITION, DESIGN,QUALITY OR PERFORMANCE OF THE EQUIPMENT OR QUALITY OR CAPACITY OF MATERIALS ORWORKMANSHIP IN THE EQUIPMENT; (ii) ITS MERCHANTABILITY OR FITNESS ORSUITABILITY FOR A PARTICULAR PURPOSE WHETHER OR NOT DISCLOSED TO LESSOR; AND (iii) DELIVERYOF THE EQUIPMENT FREE OF THE RIGHTFUL CLAIM OF ANY PERSON BY WAY OFINFRINGEMENT OR THE LIKE.  LESSOREXPRESSLY DISCLAIMS ALL SUCH WARRANTIES. If the Equipment includes any applicable Software, and the Software isnot properly installed, does not function as represented or warranted byoriginal owner/vendor/licensor, or is unsatisfactory for any reason, Lesseeshall make any claim on account thereof solely against originalowner/vendor/licensor and shall nevertheless pay all sums payable under theLease, Lessee hereby waiving the right to make any such claims against Lessor.  Lessor shall not be liable to Lessee for anyloss, damage or expense of any kind or nature caused, directly or indirectly,by the Equipment or the use, possession or maintenance thereof, or the repair,service or adjustment thereof, or by any delay or failure to provide any suchmaintenance, repair, service or adjustment, or by any interruption of serviceor loss of use thereof (including without limitation, Lessee’s use of or rightto use any Software) or for any loss of business howsoever caused.

 

(b)                                 NOTWITHSTANDINGANYTHING TO THE CONTRARY CONTAINED IN THE LEASE, LESSOR SHALL NOT, UNDER ANYCIRCUMSTANCES, BE LIABLE TO LESSEE OR ANY THIRD PARTY, FOR CONSEQUENTIAL,INCIDENTAL, SPECIAL OR EXEMPLARY DAMAGES ARISING OUT OF OR RELATED TO THETRANSACTION CONTEMPLATED HEREUNDER, WHETHER IN AN ACTION BASED ON CONTRACT,TORT (INCLUDING NEGLIGENCE OR STRICT LIABILITY) OR ANY OTHER LEGAL THEORY,INCLUDING WITHOUT LIMITATION, LOSS OF ANTICIPATED PROFITS, OR BENEFITS OF USEOR LOSS OF BUSINESS, EVEN IF LESSOR IS APPRISED OF THE LIKELIHOOD OF SUCHDAMAGES OCCURRING.

 

IT IS EXPRESSLY UNDERSTOOD AND AGREED THATEACH AND EVERY PROVISION OF ANY LEASE WHICH PROVIDES FOR A LIMITATION OFLIABILITY, DISCLAIMER OF WARRANTIES OR EXCLUSION OF DAMAGES, IS INTENDED BY THEPARTIES TO BE SEVERABLE FROM ANY OTHER PROVISION AND IS A SEPARABLE ANDINDEPENDENT ELEMENT OF RISK ALLOCATION AND IS INTENDED TO BE ENFORCED AS SUCH.

 

(c)                                  Lessorassigns to Lessee all assignable warranties on the Equipment, including withoutlimitation any warranties described in Lessor’s purchase contract, whichassignment shall be effective only (i) during the Acceptance Term and theBase Term and any extensions thereof; and (ii) so long as no Event ofDefault exists.

 

**11.****                               QUIETENJOYMENT**

 

Lessor covenants that so long as Lessee is not in Default under aLease, Lessee shall be entitled to quietly possess the Equipment subject to andin accordance with the terms and conditions of the Lease.

 

6

----

 

**12.****                               GENERALINDEMNITY**

 

(a)                                  Lesseeshall indemnify and hold Lessor harmless from and against any and all claims,(including without limitation negligence, tort and strict liability), damages,judgments, suits and legal proceedings, and any and all costs and expenses inconnection therewith (including reasonable attorney fees incurred by Lessoreither in enforcing this indemnity or in defending against such claims),arising out of or in any manner connected with or resulting from the Lease orthe Equipment, including, without limitation the manufacture, purchase,financing, ownership, rejection, non-delivery, transportation, delivery,possession, use, operation, maintenance, condition, lease, return, storage ordisposition thereof; including without limitation those claims based on latentand other defects, whether or not discoverable, or any claim for patent,trademark or copyright infringement). The provisions of this Section shall survive the expiration ortermination of any Lease.

 

(b)                                 Uponrequest of Lessor, Lessee shall assume the defense of all demands, claims, oractions, suits and all proceedings against Lessor for which indemnity isprovided and shall allow Lessor to participate in the defense thereof.  Lessor shall be subrogated to all rights ofLessee for any matter which Lessor has assumed obligation hereunder, and maysettle any such demand, claim, or action without Lessee’s prior consent, andwithout prejudice to Lessor’s right to indemnification hereunder.

