Touchpoint Metrics, Inc. (Form: 10-Q, Received: 08/04/2014 06:00:33)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2014

	OR

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 000-54918

TOUCHPOINT METRICS, INC.

(Exact name of registrant as specified in its charter)

California

(State or other jurisdiction of incorporation or organization)

26-0030631

(I.R.S. Employer Identification No.)

201 Spear Street, Suite 1100

San Francisco, CA 94105

(Address of principal executive offices, including zip code)

(415) 526-2655

(Registrant's telephone number, including area code)

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days. YES x NO o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES x NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," "non-accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer	o	Accelerated Filer	o
Non-accelerated Filer (Do not check if a smaller reporting company)	o	Smaller Reporting Company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES o NO x

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicated the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 16,081,158 as of July 30, 2014.

Table of Contents

Touchpoint Metrics, Inc.

Form 10-Q Quarterly Report

TABLE OF CONTENTS

		Page No.

	Part I . - Financial Information

Item 1.	Financial Statements.	3

	Balance Sheets as of June 30, 2014 (unaudited) and December 31, 2013.	3

	Statements of Operations for the Three and Six Months ended June 30, 2014 and 2013 (unaudited).	4

	Statements of Cash Flows for the Six Months ended June 30, 2014 and 2013 (unaudited).	5

	Notes to Financial Statements.	6

Item 2 .	Management's Discussion and Analysis of Financial Condition and Results of Operations.	12

Item 3 .	Quantitative and Qualitative Disclosure about Market Risk.	17

Item 4 .	Controls and Procedures.	18


	Part II . - Other Information

Item 1A .	Risk Factors.	18

Item 6 .	Exhibits.	18

Signatures		23

Exhibit Index		24

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

Touchpoint Metrics, Inc.

Balance Sheets

	June 30,			December 31,
	2014			2013
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	526,124		$	653,990
Accounts receivable		352,069			74,978
Accounts receivable-related party		-			-
Total current assets		878,193			728,968
Long term assets:
Property and equipment, net		90,250			91,108
Capitalized software development costs, net		127,929			164,480
Intangible assets, net		43,072			43,489
Other assets		29,788			5,953
Total assets	$	1,169,232		$	1,033,998

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	112,845		$	110,116
Accrued liabilities		273			-
Deferred revenue		96,200			3,249
Other current liabilities and accrued interest		16,500			13,773
Notes payable		50,000			50,000
Notes payable-related party		100,000			100,000
Total liabilities		375,818			277,138
Commitments and contingencies
Shareholders' equity:
Common stock, $0 par value, 30,000,000 shares authorized, 16,081,158 and 13,132,302 shares issued and outstanding at June 30, 2014 and 2013, respectively		-			-
Accumulated deficit		(1,849,143	)		(1,861,414	)
Additional paid-in capital		2,642,557			2,618,274
Total shareholders' equity		793,414			756,860
Total liabilities and shareholders' equity	$	1,169,232		$	1,033,998

The accompanying notes are an integral part of these statements.

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Touchpoint Metrics, Inc.
Statements of Operations
(unaudited)


	Three Months Ended June 30,					Six Months Ended June 30,
	2014		2013			2014		2013

Revenue
Consulting services	$	530,323	$	266,792		$	864,792	$	517,725
Products & other		82,582		6,533			118,819		21,988
Total revenue		612,905		273,325			983,611		539,713
Cost of goods sold
Labor		30,869		69,289			52,445		133,685
Services		-		17,936			0		17,936
Products and other		76,599		42,837			132,517		52,473
Total cost of goods sold		107,467		130,062			184,962		204,094
Gross profit		505,437		143,263			798,649		335,619
Expenses
Salaries and wages		248,641		153,015			509,700		325,932
Contract services		23,643		23,712			45,247		36,160
Other general and administrative		103,159		103,264			225,039		199,967
Total expenses		375,443		279,991			779,985		562,059

Net operating income		129,994		(136,728	)		18,664		(226,440	)

Interest expense		3,301		(3,123	)		6,392		(6,196	)

Other income (expense)		-		-			0		(62,982	)

Income before income taxes		126,694		(139,851	)		12,271		(295,618	)
Income tax provision		-		-			0		-

Net income	$	126,694	$	(139,851	)	$	12,271	$	(295,618	)

Net income per share-basic and diluted	$	0.01	$	(0.01	)	$	0.00	$	(0.02	)

Weighted average common shares outstanding-basic and diluted		16,081,158		13,132,302			16,081,158		13,132,302

The accompanying notes are an integral part of these statements.

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Touchpoint Metrics, Inc.
Statements of Cash Flows
(unaudited)


	Six Months Ended June 30,
	2014			2013
Cash flows from operating activities:
Net income	$	12,271		$	(295,618	)
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization		37,825			21,359
Stock compensation expense		24,284			5,270
Loss on disposal of assets		-			62,982
Changes in operating assets and liabilities:
Accounts receivable		(277,091	)		(20,187	)
Accounts receivable-related party		-			1,527
Other assets		(23,835	)		3,786
Accounts payable		2,729			70,897
Accrued liabilities					35,349
Deferred revenue		92,951			-
Accrued interest		3,000			3,000
Net cash used in operating activities		(127,866	)		(111,635	)

INVESTING ACTIVITIES
Equipment purchases		-			(3,638	)
Capitalized software development costs		-			(30,936	)
Net cash used in investing activities		-			(34,574	)

FINANCING ACTIVITIES
Proceeds from notes payable - related party		-			25,000
Proceeds from private placement of common stock		-			1,032,100
Proceeds from the issuance of common stock		-			-
Net cash provided by financing activities		-			1,057,100
Increase in cash and cash equivalents		(127,866	)		910,891
Cash and cash equivalents, beginning of period		653,990			106,999

Cash and cash equivalents, end of period	$	526,124		$	1,017,890

The accompanying notes are an integral part of these statements.

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TOUCHPOINT METRICS, INC.

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2014

Note 1: Organization and Basis of Presentation

Touchpoint Metrics, Inc. (the "Company") is a for profit corporation established under the corporation laws in the State of California, United States of America on December 14, 2001. The corporation operated as The Innes Group, Inc., dba MCorp Consulting until filing a Certificate of Amendment to the Articles of Incorporation renaming the company Touchpoint Metrics, Inc., effective October 18, 2011.

The Company develops and delivers technology-enabled products and services that improve customer experience management capabilities for corporations. Their focus assists companies who wish to improve business performance by measuring and transforming the ways they interact with customers.

The Company services a wide variety of industries and customer size.

The Financial Statements and related disclosures as of June 30, 2014 and for the three and six months ended June 30, 2014, are unaudited, pursuant to the rules and regulations of the United States Securities and Exchange Commission ("SEC"). The December 31, 2013, Balance Sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America ("U.S.). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") have been condensed or omitted pursuant to such rules and regulations. In our opinion, these financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for the fair statement of the results for the interim periods. These financial statements should be read in conjunction with the financial statements included in our Annual Report for the year ended December 31, 2013, filed on Form 10-K with the SEC on March 31, 2014. The results of operations for the three and six months ended June 30, 2014, are not necessarily indicative of the results to be expected for the full year. Unless the context otherwise requires, all references to "Touchpoint Metrics," "we," "us," "our" or the "company" are to Touchpoint Metrics, Inc. and our subsidiaries.

Note 2: Recent Accounting Pronouncements

In July 2013, the FASB issued Accounting Standards Update No. 2013-11, Income Taxes (Topic 740) ("ASU 2013-11"), which requires the financial statement presentation of an unrecognized tax benefit in a particular jurisdiction, or a portion thereof, as a reduction to a deferred tax asset for a net operating loss (NOL") carryforward, a similar tax loss, or a tax credit carryforward, unless the uncertain tax position is not available to reduce, or would not be used to reduce, the NOL or carryforward under the tax law in the same jurisdiction; otherwise, the unrecognized tax benefit should be presented as a gross liability and should not be combined with a deferred tax asset. ASU 2013-11 is effective for interim and annual periods beginning after December 15, 2013. ASU 2013-11 was adopted January 1, 2014 and did not have a significant impact on our financial statements.

In May 2014, the FASB and the International Accounting Standards Board ("IASB") jointly issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), a comprehensive new revenue recognition standard that will supersede nearly all existing revenue recognition guidance. The objective of ASU 2014-09 is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 will be effective for the first quarter of 2017. An entity can elect to adopt ASU 2014-09 using one of two methods, either full retrospective adoption to each prior reporting period, or recognizing the cumulative effect of adoption at the date of initial application. The Company is in the process of evaluating the new standard and does not know the effect, if any, ASU 2014-09 will have on the Consolidated Financial Statements or which adoption method will be used.

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Note 3: Property and Equipment

Property and equipment consist of:

	June 30,			December 31,
	2014			2013
Computers and hardware	$	48,014		$	48,014
Software		38,646			38,646
Equipment		2,359			2,359
Furniture		31,731			31,731
Land		85,000			85,000
Land improvements		4,000			4,000
		209,750			209,750
Less: accumulated depreciation		(119,500	)		(118,642	)
	$	90,250		$	91,108

Depreciation expense incurred during the three and six months ended June 30, 2014 was $858 and $1,274, respectively. Depreciation expense incurred during the three and six months ended June 30, 2013 was $1,245 and $3,083, respectively.

Note 4: Stock-Based Compensation

The Company's stock-based compensation program was established in 2008. Plan Shares cannot exceed 30% of any outstanding issue or 2,500,000 shares, whichever is the lower amount.

In order to calculate the fair value of stock options at the date of grant, we use the Black-Scholes option pricing model. The volatility used was based on historical volatility of similar sized companies due to lack of historical data of the Company's stock price. The expected term was determined based on the simplified method outlined in Staff Accounting Bulletin No. 110. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

The company currently has five active option commitments. Each commitment has an exercise price equal to the fair market value of our common stock on the date of grant, a graded vesting schedule, and a ten-year term.

At June 30, 2014, 332,000 stock options were exercisable and $67,806 of total compensation cost related to vested share-based compensation grants had been recognized. Unrecognized compensation expense from stock options was $97,155 at June 30, 2014, which is expected to be recognized over a weighted-average vesting period of 1.41 years beginning July 1, 2014.

The following table summarizes our stock option activity for the six months ended June 30, 2014:

	Number of Shares		Weighted Avg EP per Share		Weighted Avg Remaining Contractual Term (Yrs)		Aggregate Intrinsic Value
Outstanding at December 31, 2013		680,000	$	0.39		8.57		75,000
Granted		160,000	$	0.50		-		-
Exercised		-		-		-		-
Forfeited or expired		-		-		-		-
Outstanding at June 30, 2014		840,000	$	0.41		8.35	$	33,000
Fully vested and expected to vest at June 30, 2014		332,000	$	0.36		6.89	$	9,000
Non-exercisable at June 30, 2014		508,000	$	0.44		9.10	$	24,000

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The following assumptions were used to calculate weighted average fair values of the options granted in the six months ended June 30, 2014 and 2013.

