Document:

Exhibit 10.1

 

	

	

Exhibit 10.1

 

	
 

	
For Bank Use Only

Due: December 31, 2019

Obligor 0028586166

Obligation 406

 

 

AMENDMENT TO NOTE

 

This amendment (the "Amendment") is made between the undersigned borrower (the
"Borrower") and U.S. Bank National Association (the
"Bank") and shall be effective as of the date set forth
on the last page of the Amendment, except as otherwise provided
below.

 

RECITALS

 

A.

Borrower (or predecessor) executed a note
originally dated or amended or restated as of February 12, 2018,
payable to Bank (or predecessor) (as further amended and/or
restated, the "Note"). The Note and all collateral and/or other
documents, which may or may not be identified in the Note, which
supplement, secure or otherwise relate to the credit facility
evidenced by the Note are collectively referred to as the
"Loan
Documents". The Loan Documents
set forth the terms and conditions upon which Borrower has obtained
or may obtain a loan or loans from Bank in the original or amended
or restated principal amount of $5,000,000.00, as such amount may
have been or may from time to time be increased or decreased
according to the terms of the Loan Documents.

 

B.

Borrower
has requested that Bank permit certain modifications to the Note as
described below.

 

C.

Bank
has agreed to such modifications, but only upon the terms and
conditions outlined in the Amendment.

 

In
consideration of the mutual covenants contained herein, and for
other good and valuable consideration, Borrower and Bank agree as
follows:

 

ADDITIONS, DELETIONS OR CHANGES IN TERMS

 

The
following provisions are hereby added to the Note or, if so
indicated below, specified provisions of the Note are modified, in
part, or deleted or performance thereof is waived to the extent
provided below. If any provision or partial provision added below
already exists in the Note, such provision is restated in its
entirety. Capitalized terms used in the Amendment not otherwise
defined herein shall have the meanings ascribed to them in the
Note.

 

Modification of Maturity
Date. Any references in the
Note to the maturity date or date of final payment are hereby
deleted and replaced with "December 31, 2019".

 

Maximum Loan
Amount. All references in the
Note (whether or not numerical) to the maximum amount that may be
outstanding at any time are hereby deleted and replaced with
$6,000,000.00 (the "Loan Amount").

 

Interest Rate.
The interest rate under the Note
(including any provisions of the Note relating to periodic
adjustments to the applicable rate, maximum rate adjustments, floor
rates, ceiling rates and rate conversions) shall be amended as
follows:

 

Interest on each advance hereunder shall accrue at
an annual rate equal to 1.75% plus the one-month LIBOR rate quoted
by Bank from Reuters Screen LIBOROI Page or any successor thereto
which may be designated by Bank as provided below, which shall be
that one-month LIBOR rate in effect two New York Banking Days prior
to the Reprice Date, adjusted for any reserve requirement and any
subsequent costs arising from a change in government regulation,
such rate to be reset monthly on each Reprice Date. The term
"New York
Banking Day" means any date
(other than a Saturday or Sunday) on which commercial banks are
open for business in New York, New York. The term
"Reprice
Date" means the 1st day of each
month. If the initial advance under this Note occurs other than on
the Reprice Date, the initial one-month LIBOR rate shall be that
one-month LIBOR rate in effect two New York Banking Days prior to
the date of the initial advance, which rate plus the percentage
described above shall be in effect until the next Reprice Date.
Bank's internal records of applicable interest rates (including
without limitation Bank's designation of any successor interest
rate index if the rate index described above shall become
temporarily unavailable or shall cease to exist) shall be
determinative in the absence of manifest error.

 

Notwithstanding
anything to the contrary in the Note or the Amendment, for purposes
of determining any rate of interest which is based upon a stated
formula, neither the interest rate nor the index or other
referenced rate upon which the interest rate is based shall at any
time be less than 0%.

 

Payment Schedule.
The payment schedule for the Note
shall be amended as follows:

 

Interest
is payable beginning January 31, 2019, and on the last day of each
consecutive month thereafter, plus a final interest payment with
the final payment of principal.

 

Principal
is payable on December 31, 2019, the maturity date.

 

 

 

 

-1-

 

 

 

Deletion of Additional
Terms. The following named or
described additional terms are hereby deleted:

 

o

Paid-ln-Full
Period: the term which provides that all revolving loans under the
Agreement and Note must be paid in full for a specified number of
consecutive days during each fiscal year.

 

Default Interest Rate.
Notwithstanding any provision of the
Note to the contrary, upon any default or at any time during the
continuation thereof (including failure to pay upon maturity), Bank
may, at its option and subject to applicable law, (a) increase the
interest rate on the Note to a rate of 5% per annum plus the
interest rate otherwise payable under the Note and (b) until Bank
elects to accelerate payment of the Note according to the default
section, increase the required periodic payments under the Note
accordingly, Notwithstanding the foregoing and subject to
applicable law, upon the occurrence of a default by Borrower or any
guarantor involving bankruptcy, insolvency, receivership
proceedings or an assignment for the benefit of creditors, the
interest rate on the Note shall automatically increase to a rate of
5% per annum plus the rate otherwise payable under the
Note.

 

MISCELLANEOUS TERMS

 

Modification Fee.
Subject to applicable law, Borrower
will pay Bank a modification fee of S (apart from any prior closing
fee) contemporaneously with the execution of the Amendment. This
fee is in addition to all other fees, expenses and other amounts
due hereunder or under any other Loan
Documents.

 

Effectiveness of Prior
Documents. Except as
specifically amended hereby, the Note and the other Loan Documents
shall remain in full force and effect in accordance with their
respective terms. All warranties and representations contained in
the Note and the other Loan Documents are hereby reconfirmed as of
the date hereof. All collateral previously provided to secure the
Note continues as security, and all guaranties guaranteeing
obligations under the Loan Documents remain in full force and
effect. This is an amendment, not a novation.

 

Preconditions to
Effectiveness. The Amendment
shall only become effective upon execution by Borrower and Bank,
and approval by any other third party required by
Bank.

 

No Waiver of Defaults;
Warranties. The Amendment shall
not be construed as or be deemed to be a waiver by Bank of existing
defaults by Borrower, whether known or undiscovered. All
agreements, representations and warranties made herein shall
survive the execution of the Amendment.

 

Counterparts.
The Amendment may be signed in any
number of counterparts, each of which shall be considered an
original, but when taken together shall constitute one
document.

 

Authorization.
Borrower represents and warrants that
the execution, delivery and performance of the Amendment and the
documents referenced herein are within the authority of Borrower
and have been duly authorized by all necessary
action.

 

USA PATRIOT Act; Anti-Corruption Laws, Sanctions and Anti-Terrorism
Laws.

 

(a) IMPORTANT
INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the
government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to
obtain, verify, and record information that identifies each person
who opens an account, Bank will ask each person in a financial
transaction their name, address and other information that will
allow Bank to identify such person. Bank may also ask to see other
documents that substantiate a person's identity.

 

(b) Borrower
represents, warrants, covenants and agrees as follows:

 

(i)    
Borrower; each and all entities 50% or more owned,
directly or indirectly, by Borrower ("Subsidiaries"), and their respective officers, employees,
directors and agents are and at all times will remain in compliance
with the following: (A) all laws, rules, and regulations of any
jurisdiction applicable to Borrower or its Subsidiaries from time
to time concerning or relating to bribery or corruption
("Anti-corruption
Laws"), (B) economic or
financial sanctions or trade embargoes imposed, administered or
enforced from time to time by the U.S. government, including those
administered by the U.S. Department of Treasury's Office of Foreign
Assets Control or successor ("OFAC") or the U.S. Department of State or successor
("Sanctions"), and (C) the USA PATRIOT Act (Title Ill of Pub.
L. 107-56 (signed into law October 26, 2001 )), the Trading with
the Enemy Act, as amended, or any of the foreign assets control
regulations of the United States Treasury Department (31 C.F.R.,
Subtitle B, Chapter V) and any enabling legislation or executive
order relating thereto or successor statute thereto
("Anti-terrorism
Laws"), all as may be amended
from time to time,

 

(ii)    
The
loans made hereunder comply with, and neither the loans made
hereunder nor the use of the proceeds thereof will violate, any
Anti-corruption Laws, Sanctions or Anti-terrorism
Laws.

 

(iii)
None of Borrower, any Subsidiary or any of their
respective directors, officers or employees is (A) listed in any
Sanctionsrelated list of designated persons maintained by OFAC or
the U.S. Department of State, (B) operating, organized or resident
in a country or territory which is itself the subject or target of
any comprehensive Sanctions ("Sanctioned
Country"), (C) an agency,
political subdivision or instrumentality of the government of a
Sanctioned Country, or (D) 50% or more owned, directly or
indirectly, by any of the above.

