SYSTEM ON-PREMISES SUBSCRIPTION
AND SECURITY AGREEMENT

This EntryReady™ System On-Premises Subscription and Security Agreement (sometimes, this “Subscription Agreement”) is incorporated into the EntryReady™ by SmartOS Statement of Work (the “SOW”) and the Access Control Purchase Order Form between Client and SmartOS, LLC (“SmartOS”, “we” or “us”).

This Subscription Agreement is subject to all of the terms and conditions of the SOW and all of the Exhibits and Schedules that are incorporated by reference into the SOW, including the SmartOS EntryReady™ Master Services Agreement and the SmartOS EntryReady™ Extended Services Support Agreement. Capitalized terms used in this Subscription Agreement but not otherwise defined have their respective meanings in the SOW. In the event of any conflict between this Subscription Agreement and the SOW, the terms of this Subscription Agreement will govern.

TERMS AND CONDITIONS OF ON-PREMISES ENTRYREADY™ SYSTEM RENTAL AND SECURITY AGREEMENT

This Subscription Agreement is for the subscription rental and use by Client of the EntryReady™ System, which includes certain hardware, equipment and other products of SmartOS that are identified in the SOW as owned by SmartOS and rented to Client under this Subscription Agreement, which are to be maintained on Client’s premises (the “Rental”). This Subscription Agreement contains the exclusive terms and conditions upon which SmartOS provides the on-premises rentals of the EntryReady™ System. SmartOS will not accept any other terms and conditions for any rental of any of the EntryReady™ System, unless Client and an authorized officer of SmartOS have executed a written agreement that specifically modifies, supersedes and replaces this Subscription Agreement in whole or in part as expressly set forth in such written agreement. Acceptance of the EntryReady™ System rented to Client by SmartOS is expressly made conditional upon the Client’s assent, express or implied, to this Subscription Agreement without any modification, unless expressly set forth in such written agreement.

NOTE: CLIENT GRANTS SMARTOS THE AUTHORITY TO FILE THIS SUBSCRIPTION AGREEMENT AS A FINANCING STATEMENT UNDER THE UNIFORM COMMERCIAL CODE WITH RESPECT TO ALL SECURITY INTERESTS CREATED UNDER THIS SUBSCRIPTION AGREEMENT.

1. UNDERSTANDINGS AND BASIC TERMS. Client and SmartOS agree to all of the following understandings and terms of this Subscription Agreement:

(a) Client has agreed to rent and license the EntryReady™ System from SmartOS under the SOW;

(b) Client has agreed to rent the physical components of the EntryReady™ System from SmartOS in conjunction with licensing the software and intellectual property and intangible elements comprising the EntryReady™ System;

(c) Client acknowledges that SmartOS is the sole owner of the EntryReady™ System;

(d) SmartOS has agreed to provide the physical components of the EntryReady™ System to Client in consideration of Client’s payment of the EntryReady™ System initial deposit and the fees that are included as part of the total fees set forth in the SOW and charged under the SOW, on the terms and subject to the conditions set forth in this Subscription Agreement and the SOW; and

(e) Client agrees to pay the initial deposit and the fees set forth in the SOW, which include the fees for the Rental of the EntryReady™ System, whether or not they are separately stated (collectively, the “Fees”), to SmartOS in accordance with the terms of the SOW.

2. RENTAL. SmartOS will furnish to Client, and Client will accept and pay the Fees, which include the initial deposit and the aggregate rental fees for the EntryReady™ System identified in the SOW, for the “Rental Term”, which shall include the Initial Term as defined in the SOW and any extensions thereof.

3. DELIVERY, INSPECTION AND INSTALLATION. We will arrange for delivery of the EntryReady™ System in accordance with the SOW.

4. REFUSAL TO ACCEPT. If Client refuses to permit delivery or installation or to accept all or any part of the EntryReady™ System, SmartOS is entitled to receive (a) any part of the EntryReady™ System in Client’s possession and (b) all damages associated with such complete or partial refusal or delay in acceptance, including but not limited to lost profits.