 

**13.****                               RISKOF LOSS OR DAMAGE**

 

(a)                                  Fromthe earlier of the date the supplier ships the Equipment to Lessee or the dateLessor confirms Lessee’s purchase order or contract to supplier until the datethe Equipment is returned to Lessor as provided in the Lease, Lessee herebyassumes and shall bear all risk of loss for theft, damage or destruction to theEquipment, howsoever caused.  NO SUCHLOSS OR DAMAGE SHALL IMPAIR ANY OBLIGATION OF LESSEE UNDER THIS LEASE WHICHSHALL CONTINUE IN FULL FORCE AND EFFECT.

 

(b)                                 Inthe event of damage or loss to the Equipment (or any part thereof) and irrespectiveof payment from any insurance coverage maintained by Lessee, but applying fullcredit therefore, Lessee shall at the option of Lessee, (a) place theEquipment in good repair, condition and working order; or (b) replace theEquipment (or any part thereof) with like property of equal or greater value,in good repair, condition and working order and transfer clear title to suchreplacement property to Lessor whereupon such replacement property shall bedeemed the Equipment for all purposes under the Lease; or (c) pay toLessor the total rent due and owing at the time of such damage or loss plus anamount which is equal to the Casualty Loss Value (defined in the Casualty LossSchedule) specified in the Casualty Loss Schedule attached to theSchedule.

 

**14.****                               INSURANCE**

 

During the term of this Lease, Lessee shall at its sole cost andexpense maintain in full force and effect “all risk” extended coverage fire andcasualty insurance on the Equipment, and comprehensive public liabilityinsurance in amounts and with carriers reasonably satisfactory to Lessor.  Any such insurance shall name Lessor and theAssignee(s) as additional insured and, as for the “all risk” insurance, losspayees as their interests may appear. Such policy shall provide that it may not be cancelled or materiallyaltered unless thirty (30) days prior written notice is given to all partiesnamed therein.  Upon Lessor’s writtenrequest, Lessee shall provide Lessor with a Certificate of Insurance evidencingsuch insurance coverage.  If, within fifteendays after Lessee’s receipt of such request, Lessee has not provided Lessorwith a satisfactory Certificate, then Lessor may, at Lessor’s option, obtainsuch insurance until Lessee provides the Certificate, and Lessee shallreimburse Lessor for the cost of such insurance when billed.  All insurance covering loss or damage to theEquipment shall contain a breach of warranty clause reasonably satisfactory toLessor.

 

7

----

 

**15.****                               EVENTSOF DEFAULT**

 

(a)                                  An“Event of Default” shall occur under any Lease if:

 

(1)                                  Lesseefails to pay any installment of rent or other charge or amount due under theLease within ten (10) days after notice that such payment is overdue; or

 

(2)                                  Lesseeattempts to or does, remove, sell, assign, transfer, encumber, sublet or partwith possession of any one or more items of the Equipment or any interest underany Lease, except as expressly permitted herein, or permits a judgment or otherclaim to become a lien upon any or all of Lessee’s assets or upon theEquipment; or

 

(3)                                  Lesseepermits any item of Equipment to become subject to any levy, seizure,attachment, assignment or execution; or Lessee abandons any item of Equipment;or

 

(4)                                  Lesseeor any guarantor of Lessee, fails to observe or perform any of its covenantsand obligations required to be observed or performed under the Lease and suchfailure continues uncured for ten (10) days after written notice isprovided to Lessee, except that the ten (10) day cure period shall notapply and an Event of Default shall occur immediately upon Lessee’s failure tomaintain insurance; or

 

(5)                                  Lesseeor any guarantor of Lessee, breaches any of its representations and warrantiesmade under any Lease, or if any such representations or warranties shall befalse or misleading in any material respect; or

 

(6)                                  Lesseeor any guarantor of Lessee, shall (i) be adjudicated insolvent or abankrupt, or cease, be unable, or admit its inability, to pay its debts as theymature, or make a general assignment for the benefit of creditors or enter intoany composition or arrangement with creditors; (ii) apply for or consentto the appointment of a receiver, trustee or liquidator of it or of asubstantial part of its property, or authorize such application or consent, orproceedings seeking such appointment shall be instituted against it withoutsuch authorization, consent or application and shall continue undismissed for aperiod of sixty (60) days; (iii) authorize or file a voluntary petition inbankruptcy or apply for or consent to the application of any bankruptcy,reorganization in bankruptcy, arrangement, readjustment of debt, insolvency,dissolution, moratorium or other similar law of any jurisdiction, or authorizesuch application or consent; or proceedings to such end shall be institutedagainst it without such authorization, application or consent and suchproceeding instituted against it shall continue undismissed for a period ofsixty (60) days; or

 

(7)                                  Lesseeor any guarantor of Lessee, shall suffer a material adverse change in itsfinancial condition after the date hereof as reasonably determined by Lessor inits reasonable discretion, or there shall occur a substantial change inownership of the outstanding stock of Lessee or a substantial change in controlof its board of directors; or

 

(8)                                  Lesseeshall be in default under any other Schedule or agreement executed withLessor; or shall fail to sign or otherwise authenticate and deliver to Lessorany document or record reasonably requested by Lessor in connection with anyLease, or shall fail to provide financial statements to Lessor as provided in Section 19(j)hereof, or if Lessee is in default of any agreement with any party other thanLessor; or