 

 

 

-2-

 

 

 

(iv) Borrower shall, and shall cause each Subsidiary
to, provide such information and take such actions as are
reasonably requested by Bank to assist Bank in maintaining
compliance with Anti-corruption Laws, Sanctions, Anti-terrorism
Laws and applicable anti-money laundering laws and regulations
("AML
Laws"). Without limitation of
the foregoing, Borrower represents and warrants that the most
recent certification of beneficial ownership of any Borrower which
is a "legal entity" within the scope of the ownership certification
requirements of the AML Laws is true and correct as of the date of
the Amendment; and Borrower agrees to immediately (A) notify Bank
in writing of any event that results in any individual becoming or
ceasing to be the beneficial owner, directly or indirectly, of 25%
or more of any such "legal entity" Borrower; (B) notify Bank Of any
Change in the individual previously identified by Borrower's
representative(s) ("Account
Opener/Certifier") as the
individual who holds a significant responsibility to control,
manage or direct any such "legal entity" Borrower; and (C) upon
request of Bank, provide in a form acceptable to Bank an updated
certification, signed by a representative of any such "legal
entity" Borrower acting as an Account Opener/Certifier under
regulations implemented under the AML Laws, of the beneficial
ownership and control of such Borrower.

 

Copies; Electronic
Records. Borrower hereby
acknowledges the receipt of a copy of the Amendment, the Note and
all other Loan Documents. Bank may, on behalf Of Borrower, create a
microfilm or optical disk or other electronic image Of the
Amendment and any or all of the Loan Documents, including the Note.
Bank may store the electronic image of such Amendment and Loan
Documents in its electronic form and then destroy the paper
original as part of Bank's normal business practices, with the
electronic image deemed to be an original. To the extent permitted
by law, Borrower and Bank agree that Bank may convert the Note into
a "transferable record" or the equivalent thereof as defined in
applicable law and that such transferable record shall be the
authoritative copy of the Note. Bank, on its own behalf, may
control and transfer such authoritative copy as permitted by such
law.

 

Attachments. All documents attached hereto, including any
appendices, schedules, riders, and exhibits to the Amendment, are
hereby expressly incorporated herein by reference.

 

Dated
as of January 4, 2019.

 

BORROWER:

 

PARK CITY GROUP, INC.

a/an Nevada
Corporation

 

By: /s/ John R.
Merrill

Name and Title: John R. Merrill, SVP
Finance

 

BANK:

 

Agreed
to:

US.
Bank National Association

 

By:
/s/ Katie
Michalek

Name
and Title: Katie Michalek, Community Bank President

 

 

-3-

 

 

AMENDED AND RESTATED ADDENDUM TO STAND-ALONE REVOLVING
NOTE

 

This
Amended and Restated Addendum to Stand-Alone Revolving Note (this
"Addendum") is entered into by and between PARK CITY GROUP, INC., a
Nevada corporation ("Borrower"), and U.S. BANK NATIONAL ASSOCIATION
("Bank"). This Addendum (i) amends, restates and replaces that
certain Addendum to Stand-Alone Revolving Note between Borrower and
Bank dated as of February 12, 2018, and (ii) is incorporated into
and made a part of that certain Stand-Alone Revolving Note dated as
of February 12, 2018 in the original principal amount of
$5,000,000, as the same is being amended by that certain Amendment
to Note of even date herewith, which, among other things, increases
the principal amount from $5,000,000 to $6,000,000, each executed
by Borrower in favor of Bank (as amended, the "Note").

 

Capitalized
terms used herein and not otherwise defined herein shall have the
meaning set forth in the Note.

 

l .Section 3 of the Note is hereby amended and restated to read
in its entirety as follows:

 

“3            Paid-In-FulI
Period. All advances under this Note must be paid in full for two
(2) separate periods of at least thirty (30) consecutive days each
during each fiscal year."

 

2. Section 10 of the Note is hereby amended by replacing the
words "Not applicable." with the following paragraphs to read in
their entirety as follows:

 

"For
Borrower, together with Park City Group, Inc., a Delaware
corporation (TIN: 73-1247666):

 

Annual Financial
Statements: Not later than 120
days after the end of each fiscal year, annual financial
statements, audited by a certified public accounting firm
acceptable to Bank."

 

Quarterly Financial
Statements: Not later than 45
days after the end of each of the first three fiscal quarters of
each fiscal year, quarterly financial statements, compiled by a
certified public accounting firm acceptable to Bank; provided, that
Borrower will be granted a 10-day extension to provide to Bank such
quarterly financial statements in the event that Borrower has
requested that the US. Securities and Exchange Commission grant
Borrower an extension to file an amended quarterly
report."

 

3. Section 12 of the Note is hereby amended and restated to read
in its entirety as follows:

 

“12.                       Conditions
to Borrowing; Advances and Paying Procedure. Bank will not be obligated to
make (or continue to make) advances hereunder unless (i) Bank has
received executed originals of the Note and all other documents or
agreements applicable to any loans described herein, including but
not limited to the Loan Documents, in form and content satisfactory
to Bank; (ii) if the Note and loans thereunder arc secured, Bank
has received confirmation satisfactory to it that Bank has a
properly perfected security interest, mortgage or lien, with the
proper priority; (iii) Bank has received certified copies of
Borrower's governance documents and certification of entity status
satisfactory to Bank and all other relevant documents; (iv) Bank
has received a certified copy of a resolution or authorization in
form and content satisfactory to Bank authorizing the Note and
loans and all acts contemplated by the Loan Documents, and
confirmation of proper authorization of all guaranties and other
acts of third parties contemplated hereunder; (v) if required by
Bank, Bank has been provided with an Opinion of Borrower's counsel in form and
content satisfactory to Bank; (vi) no default exists under the Note
or under any other Loan Documents, or under any other agreements by
and between Borrower and Bank; and (vii) all proceedings taken in
connection with the transactions contemplated by the Note
(including any required environmental assessments), and all
instruments, authorizations and other documents applicable thereto,
are satisfactory to Bank and its counsel."

 

4. Subsections (d) and (e) of
Section 13 of the Note are
hereby amended and restated to read in their entirety as
follows:

 

"(d)            Default
on Other Obligations. Borrower
or any Guarantor shall be in default under the terms of any loan
agreement, promissory note, lease, conditional sale contract or
other agreement, document or instrument evidencing, governing or
securing any indebtedness owing by Borrower or any Guarantor to
Bank or any indebtedness in excess of $ 100,000 owing
by

 

Borrower
or any Guarantor to any third party, and the period of grace, if
any, to cure said default shall have passed.

 

(e)            Judgments.
Any judgment shall be obtained against
Borrower or any Guarantor which, together with all other
outstanding unsatisfied judgments against Borrower (or such
Guarantor), shall exceed the sum of $100,000 and shall remain
unvacated, unbonded or unstayed for a period of 30 days following
the date of entry thereof."

 

 

-4-

 

 

 

5. Section 16 of the Note is hereby amended and restated to read
in its entirety as follows:

 

"16.
Collateral. Not applicable."

 

6. Section 17 of the Note is hereby amended and restated to read
in its entirety as follows:

 

" 17. [Reserved.]"

 

7.Section
26 of the Note is hereby amended and restated to read in its
entirety as follows:

 

"26. Additional Terms.
The warranties, covenants, conditions
and other terms described in this Section are incorporated into the
Note.

 

(a) Liquid Assets.
Borrower will maintain Liquid Assets
at all times having a value at least equal to the Loan
Amount.

 

"Liquid
Assets" shall mean the following assets owned by Borrower free and
clear of all claims, liens, encumbrances and security interests
except any security interest in favor of Bank, and such of the
following types of encumbered assets owned by

 

Borrower,
less any additional amounts Bank deems appropriate in its sole
discretion:

 

●

savings
accounts, money market accounts or certificates of deposit with
Bank;

 

●

cash
deposited with Bank and pledged to secure Bank loans;
and

 

●

savings accounts, money market accounts or certificates of
deposit with financial institutions other than Bank which are
chartered and located within the United States.

 

"Liquid
Assets" shall not include any such assets which are deemed by Bank,
in its sole discretion, to be unsatisfactory.

 

(b) Senior
Funded Debt to EBITDA. Borrower will maintain a Senior Funded Debt
to EBITDA Ratio as of the end of each fiscal quarter, for the four
(4) fiscal quarters then ended, of not more than
2.00:1:00.

 

"EBITDA"
shall mean net income, plus interest expense, plus income tax
expense, plus depreciation expense plus amortization
expense.

 

"Senior Funded
Debt" shall mean indebtedness
for borrowed money, for the deferred purchase price of property not
purchased on ordinary trade terms, for capitalized leases and for
other liabilities evidenced by promissory notes or other
instruments, but not including any indebtedness that has been
subordinated to the indebtedness evidenced by the Note pursuant to
a writing that has been accepted by Bank.

 

"Senior
Funded Debt to EBITDA Ratio" shall mean the ratio of Senior Funded
Debt to EBITDA."

 

Dated as of January ____, 2019.

 

PARK
CITY GROUP, INC. a Nevada corporation

 

By: /s/ John R.
Merrill

Name: John R. Merrill

Title: SVP, Finance

 

U.S. BANK NATIONAL ASSOCIATION

 

By: 
/s/ Katie Michalek

Name: Katie Michalek

Title: Community Bank President

 

 

-5-Exhibit 10.2

 

Exhibit
10.2 

 

	

	
TECHNOLOGY
FINANCE

 

MASTER LEASE
AGREEMENT

 

 

 

 

 

 

 

THIS LEASE ("Lease"), dated as of January 04, 2019, is made by and
between U.S. Bank Equipment Finance, a division of U.S. Bank
National Association, having its principal office at PO BOX 230789,
Portland, OR 97281-0789 ("Lessor"), and PARK CITY GROUP, INC.,
having its principal office at 229 S MAIN ST STE 2225, SALT LAKE
CITY, UT 84111 ("Lessee").