5. RENTAL FEES AND OTHER PAYMENTS. Client shall pay SmartOS the Fees in accordance with the SOW.

6. TAXES. Client shall pay promptly when due all registration, title, license and other fees, and all other fees, assessments and sales, use, gross receipts, ad valorem, personal property and other taxes imposed upon the purchase or any use, ownership, rental, shipment, delivery or operation of the EntryReady™ System (and reimburse SmartOS for any fee or tax SmartOS becomes obligated to pay because of our duties under this Subscription Agreement (including sales and excise taxes), but not taxes based on our net income), and any fines, penalties and interest thereon.

7. CLIENT’S OPERATIONAL RESPONSIBILITIES. Client acknowledges that:

7.1 Client has independently determined that the EntryReady™ System ordered under this Subscription Agreement meets Client’s requirements.

7.2 Client shall ensure that Client’s personnel, employees, and any other persons authorized to use the EntryReady™ System (collectively, “Users”) are always educated and trained in the proper use, operation and care of the EntryReady™ System, and that the EntryReady™ System is always used in accordance with applicable SmartOS manuals and instructions.

7.3 Client shall provide adequate warnings when necessary or desirable to prevent harm to people (including death) or property.

7.4 Except as otherwise specifically set forth in the SOW: SmartOS will not be responsible for retaining any of Client’s data after termination of the subscription for the EntryReady™ System; Client’s data may be deleted promptly after the subscription for the EntryReady™ System is terminated and from backups during scheduled backup rotation; SmartOS will not restore, provide on any storage media or send out any data pertaining to terminated use of the EntryReady™ System; and it is Client’s responsibility to back-up and migrate Client’s data before termination of Client’s subscription for the EntryReady™ System or any other action that can lead to deletion of any of Client’s data from the EntryReady™ System.

8. WARRANTIES AND DISCLAIMERS. Read the following disclaimers carefully. They apply to (a) any and all goods, software and services comprising the EntryReady™ System, and (b) any goods, software and services not designated as comprising the EntryReady™ System.

Except as expressly stated herein, SmartOS makes no warranties, express or implied, by operation of law or otherwise. Without limiting the foregoing sentence, SmartOS disclaims the implied warranties of merchantability and fitness for a particular purpose with regard to the EntryReady™ System.

SmartOS warranties extend solely to Client and only during the Rental Term.

SmartOS does not make any warranties of any kind that the EntryReady™ System or its components do not or will not infringe any copyright, patent, trade secret or other intellectual property right of any third party in any country.

8.1 All warranties are null and void if any component of the EntryReady™ System is (a) altered, including installation of or interfacing computer programs that are not the EntryReady™ System as described in this Subscription Agreement or the SOW, (b) subjected to out of specification uses or accidents, (c) misused, (d) damaged by Client’s or any User’s negligence, or Client’s or any User’s failure to follow instructions or specifications as to proper use, care, maintenance or cleaning of the EntryReady™ System, (e) damaged by external factors such as fluctuation of electrical power, temperatures above 80 degrees Fahrenheit, fire, flood or failure or Client’s refusal to comply with SmartOS environmental specifications, or (f) subjected to improper site preparation or maintenance.

8.2 SmartOS shall have no responsibility for the effect that the installation of any software may have on any warranties relating to the EntryReady™ System.

EntryReady™ System Warranties

8.3 SmartOS warrants that the EntryReady™ System will be free from defects in material and workmanship throughout the Rental Term. During this warranty period, SmartOS shall repair or replace any defective components of the EntryReady™ System, if Client promptly reports the defect in accordance with the terms of the SOW. Because the EntryReady™ System requires ongoing maintenance, the preceding warranty is not a substitute for periodic replacement parts and any alterations necessary to keep the EntryReady™ System in good working order. SmartOS makes no representation or warranty as to components of Client’s systems other than the EntryReady™ System. Client agrees to look solely to the warranties and remedies, if any, provided by the manufacturers of such components of Client’s systems other than the EntryReady™ System.