 

(9)                                  Lesseebreaches any license or other agreement for Software; or

 

8

----

 

(10)                            Lesseefails to promptly execute or otherwise authenticate and deliver to Lessor orits assigns any document or record, as applicable, required under the terms ofthis Master Lease; or

 

(11)                            Lesseeshall have terminated or changed its corporate existence, consolidated with,merged into, or conveyed or leased substantially all of its assets to anyperson or entity, unless: (i) such person or entity executes and deliversto Lessor an agreement satisfactory in form and substance to Lessor, in itssole discretion, containing such person’s or entity’s effective assumption, andits agreement to pay, perform, comply with and otherwise be liable for, in adue and punctual manner, all of Lessee’s obligations having previously arisen,or then or thereafter arising, under the Lease, together with any and alldocuments, agreements, instruments, certificates, opinions and filingsrequested by Lessor; (ii) Lessor is satisfied as to the creditworthinessof such person’s or entity’s conformance to other standard criteria then usedby Lessor for such purposes; and (iii) Lessee has provided no less thanthirty (30) days prior written notice of such occurrence to Lessor or itsassigns; or

 

(12)                            Lessorin good faith believes that the prospect of payment or performance has becomeimpaired, or if Lessee takes any action, makes any representation, or fails todo any thing requested by Lessor, at any time before or after the execution ofthis Master Lease, the result of which causes Lessor, in good faith, to believethat the prospect of Lessee’s payment or performance under the Lease isimpaired, or otherwise causes Lessor to feel insecure in funding or continuingto fund the Lease or any Schedule.

 

**16.****                               REMEDIES**

 

(a)                                  Uponthe happening of any Event of Default, and at any time thereafter, Lessor maydeclare the Lessee to be in default, and may do any one or more of thefollowing:

 

(1)                                  enforce this MasterLease according to its terms;

 

(2)                                  advancefunds on Lessee’s behalf to cure the Event of Default, whereupon Lessee shallimmediately reimburse Lessor therefore, together with late charges accruedthereon;

 

(3)                                  refuse to deliver theEquipment to Lessee;

 

(4)                                  upon notice tolessee, refuse to fund any Schedule(s) pursuant to the Lease;

 

(5)                                  uponnotice to Lessee, cancel this Master Lease and any or all Schedules executedpursuant thereto;

 

(6)                                  require additionalcollateral to secure the Lease;

 

(7)                                  declare any Lease(s)immediately due and payable;

 

(8)                                  ifLessor determines, in its sole discretion, not to take possession of theEquipment, Lessor shall continue to be the owner of the Equipment and may, butis not obligated to, dispose of the Equipment by sale or otherwise, all ofwhich determinations may be made by Lessor in its sole discretion and for itsown account;

 

(9)                                  declareimmediately due and payable all amounts due or to become due hereunder for thefull term of the Lease (including any renewal or purchase options which Lesseehas contracted to pay);

 

(10)                            withor without terminating the Lease, recover the Casualty Loss Value of theEquipment as of the rent payment date immediately preceding the date of defaulttogether with all costs and expenses incurred by

 

9

----

 

Lessor in the repossession, recovery,storage, repair, sale, re-lease or other disposition of the Equipment,including without limitation, reasonable attorney fees and costs incurred inconnection therewith or otherwise resulting or arising from Lessee’s default,and any indemnity if then determinable, plus interest on all of the above untilpaid (before and after judgment) at the lesser of the rate of eighteen percent(18%) per annum or the highest rate permitted by law;

 

(11)                            withnotice to Lessee, repossess the Equipment wherever found, with or without legalprocess, and for this purpose Lessor and/or its agents or assigns may enterupon any premises of or under the control or jurisdiction of Lessee or anyagent of Lessee, without liability for suit, action or other proceeding byLessee (any damages occasioned by such repossession being hereby expresslywaived by Lessee) and remove the Equipment therefrom; Lessee further agrees ondemand, to assemble the Equipment and make it available to Lessor at a place tobe designated by Lessor;

 

(12)                            in itssole discretion, sell, re-lease or otherwise dispose of any or all of theEquipment securing such Schedule, whether or not in Lessor’s possession, in acommercially reasonable manner at public or private sale with notice to Lessee(the parties agreeing that ten (10) days’ prior written notice shallconstitute adequate notice of such sale), and apply the net proceeds of anysuch disposition, after deducting all Equipment costs incurred by Lessor inconnection with such default to the obligations of Lessee hereunder and undersuch Schedule, or proposed to retain any or all of the Equipment in full orpartial satisfaction, as the case may be, with Lessee remaining liable for anydeficiency. The sale, re-lease, or other disposition may, at Lessor’s soleoption, be conducted at Lessee’s premises. Lessor may at its sole discretion recover from Lessee liquidated damagesfor the loss of a bargain and not as a penalty an amount equal to the Lessor’sdamages;

 