 

LESSOR AND LESSEE COVENANT AND AGREE AS
FOLLOWS:

 

1. PROPERTY
LEASED. Lessee hereby leases from Lessor the goods ("Property")
together with any replacements, additions, repairs, now or
hereafter incorporated therein all as acceptable to Lessor and as
described in any Schedule to Master Lease Agreement ("Schedule"),
Certificate of Delivery and Acceptance ("Acceptance Certificate")
or any related document now or hereafter executed by the parties
hereto. Lessee may have elected to finance certain software and/or
software licenses(s) ("Licensed Software"), software components,
including but not limited to, software maintenance and/or support
("Products"), and/or implementation, integration, training,
technical consulting and/or professional services, in connection
with software ("Services") from software licensor(s) and or/
supplier(s), all as further described in the agreements(s) between
Lessee and the supplier (collectively referred to as "Product
Agreement") and as identified on the Schedule (collectively
referred to as the "Financed Items", which are included in the term
"Property" unless separately stated). Each Schedule shall
constitute a separate lease incorporating the terms hereof. This
Lease is not an agreement or commitment by Lessor or Lessee to
enter into a Schedule. Lessor shall have no obligation to accept,
execute or enter into any Schedule or to provide any financial
accommodations to Lessee and no Schedule shall be binding on Lessor
unless and until executed by Lessor.

 

2. TERM.
The Lease shall be effective upon the execution hereof by Lessor.
The Lease may consist of an "Installation Period" and an "Initial
Term". The Installation Period for each Schedule shall begin on the
date identified as the "Installation Date" on the first Acceptance
Certificate executed by Lessee and continue to the "Commencement
Date" identified on the Schedule. At Lessee's request, Lessor may
agree to extend the Installation Period by changing the
Commencement Date reflected on subsequent Acceptance Certificates.
The Initial Term of the Lease shall begin on the Commencement Date
and shall continue for the period as set forth in the
Schedule.

 

3. RENT
AND PAYMENT. During the Initial Term of the Lease, Lessee shall pay
Lessor rent as indicated on the Schedule, which shall be due and
payable in advance each month on or before the payment date shown
in each Schedule (the "Rent Payment Date"). The term "rent"
includes amounts due Lessor for Financed Items. During any
Installation Period, for each Acceptance Certificate, Lessee shall
pay rent on the Property from the Installation Date on the
Acceptance Certificate to the Commencement Date of the Lease. All
rent and other amounts due hereunder shall be paid to Lessor at
Lessor's address set forth above or at such place as Lessor shall
designate. For any rental payment due hereunder which is not paid
within five (5) days after the date such payment is due, Lessee
shall pay a late charge calculated at a rate of seven and one-half
percent (7.5%) of such payment. The parties agree that the amount
of such late charge represents a reasonable estimate of the cost
Lessor will incur in processing a delinquent payment and that such
late charge shall be paid as liquidated damages and not as a
penalty. Acceptance of any late charge by Lessor shall not
constitute a waiver of default with respect to any overdue amount
or prevent Lessor from exercising any other available rights and
remedies. Payments received shall be applied first to delinquent
amounts due, then to current installments. If any such rental
payment is made by check and such check is returned to Lessor for
any reason, including without limitation, insufficient funds in
Lessee's account, then Lessee shall be assessed a service charge
equal to the lesser of $30.00 or the maximum permitted by
applicable law, in addition to any other late charge or any other
fee which may be applicable.

 

This Lease is a net lease, it being the intention of the parties
that all costs, expenses and liabilities associated with the
Property or its lease shall be borne by Lessee. THIS LEASE IS
NON-CANCELABLE. Lessee's obligation to pay rent and any other
amounts due under the Lease shall be absolute and unconditional,
and shall not be subject to any abatement, reduction, defenses,
counterclaims, deferment or any recoupment or set-off against
Lessor for any reason whatsoever. To the extent permitted by
applicable law, upon Lessee's execution of an Acceptance
Certificate for the Property, Lessee waives any and all rights and
remedies under Article 2A-508 through 522 of the Uniform Commercial
Code ("UCC").

 

4. SELECTION,
INSTALLATION AND ACCEPTANCE OF PROPERTY. Lessee hereby acknowledges
that (i) all of the Property was selected by Lessee from
supplier(s) and/or manufacturer(s) chosen by Lessee; (ii) Lessee is
familiar with all supply contract rights provided by the
supplier(s) and is aware that the supplier(s) may be contacted for
a full description of any rights Lessee may have under any supply
contract; (iii) Lessee has relied on its own skill and experience
in selecting the Property suitable to its particular needs or
purposes and has neither relied upon the skill or judgment of
Lessor nor believes that Lessor or its agents possess any special
skill or judgment in the selection of the Property for Lessee's
particular purposes; (iv) Lessee has not relied on any statement,
if any, made by Lessor as to the suitability of the Property; and
(v) acknowledges that Lessor is neither the manufacturer nor
supplier of the Property nor an agent of any such
person.

 

Upon delivery and installation of the Property, Lessee shall
inspect the Property and if the Property conforms to Lessee's
specifications, Lessee agrees to accept the

 

Property and execute and deliver to Lessor an Acceptance
Certificate, which shall irrevocably establish Lessee's acceptance
of the Property for all purposes of the Lease. If the Property is
not properly installed, does not operate as represented or
warranted by the supplier or manufacturer, or the Property is
unsatisfactory for any reason whatsoever and Lessee has not signed
an Acceptance Certificate as a result thereof, Lessee shall (i)
notify Lessor within ten (10) days after delivery and installation
of the Property of the nature and extent of such defect or problem
and (ii) make a claim on account thereof solely against the
supplier or manufacturer. Lessor shall not pay the supplier of the
Property until a duly-executed Acceptance Certificate is received
from Lessee. If Lessee has not furnished Lessor with an Acceptance
Certificate within twenty (20) days after delivery and installation
of the Property, Lessee shall, upon Lessor's request, assume
Lessor's rights and obligations as purchaser, reimburse Lessor in
full for any amounts paid by Lessor on account of the Property,
indemnify and defend Lessor against all claims, liabilities,
damages and expenses in connection with the Property, and have all
rights to pursue remedies that may be available against the
supplier or manufacturer thereof.

 

 

 

 

 

 

5. LESSOR'S
DISCLAIMERS. Lessor has obtained the Property based on
specifications furnished by the Lessee. Lessor does not deal in
Property of this kind or otherwise hold itself or its agents out as
having knowledge or skill particular to the Property. So long as
Lessee is not in default under this Lease, Lessor hereby assigns to
Lessee, without recourse, all of Lessor's rights arising under any
warranties applicable to the Property provided by the manufacturer
or any other person. Lessee's sole remedy for the breach of any
such warranty shall be against the manufacturer of the Property and
not against Lessor. So long as Lessee shall not be in default
hereunder, Lessor will not interfere with Lessee's right of quiet
enjoyment of the Property. To the extent the Lease includes
Financed Items: (i) ownership of any Licensed Software shall remain
with the supplier thereof; (ii) Lessee's rights with respect to
such Financed Items shall be governed by the separate Product
Agreement between the supplier and the Lessee, which shall not be
affected by the Lease; and (iii) any Products or Services shall be
provided by a supplier unrelated to Lessor. IN NO EVENT SHALL
LESSOR HAVE ANY OBLIGATION TO PROVIDE ANY PRODUCTS OR SERVICES, AND
ANY FAILURE OF SUCHSUPPLIER
TO PROVIDE ANY SUCH PRODUCTS OR SERVICES FINANCED HEREUNDER SHALL
NOT EXCUSE LESSEE'S OBLIGATIONS TO LESSOR IN ANY WAY. LESSOR SHALL
NOT BE LIABLE TO LESSEE, NOR SHALL THERE BE ANY ABATEMENT OR SETOFF
IN LESSEE'S PAYMENTS, FOR ANY LIABILITY, CLAIM, LOSS, DAMAGE OR
EXPENSE OF ANY KIND OR NATURE CAUSED BY ANY FINANCED
ITEMS.LESSOR
ASSUMES NO RESPONSIBILITY FOR AND MAKES NO REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, AS TO THETITLE,
DESIGN, COMPLIANCE WITH SPECIFICATIONS, CONDITION, QUALITY,
WORKMANSHIP, OR THE SUITABILITY, SAFETY, ADEQUACY, OPERATION, USE
OR PERFORMANCE OF THE PROPERTY, OR THEIR MERCHANTABILITY OR FITNESS
FOR ANY PARTICULAR PURPOSE, OR AS TO PATENT, TRADEMARK OR COPYRIGHT
INFRINGEMENT. LESSOR SHALL NOT BE LIABLE TO LESSEE FOR ANY
REPRESENTATION, CLAIM, BREACH OF WARRANTY, EXPENSE OR LOSS DIRECTLY
OR INDIRECTLY CAUSED BY ANY PERSON, INCLUDING LESSOR, OR IN ANY WAY
RELATED TO THE PROPERTY.

 

Lessee understands and agrees that neither the supplier(s) nor any
salesperson or any agent of the supplier(s) is an agent of Lessor.
No salesperson or agent of supplier is authorized to waive or alter
any term or condition of this Lease, and no representation as to
the Property or any other matter by the supplier shall in any way
affect Lessee's duty to pay the rent and perform its obligations as
set forth in this Lease. Lessor shall not be liable to Lessee for
any incidental, consequential, or indirect damages or for any act,
neglect, omission, breach or default by any third
party.