	For the Six Months Ended June 30,
	2014						2013
	Option Grant 1			Option Grant 2
Expected life (in years)		5.75			5.50			-
Risk-free interest rate		2.07	%		2.07	%		-
Volatility		64.66	%		65.22	%		-
Dividend yield		-			-			-
Weighted average grant date fair value per option granted	$	0.29		$	0.29			-

To the extent the actual forfeiture rate is different than what we have anticipated, share-based compensation expense related to these options will be different from our expectations.

Note 5: Concentrations

The Company sells products and services under various terms to a broad range of companies across multiple industries ranging from start-ups to Fortune 500 companies, with sales concentrated among a few large clients. For the six months ended June 30, 2014 and 2013, the percentage of sales and the concentrations are as follows:

	06/30/14			06/30/13
Largest client		59.12	%		32.40	%
Second largest client		12.62	%		23.00	%
Third largest client		10.47	%		18.30	%
Next three largest clients		17.64	%		25.70	%
All other clients		0.15	%		0.60	%
		100.00	%		100.00	%

During 2012, the Company entered a consulting services agreement with mfifty, which is a related party. The President of the Company is also an owner of mfifty. During the six months ended June 30, 2014 and 2013, the company earned consulting revenues of approximately $5,275 and $2,343, respectively, from this related party.

Sales are made without collateral and the credit-related losses have been insignificant or non-existent. Accordingly, there is no provision made to include an allowance for doubtful accounts.

Note 6: Capitalized Software Development Costs

Costs incurred to develop Software as a Service (SaaS) technology consist of external direct costs of materials and services and payroll and payroll-related costs for employees who directly devote time to the project. Research and development costs incurred during the preliminary project stage were expensed as incurred. Capitalization begins when technological feasibility is established. Costs incurred during the operating stage of the software application relating to upgrades and enhancements are capitalized to the extent that they result in the extended life of the product. All other costs are expensed as incurred.

Amortization of software development costs commences when the product is available for general release to customers. The capitalized costs are amortized on a straight line basis over the three year expected useful life of the software. Capitalized software development costs, net of amortization, were $127,929 and $164,480 as of June 30, 2014 and December 31, 2013, respectively. Amortization expense incurred during the six months ended June 30, 2014 and 2013 was $36,551 and $0, respectively and is included in cost of goods sold.

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Note 7: Intangible Assets

Intangibles as of June 30, 2014, consist of the following:

	Gross		Accumulated Amortization			Net Book Value
PetroPortfolio	$	131,151	$	(89,537	)	$	41,614
LinkedIn group		2,500		(1,042	)		1,458
Organization costs		1,377		(1,377	)		-
Total intangibles	$	135,028	$	(91,956	)	$	43,072

Amortization of identifiable intangible assets was $417 and $0 for the six months ended June 30, 2014 and 2013, respectively.

At December 31, 2013, management identified impairment indicators and performed tests for recoverability resulting in values less than the PetroPortfolio asset's carrying amount. A resulting charge for impairment of $17,537 was based on management's review of these analyses, and the balance at June 30, 2014 accurately represents management's opinion of current value.

Note 8: Commitments and Contingencies

Leases

The Company leases two facilities in northern California under operating leases that expire in 2016. Rent expense under operating leases was $9,016 and $15,148 for the three and six months ended June 30, 2014. Rent expense under operating leases was $5,520 and $11,040 for the three and six months ended June 30, 2013.

As of June 30, 2014, estimated future payments under operating leases (including rent escalation clauses) for each of the next five years is as follows:

2014	$	17,508
2015		35,426
2016		23,890
2017		-
2018		-
Total minimum lease payments	$	76,824

Purchase Obligations

The Company has entered into non-cancelable service contracts related to SaaS licenses which expire in the years ended December 31, 2014 and 2015. As of June 30, 2014, future payments under these contractual obligations were as follows:

2014	$	39,721
2015	$	6,713
2016		-
2017		-
2018		-
Total purchase obligations	$	46,434

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Legal Matters

The Company has no known legal issues pending.

Note 9: Debt

On September 16, 2011, a $100,000 CDN note was executed with Brad Holland, a 2.67% shareholder. The note is structured to incur a balloon payment of the principal and 4% APR non-compounding accrued interest on its maturity date of September 16, 2014. As of June 30, 2014, principal and accrued interest was $100,000 and $10,000, respectively.

On September 7, 2011, a $50,000 USD note was executed with McLellan Investment Corporation, an unrelated party. The note is structured to incur a balloon payment of the principal and 4% APR non-compounding accrued interest on its maturity date of September 7, 2014. As of June 30, 2014, principal and accrued interest was $50,000 and $5,500, respectively.

Note 10: Interest Expense

Interest expense consists of interest on the Company's debt, short-term promissory note, and credit card balances. Interest expense was $3,301 and $6,392 for the three months and six months ended June 30, 2014, respectively. Interest expense was $3,123 and $6,196 for the three months and six months ended June 30, 2013, respectively.

Note 11: Advertising Expenses

Advertising is expensed as incurred. Advertising expense incurred during the three and six months ended June 30, 2014 was $6,846 and $10,559, respectively. Advertising expense incurred during the three and six months ended June 30, 2013 was $514 and $5,524, respectively.

Note 12: Income Taxes

Income taxes are summarized as follows for the six months ended June 30, 2014:

	June 30, 2014
Current expense	$	4,295
Deferred expense		(4,295	)
Net income tax expense	$	-

A full valuation allowance has been established for deferred tax assets based on a "more likely than not" threshold. The ability to realize deferred tax assets depends on our ability to generate sufficient taxable income within the carry forward periods provided in the tax law. While the Company's statutory tax rate is 35%, its effective tax rate is 0% due to the effects of the valuation allowance described above. The Company does not have any material uncertainties with respect to its provisions for income taxes .

Note 13: Net Income per Share

Net income per share was computed by dividing the net income by the weighted average number of common shares outstanding during the period. The weighted average number of shares was calculated by taking the number of shares outstanding and weighting them by the amount of time that they were outstanding. For the three and six months ended June 30, 2014 and 2013, the assumed exercise of share options are anti-dilutive due to the Company's net income and are excluded from the determination of net income per share -basic and diluted. Accordingly, net income per share basic and diluted is equal in all periods presented.

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The computations for basic and diluted net income per share are as follows:

	Three Months Ended June 30,					Six Months Ended June 30,
	2014		2013			2014		2013
Net income	$	126,694	$	(139,851	)	$	12,271	$	( 295,618	)
Basic and diluted weighted average common shares outstanding		16,081,158		13,132,302			16,081,158		13,132,302
Net income per share, basic and diluted	$	0.01	$	(0.01	)	$	0.00	$	(0.02	)

Note 14: Related Party Transactions

The Company has a related party transaction involving a significant shareholder. The nature and details of the transaction are described in Note 9. The Company also has two related party transactions with its President. The nature, description and details of the transaction are described in Note 5.

IREMCO, a controlling shareholder, provides the company with office space on a month-to-month basis at no charge under a verbal agreement. The office space was vacant and not in use by IREMCO. This space provides the company with office space in Canada and will be eliminated if IREMCO has a need for the space.

Note 15: Going Concern

The accompanying financial statements and notes have been prepared assuming that the Company will continue as a going concern.

For the six months ended June 30, 2014, the Company had a net income of $12,271. In addition, the Company had a net loss of $715,656 for the year ended December 31, 2013. These circumstances result in substantial doubt as to the Company's ability to continue as a going concern. The Company's ability to continue as a going concern is dependent upon the Company's ability to continue to generate sufficient revenues to operate profitably, or raise additional capital through debt financing and/or through sales of common stock.

The failure to achieve the necessary levels of profitability or obtain the additional funding would be detrimental to the Company. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Cautionary Statement

This Management's Discussion and Analysis includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: "believe," "expect," "plan," "estimate," "anticipate," "intend," "project," "will," "predicts," "seeks," "say," "would," "could," "potential," "continue," "ongoing," "should" and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this Form 10-Q. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or from our predictions. We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events, or otherwise.

Overview

We are a customer experience management solutions company providing Touchpoint Mapping ^(R) , an on-demand ("cloud based") suite of customer experience software and related services designed to help organizations improve customer experiences, increase customer loyalty, reduce costs and increase revenue.

We believe that delivering better customer experiences is a powerful, sustainable way for any organization to differentiate from their competition. We are engaged in the business of developing and delivering technology-enabled products and services that help large, medium and small organizations to do this by improving their customer experience management capabilities.

Our product, Touchpoint Mapping ^(R) On-Demand, is a research-based software solution designed to be a comprehensive customer experience solution for customer-centric organizations to measure and gather customer data across all their touchpoints, channels and interactions with their customers. It enables an organization's personnel to leverage a common application to see where and how to improve brand and customer loyalty, and their customers' experiences across multiple channels and touchpoints, including web, sales, marketing, contact center, social, mobile, physical locations and others.

Development is ongoing, as Touchpoint Mapping ^(R) On-Demand is refined and improved based on customer feedback, and as it is customized for specific organizations and industry sectors. The services delivered with Touchpoint Mapping ^(R) On-Demand may include consulting and additional research services, as well as services such as assessment, integration, implementation and additional offline analysis and reporting of data. Customer experience consulting services are offered primarily through our consulting services group, MCorp, which is a dba of the Company.

Although we began sales and marketing activities for Touchpoint Mapping ^(R) On-Demand in Q4 2012, we did not offer it to a broader market until 2013. We cannot predict the timing, nor probability, of generating material sales revenue from the product as we continue to build our sales and marketing team to identify, develop, and close sales opportunities. As of this filing, we have yet to engage the necessary sales and marketing staff to develop and execute material product sales opportunities, and currently lack sufficient resources to market and sell our products in the manner which we believe is required to achieve our product sales and revenue growth objectives.

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Sources of Revenue

Our revenue consisted primarily of professional and software-enabled consulting services, product sales and other revenues in the six months ended June 30, 2014 and 2013. Consulting services include customer experience management consulting in the areas of strategy development, planning, education, training and program design, and includes the articulation of customer-centric strategies and implementation roadmaps in support of these strategies. Product revenue is from productized and software-enabled service sales not elsewhere classified, while other revenue includes reimbursement of related travel costs and out-of-pocket expenses.