9. ALTERATIONS AND ATTACHMENTS; INDEMNITY. Client shall not make or allow to be made any alterations or attachments to the EntryReady™ System. SmartOS is not responsible for any malfunction, nonperformance or degradation of performance of the EntryReady™ System, supplies or maintenance support materials caused by or resulting directly or indirectly from any maintenance, repairs, alteration, modification or attachment that was not made by SmartOS. SmartOS warranties will not apply if any maintenance, repairs, attachment or equipment not supplied by SmartOS or alteration of the EntryReady™ System occurs or is allowed by Client to occur. Client will be solely responsible for any infringement, personal injury, death or damage to property and the EntryReady™ System resulting from such maintenance, repair, alteration, modification or attachment. Client shall defend, indemnify and hold harmless SmartOS and its officers, directors, employees and agents, from and against any and all liabilities, claims, costs, losses and expenses (including reasonable attorneys’ fees), paid or incurred as a result of or arising from Client’s or any User’s alteration, misuse or modification of the EntryReady™ System or violation of this Subscription Agreement.

10. LIMITATIONS OF DAMAGES.

10.1 No Consequential Damages. Neither party shall be liable to the other party for any lost profits, or any indirect, special, incidental, or consequential loss or damage of any kind, arising in connection with this Subscription Agreement, even if the party has been advised or should be aware of the possibility of such damages. In no event shall either party be liable to the other for any punitive damages.

10.2 Monetary Limitation. Notwithstanding anything in this Subscription Agreement to the contrary, SmartOS’s maximum aggregate monetary liability under any theory of law (including breach of contract, tort, strict liability and infringement) shall not exceed 4 times one month’s Fees in effect at the time of the occurrence of the event giving rise to the claim.

10.3 Except as otherwise provided in the SOW, the entire liability of SmartOS and Client’s exclusive remedy for any defects in the EntryReady™ System provided under this Subscription Agreement is limited to SmartOS’s replacement of the EntryReady™ System or for refund of the portion of the Fees paid to SmartOS for the EntryReady™ System (not including any amounts paid for related services), at SmartOS’s option.

10.4 Client acknowledges that the limitations contained herein permit SmartOS to provide the EntryReady™ System at lower rates than SmartOS otherwise could, and such limitations are reasonable.

10.5 These limitations of damages are intended to limit SmartOS’s exposure for damages. SmartOS shall not be liable to Client for any reason other than as expressly set forth herein. Regardless of whether any remedy fails of its essential purpose, SmartOS shall not be liable to Client or any third party for any consequential, indirect, incidental or special damages, even if SmartOS has been advised of the possibility of such damages. SmartOS’s total liability for all causes of action added together may not exceed the amount described in Section 10.2 with respect to all components of the EntryReady™ System and all claims made under this Subscription Agreement that result in SmartOS’s liability.

11. RISK OF LOSS: Client shall bear all risks of loss, theft, damage or destruction of the components of the EntryReady™ System that are on Client’s premises (“Rented Components”) from any cause. Client shall promptly notify SmartOS in writing of any such loss, theft, damage or destruction of the Rented Components. Except as otherwise provided in the SOW, if damage of any kind to the Rented Components occurs (unless the damage is beyond repair), Client shall engage Corerva, at Client’s expense, place the Rented Components in good repair, condition and working order. If SmartOS determines that Rented Components are lost, stolen, destroyed or damaged beyond repair and Client is not entitled to repair or replacement by SmartOS under the terms of the SOW, then Client shall immediately pay in addition to unpaid late charges, and additional rent, an amount equal to (i) all unpaid Fees attributable to the rental of the EntryReady™ System that are due and to become due under this Subscription Agreement, plus (ii) the estimated residual value at the end of the scheduled Rental term, discounted to present value at the rate of 6% per annum, less the net amount of the recovery, if any, we actually receive from insurance on the EntryReady™ System. Only upon such payment, the Rental under this Subscription Agreement shall terminate.