 

6. TITLE, ASSIGNMENT AND CHANGE IN CONTROL. The Property shall at
all times remain the personal property of Lessor. Lessee shall have
no right, title or interest in the Property, except for the express
rights granted hereunder. Lessee shall hold all Property subject
and subordinate to the rights of Lessor. Notwithstanding the
foregoing, Lessee hereby grants to Lessor a security interest in
the Property and in Lessee's rights in any associated software and
Financed Items as security for all Lessee's liabilities and
obligations to Lessor of every kind or nature under this Lease or
any other writing between Lessee and Lessor ("Other Agreements"),
but excluding any liabilities and obligations under Other
Agreements which are secured by land and/or building(s) in which a
first priority lien can only be perfected by recording mortgage,
deed of trust, or similar instrument in the real property records
of the jurisdiction where such land/building(s) are located. Lessee
authorizes and ratifies Lessor's filing of financing statement(s)
(and Lessee agrees to pay the cost of filing the same in all public
offices where filing is deemed by Lessor to be necessary or
desirable). Lessee shall, at its sole expense, (i) defend Lessor's
title against all persons claiming against or through Lessee, (ii)
at all times keep the Property free and clear from any claim, suit,
liens or encumbrances whatsoever (except any placed thereon by
Lessor and arising from the Lease), and (iii) give Lessor immediate
notice of any such claim, suit, lien or
encumbrance.

 

LESSEE SHALL NOT ASSIGN OR IN ANY WAY DISPOSE OF ANY OR ALL OF ITS
RIGHTS OR OBLIGATIONS UNDER THIS LEASE OR ENTER INTO ANY SUBLEASE
OF ALL OR ANY PART OF THE PROPERTY WITHOUT THE PRIOR WRITTEN
CONSENT OF LESSOR. IN CONNECTION WITH THE GRANTING OF SUCH CONSENT
AND THE PREPARATION OF NECESSARY DOCUMENTATION, A FEE SHALL BE
ASSESSED

 

EQUAL TO ONE PERCENT (1%) OF THE SUM OF THE REMAINING BALANCE THEN
DUE HEREUNDER PLUS ANY RESIDUAL VALUE OF

 

THE PROPERTY, AND IN ADDITION, LESSEE SHALL PAY OR REIMBURSE LESSOR
UPON DEMAND FOR ALL COSTS AND EXPENSES, INCLUDING FEES AND EXPENSES
OF LESSOR'S LEGAL COUNSEL, INCURRED IN CONNECTION WITH THE
PREPARATION, RECORDING AND/OR FILING OF SUCH DOCUMENTATION AS MAY
BE NECESSARY TO EFFECT ANY SUCH ASSIGNMENT, DISPOSITION OR
SUBLEASE. In the event Lessor has consented to any sublease of the
Property, Lessee hereby assigns and grants to Lessor a security
interest in any and all rights under any sublease(s), to secure all
liabilities and obligations to Lessor, and Lessee shall deliver to
Lessor the original of such sublease(s). Lessee shall not
consolidate or merge with or into any other entity, liquidate or
dissolve, distribute, transfer, sell or dispose of all or any
substantial portion of its properties or assets other than in the
ordinary course of its business, without the prior consent of
Lessor, and the surviving, or successor entity or the transferee of
such assets, as the case may be, shall assume, by a written
instrument which is legal, valid and enforceable against such
surviving or successor entity or transferee, all of the obligations
of Lessee to Lessor or any affiliate of Lessor. No event shall
occur which causes or results in a transfer of majority ownership
of Lessee while any obligations are outstanding
hereunder.

 

LESSEE AGREES THAT LESSOR MAY ASSIGN OR TRANSFER THIS LEASE OR
LESSOR'S INTEREST IN THE PROPERTY WITHOUT NOTICE
TO

 

LESSEE. Any assignee of Lessor shall have all of the rights (except
for any rights retained by the assignor Lessor), but none of the
obligations (which arise prior to the date of the assignment), of
Lessor under this Lease and Lessee shall not assert against any
assignee of Lessor any defense, counterclaim or offset that Lessee
may have against Lessor. Any assignee of Lessor shall have the
obligations of the Lessor that arise after the assignment (except
for any obligations retained by the assignor Lessor). Lessee
acknowledges that any assignment or transfer by Lessor will not
materially change Lessee's duties or obligations under this Lease
nor materially increase the burdens or risks imposed on Lessee.
Lessee will cooperate with Lessor in executing any documentation
reasonably required by Lessor or any assignee of Lessor to
effectuate any such assignment.

 

 

 

 

 

7. TAXES
AND FEES. Lessee agrees to pay when due or reimburse and indemnify
and hold Lessor harmless from and against all taxes, fees or other
charges of any nature whatsoever now or hereafter imposed or
assessed against Lessor, Lessee or the Property by any federal,
state, county or local governmental authority upon the ordering,
purchase, sale, delivery, leasing, possession, use, operation,
return or other disposition of the Property or upon the rents,
receipts or earnings arising therefrom or with respect to the Lease
(other than taxes based on or measured by the net income of
Lessor). If Lessee directly pays any such taxes, fees or other
charges, upon the request of Lessor, Lessee shall furnish written
evidence of Lessee's payment to Lessor. Lessor shall be responsible
for the preparation and filing of all personal property tax returns
on the Property and Lessee shall timely reimburse Lessor for all
taxes paid by Lessor.

 

8. MAINTENANCE,
USE, ADDITIONS AND UPGRADES. Lessee shall use the Property for
business purposes. Lessee shall use or permit the use of the
Property primarily at the location specified in the Schedule
(unless the Property is intended to be portable, in which case it
may be moved in the ordinary course of business) and shall not
remove the Property from such location without prompt written
notice to Lessor. Notwithstanding the foregoing, the Property shall
not be moved outside the United States without Lessor's written
consent. Lessee shall, at its sole expense: (i) maintain the
Property in good operating order, repair, condition and appearance
and protect the Property from deterioration, other than normal wear
and tear, and furnish all required labor, parts, replacements and
repairs; (ii) enter into and maintain in force, for the term of
each Lease (after the expiration of any applicable manufacturer's
warranty), a maintenance contract with the manufacturer of the
Property or with a service organization satisfactory to Lessor and
provide Lessor with a copy of such contract and all supplements
thereto upon Lessor's request; (iii) take all actions necessary to
cause the Property to remain eligible for any maintenance program
of the manufacturer, including the purchase of all replacements,
upgrades and enhancements relating to the Property and the software
used on or with the Property, that are required by the manufacturer
for such eligibility; and (iv) at all times during the Term,
otherwise keep the Property in "Eligible Condition" as defined
hereafter. Lessee shall at reasonable times during business hours
make the Property and Lessee's log and maintenance records
pertaining to the Property available to Lessor for inspection.
Lessee shall be entitled to acquire and install, at Lessee's
expense, Additions to the Property if such Additions: (i) do not
interfere with or impair the operation of the Property; (ii) are
readily removable without damage to the Property; (iii) are removed
by Lessee before the Property is returned to Lessor; and (iv) do
not interfere with Lessee's ability to keep the Property eligible
for manufacturer's maintenance. Subject to compliance with the
foregoing requirements, such Additions (but not Upgrades or other
attachments) shall remain the property of Lessee upon termination
of the Lease. Except as authorized herein, Lessee shall not,
without the prior written consent of Lessor, make any alterations
or install any attachments or Upgrades to the Property. Any
permitted alterations, attachments or Upgrades, and all items and
materials related thereto, shall automatically become the property
of Lessor. "Additions" means new items of equipment acquired by
Lessee that are connected to or work with the Property but which
have a unique identification or serial number and do not require
the removal or replacement of any of the Property or any Component
in order for the Addition to function with the Property. "Upgrades"
means technical improvements to the Property the installation of
which requires replacement of Components or other parts or requires
the rewiring or other physical or permanent alteration of the
Property on which the Upgrade is installed. "Components" means
those parts and other separately identifiable devices that are
contained in the Property and that are useful or necessary in the
function of the Property.

 

Lessee may obtain Upgrades for the Property if (i) installation of
such Upgrades will not interfere with Lessor's title to the
Property, and (ii) when returned to Lessor in compliance with
return provisions hereunder, the Property shall include all such
Upgrades or shall have been returned to its original condition in a
manner acceptable to Lessor. At its option and expense, Lessee may
obtain and install replacement Components for the Property if all
such replacement Components are, in Lessor's opinion, of comparable
type and value as the Component being replaced. All such
replacement Components shall immediately become the property of
Lessor.