While our plan of operations is based on migrating the majority of our service revenue from these categories to recurring SaaS subscription fees, we anticipate that fees for professional and software-enabled consulting services will remain a significant revenue source in the near future. As of June 30, 2014, we have successfully delivered certain features and functionality of our software product, Touchpoint Mapping ^(R) On-Demand, to several clients. However, we have not obtained material stand-alone sales commitments for Touchpoint Mapping ^(R) On-Demand, and do not anticipate being able to do so until we engage the necessary sales and marketing staff to develop and execute product sales opportunities.

Should we successfully obtain material sales commitments for Touchpoint Mapping ^(R) On-Demand, we anticipate that subscription agreements and related professional services associated with delivering our software solutions will become a source of significant revenue. Subscriptions and associated professional services pricing are be based upon our gross margin objectives, growth strategies and the specific needs of our clients' organizations, measured primarily by the following metrics: breadth of insights sought, number of employees, number of customers and customer segments, frequency of insights gathered, and other variables.

Subscription agreements for our software solutions are offered as monthly term agreements which contain a minimum commitment period of at least 12 months, and which include related setup, upgrades, hosting and support. Professional services include consulting fees related to implementation, customization, configuration, training and other value added services.

Based on data gathered during the implementation stage of on-demand software and software-enabled services engagements, we believe that the average time it will take our clients from placing an order to live deployment of our products is between 30 and 45 days. We typically invoice clients upon inception of subscription agreements for setup and total subscription fees contracted over the term of the agreements, with payment due within 30 days. Professional services related to the subscription agreements are invoiced at the inception of the professional services agreement at one-third or fifty percent of total fees, with the balance of payments due over the duration of the contract as project milestones are met. Amounts invoiced are recorded in accounts receivable and deferred revenue or revenue, depending on whether revenue recognition criteria have been met.

Cost of Revenue and Operating Expenses

Our costs of revenue and operating expenses are detailed at the sub-category level in our Income Statements. And while the financial results for these categories are further explained in the Results of Operations section below, a general description of these categories follows:

Cost of Goods Sold

Cost of goods sold consists primarily of expenses directly related to providing professional and consulting services. Those expenses include contract labor, third-party services, and materials and travel expenses related to providing professional services to our clients.

As certain features of Touchpoint Mapping ^(R) On-Demand were made available for general release in 2013, costs of goods also included product-related hosting and monitoring costs, licenses for products embedded in the application, amortization of capitalized software development costs, related sales commissions, service support, account management and subscriptions, as applicable.

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Should our client base grow, we intend to continue to invest additional resources in our hosting, technical support and professional services capabilities, as well as our utilization of third-party licensed software. We expect our professional services costs to increase in absolute dollars as we increase our overall revenue, but expect that professional services as a percentage of total revenue will decrease as we continue to shift our business towards sales of on-demand software solutions and software-enabled services. Because cost as a percentage of revenue is higher for professional services revenue than for software product sales revenue, a decrease in professional services as a percentage of total revenue will likely increase gross profit as a percentage of total revenue.

General and Administrative Expenses

General and administrative expenses consist primarily of salary and related expenses for management, client delivery, finance and accounting, and sales personnel. Expenses also include contract services, marketing and promotion, professional fees, software license fee expenses, administrative costs, insurance, rent and a portion of travel expenses and other overhead.

Sales and marketing expenses are currently reflected in salaries and wages, contract labor, marketing and promotion, and other related overhead expense categories. While we have not yet recognized material commissionable sales, we plan to expense sales commissions through cost of goods sold. Since we will be recognizing revenue over the terms of the subscriptions or professional services engagements, we expect to experience a delay between increases in selling and marketing expenses and the recognition of revenue. We expect to continue to incur significant sales and marketing expenses in both absolute dollars and as a percentage of expenses as we hire sales and additional marketing personnel and increase the level of marketing activities.

We expect that total general and administrative expenses will increase as we continue to add personnel in connection with the growth of our business. In addition to increases in sales and marketing and research and development expenses, we anticipate we will also incur additional employee salaries and related expenses, professional service fees and insurance costs related to the growth of our business and operations to meet the requirements of a public company.

Results of Operations

Revenue	2014		2013		Change from Prior Year		Percent Change from Prior Year
Three Months Ended June 30,	$	612,905	$	273,325	$	339,580		124	%
Six Months Ended June 30,	$	983,611	$	539,714	$	443,897		82	%

Revenues increased for the three and six months ended June 30, 2014 as compared to the three and six months ended June 30, 2013, due to increased sales of our consulting and software-enabled services, including delivery of Touchpoint Mapping ^(R) On-Demand.

Cost of Goods Sold	2014		2013		Change from Prior Year			Percent Change from Prior Year
Three Months Ended June 30,	$	107,467	$	130,062	$	(22,595	)		(17	)%
Six Months Ended June 30,	$	184,962	$	204,094	$	(19,132	)		(9	)%

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Cost of goods sold decreased for the three months ended June 30, 2014 as compared to the same period in 2013 based on the following:

·	A decrease of approximately $45,500 in direct labor costs primarily due to the shift from the use of contract labor to full-time employees in delivering professional services.

·	An increase of approximately $27,900 in travel expenses resulting from an increase in consulting engagements requiring client site visits.

·	A decrease of approximately $5,800 in non-reimbursable expenses as we began to include these costs in contractual arrangements with professional consulting engagements.

Cost of goods sold as a percent of sales decreased from 28% to 21% in part as a result of an increased reliance on full time employees to deliver consulting engagements during the three months ended June 30, 2014. In the comparative period in 2013, consulting contract labor was a more material component of cost of goods sold.

Cost of goods sold decreased for the six months ended June 30, 2014 as compared to the same period in 2013 based on the following:

·	A decrease of approximately $88,300 in direct labor costs primarily due to the shift from the use of contract labor to full-time employees in delivering professional services.

·	An increase of approximately $31,400 primarily due to amortization of software development costs, product-related hosting and monitoring costs, and licenses for products embedded in Touchpoint Mapping ^(R) On-Demand, sales of which began in the second quarter of 2013.

·	An increase of approximately $52,300 in travel expenses resulting from an increase in consulting engagements requiring client site visits.

·	A decrease of approximately $14,600 in non-reimbursable expenses as we began to include these costs in contractual arrangements with professional consulting engagements.

·	Cost of goods sold as a percent of sales decreased in part due to a large increase in billed accounts receivable. In the comparative period in 2013, consulting contract labor was a more material component of cost of goods sold.

Salaries and Wages	2014		2013		Change from Prior Year		Percent Change from Prior Year
Three Months Ended June 30,	$	248,641	$	153,015	$	95,626		62	%
Six Months Ended June 30,	$	509,700	$	325,932	$	183,768		56	%

Salaries and wages increased for the three and six months ended June 30, 2014 as compared to the three and six months ended June 30, 2013 due to the addition of research, consulting services and sales staff in accordance with our strategic plan. These increases also resulted from discontinuing the capitalization of certain employee payroll costs in Q1 2014 which were capitalized during Q1 2013.

Contract Services	2014		2013		Change from Prior Year			Percent Change from Prior Year
Three Months Ended June 30,	$	23,643	$	23,712	$	(69	)		0	%
Six Months Ended June 30,	$	45,247	$	36,160	$	9,087			25	%

Contract services expenses remained approximately static and increased for the three and six months ended June 30, 2014 as compared to the same periods in 2013, respectively due to an increase in investor relations-related expenses.

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Other General and Administrative	2014		2013		Change from Prior Year			Percent Change from Prior Year
Three Months Ended June 30,	$	103,159	$	103,264	$	(105	)		0	%
Six Months Ended June 30,	$	225,039	$	199,967	$	25,072			13	%

General and administrative costs remained consistent for the three months ended June 30, 2014 as compared to the same period in 2013.

General and administrative costs increased for the six months ended June 30, 2014 as compared to the same period in 2013, based on the following:

·	An increase of approximately $44,500 in marketing expenses.

·	An increase of approximately $900 in other costs including fees related to SEC and SEDAR filings, professional memberships and contact data list licensing.

·	An increase of approximately $9,000 due to travel and entertainment expenses related to marketing, business development and quarterly management planning meetings.

·	An increase of approximately $10,400 in software license expenses related to accounting, project management, and other productivity software.

·	An increase of approximately $5,400 in other miscellaneous charges.

·	A decrease of approximately $45,100 in professional fees primarily resulting from the non-renewal of a services agreement with a market research provider Q1 2014.

Other Income/Expense	2014		2013			Change from Prior Year			Percent Change from Prior Year
Three Months Ended June 30,	$	0	$	0		$	0			0	%
Six Months Ended June 30,	$	0	$	(62,982	)	$	(62,982	)		(100	%)

Other income (expense) was unchanged for the three months ended June 30, 2014 as compared to the three months ended June 30, 2013. Other income (expense) increased for the six months ended June 30, 2014 as compared to the six months ended June 30, 2013 due to the write off of leasehold improvements with a net book value of approximately $63,000 in Q1 2013, which were written off as the lease term of the subject property had been terminated.

Net Income	2014		2013			Change from Prior Year		Percent Change from Prior Year
Three Months Ended June 30,	$	126,694	$	(139,851	)	$	266,545		191	%
Six Months Ended June 30,	$	12,271	$	(295,618	)	$	307,889		104	%

Net income increased by 191% for the three months ended June 30, 2014 as compared to the three months ended June 30, 2013, from ($139,851) to $126,694, and by 104% for the six months ended June 30, 2014 as compared to the six months ended June 30, 2013, from ($295,618) to $12,271. These changes resulted from an increase in products and services sales, as well as a reduction in costs of goods sold for the three and 6 months ended June 30, 2014 as compared to the same periods in 2013.

Liquidity and Capital Resources

We measure our liquidity in a variety of ways, including the following:

	June 30, 2014		December 31, 2013
Cash and Cash Equivalents	$	526,124	$	653,990
Working Capital	$	502,375	$	451,830

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During the six months ended June 30, 2014, we were able to finance our operations, including capital expenditures for infrastructure, product development, sales and marketing through operating activities and proceeds from private placement offerings.

For the year ended December 31, 2013, we were able to finance our operations, including capital expenditures for infrastructure, product development, sales and marketing activities through operating activities, private sales of common stock, and cash on hand. On July 2, 2013 the Company completed a private placement of 2,948,856 restricted shares of common stock. Gross proceeds from that private placement totaled $1,032,100.

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. As reflected in the consolidated financial statements included in this report, we had a net income of $12,271 for the six months ended June 30, 2014, and a net loss of $715,656 for the year ended December 31, 2013. We have had material operating losses and have not yet created consistent positive cash flows. These factors raise substantial doubt as to our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to achieve a level of profitability, and/or raise additional capital through debt financing and/or through sales of common stock. We cannot provide any assurance that profits from operations will generate sufficient cash flow to meet our working capital needs and service our existing debt, nor that sufficient capital can be raised through debt or equity financing. The consolidated financial statements do not include adjustments related to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should we be unable to continue as a going concern.