(13)                            ifLessee breaches any of its obligations under Section 6(g) of thisMaster Lease with regard to Software, Lessee shall be liable to Lessor foradditional damages in an amount equal to the original price paid by Lessor forthe Software, and in addition, at Lessor’s option, Lessor shall be entitled toinjunctive relief;

 

(14)                            exerciseany other right or remedy which may be available to it under the UniformCommercial Code or any other applicable law;

 

(15)                            acancellation hereunder shall occur only upon notice by Lessor and only as to suchitems of Equipment as Lessor specifically elects to cancel and this Lease shallcontinue in full force and effect as to the remaining items, if any;

 

(16)                            (i) bynotice to Lessee, declare any license agreement with respect to Softwareterminated, in which event the right and license of Lessee to use the Softwareshall immediately terminate, and Lessee shall thereupon cease all use of theSoftware and return all copies thereof to Lessor or original licensor; (ii) haveaccess to and disable the Software by any means deemed necessary by Lessor, forwhich purposes Lessee hereby expressly consents to such access and disablement,promises to take no action that would prevent or interfere with Lessor’sability to perform such access and disablement, and waives and releases any andall claims that it has or might otherwise have for any and all losses, damages,expenses, or other detriment that it might suffer as a result of such accessand disablement; and (iii) Lessee agrees that the detriment which Lessorwill suffer as a result of a breach by Lessee of the obligations contained inthe Lease cannot be adequately compensated by monetary damages, and thereforeLessor shall be entitled to injunctive and other equitable relief to enforcethe provisions of this paragraph.  LESSEEAGREES THAT LESSOR SHALL HAVE NO DUTY TO MITIGATE LESSOR’S DAMAGES UNDER ANYLEASE BY TAKING LEGAL ACTION TO RECOVER THE SOFTWARE FROM LESSEE OR ANY THIRDPARTY, OR TO DISPOSE OF THE SOFTWARE BY SALE, RE-LEASE OR OTHERWISE.

 

10

----

 

(17)                            Withrespect to any exercise by Lessor of its right to recover and/or dispose of anyEquipment securing Lessee’s obligations under any Schedule, Lessee acknowledgesand agrees as follows: (i) Lessor shall have no obligation, subject to therequirements of commercial reasonableness, to clean-up or otherwise prepare theEquipment for disposition; (ii) Lessor may comply with any applicableState or Federal law requirements in connection with any disposition of theEquipment, and any actions taken in connection therewith shall not be deemed tohave adversely affected the commercial reasonableness of any disposition ofsuch Equipment; (iii) Lessor may specifically disclaim any warranties oftitle or the like with respect to the disposition of the Equipment; (iv) ifLessor purchases any of the Equipment, Lessor may pay for the same by creditingsome or all of Lessee’s obligations hereunder or under any Schedule; and (v) noright or remedy referred to in this Section is intended to be exclusive,but each shall be cumulative and shall be in addition to any other remedyreferred to above or otherwise available at law or in equity, and may beexercised concurrently or separately from time to time.

 

(b)                                 Lessormay exercise any and all rights and remedies available at law or in equity,including those available under the Uniform Commercial Code.  The rights and remedies afforded Lessorhereunder shall not be deemed to be exclusive, but shall be in addition to anyrights or remedies provided by law. Lessor’s failure promptly to enforce any right or remedy hereunder shallnot operate as a waiver of such right or remedy, and Lessor’s waiver of anydefault shall not constitute a waiver of any subsequent or other default.  Lessor may accept late payments or partialpayments of amounts due under the Lease and may delay enforcing any of Lessor’srights or remedies hereunder without losing or waiving any of Lessor’s rightsor remedies under the Lease.

 

**17.****                               LESSOR’STAX BENEFITS**

 

Lessee acknowledges that Lessor shall be entitled to claim all taxbenefits, credits and deductions related to the Equipment for federal incometax purposes including, without limitation: (i) deductions on Lessor’scost of the Equipment for each of its tax years during the term of the Leaseunder any method of depreciation or other cost recovery formula permitted bythe Internal Revenue Code of 1986, as amended (“Code”), and (ii) interestdeductions as permitted by the Code on the aggregate interest paid to anyAssignee (hereinafter collectively called “Lessor’s Tax Benefits”).  Lessee agrees to take no action inconsistent(including voluntary substitution of Equipment) with the foregoing or whichwould result in the loss, disallowance, recapture or unavailability to Lessorof Lessor’s Tax Benefits.  Lessee herebyindemnifies Lessor and its Assignee(s) from and against (a) any loss,disallowance, unavailability or recapture of Lessor’s Tax Benefits resultingfrom any action or failure to act of Lessee, including replacement of theEquipment, plus (b) all interest, penalties, costs (including attorney’sfees), or additions to tax resulting from such loss, disallowance,unavailability or recapture.