 

9. LESSEE
REPRESENTATIONS AND WARRANTIES. Lessee hereby represents, warrants
and covenants that: (i) Lessee has adequate power and capacity to
enter into the Lease, any Schedule, and any other documents
required to be delivered in connection with this Lease
(collectively, the "Documents"); (ii) the Documents have been duly
authorized, executed and delivered by Lessee and constitute valid,
legal and binding agreements, enforceable in accordance with their
terms; there are no proceedings presently pending or, to the best
knowledge of Lessee, threatened against Lessee which will impair
its ability to perform under the Lease; (iii) Lessee's entering
into the Lease and leasing the Property and financing any Financed
Items does not and will not (a) violate any judgment, order or law
applicable to the Lease, Lessee or Lessee's organizational
documents; or (b) result in the creation of any lien, security
interest or other encumbrance upon the Property, other than as
granted hereunder; (iv) all information and representations
furnished by Lessee to Lessor concerning the Property are accurate
and correct; (v) the Property is personal property and when placed
in use by Lessee will not be or become fixtures under applicable
law; (vi) if Lessee is a business entity, it is and shall be
validly existing and in good standing under laws of the state of
its organization, and Lessee shall give written notice to Lessor
within 30 days of any termination or revocation of Lessee's
existence by its state of organization. Lessee shall not change its
name, state of organization, headquarters or residence without
providing prior written notice to Lessor. (vii) the persons signing
the Documents are acting with all necessary authority and hold the
offices indicated below their signatures, which are genuine; (viii)
all financial data of Lessee or of any consolidated group of
companies of which Lessee is a member ("Lessee Group") delivered to
Lessor have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis with prior
periods and fairly present the financial position and results from
operations of Lessee, or of the Lessee Group, as of the stated date
and period(s); (ix) since the date of the most recently delivered
financial data, there has been no material adverse change in the
financial or operating condition of Lessee or of the Lessee Group;
(x) Lessee has not received any tax or accounting advice from
Lessor, and Lessor shall have no liability for Lessee"s failure to
secure any particular tax benefits or accounting treatment with
respect to the Property or the Lease, and (xi) Lessee and any other
person who Lessee controls, owns a controlling interest in, or who
owns a controlling interest in or otherwise controls Lessee in any
manner ("Lessee Representatives") are and will remain in full
compliance with all laws, regulations and government guidance
concerning foreign asset control, trade sanctions, embargoes, and
the prevention and detection of money laundering, bribery,
corruption, and terrorism, and neither Lessee nor any Lessee
Representative is or will be listed in any Sanctions-related list
of designated persons maintained by the U.S. Department of
Treasury's Office of Foreign Assets Control or successor or the
U.S. Department of State. Lessee shall, and shall cause any Lessee
Representative to, provide such information and take such actions
as are reasonably requested by Lessor in order to assist Lessor in
maintaining compliance with anti-money laundering laws and
regulations.

 

10. RETURN
OF PROPERTY. Unless Lessee has exercised an option granted in
connection with the Lease or is obligated to purchase the Property,
Lessee shall provide Lessor with one hundred twenty (120) days
prior written notice of Lessee's intent to return the Property and
Lessee shall return all, but not less than all, of the Property to
Lessor at a location designated by Lessor within the continental
United States prior to expiration of the Initial Term (or any
Extension Term). Lessee shall prepare the Property for shipping
according to manufacturer's instructions using approved packing
materials and shall bear all risk of damage or loss until the
Property is returned to Lessor at the designated location. Lessee
shall bear all costs and expenses associated with the packing,
shipping, delivery and inspection of the Property, including any
costs incurred by Lessor for de-installation of alterations,
attachments or Additions to the Property.

 

 

 

 

 

 

Lessee shall return the Property to Lessor in Eligible Condition.
The Property shall be in "Eligible Condition" if each of the
following conditions is satisfied: (i) the Property is in good
working order (normal wear and tear excepted) and is capable of
performing all functions that the Property could perform when
delivered to Lessee; (ii) the Property as returned includes (a) all
engineering modifications, (b) all software required by the
manufacturer to operate the Property, (c) all hardware and software
Upgrades, and (d) other alterations required by the manufacturer
for maintenance eligibility during the term of the Lease; (iii) the
Property includes only Components and other parts from the
manufacturer or an authorized supplier; (iv) if maintenance of the
Property has been provided under a service contract, the Property
is certified as eligible for a service contract by the manufacturer
of the Property or by a service organization satisfactory to
Lessor; and (v) all data and other information stored on hard
drives and other media storage devices ("Resident Data") shall have
been securely overwritten and destroyed beyond recovery using
advanced wiping techniques (such process being referred to as "Data
Erasure"), or if Lessee does not wish to perform the Data Erasure
itself, Lessee shall so notify Lessor within four (4) months prior
to termination of the Lease, and Lessee shall return the Property
to a location designated by Lessor, and Lessor will arrange for
the

Data Erasure to be performed at such location at Lessee's sole risk
and expense and Lessor may charge a fee for such service. If Data
Erasure is not technically feasible,

 

Lessee may remove and destroy the affected hard drives and other
media storage devices, and in such event the drives and devices
shall be deemed to have suffered an Event of Loss and shall be
replaced by Lessee as required hereunder. IN NO EVENT SHALL LESSOR
BE RESPONSIBLE FOR ANY DAMAGES OR CLAIMS IN

CONNECTION WITH RESIDENT DATA OR DATA ERASURE, INCLUDING WITHOUT
LIMITATION, THE SUFFICIENCY OF ANY DATA ERASURE

 

PROCEDURES OR SERVICES, ANY ALLEGED OR ACTUAL VIOLATION OF PRIVACY
LAWS, LOST OR COMPROMISED PROPRIETARY

 

INFORMATION, LOSS OF PROFITS, BUSINESS OR USE, OR INCIDENTAL,
SPECIAL, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES,
AND

 

LESSEE SHALL INDEMNIFY AND HOLD LESSOR HARMLESS FROM AND AGAINST
ANY SUCH DAMAGES AND CLAIMS. LESSOR MAKES NO

 

REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, WITH
RESPECT TO DATA ERASURE OR THE MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OF ANY DATA ERASURE PROCEDURES OR SERVICES.
Lessee shall arrange or pay for any inspections and any repairs or
modifications as are required to cause the Property to be in
Eligible Condition. If Lessee fails to return the Property in
Eligible Condition the Lease shall continue and Lessee shall remain
obligated to pay rent and all other amounts due under the Lease for
all Property and otherwise perform all obligations hereunder, until
such time as Lessee causes the Property to be in Eligible Condition
or Lessor elects to terminate the Lease.

 

11. GENERAL
INDEMNITY. Lessee assumes liability for, shall defend, indemnify
and hold Lessor harmless from and against any and all claims,
liabilities, losses, costs, expenses, or damages of any kind or
nature (including, without limitation, fines, forfeitures,
penalties, settlements, and attorneys' fees) incurred or suffered
by any person whomsoever and/or to any property whatsoever,
(collectively, "Claims"), including, without limitation, Claims
asserting any wrongful, negligent or improper act or omission of
Lessor, when such Claims result from or pertain to: (a) the
inaccuracy or breach of any representation or warranty of Lessee
under the Documents; (b) any failure by Lessee to observe or
perform any obligations under or in connection with the Documents;
or (c) the leasing, manufacture, delivery, ownership, use,
possession, selection, performance, operation, inspection,
condition (including without limitation, latent or other defects,
and whether or not discoverable), improvements, removal, return or
storage of the Property, except, with respect to this clause (c),
to the extent arising while the Property is in the possession of
Lessor or its agent. Upon request of Lessor, Lessee shall assume
the defense of all demands, claims, actions, suits and proceedings
against Lessor for which indemnity is provided and shall allow
Lessor to participate in the defense thereof.

 

12. INCOME
TAX INDEMNITY. Lessee hereby represents, warrants, and covenants to
Lessor as follows: (i) this Lease shall be a lease for federal and
state income tax purposes; Lessor shall be treated as the
purchaser, owner, lessor, and original user of the Property and
Lessee shall be treated as the lessee of the Property for such
purposes; (ii) Lessor shall be entitled to depreciation deductions
with respect to each item of Property as provided by Section 167(a)
of the Internal Revenue Code of 1986, as amended (the "Code"),
determined under Section 168 of the Code by using the applicable
depreciation method, the applicable recovery period, and the
applicable convention, all as may be specified on the applicable
Schedule for the Property, and Lessor shall also be entitled to
corresponding state depreciation deductions; (iii) for purposes of
determining depreciation deductions, the Property shall have an
income tax basis equal to Lessor's cost for the Property specified
on the applicable Schedule, plus such expenses of the transaction
incurred by Lessor as may be included in basis under Section 1012
of the Code, and shall be placed in service (and certified as such
by Lessee) by the last business day of the same calendar year in
which the Schedule for such Property is executed; and (iv) the
maximum federal and state income tax rates applicable to Lessor in
effect on the date of execution and delivery of a Schedule with
respect to an item or items of Property will not change during the
lease term applicable to such Property.

 

If for any reason whatsoever any of the representations,
warranties, or covenants of Lessee contained in this Lease or in
any other agreement relating to the Property shall prove to be
incorrect and (a) Lessor shall determine that it is not entitled to
claim all or any portion of the depreciation deductions in the
amounts and in the taxable years determined as specified in (ii)
and (iii), above, or (b) such depreciation deductions are
disallowed, adjusted, recomputed, reduced, or recaptured, in whole
or in part, by the Internal Revenue Service or applicable state
taxing authority (such determination, disallowance, adjustment,
recomputation, reduction, or recapture being herein called a
"Loss"), then Lessee shall pay to Lessor as an indemnity and as
additional rent such amount as shall, in the reasonable opinion of
Lessor, cause Lessor's after-tax economic yield (the "Net Economic
Return") to equal the Net Economic Return that would have been
realized by Lessor if such Loss had not occurred. The amount
payable to Lessor pursuant to this Section shall be payable on the
next succeeding rental payment date after written demand therefor
from Lessor accompanied by a written statement describing in
reasonable detail such Loss and the computation of the amount so
payable.