Anticipated Uses of Cash

In 2014, our primary areas of investment are expected to continue to be ongoing product development and supporting sales and marketing activities, including building our sales, marketing and consulting services staffand other related services. Dependent on product sales, a secondary area of investment may include hiring client support staff to support SaaS product delivery and client relationship management.

We currently plan to fund anticipated expenditures with cash flows generated from ongoing operations during this period. We will consider raising capital through debt financing and/or additional sales of common stock if necessary.

We do not intend to pay dividends in the foreseeable future.

Cash Flow

Six Months Ended June 30, 2014 and 2013

Operating Activities. During the six months ended June 30, 2014, we reported negative cash flows from operations of $127,866. This consisted of our net income of $12,271 adjusted primarily by depreciation and amortization of $36,825, stock compensation expense of $24,284, increases in accounts receivable of $277,091, other assets of $23,835, accounts payable of $2,729, deferred revenue of $92,951 and accrued liabilities of $3,000.

The increase in accounts receivable is a direct result of entering four significant consulting services engagements in Q1 of 2014. Increases in accounts payable were due to increased spending associated with the marketing and sales of our SaaS product, direct costs incurred in delivering our consulting services, and legal and advisory fees relating to our SEC and SEDAR filings.

Accrued liabilities decreased primarily due to the return of deposits in Q2 of 2014.

Days Sales Outstanding (DSO) during the six months ended June 30, 2014 was approximately 65 days, up from approximately 44 days during the six months ended June 30, 2013. The company was engaged in a substantial consulting services project that had been placed on hold during the six months ended June 30, 2014. Additionally, approximately $173,000 in receivables issued in late June were collected in early July, so we anticipate an improvement in this ratio for the upcoming quarter.

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Investing Activities. Net cash used in investing activities for the six months ended June 30, 2014 and 2013 amounted to $0 and $34,574, respectively and primarily consisted of capitalized software development costs in Q1 of 2013.

Financing Activities. Net cash provided by financing activities for the six months ended June 30, 2014 and June 30, 2013 amounted to $0 and $1,057,100, respectively, and resulted from a non-convertible promissory note entered into with Michael Hinshaw, President in Q1 of 2013 and proceeds from the private placement of common stock of $1,032,100 that closed on July 2, 2013.

Off Balance Sheet Arrangements

We did not have any off balance sheet arrangements as of June 30, 2014.

Contractual Obligations

We lease two facilities in northern California from Four Kays, under operating leases both expected to expire in 2016. We do not have any debt capital lease obligations. We have four purchase obligations primarily representing non-cancelable contractual obligations related to SaaS licenses. As of June 30, 2014, the following table summarizes our contractual obligation under the foregoing leases and SaaS license agreements, and the effect such obligations are expected to have on our liquidity and cash flow in future periods:

	Payments Due by Period
	Total		Less Than 1 Year		1-3 Years		3-5 Years		More Than 5 Years
Operating lease obligations (a)	$	76,824	$	35,119	$	41,704	$	-	$	-
Purchase obligations (b)	$	46,434	$	46,434	$	-	$	-	$	-

(a)	The operating lease obligations presented reflect future minimum lease payments due under the non-cancelable portions of our operating lease.

(b)	Purchase obligations primarily represent non-cancelable contractual obligations related to SaaS licenses.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES

Our management, under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that, as of June 30, 2014, our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission and (ii) accumulated and communicated to our management, including our principal executive and principal accounting officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

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There was no change in our internal control over financial reporting during the quarter ended June 30, 2014 that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1A. RISK FACTORS.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 6. EXHIBITS.

		Incorporated by reference			Filed
Exhibit	Document Description	Form	Date	Number	herewith
3.1	Articles of Incorporation (12/14/2001).	S-1	4/25/12	3.1

3.2	Amended Articles of Incorporation (4/08/2006).	S-1	4/25/12	3.2

3.3	Amended Articles of Incorporation (10/17/2011).	S-1	4/25/12	3.3

3.4	Amended and Restated Bylaws.	S-1	4/25/12	3.4

4.1	Specimen Stock Certificate.	S-1	4/25/12	4.1

10.1	Lease Agreement for San Anselmo office.	S-1	4/25/12	10.1

10.2	Lease Agreement for North Carolina office.	S-1	4/25/12	10.2

10.3	Lease Agreement for San Francisco office.	S-1	4/25/12	10.3

10.4	Deed covering Lake County Real Property.	S-1	4/25/12	10.4

10.5	Stock Option Plan.	S-1	4/25/12	10.5

10.6	Promissory Note - McLellan Investment Corporation.	S-1/A-2	7/24/12	10.6

10.7	Promissory Note - Brad Holland.	S-1/A-2	7/24/12	10.7

10.8	Employment Agreement - Lynn Davison.	S-1/A-3	9/12/12	10.8

10.9	Services Agreement with mfifty dated March 2, 2012.	S-1/A-3	9/12/12	10.9

10.10	Letter of Agreement with TAG Oil, Ltd. dated February 1, 2010.	S-1/A-4	10/16/12	10.1

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10.11	Letter of Agreement TAG Oil, Ltd. with dated September 1, 2010.	S-1/A-4	10/16/12	10.2

10.12	Letter of Agreement with Infinitee dated May 26, 2011.	S-1/A-4	10/16/12	10.3

10.13	Letter of Agreement with Dolce Vita Homes LP dated May 31, 2011.	S-1/A-4	10/16/12	10.4

10.14	Letter of Agreement with Labrador Technology, Inc. dated June 3, 2011.	S-1/A-4	10/16/12	10.5

10.15	Letter of Agreement with Infinitee dated July 15, 2011.	S-1/A-4	10/16/12	10.6

10.16	Letter of Agreement with Brinson Patrick Securities dated October 27, 2011.	S-1/A-4	10/16/12	10.7

10.17	Letter of Agreement with Labrador Technology, Inc. dated November 22, 2011.	S-1/A-4	10/16/12	10.8

10.18	Letter of Agreement with Brinson Patrick Securities dated February 1, 2012.	S-1/A-4	10/16/12	10.9

10.19	Statement of Work for mfifty dated March 2, 2012.	S-1/A-4	10/16/12	10.10

10.20	Letter of Agreement with Danone Trading B.V. dated April 17, 2012.	S-1/A-5	11/05/12	10.11

10.21	Letter of Agreement and Addendum to Proposal with Danone Trading B.V. dated April 25, 2012.	S-1/A-4	10/16/12	10.12

10.22	Consulting Agreement with California Physicians' Service d/b/a Blue Shield of California dated August 30, 2012.	10-K	3/27/13	10.22

10.23	Statement of Work for MBO Partners, Inc. dated October 29, 2012.	10-K	3/27/13	10.23

10.24	Services Agreement with Tanger Factory Outlet Centers, Inc. dated August 28, 2012.	10-Q	5/15/13	10.24

10.25	Statement of Work with Tanger Factory Outlet Centers, Inc. dated August 28, 2012.	10-Q	5/15/13	10.25

10.26	Services Agreement with Centurion Medical Products dated October 4, 2012.	10-Q	5/15/13	10.26

10.27	Statement of Work with Centurion Medical Products dated October 4, 2012.	10-Q	5/15/13	10.27

10.28	Services Agreement with Quadrant Homes dated November 30, 2012.	10-Q	5/15/13	10.28

10.29	Statement of Work with Quadrant Homes dated November 30, 2012.	10-Q	5/15/13	10.29

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10.30	Services Agreement with Arizona State Credit Union dated March 29, 2013.	10-Q	8/08/13	10.30

10.31	Statement of Work with Arizona State Credit Union dated March 29, 2013.	10-Q	8/08/13	10.31

10.32	Statement of Work with Quadrant Homes dated April 2, 2013.	10-Q	8/08/13	10.32

10.33	Statement of Work with Quadrant Homes dated April 2, 2013.	10-Q	8/08/13	10.33

10.34	Statement of Work with Quadrant Homes dated April 8, 2013.	10-Q	8/08/13	10.34

10.35	Statement of Work with Tanger Factory Outlet Centers, Inc. dated April 9, 2013.	10-Q	8/08/13	10.35

10.36	Statement of Work with Tanger Factory Outlet Centers, Inc. dated April 9, 2013.	10-Q	8/08/13	10.36

10.37	Statement of Work with Microsoft dated September 3, 2013.	10-Q	11/14/13	10.37

10.38	Share Option Plan with Lynn Davison dated September 3, 2013.	10-Q	11/14/13	10.38

10.39	Lease Extension Agreement with Annette Kaufman Survivor Trust dated February 26, 2013.	10-K	3/31/14	10.39

10.40	Independent Contractor Agreement with Ashley Garnot dated August 1, 2013.	10-K	3/31/14	10.40

10.41	Non-Disclosure Agreement with Ashley Garnot dated August 1, 2013.	10-K	3/31/14	10.41

10.42	Statement of Work with Ashley Garnot dated August 1, 2013.	10-K	3/31/14	10.42

10.43	Master Services Agreement with Progress Software Corporation dated December 6, 2013.	10-K	3/31/14	10.43

10.44	Statement of Work (Schedule A) with Progress Software dated December 6, 2013.	10-K	3/31/14	10.44

10.45	Services Agreement with RedPort International, LLC dated	10-K	3/31/14	10.45

10.46	Statement of Work with RedPort International, LLC dated December 9, 2013.	10-K	3/31/14	10.46

10.47	Statement of Work with Microsoft dated December 16, 2013.	10-K	3/31/14	10.47

10.48	Statement of Work 2 with Ashley Garnot dated February 2, 2014.	10-K	3/31/14	10.48

10.49	Endorsement and Market Agreement with Western Independent Bankers' Service Corporation, dated March 17, 2014.				X

10.50	Lease with Four Keys dated June 5, 2014.				X

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14.1	Code of Ethics.	10-K	3/27/13	14.1

31.1	Certification of Principal Executive and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X

32.1	Certification of Chief Executive and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				X

99.7	Letter to the Shareholders.	8-K	4/04/14	99.7

101.INS	XBRL Instance Document.				X

101.SCH	XBRL Taxonomy Extension - Schema.				X

101.CAL	XBRL Taxonomy Extension - Calculations.				X

101.DEF	XBRL Taxonomy Extension - Definitions.				X

101.LAB	XBRL Taxonomy Extension - Labels.				X

101.PRE	XBRL Taxonomy Extension - Presentation.				X

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report has been signed on its behalf by the undersigned, thereunto duly authorized on this 31st day of July, 2014.