12. INSURANCE: Client shall, at Client’s sole expense, procure and maintain throughout the Rental term (a) primary (i.e., without right of contribution from any other policy) person injury liability and property damage liability insurance with respect to the EntryReady™ System and its use, in such amounts as may be acceptable to us, and naming SmartOS as additional insured, and (b) insurance insuring the EntryReady™ System against all risks of physical loss, theft, damage and destruction and extended coverage in an amount equal to the greater of (i) the total rent (or remaining total rent) for the full term (or remaining term) of this Subscription Agreement, or (ii) the full replacement value (new) of the EntryReady™ System, with loss payable solely to SmartOS. All insurers and coverages must be satisfactory to us. Client shall deliver us policies or duplicates of certificates of such insurance (or other evidence of such insurance acceptable to us). Policies shall provide that they may not be canceled or altered without at least 30 days’ prior written notice to us. We may apply the proceeds of insurance to replace or repair the EntryReady™ System and/or satisfy any of Client’s obligations under this Subscription Agreement. If Client fail to procure such insurance or pay any insurance premium when due, we may (but shall not be required to) procure such insurance or make such premium payments, and Client shall pay us the costs thereof as additional rent with Client’s next payment of Rental Fees. All insurance policies insuring against risk or physical loss of the EntryReady™ System shall provide that the coverages shall not be invalidated against SmartOS because of any violation of any condition or warranty contained in any policy or application therefor by Client or by reason of any action or inaction of SmartOS.

13. USE OF ENTRYREADY™ SYSTEM. Client shall use the EntryReady™ System solely for business or commercial purposes. Client warrants that the EntryReady™ System shall at all times be used and operated in compliance with manufacturer’s instructions and under and in compliance with the laws of the jurisdictions in which such systems may be operated. Any alterations, modifications, additions or improvements, and all repairs, parts and supplies shall be the property of SmartOS and shall be subject to the terms of this Subscription Agreement.

14. SECURITY AGREEMENT; SECURITY INTEREST. Client grants SmartOS a security interest in all the components of the EntryReady™ System and all other items of property in which SmartOS has any interest under this Subscription Agreement or the SOW, wherever located, now or hereafter, and all proceeds of the foregoing, which shall secure the performance of all of Client’s obligations of any kind whatsoever to SmartOS.

15. OWNERSHIP: Title to the EntryReady™ System throughout the Rental term shall at all times be in SmartOS. Client shall protect and defend, at Client’s own cost and expense, our title from and against all claims, liens and legal processes of creditors of or arising under, by, or through Client and keep all components of the EntryReady™ System free and clear of all such claims, liens and processes.

15.1 Client shall not assign or transfer the Rental, this Subscription Agreement or Client’s rights under this Subscription Agreement or sublease the EntryReady™ System, or remove or permit the EntryReady™ System or any parts thereof to be removed from the location specified above as Client’s address (or EntryReady™ System location, if another location has been specifically permitted under the terms of this Subscription Agreement) or permit the EntryReady™ System to be used by anyone other than Client’s employees or Client’s Users. Client shall keep SmartOS’s interest in the EntryReady™ System and each component of the EntryReady™ System free and clear of any and all liens, charges, encumbrances, rights of distraint, charges, and claims of the owner of the real estate in which the EntryReady™ System is installed and of any purchaser or present or future creditor obtaining a lien on such real estate. At SmartOS’s request, Client will obtain and deliver a waiver of any interest of Client’s landlord and mortgagees of such real estate in the EntryReady™ System in a recordable form supplied by SmartOS.