 

Further, in the event (y) there shall be any change, amendment,
addition, or modification of any provision of applicable state law
or of the Code or regulations thereunder or interpretation thereof
with respect to the matters set forth in this Section with respect
to any Property or (z) if at any time there shall be any change,
amendment, addition, or modification of any provision of applicable
state law or of the Code or regulations thereunder or
interpretation thereof with respect to the maximum applicable
federal and state income tax rates as set forth in (iv) above,
which results in a decrease in Lessor's Net Economic Return, then
Lessor shall recalculate and submit to Lessee the modified rental
rate required to provide Lessor with the same Net Economic Return
as it would have realized absent such change and the Lease shall
thereupon automatically be deemed to be amended to adopt such
rental rate and values.

 

 

 

 

 

 

13. INSURANCE
AND RISK OF LOSS. 
Lessee shall obtain insurance coverage for the Property. The
expense of such insurance coverage shall be
borne by
Lessee and is not covered by Lessee's rental payments hereunder.
Lessee shall maintain in force, at all times from shipment of the
Property to Lessee until surrender
thereof, property damage and risk insurance and liability insurance
with such coverage and from such insurance carriers as shall be
satisfactory to Lessor.
The Property must be insured against all risks that are customarily
insured against on the type of equipment leased hereunder. Such
insurance policies must name Lessor as additional insured and
lender's loss payee. Lessee shall provide ten (10) days advance
written notice to Lessor of any cancellation or modification of
Lessee's insurance policy(s). Upon request, Lessee shall deliver to
Lessor satisfactory evidence of insurance
coverage.

 

Lessee hereby assumes the entire risk of damage to or loss of the
Property from any cause whatsoever, whether or not insured against,
while in transit or during the term hereof. In the event of any
loss or damage, the Lease shall continue in full force and effect,
without any modification or reduction of any obligation of Lessee
unless otherwise provided. In the event of damage of any kind to
any of the Property (unless damaged beyond repair), Lessee shall
continue to pay rent and place the Property in good repair,
condition and working order to the satisfaction of Lessor within
ninety (90) days of the date of damage. If the Property or any
portion of the Property is determined by Lessee to be lost, stolen,
destroyed or damaged beyond repair and is a documented casualty or
if any Property is destroyed or damaged beyond repair in connection
with Data Erasure (an "Event of Loss"), Lessee at its option may
(a) continue to pay rent and replace the Property with equipment
acceptable to Lessor and of identical manufacture and equal or
greater capacity, utility and value to that of the original
Property (in which case Lessee shall transfer title to the
replacement equipment to Lessor free and clear of all liens and
encumbrances of any kind) and take such further action as Lessor
may request in order to effect such substitution, or (b) pay Lessor
on the next Rent Payment Date the stipulated loss value for the
Property as set forth in the relevant Schedule (the "Stipulated
Loss Value") as of the date of the Event of Loss and all rent
accrued up to the date of payment and all other amounts then due in
connection with the Property. Upon payment of the foregoing
amounts, the Lease shall terminate with respect to such Property,
and Lessor shall transfer ownership and title to such Property to
Lessee free and clear of all encumbrances created by
Lessor.

 

14. DEFAULT.
Time is of the essence under this Lease. Lessee shall be in default
in the event of any of the following (each, an "Event of Default"):
(i) any failure of Lessee to pay when due any installment of rent
or any other amount due under the Lease; (ii) any misstatement or
false statement in connection with, or nonperformance of any of
Lessee’s obligations, agreements, or affirmations under or
emanating from, this Lease or the Schedule; (iii) if any of the
following actions or proceedings occur and, if involuntary, are not
dismissed within sixty (60) days after commencement: insolvency of
Lessee under either federal or state law or applicable principles
of equity, becoming the subject of a petition or complaint in
bankruptcy or in any other proceeding under federal bankruptcy
laws, making an assignment for benefit of creditors, or being named
in, or the Property being subjected to, a suit for the appointment
of a receiver, trustee or conservator (each, an “Insolvency
Event”); (iv) the death, dissolution or termination of
existence of Lessee; (v) the suspension or cessation of all or
substantially all of Lessee’s commercial operations; (vi) any
failure of Lessee to procure and maintain any insurance required to
be maintained in accordance with this Lease; (vii) if the
bankruptcy, insolvency, termination, death, dissolution, or default
of any guarantor for Lessee under the guaranty or any other
agreement between guarantor and Lessor or an affiliate of Lessor;
(viii) any default under any agreement between Lessee and Lessor
(other than this Lease) or between Lessee and any affiliate of
Lessor; (ix) any non-performance of, or failure to pay, as and when
due, any obligation of Lessee, arising independently of this Lease;
(x) any removal, sale, transfer, encumbrance, seizure or levy of or
upon the Property; (xi) any actual or anticipated (in
Lessor’s reasonable discretion) unauthorized revocation,
non-renewal or termination of a letter of credit, surety bond or
other instrument issued for the benefit of Lessor as additional
security for the obligations of Lessee hereunder; and (xii) any
unauthorized filing by Lessee of a termination statement for any
financing statement filed by Lessor.

 

15. REMEDIES.
Upon the occurrence of any Event of Default which continues for
more than ten (10) days following notice thereof by Lessor and at
any time thereafter, Lessor shall have all the remedies provided by
law; and without limiting the generality of the foregoing and
without terminating this Lease, Lessor, at its sole option, shall
have the right at any time to exercise concurrently, or separately,
without further notice to Lessee, any one or all of the following
remedies: (i) proceed by appropriate court action, either at law or
in equity, to enforce performance by Lessee of the Lease; (ii)
request Lessee return the Property or assemble the Property and
make it available to Lessor, at a place designated by Lessor; (iii)
immediately and without legal proceedings or notice to Lessee,
enter the premises, take possession of, remove and accept the
Property or render it unusable (any such taking shall not terminate
this Lease); (iv) declare the entire amount of rent and other sums
payable hereunder immediately due and payable; however, in no event
shall Lessor be entitled to recover any amount in excess of the
maximum permitted by applicable law, provided, however, if an
Insolvency Event occurs, such amounts will become immediately and
automatically due and payable without any action of Lessor and
without notice to or demand on Lessee; (v) cancel the Lease as to
any or all items of Property. Such cancellation shall occur only
upon notice by Lessor and only as to such items as Lessor
specifically elects to cancel. The Lease shall continue in full
force and effect as to any remaining items; (vi) recover all of the
following (collectively, “Damages”): (a) any accrued
and unpaid rent and any other sums payable under this Lease,
including, without limitation, any liability for taxes set forth in
this Lease; plus (b) as liquidated damages for loss of a bargain
and not as a penalty, an amount equal to the Stipulated Loss Value
as of the date of default, plus (c) any indemnity payment, if then
determinable; plus (d) all commercially reasonable costs incurred
by Lessor in any repossession, recovery, storage, repair, sale,
re-lease or other disposition of the Property, including
attorney’s fees and costs of collection of any amounts
hereunder, including any collection agency fee; and (e) the value
of all tax benefits lost to Lessor as a result of Lessee’s
default or the enforcement by Lessor of any remedy, plus interest
("Default Interest") on each of the foregoing, from the date such
amounts are due until paid, at the lesser of: (y) the maximum rate
per annum which Lessor is permitted by law to charge, or (z) twelve
percent (12%) per annum; and (vii) Lessor may, but is not required
to, re-lease or sell the Property, or any portion thereof, at
public or private sale on such terms and to such persons as Lessor
shall elect. The proceeds of any such lease or sale shall be
applied in the following order of priorities: (i) to pay all of the
Damages in such order as Lessor shall determine, then (ii) to pay
all amounts owed hereunder. Any remaining proceeds will reimburse
Lessee for payments which it made pursuant to section (vi) above to
reduce the amounts owed to Lessor hereunder. Lessor shall keep any
excess. If the proceeds from any sale or lease of the Property is
not sufficient to pay the amounts owed Lessor under this Section,
Lessee shall pay the deficiency.

 

In exercising its remedies, Lessor may require Lessee return the
Property. The Property as returned shall be in accordance with the
terms of the Lease. If Lessee fails to return the Property in the
required condition, Lessor may cause the Property to be placed in
such condition, at Lessee’s expense. In the event Lessor
takes possession of the Property, Lessor shall make commercially
reasonable efforts to mitigate its damages and Lessee agrees that
Lessor's proceeding in accordance with the remedies herein shall be
sufficient effort for such purposes. Lessee agrees that, upon any
Event of Default, Lessee will immediately cease and refrain from
further use of, or otherwise exercising any rights under any
Financed Items, AND Lessor has the right to cause the termination
of all Financed Items.

 

 

 

 

 

 

16. FINANCIAL
REPORTS. Within thirty (30) days after Lessor's request (or such
longer period as provided herein), Lessee shall deliver all
information (including tax returns) requested by Lessor which
Lessor deems reasonably necessary to determine Lessee's current
financial condition and faithful performance of the terms hereof.
This may include: (i) reviewed, audited or compiled annual
financial statements (including, without limitation, a balance
sheet, a statement of income, a statement of cash flow, a statement
of changes in equity, and notes to financial statements) within 120
days after Lessee's fiscal year end, and (ii) management-prepared
interim financial statements within 45 days after the requested
reporting period(s). Annual statements shall set forth the
corresponding figures for the prior fiscal year in comparative
form, all in reasonable detail without any qualification or
exception deemed material by Lessor. Unless otherwise accepted by
Lessor, each financial statement submitted to Lessor shall be
prepared in accordance with generally accepted accounting
principles consistently applied and shall fairly and accurately
present the Lessee's financial condition and results of operations
for the period to which it pertains.