 

**18.****                               REPRESENTATIONSAND WARRANTIES OF LESSEE**

 

(a)                                  Lesseerepresents and warrants to Lessor and its Assignee(s) as follows:

 

(1)                                  IfLessee is a corporation, that it is duly organized and validly existing in goodstanding under the laws of the jurisdiction of its incorporation, that it isduly qualified to do business in each jurisdiction where any Equipment is, oris to be located, and has full corporate power and authority to hold propertyunder lease and to enter into and perform its obligations under any Lease; thatthe execution, delivery and performance by Lessee of any Lease has been dulyauthorized by all necessary corporate action on the part of Lessee, and is notinconsistent with its articles of incorporation or by-laws or other governinginstruments;

 

(2)                                  Theexecution, delivery and performance by Lessee of any Lease does not violate anylaw or governmental rule, regulation, or order applicable to Lessee, does notand will not contravene any provision, or constitute a default under anyindenture, mortgage, contract, or other instrument to which it 

 

11

----

 

is bound and, upon execution and delivery ofeach Lease, will constitute a legal, valid and binding agreement of Lessee,enforceable in accordance with its terms;

 

(3)                                  Noaction, including any permits or consents, in respect of or by any state,federal or other governmental authority or agency is required with respect tothe execution, delivery and performance by Lessee of any Lease;

 

(4)                                  (i) Lessee’sstate of incorporation is the state listed in the introductory paragraph ofthis Lease; (ii) Lessee’s chief executive office is located in the statelisted in the introductory paragraph of this Lease; (iii) Lessee is thelegal entity or organization indicated in the introductory paragraph of thisLease, which organization is duly organized, validly existing and in goodstanding under the laws of the state listed in the introductory paragraph ofthis Lease; and (iv) Lessee’s full and exact legal name is the same aslisted in the introductory paragraph of this Lease.

 

(5)                                  Lessee does not owe any amount to, or haveany contract with or commitment to (including, without limitation, guaranties)any of Lessee’s directors, officers, employees, vendors, customers,consultants, parents, subsidiaries or affiliates (other than compensation forcurrent services not yet due and payable and reimbursement of expenses arisingin the ordinary course of Lessee’s particular business), and none of suchpersons or entities owes any amount to Lessee. No part of the property or assets (including any item of leasedequipment or property) of any parent, subsidiary or affiliate of Lessee is usedby Lessee in its business.  Lessee hasdisclosed to Lessor the identity of and basic contact information for, anyparent, subsidiary or affiliate of Lessee. Lessee has also disclosed to Lessor all contracts and commitments(including, without limitation, guaranties) between Lessee and any of Lesseesdirectors, officers, employees, vendors, customers, consultants, parents,subsidiaries or affiliates.

 

(6)                                  No lawsuit, action, administrativeproceeding, arbitration proceeding, bankruptcy filing, insolvency proceeding,governmental investigation, or other legal or equitable proceeding of any kindis pending or threatened, or to Lessee’s knowledge, contemplated, againstLessee or any of Lessee’s property, or against any of Lessee’s parents,subsidiaries or affiliates or their property, that might adversely affect theoperation of Lessee’s business or cause a material adverse change in Lessee’sfinancial condition.

 

(7)                                  Lessee has disclosed to Lessor true, accurateand complete information regarding Lessee’s indebtedness for borrowed money orguarantees of any obligation or liability for any entity that may have amaterial impact on the operation of Lessee’s business or Lessee’s financialcondition.  Lessee is not in default orviolation of any provision of any agreement or guarantee evidencing or relatingto its indebtedness for borrowed money.

 

(8)                                  All information and documents Lessee hassupplied to Lessor regarding or reflecting Lessee’s operations, business orfinances fairly represent the financial condition of Lessee and its businessoperations for the periods covered and are true, accurate and complete in allmaterial respects.  The books, recordsand accounts of Lessee fairly reflect all material transactions, all materialassets of Lessee and all material liabilities of Lessee.

 

(9)                                  No representation or warranty by Lessee inthis Master Lease or in any written information provided, or to be provided, toLessor contains or will contain any untrue statement of a material fact, oromits or will omit to state a material fact necessary to make the statementscontained herein or therein not misleading.

 

(b)                                 Tothe extent permitted by applicable law, Lessee hereby waives any and all rightsand remedies conferred upon a Lessee by Sections 70A-2A-508 through 70A-2A-522of the Utah Uniform Commercial Code, including but not limited to Lessee’srights to: (i) cancel the Lease; (ii) repudiate the Lease; (iii) revokeacceptance of the

 

12

----

 

Equipment; (iv) claim, grant or permit asecurity interest in the Equipment in Lessee’s possession or control for anyreason; (v) deduct all or any part of any claimed damages resulting fromLessor’s default, if any, under the Lease; (vi) cover by making anypurchase or lease of or contract to purchase or lease property in substitutionfor the Equipment due from Lessor; (vii) recover any general, special,incidental or consequential damages, for any reason whatsoever.  To the extent permitted by applicable law,Lessee also hereby waives any rights now or hereafter conferred by statute orotherwise which may require Lessor to sell, lease or otherwise use anyEquipment in mitigation of Lessor’s Damages as set forth in Section 16hereof or which may otherwise limit or modify any of Lessor’s rights orremedies in that section.