15.2 The EntryReady™ System shall be and remain personal property regardless of the manner in which they may be attached or affixed to real estate. Upon termination of the Rental Term, Client shall have the duty and SmartOS shall have the right to remove each component of the EntryReady™ System from its location, at Client’s sole cost and expense, unless the SOW provides otherwise. SmartOS shall not be liable for any damage caused to the real estate or any building by the removal of the EntryReady™ System, and Client hereby indemnifies SmartOS against any damage.

15.3 Client shall at SmartOS’s request securely affix conspicuous tags or plates on the EntryReady™ System containing a notation that each component of the EntryReady™ System is owned by SmartOS. Client agrees from time to time to execute and file any financing statements, security schedules, and similar instruments, that in SmartOS’ judgment are necessary to protect SmartOS. Client authorizes SmartOS and its assignees to file one or more financing statements with respect to the EntryReady™ System and/or additional collateral without Client’s signature. Client appoints SmartOS as Client’s attorney-in-fact to execute financing statements on Client’s behalf when required by the filing jurisdiction, and to file a carbon, photographic or other reproduction of this Subscription Agreement or a financing statement.

15.4 SmartOS may from time to time during reasonable business hours enter upon Client’s premises or elsewhere for the purpose of confirming the existence, condition and proper maintenance of the EntryReady™ System.

16. RETURN OF THE ENTRYREADY™ SYSTEM. Upon the expiration or termination of the Rental Term, Client shall return the EntryReady™ System to us in good order and repair, ordinary wear and tear excepted, free and clear of all liens other than those created by us. Client shall provide access to SmartOS for SmartOS’s removal of the EntryReady™ System. Client shall properly prepare the premises for removal of the EntryReady™ System, at Client’s expense. If, within 10 days after the expiration of the Rental term, Client fails to provide such access as provided above, we may at our sole option (x) extend the Rental Term, or (y) declare an Event of Default under Section 17 and pursue our remedies under this Subscription Agreement. All provisions applicable to the initial Rental Term shall apply to the extended Rental term, except as provided in the following sentence. The Rental term is automatically extended for a 5-year extended term, upon the expiration or termination of the extended Rental, if Client have not returned the EntryReady™ System to SmartOS in accordance with the terms of this Section 16, and the Rental Term shall continue on a month-to-month basis until Client returns the EntryReady™ System, or SmartOS in its sole discretion terminates the Rental Term. If we do not exercise our option to extend the Rental Term following Client’s failure to timely return the EntryReady™ System, Client shall pay us the renewal rent for the EntryReady™ System, monthly, from the Rental Term expiration date through the month in which the EntryReady™ System is returned.

17. DEFAULT. The occurrence of any one of the following shall constitute an Event of Default under this Subscription Agreement, which shall also be a default under the SOW: (a) Client fails to pay any installment of Fees or other amount due hereunder on or before its due date, or fails to provide access to SmartOS to recover the EntryReady™ System in accordance with Section 16 as required by Section 16, as time is of the essence with respect to any payment due hereunder; (b) Client removes, sells, transfers, encumbers, sublets or parts with possession of any EntryReady™ System, or if Client attempts to do any of the foregoing; (c) Client fails to maintain in force the required insurance on the EntryReady™ System in compliance with Section 12 or fails to provide loss payable protection to us in a form satisfactory to us; (d) Client fails to observe or perform any of the other obligations Client is required to observe or perform under this Subscription Agreement or in any other Schedule now or hereafter executed between Client and SmartOS, and such failure continues uncured for 10 days after written notice to Client by SmartOS; (e) Client ceases doing business as a going concern, makes an assignment for the benefit of creditors, admits in writing Client’s inability to pay Client’s debts as they become due, files a voluntary petition in bankruptcy, is adjudicated a bankrupt or an insolvent, files a petition seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar arrangement under any present or future statute, law or regulation, or files an answer admitting the material allegations of a petition filed against Client in any such proceeding; Client consents to or acquiesces in the appointment of a trustee, custodian, receiver or liquidator of Client or any substantial part of Client’s assets or properties; or if Client or Client’s shareholders take any action looking to Client’s dissolution or liquidation; or an order for relief is entered under the Bankruptcy Code against Client; or (f) if within 30 days after any proceedings are commenced against Client seeking reorganization, arrangement, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, such proceedings shall not have been dismissed, or if within 30 days after the appointment with Client’s consent or acquiescence of any trustee, custodian, receiver or liquidator of Client or of all or any substantial part of Client’s assets and properties, such appointment is not vacated. It shall be an Event of Default under this Subscription Agreement, if any payment is not made in a timely manner, without any right to cure, unless such right to cure is granted by SmartOS in any particular instance in SmartOS’s sole discretion. If an Event of Default occurs, SmartOS shall be entitled to exercise all remedies, including but not limited to those listed in those listed in Section 18 of this Subscription Agreement and those contained in the SOW.