	TOUCHPOINT METRICS, INC.
	(the "R egistrant ")

	BY:	MICHAEL HINSHAW
		Michael Hinshaw
		President, Principal Executive Officer, Principal Accounting Officer, Principal Financial Officer, Treasurer and a Director

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EXHIBIT INDEX

		Incorporated by reference			Filed
Exhibit	Document Description	Form	Date	Number	herewith
3.1	Articles of Incorporation (12/14/2001).	S-1	4/25/12	3.1

3.2	Amended Articles of Incorporation (4/08/2006).	S-1	4/25/12	3.2

3.3	Amended Articles of Incorporation (10/17/2011).	S-1	4/25/12	3.3

3.4	Amended and Restated Bylaws.	S-1	4/25/12	3.4

4.1	Specimen Stock Certificate.	S-1	4/25/12	4.1

10.1	Lease Agreement for San Anselmo office.	S-1	4/25/12	10.1

10.2	Lease Agreement for North Carolina office.	S-1	4/25/12	10.2

10.3	Lease Agreement for San Francisco office.	S-1	4/25/12	10.3

10.4	Deed covering Lake County Real Property.	S-1	4/25/12	10.4

10.5	Stock Option Plan.	S-1	4/25/12	10.5

10.6	Promissory Note - McLellan Investment Corporation.	S-1/A-2	7/24/12	10.6

10.7	Promissory Note - Brad Holland.	S-1/A-2	7/24/12	10.7

10.8	Employment Agreement - Lynn Davison.	S-1/A-3	9/12/12	10.8

10.9	Services Agreement with mfifty dated March 2, 2012.	S-1/A-3	9/12/12	10.9

10.10	Letter of Agreement with TAG Oil, Ltd. dated February 1, 2010.	S-1/A-4	10/16/12	10.1

10.11	Letter of Agreement TAG Oil, Ltd. with dated September 1, 2010.	S-1/A-4	10/16/12	10.2

10.12	Letter of Agreement with Infinitee dated May 26, 2011.	S-1/A-4	10/16/12	10.3

10.13	Letter of Agreement with Dolce Vita Homes LP dated May 31, 2011.	S-1/A-4	10/16/12	10.4

10.14	Letter of Agreement with Labrador Technology, Inc. dated June 3, 2011.	S-1/A-4	10/16/12	10.5

10.15	Letter of Agreement with Infinitee dated July 15, 2011.	S-1/A-4	10/16/12	10.6

10.16	Letter of Agreement with Brinson Patrick Securities dated October 27, 2011.	S-1/A-4	10/16/12	10.7

10.17	Letter of Agreement with Labrador Technology, Inc. dated November 22, 2011.	S-1/A-4	10/16/12	10.8

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10.18	Letter of Agreement with Brinson Patrick Securities dated February 1, 2012.	S-1/A-4	10/16/12	10.9

10.19	Statement of Work for mfifty dated March 2, 2012.	S-1/A-4	10/16/12	10.10

10.20	Letter of Agreement with Danone Trading B.V. dated April 17, 2012.	S-1/A-5	11/05/12	10.11

10.21	Letter of Agreement and Addendum to Proposal with Danone Trading B.V. dated April 25, 2012.	S-1/A-4	10/16/12	10.12

10.22	Consulting Agreement with California Physicians' Service d/b/a Blue Shield of California dated August 30, 2012.	10-K	3/27/13	10.22

10.23	Statement of Work for MBO Partners, Inc. dated October 29, 2012.	10-K	3/27/13	10.23

10.24	Services Agreement with Tanger Factory Outlet Centers, Inc. dated August 28, 2012.	10-Q	5/15/13	10.24

10.25	Statement of Work with Tanger Factory Outlet Centers, Inc. dated August 28, 2012.	10-Q	5/15/13	10.25

10.26	Services Agreement with Centurion Medical Products dated October 4, 2012.	10-Q	5/15/13	10.26

10.27	Statement of Work with Centurion Medical Products dated October 4, 2012.	10-Q	5/15/13	10.27

10.28	Services Agreement with Quadrant Homes dated November 30, 2012.	10-Q	5/15/13	10.28

10.29	Statement of Work with Quadrant Homes dated November 30, 2012.	10-Q	5/15/13	10.29

10.30	Services Agreement with Arizona State Credit Union dated March 29, 2013.	10-Q	8/08/13	10.30

10.31	Statement of Work with Arizona State Credit Union dated March 29, 2013.	10-Q	8/08/13	10.31

10.32	Statement of Work with Quadrant Homes dated April 2, 2013.	10-Q	8/08/13	10.32

10.33	Statement of Work with Quadrant Homes dated April 2, 2013.	10-Q	8/08/13	10.33

10.34	Statement of Work with Quadrant Homes dated April 8, 2013.	10-Q	8/08/13	10.34

10.35	Statement of Work with Tanger Factory Outlet Centers, Inc. dated April 9, 2013.	10-Q	8/08/13	10.35

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10.36	Statement of Work with Tanger Factory Outlet Centers, Inc. dated April 9, 2013.	10-Q	8/08/13	10.36

10.37	Statement of Work with Microsoft dated September 3, 2013.	10-Q	11/14/13	10.37

10.38	Share Option Plan with Lynn Davison dated September 3, 2013.	10-Q	11/14/13	10.38

10.39	Lease Extension Agreement with Annette Kaufman Survivor Trust dated February 26, 2013.	10-K	3/31/14	10.39

10.40	Independent Contractor Agreement with Ashley Garnot dated August 1, 2013.	10-K	3/31/14	10.40

10.41	Non-Disclosure Agreement with Ashley Garnot dated August 1, 2013.	10-K	3/31/14	10.41

10.42	Statement of Work with Ashley Garnot dated August 1, 2013.	10-K	3/31/14	10.42

10.43	Master Services Agreement with Progress Software Corporation dated December 6, 2013.	10-K	3/31/14	10.43

10.44	Statement of Work (Schedule A) with Progress Software dated December 6, 2013.	10-K	3/31/14	10.44

10.45	Services Agreement with RedPort International, LLC dated	10-K	3/31/14	10.45

10.46	Statement of Work with RedPort International, LLC dated December 9, 2013.	10-K	3/31/14	10.46

10.47	Statement of Work with Microsoft dated December 16, 2013.	10-K	3/31/14	10.47

10.48	Statement of Work 2 with Ashley Garnot dated February 2, 2014.	10-K	3/31/14	10.48

10.49	Endorsement and Market Agreement with Western Independent Bankers' Service Corporation, dated March 17, 2014.				X

10.50	Lease with Four Keys, dated June 5, 2014.				X

14.1	Code of Ethics.	10-K	3/27/13	14.1

31.1	Certification of Principal Executive and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X

- 26 -

Table of Contents

32.1	Certification of Chief Executive and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				X

99.7	Letter to the Shareholders.	8-K	4/04/14	99.7

101.INS	XBRL Instance Document.				X

101.SCH	XBRL Taxonomy Extension - Schema.				X

101.CAL	XBRL Taxonomy Extension - Calculations.				X

101.DEF	XBRL Taxonomy Extension - Definitions.				X

101.LAB	XBRL Taxonomy Extension - Labels.				X

101.PRE	XBRL Taxonomy Extension - Presentation.				X

EXHIBIT 10.49

ENDORSEMENT & MARKETING AGREEMENT

WESTERN INDEPENDENT BANKERS SERVICE CORPORATION

AND

TOUCHPOINT METRICS, INC.

THIS AGREEMENT, made and entered into effective this 17 of March 2014 ( the "Effective Date"), by and between TOUCHPOINT METRICS, INC., (hereinafter referred to as "COMPANY"), headquartered in San Francisco, CA and WESTERN INDEPENDENT BANKERS SERVICE CORPORATION, headquartered in San Francisco, a California corporation (hereinafter referred to as "WIB SERVICE CORPORATION").

WHEREAS, COMPANY has, among other things, expertise in and provides TouchPoint Mapping ® On-Demand collectively referred to as "Services"); and

WHEREAS, COMPANY markets the Services to banks, savings and loan associations and other types of financial institutions or affiliates of financial institutions; and

WHEREAS, WIB SERVICE CORPORATION promotes various vendor produces endorsed by WIB to community banks in the West; and

WHEREAS, COMPANY desires for WIB SERVICE CORPORATION to promote the Services to financial institutions in the western states of: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Nevada, New Mexico, Montana, Oregon, Utah, Washington, Wyoming, and Pacific U.S. Territories (hereinafter referred to as "Territory"), which may be current or prospective members of Western Independent Bankers (WIB), an Oregon non-profit corporation and their respective customers (hereinafter referred to as "Participating Banks"); and

WHEREAS, COMPANY wishes WIB SERVICE CORPORATION to promote the Services to associate members of WIB who are banks (hereinafter referred to as "Associate Members''); and

WHEREAS, COMPANY desires to provide the opportunity for WIB SERVICE CORPORATION to receive fees for referrals to Members, Non-members and Associate Members; and

WHEREAS, COMPANY desires to provide Member Banks and Associate Members "WIB Members Only" benefits in order to further build the relationship between COMPANY and WIB SERVICE CORPORATION; and

WHEREAS, COMPANY wishes WIB SERVICE CORPORATION to assist COMPANY in developing additional business relationships and marketing opportunities for the Services, and WIB SERVICE CORPORATION is willing to make such services available to COMPANY upon the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the promises and mutual covenants hereinafter set forth, the parties agree as follows:

I. DEFINITIONS. The following terms shall have the meanings set forth below and shall include the singular as well as the plural of each term:

A. "Agreement," "hereunder," "herein" and words to like effect mean this Agreement between COMPANY and WIB SERVICE CORPORATION, including Exhibits and Attachment hereto.

B. "Applicable Law" means any federal, state or local law, regulation, rule or ordinance and all other applicable judicial and administrative judgments, orders, stipulations, awards, writs, injunctions and consent decrees, in each case as in effect and applicable to the subject matter referenced.

C. "Associate Member" means any financial institution located within the "territory" as defined in Section I.M., below, and is an Associate Member of WIB as of the effective date of an agreement executed between such Associate Member and COMPANY.

1218895.3 - 11

D. "Commissions" means the payments provided by COMPANY to WIB Service Corporation as identified in Exhibit A hereto, which WIB SERVICE CORPORATION is eligible to earn for sales made by COMPANY to Participating Banks.

E. "COMPANY Marks/Materials" means logos, symbols, taglines, trademarks, service marks, trade names and graphics, images, content and other copyrightable work or material used by COMPANY to identify or promote COMPANY and/or COMPANY's Products.

F. "Endorsed Programs" means providers of services and/or products to financial institutions that are supported by WESTERN INDEPENDENT BANKERS AND WIB SERVICE CORPORATION through advertising and other marketing efforts as set forth in this Agreement.