 

**19.****                               GENERAL**

 

(a)                                  ThisLease and all Schedules duly executed and attached hereto from time to timeconstitute the entire agreement between the parties hereto with respect to theEquipment, and any change or modification hereto and any related agreement mustbe in writing and signed by the parties hereto. Notwithstanding the foregoing, Lessee authorizes Lessor to amend any Schedule toidentify more accurately the Equipment (including, without limitation,supplying serial numbers or other identifying data), and such amendment shallbe binding on Lessor and Lessee unless Lessee objects thereto in writing withinten 10 days after receiving notice of the amendment from Lessor.

 

(b)                                 Thereshall be a single executed original of this Lease which shall be marked and forthe purposes hereof shall be referred to as the “Original”; all othercounterparts shall be marked “Duplicate”. To the extent, if any, that this Lease constitutes chattel paper (assuch term is defined in the Uniform Commercial Code as in effect in anyapplicable jurisdiction) no security interest therein may be created throughthe transfer or possession of this Lease or of any counterpart of this Leaseother than the Original, provided that if any Schedule to this Lease isexecuted by the parties hereto, (i) each such Schedule shallconstitute a new lease between the parties; (ii) there shall be a singleexecuted original of each such Schedule marked “Original”; (iii) allother counterparts of such Schedule shall be marked “Duplicate”; and (iv) tothe extent, if any, that any such Schedule constitutes chattel paper (asdefined above) no security interest therein may be created through the transferor possession of the Original of this Lease or any counterpart of such Schedule otherthan the Original of such Schedule.

 

(c)                                  Noticesor demands required to be given hereunder shall be in writing and shall bedelivered in person or sent by certified mail, return receipt requested, or bycourier service to the address of the other party set forth in the introductionof this Master Lease or to such other address as such party shall havedesignated by proper notice.

 

(d)                                 Uponthe completion of the Base Term of any Lease, Lessee shall, provided at leastone hundred eighty (180) days prior written notice is received by Lessor fromLessee via certified mail, elect one of the following options: (i) purchaseall, but not less than all, of the Items of Equipment for a price to be agreedupon by both Lessor and any applicable Assignee and Lessee, (ii) extendthe Lease for twelve (12) additional months at the rate specified on therespective Schedule, or (iii) return the Equipment to Lessor at Lessee’sexpense to a destination within the continental United States specified byLessor and terminate the Schedule; provided, however, that for option (iii) toapply, all accrued but unpaid late charges, interest, taxes, penalties, and anyand all other sums due and owing under the Schedule must first be paid infull, Lessee shall have complied with the provisions of Sections 6(b), (c), (g) andSection 7 hereof must be specifically complied with, and Lessee must enterinto a new Schedule with Lessor to lease Equipment which replaces theEquipment listed on the old Schedule. With respect to options (i) and (iii), each party shall have theright in its absolute and sole discretion to accept or reject any terms ofpurchase or of any new Schedule, as applicable. In the event Lessor and Lessee have not agreed to either option (i) or(iii) by the end of the Base Term or if Lessee fails to give writtennotice of its election via certified mail at least one hundred eighty (180)days prior to the termination of the Base Term, then option (ii) shallapply at the end of the Base Term.  Atthe conclusion of the extension period provided for in option (ii) above,the Lease shall continue in effect at the rate specified in the respective Schedule forsuccessive periods of six (6) months each subject to

 

13

----

 

termination at the end of any such successivesix-month renewal period by either Lessor or Lessee giving to the other partyat least one hundred eighty (180) days prior written notice of termination.

 

(e)                                  Timeis of the essence with respect to any Lease. The provisions contained in any agreement shall be deemed to beindependent and severable.  Theinvalidity or partial invalidity of any one provision or portion of the Leaseunder the laws of any jurisdiction shall not affect the validity orenforceability of any other provisions of the Lease.  The captions and headings set forth hereinare for convenience of reference only and shall not define or limit any of theterms hereof.

 

(f)                                    THISLEASE SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THELAWS OF THE STATE OF UTAH, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY ANDPERFORMANCE.  LESSEE AGREES TO SUBMIT TOTHE JURISDICTION OF THE STATE AND/OR FEDERAL COURTS IN THE STATE OF UTAH IN ALLMATTERS RELATING TO THE LEASE, THE EQUIPMENT AND THE CONDUCT OF THERELATIONSHIP BETWEEN LESSOR AND LESSEE. THIS LEASE WAS EXECUTED IN THE STATE OF UTAH (BY THE LESSOR HAVINGCOUNTERSIGNED IT IN UTAH) AND IS TO BE PERFORMED IN THE STATE OF UTAH (BYREASON OF ONE OR MORE PAYMENTS REQUIRED TO BE MADE TO LESSOR IN UTAH).  LESSOR AND LESSEE HEREBY WAIVE THE RIGHT TOTRIAL BY JURY OF ANY MATTERS ARISING OUT OF THE LEASE OR EQUIPMENT OR THE CONDUCTOF THE RELATIONSHIP BETWEEN LESSOR AND LESSEE.

 

(g)                                 IfLessee fails to sign and deliver an Acceptance Certificate, then except asotherwise provided in Section 3 or 2(a) hereof, the Acceptance Dateshall be a date determined by Lessor which shall be no sooner than the dateLessee receives substantially all of the Equipment.