18. REMEDIES FOLLOWING DEFAULT. Upon the occurrence of any Event of Default, SmartOS may at our option do any of the following: (i) terminate the Rental under this Subscription Agreement; (ii) whether or not the Rental is terminated, take possession of any or all of the EntryReady™ System, and for such purpose, enter upon any premises without liability for so doing, or cause Client to, and Client hereby agrees to, return the EntryReady™ System to SmartOS as provided in this Subscription Agreement; (iii) sell, dispose of, hold, use or lease any EntryReady™ System as SmartOS, in our sole discretion, may determine; (iv) recover from Client, as liquidated damages for loss of a bargain and not as a penalty, a sum equal to the aggregate of the following: (a) all Fees and other sums due under this Subscription Agreement through the date of the Event of Default, (b) any expenses paid or incurred by SmartOS in connection with the repossession, holding, repair and subsequent sale, lease or other disposition of the EntryReady™ System, including attorneys’ fees and legal expenses, (c) the present value (using a 6% percent per annum discount rate) of all amounts Client is required to pay during the remaining Rental Term, (d) the present value (using a 6% percent per annum rate) of the estimated residual value at the end of the scheduled Rental Term, and (e) interest on the aggregate amounts specified in (a) through (d) above from the date of the Event of Default (or expenditure) at a rate equal to 1.5% per month or such lesser maximum rate as is allowed by law. Client shall in any event remain fully liable for damages as provided by law and for all costs and expenses incurred by SmartOS on account of such default, including but not limited to all court costs and reasonable attorneys’ fees. Client shall remain liable for any deficiency after any sale, rental, or other disposition of the EntryReady™ System by SmartOS. Any right afforded SmartOS shall not be deemed to be exclusive, but shall be in addition to any rights and remedies provided by law. If any court of competent jurisdiction determines that any provision of this Section 18 is invalid or unenforceable in whole or in part, such determination shall not prohibit SmartOS from enforcing its rights and establishing its damages sustained as a result of any breach of this Subscription Agreement in any action or proceeding in which SmartOS seeks to enforce its rights and recover such damages, in accordance with the laws of such jurisdiction. Without prejudice to other remedies, SmartOS may cancel this Subscription Agreement or part thereof or any order placed under it and repossess the EntryReady™ System and/or disable Client’s use of the EntryReady™ System if Client defaults and, after written notice, fails to (a) make any payment identified as delinquent (including payment of charges for Services) within 10 days, or (b) cure any default relating to Section 7 within 30 days. Termination or cancellation of this Subscription Agreement will not affect any rights or duties arising with respect to Proprietary Information.

19. OTHER CHATTEL PAPER. As additional collateral security for Client’s obligations, Client grants SmartOS a further security interest in the SOW and all machinery, equipment, software and goods covered by any other lease or security agreement (collectively, the “other Agreements”) between Client and SmartOS as security for Client’s obligations under this Subscription Agreement, and all of Client’s rights, title and interest in and to any surplus money to which Client may be entitled upon the sale of machinery, equipment and goods covered by such other Agreements. The benefit of this additional security provision shall apply to us and our assignees to the extent that we or such assignees are also the holder of any such other Schedules.