G. "Financial Institution" means any bank or savings association insured by the federal Deposit Insurance

Corporation.

H. "Marketing Materials" means all sales promotional, marketing or advertising materials (including whether written. electronic or otherwise) produced or distributed in connection with the Services or which otherwise make reference to the Services, or express or imply a connection between the WIB SERVICE CORPORATION and COMPANY.

I. "Member" means any financial institution located within the Territory that is a member of WIB as of the effective date of an agreement executed between such bank and COMPANY.

J. "Member Incentives" means the benefits provided by COMPANY to WIB Members as listed in Exhibit B

to this Agreement.

K. "Non-member" means any financial institution within the Territory that is eligible for membership but is not a member of WIB as of the effective date of an agreement executed between such bank and COMPANY.

L. "Participating Associate Member" means any Associate using the endorsed Services of COMPANY.

M. "Participating Bank" means any Member or Non-member using the endorsed Services of COMPANY.

N. "Reseller" is a company or individual that is contracted to sell the goods or services with the intention of reselling them rather than consuming or using them.

O. "Royalty Fee" means the fee identified in Exhibit A hereto which WIB is eligible to earn.

P. "Services" means the services listed in Exhibit B to this Agreement and any additional products or services, as mutually agreed upon, in writing, by WIB SERVICE CORPORATION and COMPANY.

Q. "Territory" means, collectively, the western states of Alaska. Arizona, California. Colorado, Hawaii, Idaho, Nevada, New Mexico, Montana, Oregon, Utah, Washington, Wyoming and the U.S. Pacific Territories.

R. "U.S. Pacific Territories" means American Samoa and Guam in the Pacific Ocean and the U.S. Virgin

Islands.

2. ENGAGEMENT.

A. As of the Effective Date, COMPANY hereby engages WIB to endorse and WIB SERVICE CORPORATION to promote COMPANY's Services as "Endorsed Programs" to Members and Non-members during the term of this Agreement and any extensions thereto.

1218895.3 - 21

B. During the term of this Agreement, COMPANY shall not enter into an agreement with any financial institution trade association or bankers' bank or subsidiaries thereof located in or having members in the Territory for the purchase of Services offered by COMPANY which are the subject of this Agreement without the prior written agreement by WIB SERVICE CORPORATION.

C. This agreement to endorse and promote the Services is non-exclusive and WIB SERVICE CORPORATION can, at any time, endorse and/or promote other companies providing services similar or identical to COMPANY's Services.

D. COMPANY may in the future offer additional products or services that are wholly independent of the Services. In that event, COMPANY shall notify WIB SERVICE CORPORATION immediately of such additions to their product or services offerings and WIB SERVICE CORPORATION shall have a right of first refusal to expand this Agreement to include such additional services or products upon acceptance by WIB SERVICE CORPORATION and COMPANY of appropriate terms and conditions including. without limitation. appropriate compensation for such endorsement.

E. In the event COMPANY offers services or products now or in the future which are not covered by this Agreement, COMPANY will not market, use, infer, imply or otherwise tie such services or products, whether directly or indirectly, to Endorsed Program covering the Services nor will it use the WIB or WIB SERVICE CORPORATION name or logo or any other identifying marks in any marketing efforts related to such services or products.

F. WIB SERVICE CORPORATION acknowledges and agrees that Participating Banks and Associate Members may enter into and be parties to contracts with COMPANY for the Services. WIB SERVICE CORPORATION acknowledges that such agreements are exclusively the property of COMPANY, and WIB SERVICE CORPORATION has no right, title, license, or interest in such agreements.

3. TERM Of AGREEMENT.

A. General. Unless earlier terminated as provided herein, the term of this Agreement ("Term") shall be for a period of two (2) years, commencing on the Effective Date. Thereafter, this Agreement will automatically renew for an additional one (1) year term unless either party notifies the other in writing of their intent to terminate or renegotiate the terms of the Agreement no later than ninety (90) days in advance of the contract expiration date.

B. Termination for Insolvency or Change of Control. WIB SERVICE CORPORATION shall have the right to terminate this Agreement immediately upon: (I) any affirmative act of insolvency by the other party (including, without limitation, the commencement of bankruptcy proceedings); (ii) the appointment of any receiver or trustee to take possession of the properties of the other party; (iii) the dissolution of the other party; (iv) a party experiences a Change in Control, as defined below. (The term Change in Control shall mean (I) the merger or consolidation of a party with or into another entity or any other corporate reorganization, if persons who were not stockholders of the party immediately prior to such transaction own, whether directly or indirectly, immediately after such transaction 50% or more of the voting power of the outstanding securities of the continuing or surviving entity or any direct or indirect parent corporation of such continuing or surviving entity, or (ii) the sale, transfer or other disposition of all or substantially all of the assets of a party.)

C. Termination for Cause-Breach or Default.

I) In the event of a material breach or material default by COMPANY or WIB SERVICE CORPORATION in the performance of any of their obligations hereunder, and if COMPANY or WIB SERVICE CORPORATION fails to cure such material breach or material default within the applicable time period defined below (each a "Cure Period'1, then the non-breaching/non-defaulting party may, upon written notice delivered to the breaching/defaulting party. terminate this Agreement immediately upon written notification to the other party.

1218895.3 - 31

2) There shall be no Cure Period with respect to any breach or default by either party arising out of or resulting from any fraud or willful misconduct by COMPANY or WIB SERVICE CORPORATION, or any of their respective employees, officers. representatives, or agents.

3) There shall be a Cure Period of fifteen (15) days from the date of such breach of default with respect to the payment by COMPANY to WIB Service Corporation of any monetary obligation under this Agreement.

4) With respect to any other default. including but not limited to a breach of any material term or condition of this Agreement, each party will have a Cure Period of thirty (30) days from the date of written notice by the non-breaching party to the other to cure any such default or breach. If the breach is of a nature or involves circumstances reasonably requiring more than thirty (30) days to cure, the time period may be extended at the option of the non-breaching party provided the breaching party proceeds diligently to cure the breach.

5) WIB SERVICE CORPORATION may, in its sole discretion, cease performance of its marketing obligations, as provided in Section 4.A. below, during any Cure Period contained in Section 3.C. above.

A. Termination Payments.

1) In the event of a breach or default by WIB SERVICE CORPORATION under this Agreement. which is not cured within the applicable Cure Period as set forth in Section 3.C.2, above, COMPANY may terminate this Agreement by providing written notice to WIB SERVICE CORPORATION, effective upon date of notification. If COMPANY terminates this Agreement due to a breach or default by WIB SERVICE CORPORATION, COMPANY shall have no further payment obligations to WIB SERVICE CORPORATION.

2) Nothing contained in this Agreement pertaining to COMPANY's rights and remedies with respect to a breach or default by WIB SERVICE CORPORATION under this Agreement will affect any agreement entered into between COMPANY and any Participating Bank or Associate Member or COMPANY's obligation under such agreement.

3) In the event of termination of this Agreement other than provided in Sections 3.0.1, above, WIB SERVICE CORPORATION shall be entitled to continued payment for a period of two (2) years of all commissions resulting from contracts signed during the term of this Agreement or any renewals of this Agreement, or contracts signed within sixty (60) days following termination of this Agreement, if the contract was pending on or before the termination date of this Agreement, with Participating Banks or Associate Members, in accordance with this Agreement.

4) A list of all pending contracts noted in 3.0.3 will be provided by the COMPANY within ten (10) days following delivery of the letter of termination or nonrenewal of this Agreement. WIB SERVICE CORPORATION will have fifteen (15) days after receipt date of such notice to notify COMPANY of any disputes with such list. COMPANY will provide a written notice and evidence satisfactory to WIB SERVICE CORPORATION within ninety {90) days following termination whether or not such contracts have been signed.

5) WIB SERVICE CORPORATION shall have no obligation to continue any marketing efforts nor shall receipt of termination payments be contingent upon the WIB SERVICE CORPORATION'S continued performance of any marketing or other obligations contained herein.

1218895.3 41

6) Upon any expiration or termination of this Agreement, WIB SERVICE CORPORATION shall promptly cease and discontinue all endorsement and promotion of COMPANY and the Services and no Fees will be earned by WIB SERVICE CORPORATION after the date of any such expiration or termination except any applicable commissions earned by WIB SERVICE CORPORATION pursuant to Section 3.0.3.

4. DUTIES OF WIB SERVICE CORPORATION.

During the term of this Agreement, WIB Service Corporation shall use its commercially reasonable efforts to do the following:

A. Support direct sales efforts and identify prospective Members and Non-members Banks for the Services offered by COMPANY and use its best effort to promote COMPANY, as defined in this Agreement and as otherwise agreed to by the parties.

B. Provide referrals to COMPANY as an Endorsed Program for Services to Members and Non-members Banks when appropriate.

C. Provide use of the WIB Service Corporation name and logo signifying that COMPANY is a part of the Endorsed Program with respect to the Services for use in promoting this relationship.

D. Provide to COMPANY, within forty-five (45) days of receipt of a draft of such provided by COMPANY, a one (1) page fact sheet promoting COMPANY's Services in the WIB SERVICE CORPORATION'S Endorsed Program Marketing Materials.

E. Within forty-five (45) days of receipt of a draft of such provided by COMPANY, provide one (1) web page on the WIB's website promoting COMPANY'S Services and including links from such WIB web page to the COMPANY website.

F. Provide COMPANY, within forty-five (45) days of the Effective Date and thereafter on a quarterly basis if requested in writing by COMPANY, and in an excel format, an up-to-date list of Member and Non-member Banks of Western Independent Bankers. Such list shall provide key contact, company. address, phone and fax but shall not include email addresses.

G. Within sixty (60) days of the Effective Date, at WIB SERVICE CORPORATION'S expense, provide one (1) direct email campaign to an agreed-upon target list of Members and Non-members to introduce COMPANY Services.

H. Provide to COMPANY, within forty-five (45) days a list of WIB and WIBSCO Board of Directors in electronic format.

I. Provide to COMPANY, a Membership list (electronic format) as requested in writing by COMPANY.

J. At COMPANY's written request, at WIB SERVICE CORPORATION'S expense, provide two (2) direct mail campaigns each calendar year to an agreed-upon target list of Members and Non-members.

K. Include at least two (2) mentions or advertisements of COMPANY's Services in WIB or WIB SERVICE CORPORATION electronic or mailed publications, printed event programs, or on the WIB website each calendar year, placement to be determined by WIB, at no cost to COMPANY.

L. Provide a complimentary upgrade to a Premium Booth at WIB Expo events if written applications for such are received by the deadline determined by WIB staff.

1218895.3 - 51

M. When appropriate and subject to WIB's Advisory Committee selection process and agreement of WIB, include educational articles written by COMPANY in WIB's magazine and electronic newsletters.