 

17. ENTIRE
AGREEMENT, WAIVERS, SUCCESSORS, NOTICE, ETC. This Lease and any
Schedule and associated Documents contain the entire agreement of
the parties and shall not be qualified or supplemented by course of
dealing. No waiver or modification by Lessor of any of the terms or
conditions hereof shall be effective unless in writing signed, or
an electronic record duly authenticated, by an authorized signatory
of Lessor. No waiver or indulgence by Lessor of any default or
deviation by Lessee of any required performance shall be a waiver
of Lessor's right to subsequent or other full and timely
performance. This Lease shall be binding on the parties hereto and
their respective successors and assigns and shall inure to the
benefit of such successors and assigns. Paragraph headings shall
not be considered a part of this Lease. Except as expressly
provided otherwise herein, Lessor may grant, withhold, or condition
any consent of Lessor required hereunder in Lessor’s sole
discretion. Lessor may make a profit from fees, estimated tax
payments and other charges that Lessee is required to pay
hereunder. If any of the executed Documents are delivered to Lessor
by facsimile transmission or by Adobe Acrobat (or equivalent)
attachment to an e-mail, such Documents (and signatures thereon)
shall be treated as, and have the same force and effect as,
originals. Lessor and Lessee agree that the electronic version of
this Lease and any Schedule which has been authenticated by Lessor
and Lessee in accordance with applicable law and controlled by
Lessor (or any assignee of Lessor identified pursuant to Section 6
hereof) shall (pursuant to the rules and regulations of eOriginal,
Inc.) constitute the original authoritative version of this Lease
and such Schedule; provided that if the “Paper Out”
process shall have occurred pursuant to the eOriginal Product
Reference Guide, and there shall simultaneously exist both the
“Paper Out” printed version and an electronic version
of this Lease and such Schedule, then the “Paper Out”
printed version of this Lease and such Schedule as identified in
the eOriginal audit record and corresponding affidavit shall
constitute the sole authoritative version. Both Lessor and Lessee
hereby agree that this Lease and any Schedule may be authenticated
by electronic means, and expressly consent to the use of the
electronic version of this Lease and such Schedule to embody the
entire agreement and the understanding between Lessor and Lessee.
Reference herein to eOriginal shall mean eOriginal, Inc.,
Baltimore, MD, or any successor electronic custodian appointed by
Lessor and Lessee. Lessee agrees not to raise as a defense to the
enforcement of this Lease or any Schedule that Lessee executed or
authenticated such Lease or Schedule by electronic or digital means
or used facsimile or other electronic means to transmit
Lessee’s signature on such Lease or Schedule. Notwithstanding
anything to the contrary herein, Lessor reserves the right to
require Lessee to sign any instrument manually and to deliver to
Lessor an original of such Lease or Schedule. Lessee shall also
promptly execute and deliver to Lessor such further documents and
take further action as Lessor may request to more effectively carry
out the intents and purposes of this Lease. All notices shall be
mailed or delivered by facsimile transmission or overnight courier
to the respective parties at the addresses shown on any Schedule
hereto or such other address as a party may provide in writing from
time to time. By providing Lessor with a telephone number for a
cellular phone or other wireless device, including a number that
Lessee later converts to a cellular number, Lessee is expressly
consenting to receiving communications—including but not
limited to prerecorded or artificial voice message calls, text
messages, and calls made by an automatic telephone dialing
system—from Lessor and Lessor’s affiliates and agents
at that number. This express consent applies to each such telephone
number that Lessee provides to Lessor now or in the future and
permits such calls for non-marketing purposes. Calls and messages
may incur access fees from Lessee’s cellular
provider.

 

18. ATTORNEYS'
FEES, GOVERNING LAW, JURY WAIVER. Upon demand, Lessee will
immediately reimburse Lessor for all reasonable attorneys' fees and
all other costs, fees and out-of-pocket disbursements incurred by
Lessor in connection with the preparation, execution, delivery,
administration, interpretation, defense and enforcement of this
Lease or any of the other Documents, including, without limitation,
waivers, consents, and amendments related to this Lease and the
other Documents as well as reasonable attorneys' fees and other
costs and fees (a) incurred before or after commencement of
litigation or at trial, on appeal or in any other proceeding, and
(b) incurred in any bankruptcy proceeding of Lessee, whether
voluntarily or involuntarily filed. Lessee will also reimburse
Lessor for all costs of collection, including all attorneys' fees,
before and after judgment, any collection agency fee, and the costs
of preservation and/or liquidation of any Property. This Lease, and
the rights and liabilities of the parties shall be governed by and
construed in accordance with the internal laws (without regard to
the conflict of laws provisions) of the State of Minnesota, but
giving effect to federal laws applicable to national banks. Any
legal action or proceeding with respect to this Lease shall be
brought in the State of Minnesota, and, by execution and delivery
of this Lease, each of the parties consents to the jurisdiction of
such court and waives any defense of lack of jurisdiction or
inconvenient forum. LESSOR AND LESSEE EACH IRREVOCABLY WAIVE ALL
RIGHTS TO TRIAL BY JURY IN ANY LITIGATION ARISING FROM OR RELATED
TO THIS LEASE.

 

19. SEVERABILITY;
SURVIVAL. In the event any of the provisions of the Lease shall be
held invalid, illegal or unenforceable, that provision shall be
considered inapplicable and omitted, but shall not invalidate the
remaining provisions of the Lease. In no event shall the Lease be
enforced in any way that permits Lessor to charge or collect
interest in excess of the maximum lawful rate. Lessee agrees that
Lessor shall not be subject to any penalties provided by law for
contracting for or collecting interest in excess of the maximum
lawful rate and Lessor agrees to return any such excess to Lessee.
All of Lessor's rights, privileges and indemnities contained herein
shall survive the expiration or other termination of the Lease and
any Schedule, and the rights privileges and indemnities contained
herein are expressly made for the benefit of, and shall be
enforceable by, Lessor, its successors and
assigns.

 

 

 

 

 

 

20. POWER
OF ATTORNEY. LESSEE HEREBY AUTHORIZES AND APPOINTS LESSOR AS ITS
ATTORNEY-IN-FACT TO COMPLETE AND EXECUTE IN LESSEE'S NAME AND TO
MAKE NON-MATERIAL AMENDMENTS (INCLUDING COMPLETING AND CONFORMING
THE DESCRIPTION OF THE PROPERTY (INCLUDING SERIAL NUMBERS)) ON ANY
DOCUMENT IN CONNECTION WITH THIS AGREEMENT AND TO OBTAIN, ADJUST
AND SETTLE ANY INSURANCE REQUIRED BY THIS AGREEMENT AND TO ENDORSE
ANY DRAFTS IN CONNECTION WITH SUCH INSURANCE.

 

Most agreements, promises and commitments made by Lessor,
concerning loans and other credit extensions must be in writing,
express consideration and be signed
or an electronic record duly authenticated by Lessor to be
enforceable.

 

21. USA
PATRIOT ACT NOTICE. IMPORTANT INFORMATION ABOUT PROCEDURES: To help
the government fight the funding of terrorism and money laundering
activities, Federal law requires all financial institutions to
obtain, verify, and record information that identifies each
customer who opens an account. When Lessee enters a new transaction
with Lessor, Lessor will ask for Lessee's name, address and other
information that will allow Lessor to identify Lessee. Lessor may
also ask to see other documents that substantiate Lessee's
identity.

 

IN WITNESS WHEREOF, the parties hereto have executed or
authenticated this Lease on or as of the day and year first above
written.

 

U.S. Bank
Equipment Finance, a division
of                                   

PARK CITY GROUP, INC.