 

(h)                                 Theparties acknowledge and agree that this is a “true lease” and title to theleased Equipment is vested in the Lessor. In the event a court of competent jurisdiction or other governingauthority shall determine that the Lease is not a “true lease” or is a leaseintended as security or that Lessor (or its assigns) does not hold legal titleto or is not the owner of the Equipment, the following shall apply:

 

(1)                                  Effectivethe execution date of the Lease, Lessee, as debtor, grants a security interestto Lessor, as secured party, in the Equipment, including all Items and otherpersonal property, general intangibles, and accessions to and proceeds of anyof the foregoing, to secure all duties and obligations of Lessee under anyLease or other agreement with Lessor. The Lease shall be deemed to be a security agreement with Lessee havinggranted to Lessor a security interest in the Equipment, and the Equipment shallsecure all duties and obligations of Lessee under any Lease or other agreementwith Lessor.  With regard to any securityinterest created hereunder in any of the Equipment, Lessee consents and agreesthat Lessor shall have all of the rights, privileges and remedies of a securedparty under the Utah Uniform Commercial Code.

 

(2)                                  Lesseeauthorizes Lessor to file financing statements and any records describing theEquipment and to take any and all actions necessary to perfect Lessor’sinterest in the Equipment.  Lessee agreesto execute any further documents, and to take any further actions, reasonablyrequested by Lessor to evidence or perfect the security interest granted underthis subpart of the Lease, to maintain the first priority of the securityinterests, or to effectuate the rights granted to Lessor under this subpart ofthe Lease.

 

(i)                                     Lessor’sobligations under each Schedule are conditioned upon Lessor’s receipt ofand determination that the following are satisfactory to Lessor:  (a) lien searches in the jurisdiction ofLessee’s organization and in each jurisdiction in which the Equipment and/orLessee’s chief executive office are located; (b) if requested by Lessor, acertified copy of Lessee’s organizational documents; and (c) if requestedby Lessor, certificates of good standing from the jurisdiction of Lessee’sorganization and evidence of Lessee’s organizational number.

 

14

----

 

(j)                                     Lessee,and any guarantor, shall provide to Lessor a copy of its annual auditedfinancial statements within ninety (90) days after its fiscal year end, and acopy of its quarterly unaudited financial statements within forty-five (45)days after the end of each fiscal quarter.

 

(k)                                  Inthe event two or more parties execute this Master Lease as Lessee, each partyshall be jointly and severally liable for all Lessee representations,warranties, and obligations (including without limitation, payment obligations)under this Master Lease or under any Schedule or other document executedin connection herewith.

 

(l)                                     Lesseeagrees that it will not, through any of its actions or omissions, cause anydocument, or any portion of any document, associated with any Lease to bedelivered, disseminated, or otherwise fall into the possession of anyone notemployed by Lessee on a full time basis, without the written consent ofLessor.  Lessee further acknowledges thatany such unauthorized delivery or dissemination could cause Lessor to sufferirreparable economic harm.

 

(m)                               IfLessee fails to perform or comply with any of its agreements contained herein,Lessor may perform or comply with such agreements and the amount of anypayments and expenses of Lessor incurred in connection with such performance orcompliance (including attorney fees), together with interest thereon at thelesser of the rate of eighteen percent (18%) per annum, or the highest ratepermitted by law shall be deemed additional rent payable by Lessee upon demand,if Lessee is in default under any Lease.

 

(n)                                 Lesseeshall reimburse Lessor for all reasonable charges, costs, expenses and attorneyfees incurred by Lessor:  (i) inpreparation of Lease documentation; (ii) in defending or protecting itsinterest in the Equipment; (iii) in the enforcement of the Lease or thecollection of any rent or other payments due under the Lease, or the preparationof any amendments or settlement agreements prepared in connection with theLease; and (iv) in any lawsuit or other legal or arbitration/mediationproceeding to which the Lease gives rise, including without limitation, actionsin tort.

 

(o)                                 Lesseewill cooperate with Lessor in protecting Lessor’s interests in the Equipment,the Lease and the amounts due under the Lease. Lessee will promptly execute, or otherwise authenticate, and deliver toLessor such further documents, instruments, assurances and other records, andtake such further action as Lessor may reasonably request in order to carry outthe intent and purpose of this Lease and to establish and protect the rightsand remedies created or intended to be created in favor of Lessor under thisLease.  Lessee hereby authorizes Lessorto file UCC financing statements and fixture filings, requested real propertywaivers, and all other filings and recordings, as may be deemed necessary byLessor.  Lessee hereby authorizes and/orratifies the filing of any UCC-1 financing statements by Lessor before or afterthe execution of this Lease.  Lesseeshall pay all costs of filing any financing, continuation or terminationstatements with respect to the Equipment and Lease, including withoutlimitation, any intangibles tax, documentary stamp tax or other similar taxesor charges relating thereto and all costs of UCC or other lien searches and ofobtaining and filing any full or partial third-party releases deemed necessaryor advisable by Lessor.  Lessee will do whatevermay be necessary or advisable to have a statement of the interest of Lessor inthe Equipment noted on any certificate of title relating to the Equipment andwill deposit said certificate with Lessor. Lessee grants to Lessor a security interest in all deposits and otherproperty transferred or pledged to Lessor to secure the payment and performanceof all of Lessee’s obligations under the Lease.   Lessor is authorized to take any measuresnecessary to protect its interest in the Equipment.   In the event the Equipment is in thepossession of a third party, Lessee will join with Lessor in notifying thethird party of Lessor’s interest in the Equipment and obtaining anacknowledgment from the third party that the third party is holding theEquipment for the benefit of Lessor.