20. ASSIGNMENT. SmartOS may assign or otherwise transfer the Rental and/or this Subscription Agreement and any and all of SmartOS’s right, title and interest under this Subscription Agreement and in the EntryReady™ System, including the right to receive Fees and all other amounts payable hereunder, without Client’s consent. If SmartOS assigns the Rental or this Subscription Agreement, the assignee’s right to receive rentals and other amounts payable hereunder, as well as any other right of the assignee, shall not be subject to any defense, set-off or counterclaim Client may have against SmartOS. Upon SmartOS’s giving notice to Client of any such assignment, Client shall promptly acknowledge Client’s obligations to the assignee and shall comply with the written directions or demands of such assignee. Thereafter, Client shall make all rental and other payments due under this Subscription Agreement as such assignee may direct in writing. Following any such assignment, the terms “SmartOS,” “we,” and “us,” shall be deemed to include or refer to SmartOS’s assignee, but no such assignee shall be deemed to assume any obligation or duty imposed upon SmartOS. Client shall look only to SmartOS for performance of our duties under this Subscription Agreement. As used in this Section 20: the term “assign” includes a pledge, sale of, or grant of a mortgage on, or a security interest in, any of the SOW, the EntryReady™ System or the Rental or this Subscription Agreement by SmartOS; and the term “assignee” refers to the recipient of such pledge, hypothecation, sale, mortgage or security interest. Client may not assign this Subscription Agreement or transfer Client interest in this Subscription Agreement without SmartOS’ express, prior written consent. Any such purported assignment by Client other than in compliance with the provisions of this Section 20 shall be null and void ab initio.

21. RENTAL, IRREVOCABILITY: Upon acceptance of the EntryReady™ System under the SOW, this Subscription Agreement and the SOW shall constitute a non-cancelable net lease covering the components of the EntryReady™ System listed in the SOW. Client’s obligations to pay all Fees and other amounts when due and to perform as required under this Subscription Agreement are unconditional and irrevocable. Delinquent installments of Fees and other sums due under this Subscription Agreement shall bear interest at the rate of 1.5% per month (computed on the basis of a 30-day month), if not prohibited by law, otherwise at the highest rate lawfully payable by Client. Such obligations are not subject to cancellation, termination, prepayment, modification, repudiation, revocation or excuse. Client shall not be entitled to any abatement, reduction, offset or counterclaim with respect to these obligations for any reason whatsoever, whether arising out of claims against SmartOS, the manufacturer or supplier, defect in, lack of fitness for use of, loss of possession or use of or damage or destruction of any EntryReady™ System, any prohibition against use or otherwise.

22. INITIAL DEPOSIT. SmartOS may, at its option, require an initial deposit (“Initial Deposit”) and the Initial Deposit shall be considered a component of the “Fees” under this Subscription Agreement. SmartOS may, at its sole option, apply the Initial Deposit to cure any of Client’s defaults under this Subscription Agreement, whereupon Client shall promptly restore the mount of the Initial Deposit to its original amount.

23. NOTICES. All notices required by this Subscription Agreement to be given to Client will be sent to Client’s address on the SOW or to such other address as Client shall designate in writing to SmartOS. All notices required to be given to SmartOS and all requests for information under Section 8 will be addressed to SmartOS at the address provided in the SOW, or to such other address as SmartOS shall from time to time designate, and shall be sent by U.S. registered mail, postage and registry fees prepaid.

24. TIME IS OF THE ESSENCE. Time is of the essence with respect to any payment due hereunder. It shall be an Event of Default (defined in Section 17) under this Subscription Agreement, which shall also be a default under the SOW, if any payment is not made in a timely manner, without any right to cure, unless such right to cure is granted by SmartOS in any particular instance in SmartOS’s sole discretion. If an Event of Default occurs, SmartOS shall be entitled to exercise all default remedies, including but not limited to those listed in the SOW and the SOW and those listed in Section 18 of this Subscription Agreement.