U.S. Bank
National
Association                                                       

(LESSEE)

(LESSOR)

 

By:
_________________________________                              
   
By:

Authorized Signatory

Print Name:____________________________ 

Print Title:_____________________________

 

 

ADDRESS FOR ALL NOTICES TO LESSOR:

PO BOX 230789

Portland, OR 97281-0789

 

 

 

 

 

	

	
CERTIFICATE
OF AUTHORITY

(LEASE/LOAN)

 

I/WE HEREBY CERTIFY to U.S. Bank Equipment Finance, a division of
U.S. Bank National Association (the "Creditor") that: a) I/we
am/are the person(s) authorized to certify on behalf of PARK CITY
GROUP, INC., a business entity (the "Company") organized and
maintaining good standing under the laws of the State of Nevada; b)
the following is a true and correct copy of certain Resolutions
duly adopted or voted by the Board of Directors, Members or
Managers, as appropriate, of the Company; c) I/we have placed a
copy of such Resolutions in the official records of the Company; d)
such Resolutions have not been rescinded, amended, or otherwise
altered or repealed; and e) such Resolutions are now in full force
and effect and are in full compliance with the formation documents
of the Company, as such may have been amended. The Company has
resolved the following:

1) That
the Company from time to time leases personal property and/or
borrows money or otherwise obtains credit from Creditor and that
the entire amount of leasing, borrowing or credit under this
resolution at any one time, whether direct or indirect, absolute or
contingent, shall be unlimited;

 

2) That
any one of the officers, agents, members, or managers designated
below is hereby authorized to borrow money and to obtain credit and
other financial accommodations (including the leasing of personal
property) for the Company; and to execute and deliver on behalf of
the Company any and all documentation required in connection
therewith in such form and containing such terms and conditions as
the person(s) executing such documents shall approve as being
advisable and proper and in the best interests of the Company; and
that the execution thereof by such person(s) shall be conclusive
evidence of such approval; and, as security for the Company's
obligations to Creditor to pledge, assign, transfer, mortgage,
grant a security interest in, hypothecate, or otherwise encumber
any and all property of the Company, whether tangible or
intangible; and to execute and deliver all instruments of
assignment and transfer;

 

3) That
any officer, member, manager, agent or employee of the Company is
hereby further authorized to take any and all such other actions as
may be necessary to carry out the intent and purposes of these
Resolutions, and that any and all actions taken by such person(s)
to carry out such intent and purposes prior to the adoption of
these Resolutions are hereby ratified and confirmed by, and adopted
as the action of, the managers of the Company;
and

 

4) That
these Resolutions shall constitute a continuing authority to the
designated person or persons to act on behalf of the Company, and
the powers and authority granted herein shall continue until
revoked by the Company and formal written notice of such revocation
shall have been given to Creditor. These Resolutions do not
supersede similar prior resolutions given to
Creditor.

 

I/WE HEREBY FURTHER CERTIFY that pursuant to the formation
documents and any other appropriate documents of the Company as may
be necessary, the following named person(s) have been properly
designated and appointed to the position(s)/ office(s) indicated
below, that such person(s) continue to hold such
position(s)/office(s) at the time of execution of the documentation
for the transaction(s) with Creditor, and that the signature(s) of
such person(s) shown below are genuine.

 

OFFICE                                           

NAME                                               

SIGNATURE

 

     Print Title:________________________
Print Name:_____________________
________________________________________

 

I/WE HEREBY FURTHER CERTIFY that, pursuant to the formation
documents of the Company, and any other appropriate documents of
the Company as may be necessary, I/we have the power and authority
to execute this Certificate on behalf of the Company. A copy of
this Certificate, which is duly signed and which is received by
facsimile transmission ("fax") or by Adobe Acrobat (or equivalent)
attachment to an e-mail message, shall be deemed to be of the same
force and effect as the original.

 

I/we have so
executed this Certificate on the
_________day
of____________________, 20________.
           

 

 

Print Name:_________________________

 

Print Title:__________________________                                                                                                               

(Must be
certified by another officer other than
the

above authorized signer)

 

ADDRESS FOR ALL NOTICES:

PO BOX 230789

Portland, OR 97281-0789

 

 

 

 

 

	

	
INSURANCE
AUTHORIZATION

AND
VERIFICATION

 

 

 

 

Date:January
04, 2019  Application #
2470553

 

To:PARK CITY
GROUP, INC.
("Customer")                      

229 S MAIN ST
STE 2225

SALT LAKE CITY,
UT 84111
                                          

 

From: U.S. Bank Equipment Finance, a division
of 

U.S. Bank
National Association ("Creditor")

and its
successors and
assigns 

1310 Madrid Street

Marshall, MN 56258Attn:
Insurance Department

 

TO
THE CUSTOMER: In connection with one or
more financing arrangements, Creditor requires proof in the form of
this document, executed by both Customer* and Customer's agent,
that Customer's insurable interest in the financed property (the
"Property") meets Creditor’s requirements as follows, with
coverage including, but not limited to, fire, extended coverage,
vandalism, and theft:

 

Creditor,

AND ITS SUCCESSORS AND ASSIGNS shall be
covered as both 
ADDITIONAL INSURED and LENDER'S LOSS PAYEE with
regard to all equipment financed or leased by policy holder through
or from Creditor.

 

Customer must carry COMMERCIAL GENERAL LIABILITY (and/or EDP, if
applicable) in the amount of no less than $1,000,000.00 (one
million dollars).

 

Customer must carry PROPERTY Insurance (and/or EDP, if applicable)
in an amount no less than the 'Insurable Value' $1,000,000.00, with
deductibles no more than $10,000.00.

 

*Customer: Please execute this form and return with your document
package. Creditor will fax this form to your insurance agency for
endorsement. In lieu of agent endorsement, Customer’s agency
may submit insurance certificates demonstrating compliance with all
requirements. If fully executed form (or Customer-executed form
plus certificates) is not provided within 15 days, we have the
right to purchase such insurance at your expense. Should you have
any questions, please contact the Insurance Department at (800)
828-8246 Ext. 1513720.

 

By signing, Customer authorizes the Agent named below: 1) to
complete and return this form as indicated; and 2) to endorse the
policy and subsequent renewals to reflect the required coverage as
outlined above.

 

	

Agency/Agent: 

Address:

 

Phone/Fax:                      

	

/____________________

_______________

/____________________

	

Park City Group, Inc.

By: _________________________________

Print Name: __________________________

Print Title: ___________________________

E-Mail              

 

 

 

TO THE AGENT: In lieu of providing a
certificate, please execute this form in the space below and
promptly fax it to Creditor at (866) 4058329. This fully endorsed
form shall serve as proof that Customer's insurance meets the above
requirements. 
CANCELLATION: Should any of the above
described policies be cancelled before the expiration date thereof,
please deliver notice to U.S. Bank Equipment Finance, a division of
U.S. Bank National Association in accordance with the policy
provisions.

 

Agent hereby verifies that the above requirements have been met in
regard to the Property listed below.

 

Print Name Of Agency:

 

X

 

 

(Agent's Signature)

 

Print Name:
X                                                                       

Date: X

 

 

 

Insurable Value: $1,000,000.00

 

PROPERTY DESCRIPTION: ALL ASSETS RELATED TO CUSTOMER NUMBER 778871
10707 REV 08/16

 

 

 

 

 

 

 

U.S. Bank Equipment Finance, a division of U.S. Bank National
Association

PO BOX 230789

Portland, OR 97281-0789

Main Number: (800) 253-3468 Fax: (844) 598-0451

Vendor Instructions

 

	

Important:

	

In order to ensure prompt payment of your invoices for equipment
shipped to PARK CITY GROUP, INC. ("Customer") please prepare
invoices as follows:

	

Sold/Billed to:

	

U.S. Bank Equipment Finance, a division of U.S. Bank National
Association Attention:

Katie Michalek

PO BOX 230789

Portland, OR 97281-0789

	

Ship To:

What to Include

	

Please ship to: Customer at the address specified by
Customer.

Indicate on your invoice the company name and address specified by
Customer.

	

On Invoice:

	

● Both
"Bill to" and "Ship to" information is
required.

 

● Equipment
ship date

 

● Detailed
itemization of equipment

 

● Detailed,
itemized pricing for each piece of equipment

 

● Model
numbers

 

● Part
numbers

 

● Serial
numbers

 

● Other
relevant equipment or order information

	

Sales Tax:

	

Please do not include sales tax on the
invoices.

U.S. Bank Equipment Finance, a division of U.S. Bank National
Association is a lessor under a lease agreement with the Customer
and will collect the appropriate sales and use tax from Customer
and remit it directly to the tax authorities. We will provide the
appropriate state resale exemption certificate. Please request the
exemption certificate by email from Katherine.Michalek@usbank.com
or telephone at 800-253-3468 ext.

603-2866. Please include a full address to which the certificate
information should be sent.

	

Payment:

	

Payment will be released upon return of the original executed
Certificate of Delivery and Acceptance

	

Reference:

	

Credit Information for U.S. Bank Equipment Finance, a division of
U.S. Bank National Association can be found at
www.usbank.com.

 

 

Thank
You!

 

 

 

 

 

 

Main Number: (800) 253-3468

 

Email: EFTFGDOCS@USBANK.COM

 

BILLING QUESTIONNAIRE

 

Customized Invoicing Specifications

We are confident we can make every invoicing experience a positive
one. This form will ensure all necessary data is collected to
customize your invoice to your specific business
needs.

 

Accounts Payable Information

Customer Name: PARK CITY GROUP, INC.

 

Phone:

 

Payment Details

 

The due date of the contract will be the first day of the
month.

 

Payment
Type:                                                                       

WIRE

 

Do you require
a
W9?                                             

YesNo

 

 Sales Tax Exempt*

 

*A current copy of a tax exemption certificate is required for each
state in which the equipment is located.

 

Please mail payments to:

 

U.S. Bank Equipment Finance

 

P.O. Box 790413

 

St. Louis, MO 63179-0448

 

For application purposes, be sure to enclose your invoice stub with
your payment. If you utilize bill pay from your financial
institution, be sure to reference the Schedule Number in the Memo
field to ensure accurate payment application.

 

Invoice Details

 

One Invoice for Each Schedule*One Invoice for Multiple
Schedules*

 

*You must remit a check with each invoice to ensure accurate
payment application.

 

Do you require
specific information referenced on your
invoices?                                                                                                                
       

 

Purchase Order Number:

 

 

 

Comments

 

 

 

 

 

 

 

Please complete this form and return to:

U.S. Bank Equipment Finance, a division of U.S. Bank National
Association, PO BOX 230789

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