 

(p)                                 Lesseehereby authorizes and appoints Lessor and Lessor’s agents and assigns as Lessee’sattorney-in-fact to execute acknowledgement letters and other documentsrequired to be executed by Lessee to effect any underwriting or perfect anysecurity interest with regard to a Schedule.

 

15

----

 

**IN WITNESS WHEREOF**,Lessor and Lessee, through their respective duly authorized and actingrepresentatives, have signed and executed this Master Lease as of the day anddate first above written.

 
| **LESSOR:**                       | **LESSEE**                |
|-----------------------------------|---------------------------|
| ** **                        | ** **                |
| **TETRA FINANCIAL GROUP, L.L.C.** | **SENTO CORPORATION**     |
|                              |                      |   |   |
| BY:                               |                      |   | BY: |   |   |
|                              |                      |   |   |
| NAME:                             | Scott R.  Scharman        |   | NAME: | Anthony J.  Sansone |   |
|                              |                      |   |   |
| TITLE:                            | Executive  Vice President |   | TITLE: | Senior Vice  President/CFO |   |
|                                   |                           |  |  |  |  |  |  |

 

16

----

 

**AMENDEDAND RESTATED**

# **LEASE SCHEDULE NO. 1**

**TO**

**MASTERLEASE AGREEMENT NO. TFG/SC 121405**

 
| **LESSEE:**                          | ** ** | **LESSOR:**                             |
|--------------------------------------|------------|-----------------------------------------|
|                                 |       |                                    |
| Sento  Corporation                   |       | Tetra Financial  Group, L.L.C.          |
| 420 E. South  Temple, Suite 400 |       | 6925 Union  Park Center, Suite 525 |
| Salt Lake  City, UT 84111            |       | Midvale, UT  84047                      |

 

1.               Equipment:  Cisco Network Equipment, Verint ScreenRecording Software, Nextira Solutions Data Switches as more fully described onthe attached Exhibit A which by this reference is made a part hereof.

 

2.               EquipmentLocation:  Various locations as morefully described on the attached Exhibit A which by this reference is madea part hereof.

 

3.               AcceptanceDate:  As specified in the AcceptanceCertificate

 

4.               Base Term:  Twelve (12) quarters starting on theCommencement Date

 

5.               Base QuarterlyRental:  $49,385.54, plus applicablesales tax.  Payments will be transferredelectronically from your account using Automated Clearing House (“ACH”)

 

6.               Deposit:  $49,385.54 to be applied to last billingperiod

 

7.               Total Equipment Cost:  $558,281.00

 

8.               Base Lease RateFactor:  .08846

 

9.               Representation ofLessee:  Lessor and Lessee agree thatthis Lease Schedule constitutes a “finance lease” under the UniformCommercial Code – Article 2A, in that (a) Lessee has selected theProperty in its sole discretion, (b) Lessor has acquired the Propertysolely for purposes of leasing such Property under this Lease Schedule, and (c) Lesseehas received a copy of the contract evidencing Lessor’s purchase of theProperty.

 

This Amendedand Restated Lease Schedule No. 1 incorporates by reference the termsand conditions of Master Lease Agreement No. TFG/SC 121405 dated December 14,2005 (the “Master Lease”), Exhibit A (the “Equipment Description”) and Exhibit B(the “Casualty Loss Schedule”), and constitutes a separate “Lease” betweenLessor and Lessee. All capitalized terms used herein but not defined hereinshall have the same meanings ascribed to them in the Master Lease.  This Amended and Restated Lease Schedule No. 1supercedes and replaces Lease Schedule No. 1 dated as of the 14th dayof December, 2005.

 

**IN WITNESS WHEREOF,  **the parties haveexecuted this Amended and Restated Lease Schedule as of the 6th day ofFebruary, 2006.

 
| **LESSOR:**                       | **LESSEE:**               |
|-----------------------------------|---------------------------|
|                              |                      |
| **TETRA FINANCIAL GROUP, L.L.C.** | **SENTO CORPORATION**     |
|                              |                      |   |   |
| By:                               |                      |   | By: |   |   |
|                              |                      |   |   |
| Name:                             | Scott R. Scharman         |   | Name: | Anthony J. Sansone |   |
|                              |                      |   |   |
| Title:                            | Executive Vice  President |   | Title | Senior Vice  President/CFO |   |
|                                   |                           |  |  |  |  |  |

 

----