N. When appropriate and subject to WIB's Advisory Committee selection process and agreement of WIB, include COMPANY as a speaker at educational events hosted by WIB.

O. Where appropriate, and at COMPANY's written request, make personal contact with a Member or Non-member to inform such of the WIB endorsement of COMPANY's Services in a timely manner upon receiving such request from COMPANY and not less than once each contract year.

P. Participate in regular sales pipeline calls with COMPANY that are mutually agreed upon but in no event no more frequently than once each contract year.

Q. Provide COMPANY a reference letter in PDF format on WIB letterhead to be used in Marketing Materials.

R. Provide COMPANY a complimentary pre-conference attendance list of registrants for all WIB events for which such a list is normally supplied solely to sponsors, or at which a COMPANY representative is attending or speaking.

S. At the written request of COMPANY, at WIB SERVICE CORPORATION's expense, coordinate and host at least two (2) webinars each contract year to promote the Services to Members and Non-member. COMPANY shall provide the webinar content. The time frame shall be mutually agreed upon by COMPANY and WIB SERVICE CORPORATION.

T. Comply with all Applicable Laws in its marketing of the Services hereunder.

U. Conduct itself in a professional manner in representing the Services to Members and Non-members and not make any representations or warranties with respect to the Services unless expressly authorized by COMPANY.

V. Carry out all its endorsement. promotion and support activities hereunder in a professional manner and closely coordinate all such activities with COMPANY in a timely manner.

W. Designate a primary contact person or persons responsible for the relationship between COMPANY and WIB SERVICE CORPORATION.

X. Meet with COMPANY's designated contact persons will meet in person or by conference call on a mutually agreed upon regular basis to review marketing efforts and sales plans.

Y. Make itself available to COMPANY's designated contact person should problems regarding the Services provided to Participating Banks be of a serious nature, and both parties agree to review such issues and discuss remedies in a timely manner.

S. DUTIES OF COMPANY.

During the term of this Agreement, COMPANY shall use its commercially reasonable efforts to do the following:

A. Maintain or acquire adequate resources, including sales representation based in the Territory, to accommodate new business contemplated herein.

B. Provide regular written sales pipeline reports and participate in pipeline review calls at least quarterly to WIB SERVICE CORPORATION.

1218895.3 - 61

C. In accordance with its usual business practices and pursuant to its business judgment and discretion, to follow up any prospect lead generated by WIB SERVICE CORPORATION in a timely and appropriate manner.

D. Provide timely implementation of Services to Participating Banks and Associate Members, pursuant to their respective agreements.

E. Provide WIB SERVICE CORPORATION with all current information requested by WIB SERVICE CORPORATION as and when the same becomes available, necessary to conduct on-going due-diligence updates as required by the WIB SERVICE CORPORATION policies for endorsement. and as required by the Federal Financial Institutions Examination Council ("FFIEC") Vendor Management Guidelines.

F. Provide WIB SERVICE CORPORATION with all current information requested by WIB SERVICE CORPORATION, concerning the marketing, sales and implementation of Services to Participating Banks and Associate Members.

G. Pay the fees described in Exhibit A attached hereto and specifically made a part of this Agreement by this reference.

H. Provide to WIB SERVICE CORPORATION a written fee report no later than twenty (20) days after the end of each calendar month, in a format mutually agreed to by COMPANY and WIB SERVICE CORPORATION. The report for each month shall contain the amount of fees earned by WIB SERVICE CORPORATION for each Participating Bank.

I. Pay, no later than twenty (20) days after the end of each calendar month in which COMPANY has received payment for products and services from participating Bank or Associate Members, in a format mutually agreed to by COMPANY and WIB SERVICE CORPORATION, the payments required under Exhibit A

J. Designate a primary contact person responsible for the relationship between COMPANY and WIB Service Corporation.

K. Comply with all applicable laws in its offering of the Services hereunder.

L. Provide quality customer service to Participating Banks and Associate Members, in accordance with the terms of any agreements between COMPANY and such Participating Banks and Associate Members.

M. Conduct itself in a professional manner in representing and providing the Services to Participating Banks and Associate Members.

N. Provide WIB SERVICE CORPORATION with current marketing material for the WIB website, Endorsed Program Marketing Brochure, and other marketing material in a timely manner.

O. Keep confidential the information obtained hereunder relating to customers, employees or board members of the Participating Banks and Associate Members and further agrees that it will not use any confidential information for purposes of soliciting such customers or employees, absent permission from the Participating Banks and Associate Members and subject to all applicable financial privacy laws. The foregoing will not prohibit COMPANY from soliciting such Participating Banks and Associate Members identified by COMPANY independent of this Agreement.

1218895.3 71

P. Provide WIB SERVICE CORPORATION reasonable access to the books and records of COMPANY for the purpose of auditing business conducted with Participating Banks and Associate Members and payments due to WIB SERVICE CORPORATION in consideration for this Agreement, as WIB SERVICE CORPORATION may reasonably deem necessary or appropriate. Should such audit find that COMPANY underpaid an amount equal to ten percent (10%) or more of the total amount paid by COMPANY, COMPANY will be responsible for all fees and costs incurred by WIB SERVICE CORPORATION, (including accounting and attorneys' fees) to enforce this Section S.P perform the audit and will remit payment within 30 (thirty) days of a request for payment. Notwithstanding anything herein to the contrary, COMPANY shall not be required to release any information from any prospect or client of COMPANY that may be considered confidential information of such prospect or client without first obtaining a non-disclosure agreement from WIB SERVICE CORPORATION.

Q. Employ resellers to market and self the Services in the Territory to WIB Prospects without the express written consent of the WIB Service Corporation. WIB Service Corporation shall only withhold consent for a commercially reasonable issue. Resellers do not include employees of the Company that are selling directly to WIB prospects.

R. Notify WIB Service Corporation in writing of any changes in senior or executive management or any designated contact person at COMPANY within thirty (30) days of the change.

6. EXPENSES AND COMPENSATION.

A. As compensation for the services to be provided by WIB SERVICE CORPORATION hereunder, WIB and WIB SERVICE CORPORATION shall receive fees in accordance with Exhibit A.

B. WIB and WIB SERVICE CORPORATION shall be solely liable to pay all taxes and levies imposed by a government entity on revenue or income resulting from the fees paid by COMPANY under this Agreement.

7. INDEMNIFICATION AND HOLD HARMLESS.

A. COMPANY hereby agrees to indemnify and hold harmless WIB SERVICE CORPORATION and its affiliates, officers. directors, employees, representatives, agents, successors and assigns from and against any and all expenses, costs, causes of action, loss or damages arising from third party claims arising from gross negligence, fraudulent or willful misconduct by COMPANY and its officers, employees, directors, members, shareholders. representatives, agents, successors and assigns, and each of them in connection with their activities hereunder.

B. WIB SERVICE CORPORATION hereby agrees to indemnify and hold harmless COMPANY and its officers, directors and employees from and against any and all expenses. costs, causes of action, loss or damages arising from gross negligence, fraudulent or willful misconduct by WIB SERVICE CORPORATION and its officers and employees in connection with their activities hereunder.

8. RELATIONSHIP OF THE PARTIES -INDEPENDENT CONTRACTOR.

1218895.3 - 81

A. WIB SERVICE CORPORATION and COMPANY agree that each shall be an independent contractor as to the other, and that nothing in this Agreement is intended to establish or authorize either party as an agent, legal representative, joint venture party, franchisee, employee or servant of the other for any purpose. COMPANY will have no authority, whether express or implied, to assume or create any obligation on behalf of WIB SERVICE CORPORATION, including, without limitation, price quotations, letters or other documents of WIB SERVICE CORPORATION, except as expressly provided herein or with the duly authorized written consent of WIB SERVICE CORPORATION. WIB SERVICE CORPORATION will have no authority, whether express or implied, to assume or create any obligation on behalf of COMPANY, including. without limitation, price quotations, letters or other documents of COMPANY, except as expressly provided in Schedule B herein or with the duly authorized written consent of COMPANY.

9. USE OF CONFIDENTIAL OR PROMOTIONAL MATERIALS.

A. Confidential Information. WIB SERVICE CORPORATION and COMPANY acknowledge and agree that during the term of this Agreement, each may possess certain confidential information about the business of the other, including, but not limited to, membership lists, employee and customer records, and other documents, data, records, and other information. Therefore, WIB SERVICE CORPORATION and COMPANY agree that all such information shall be held in confidence and each will not divulge such information to any party (other than as required to perform its obligations under this Agreement) without the express written consent of the other. WIB SERVICE CORPORATION and COMPANY also agree that each party will adopt reasonable precautions to guard against unauthorized release of such information, and that each will not use such information in any manner that will unfairly benefit it or damage the other party. Confidential information does not include information that was in a person's knowledge or possession prior to disclosure to it by another person; was public. knowledge or has become public knowledge through no fault of the person using or disclosing it; was properly provided to the person using or disclosing it by an independent third person without obligation of confidentiality or non-disclosure; or is required by law, regulation or court order to disclose.

B. Promotional Materials. WIB SERVICE CORPORATION and its affiliates, officers and employees shall not. in carrying out its duties under the terms of this Agreement, utilize any sales, advertising or promotional materials or techniques of any kind relating to Services of COMPANY unless the same have received prior approval of COMPANY. WIB SERVICE CORPORATION, on its own behalf and on behalf of its affiliates and employees, acknowledges that all such promotional materials and the information contained therein are confidential and shall remain the sole property of COMPANY, and in no event shall the contents of the same be divulged to any party without COMPANY's prior express consent. WIB SERVICE CORPORATION, on its own behalf and on behalf of its affiliates and employees, agrees to prompt return any such sales, advertising. and promotional materials upon termination of this Agreement upon written request of COMPANY. WIB SERVICE CORPORATION, on its own behalf and on behalf of its affiliates and employees, agrees that the names, service marks, trade names and trademarks, including but not limited to "COMPANY", among others, are trademarks of COMPANY and that, without COMPANY'S prior approval, WIB SERVICE CORPORATION hereby receives no right, authority, or permission to use those or any other registered or otherwise proprietary COMPANY marks in any manner.

C. COMPANY and its officers and employees shall not, in carrying out its duties under the terms of this Agreement, utilize any sales, advertising or promotional materials or techniques of any kind relating to WIB or WIB SERVICE CORPORATION unless the same have received prior approval of WIB SERVICE CORPORATION and WIB.

10. MEDIATION/ ARBITRATION OF DISPUTES.

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A. If either party objects to or otherwise has an issue with the other party's interpretation or performance of obligations under the agreement. that party shall notify the other in writing, stating its position on the issue in question and providing the other party with all pertinent information regarding its issue. The parties shall meet in person or by telephone to discuss the matter at the first mutually convenient time and acceptable location. If the parties cannot resolve their differences, they shall agree on a mediator to whom both parties shall submit the dispute within thirty (30) days after notice of the dispute. Both parties shall meet with the mediator at a location in San Francisco, CA or any other location mutually agreeable to the parties as soon as possible after the mediator has been named but in no event more than thirty (30) days thereafter.

B. If a dispute cannot be resolved by mediation as described above, it shall be settled by arbitration to be held in San Francisco, CA or any other location mutually agreeable to the parties. Arbitration shall be conducted by judicial Arbitration and Mediation Services in accordance with the Commercial Arbitration Rules, effective January 1 in the year in which the arbitration arises. The judgment of the arbitrator shall be in writing and shall enunciate the reasoning for their decision. judgment upon the award by the arbitrators may be entered in any court of competent jurisdiction.

II. ASSIGNMENT.

A. In the event of a Change in Control of COMPANY, notice must be provided to WIB SERVICE CORPORATION within ten (10) days of a public announcement of such Change in Control, and WIB SERVICE CORPORATION shall, in addition to those rights set forth in Section 3.6., have sixty (60) days to notify the other party of their disapproval of the Assignment of this Agreement. If no such notice is provided, the Agreement shall be binding upon and inure to the benefit of each party and its permitted successors and assigns.

12. MISCELLANEOUS PROVISIONS.

A. Modification and Assignment. This Agreement. including any Exhibit(s) or Schedules referenced herein or attached hereto may not be changed, modified or amended except by a written instrument signed by authorized representatives of both WIB SERVICE CORPORATION and COMPANY.

B. Entire Agreement. This Agreement contains the entire agreement and contains all of the representations of the parties with respect to the matters contained in this Agreement and supersedes and replaces any other Agreement between them either oral or written. No term or provision of this Agreement will be deemed waived and no breach excused, unless the waiver is in writing and signed by the party granting such waiver. Any consent by either party to, or waiver of, a breach by the other party, will not constitute consent to or waiver of any other different or subsequent breach.

C. Authorization. COMPANY and WIB SERVICE CORPORATION represent and warrant to one another that this Agreement has been duly authorized, executed and delivered by each of them, is valid and enforceable in accordance with its terms and conditions hereof and will not conflict with, result in a breach of, or be adversely affected by their articles of incorporation, bylaws or other agreement or instrument to which each is a party or by which each may be bound or any judgment, order, law, statute or regulation to which either is subject.

D. Resellers. COMPANY shall not employ resellers to market and sell the Services in the Territory to Financial Institutions without the express written consent of WIB SERVICE CORPORATION. WIB SERVICE CORPORATION shall only withhold consent for a commercially reasonable issue. Revenue from resellers will be considered as normal sales.

E. Change in Management. COMPANY shall notify WIB SERVICE CORPORATION in writing of any change in senior or executive management at COMPANY within thirty calendar days of the change.

1218895.3 - 101

F. Governing Law; jurisdiction. This Agreement and the rights of the parties hereunder shall be governed by the laws of the State of California.

G. Notices. Any and all notices or any related or supplemental document required or authorized to be provided ("Notice") under the terms of this Agreement shall be in writing and delivered to the addresses set forth below and shall be deemed given when received if sent via public or private delivery service or three business days after the date of mailing if mailed via United States certified or registered mail, postage prepaid :

To: WIB SERVICE CORPORATION:

Attn: Julian D. Graham, President

601 Montgomery Street, Suite 1200

San Francisco, CA 94111

To: Touchpoint Metrics, Inc.

Attn: Lynn Davison

201 Spear Street, Suite 1100

San Francisco, CA 94105

Each of the parties agrees to notify the other promptly in writing of any change in its mailing address hereinabove set forth.

H. Captions. The captions set forth at the beginning of each article and paragraph are not a part of the content of this Agreement. but merely intended for convenience in locating specific provisions hereof and shall otherwise be ignored in construing this Agreement.

I. Binding Effect. This Agreement and the duties, obligations and rights specified herein shall be binding on and inure to the benefit of each of the parties and their respective heirs, executors, administrators, legal representatives, successors, assigns, and permitted designees.

J. Savings Clause. If any term or provision of this agreement is held or construed to be invalid or unenforceable to any extent or application, then the remainder of this agreement shall be valid and enforceable to the fullest extent and the broadest application permitted by law.

K. Survival.Sections 7, 9, I 0, and 12 of this Agreement shall survive and continue in full force and effect in accordance with their respective terms, notwithstanding any termination of the Agreement.

L. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original for any and all purposes and all of which shall constitute one and the same document.

IN WITNESS WHEREOF, the parties have hereunder executed this Agreement on the day first above written.

WESTERN INDEPENDENT BANKERS SERVICE CORPORATION A California Corporation		TOUCHPOINT METRICS, INC. A California Corporation

BY:	JULIAN D. GRAHAM	BY:	MICHAEL HAUNCH
	Julian D. Graham, President		Michael HAUNCH, President

Date: 3/18/14		Date: 3/18/14

EXHIBIT A FEES

The following is added as Exhibit A to the Endorsement and Marketing Agreement ("Agreement») by and between TOUCHPOINT METRICS, INC., ("COMPANY"), and WESTERN INDEPENDENT BANKERS SERVICE CORPORATION ("WIB SERVICE CORPORATION").

This Exhibit A shall be deemed an integral part of the above referred Agreement and may from time to time be modified by mutual signed agreement between WIB SERVICE CORPORATION and COMPANY.

COMPANY agrees to pay the following fees:

A. Annual WIB Membership Dues.

For such time as this Agreement remains in effect, COMPANY will pay such dues as required to maintain its WIB Associate Membership. Annual dues will be paid to Western Independent Bankers based upon the published dues schedule.

B. Endorsement Royalty fee.

COMPANY will pay WIB Annual Endorsement Royalty Fee of Two Thousand, Five Hundred Dollars ($2,500) within thirty (30) days after the effective date of this Agreement; and on the anniversary of the effective date of each succeeding calendar year during the term of this Agreement.

The Royalty Fee is paid solely in consideration for use of the WIB and WIB SERVICE CORPORATION endorsement and marks, including the "Endorsed Program" mark.

C. Annual Sponsorship Activities.

COMPANY agrees to pay for an annual sponsorship at a minimum level of five Thousand Dollars ($5,000) annually.

D. Annual Exhibitorship Activities.

COMPANY agrees to exhibit at WIB hosted events no less than two (2) times each calendar year.

E. Annual Marketing Fee.

COMPANY will pay WIB SERVICE CORPORATION an Annual Marketing Fee of Five Thousand Dollar ($5,000) within thirty (30) days after the effective date of this contract; and on the anniversary of the effective date of each succeeding calendar year during the term of this Agreement.

F. Commissions.

1) Commissions shall be paid to WIB SERVICE CORPORATION on sales of Services to Participating Banks and Associate Members for contracts executed and payment received by COMPANY according to following schedule:

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Level 1 Lead Generation Role	10%
Level 2:+ Sales Closing Role	20%
Level 3: + Delivery Role	55%

Lead Generation Role Definition: WIB SERVICE CORPORATION has sole responsibility for generating and providing a marketing qualified lead to COMPANY. "Marketing qualified lead" is a prospect who expresses interest in COMPANY's products and services and initiates contact with COMPANY via phone, email or web form. COMPANY will pay WIB SERVICE CORPORATION 10% of revenue generated from a contract executed for each marketing qualified lead provided to COMPANY which results in a sale.

Sales Closing Role Definition: WIB SERVICE CORPORATION has sole responsibility for all aspects of the sales cycle from generating and qualifying a lead, to demonstrating or presenting COMPANY's products and services, to creating and presenting proposals, to dosing a sale. COMPANY will pay WIB SERVICE CORPORATION 20% of revenue generated from each COMPANY product or service sold, as evidenced by an executed contract by WIB SERVICE CORPORATION.

Delivery Role Definition: WlB SERVICE CORPORATION has sole responsibility for all aspects of the sale and delivery of COMPANY products and services. This assumes WIB SERVICE CORPORATION representatives delivering COMPANY products and services are certified by COMPANY in its Touchpoint Mapping® methodology. COMPANY will pay WIB SERVICE CORPORATION 55% of revenue from each product or service sold, as evidenced by an executed contract, and delivered by WIB SERVICE CORPORATION.

2) Such commissions will be paid by agreed upon method, no later than twenty (20) days after the end of each month in which COMPANY has received payment for products and services, throughout the term of the contract from participating Bank or Associate Members.

3) Minimum Annual Commissions. COMPANY shall pay WIB SERVICE CORPORATION annual commissions of no less than Ten thousand Dollars ($1 0,000). In the event the annual commissions paid by COMPANY are less than the $10,000 minimum, the difference will be paid to WIB SERVICE CORPORATION within thirty (30) days after the dose of each contract year.

Initial MH

Initial JDG

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EXHIBIT B

SERVICES DESCRIPTIONS &

SPECIAL DISCOUNT PROGRAM FOR WIB MEMBERS

The following is added as Exhibit B to the Marketing Agreement ("Agreement") by and between COMPANY and WIB SERVICE CORPORATION.

This Exhibit B shall be deemed an integral part of the above referred Agreement and may from time to time be modified by mutual written agreement between WIB SERVICE CORPORATION and COMPANY.

A. WIB SERVICE CORPORATION agrees to endorse, market and promote the following COMPANY services:

a. Touchpoint Mapping®

B. COMPANY agrees to provide Members a "WIB Member Only" preferred pricing as noted below or other special WIB Member incentive on the following services:

a. 10% discount for Touchpoint Mapping On-Demand products offered by COMPANY

Initial MH

Initial JDG

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EXHIBIT C

Current Client list

The following is added as Exhibit C to the Endorsement and Marketing Agreement ("Agreement'1by and between TOUCHPOINT METRICS, INC.("COMPANY"),and WESTERN INDEPENDENT BANKERS SERVICE CORPORATION ("WIB SERVICE CORPORATION").

This Exhibit C shall be deemed an integral part of the above referred Agreement and may from time to time be modified by mutual signed agreement between WIB SERVICE CORPORATION and COMPANY.

The following is a list of COMPANY's bank clients in the Territory as of January 31, 2014 which are NOT subject to commissions on sale or renewal at the rate of as noted in Exhibit A.

Banks

Wells Fargo

Silicon Valley Bank

River City Bank

Nevada State Bank

First California Bank

Heritage Oaks Bank

EverBank

Bank of America

Chase

Credit Unions

Tucson Pueblo Credit Union

North Peace Credit Union

Star One Credit Union

Golden 1 Credit Union

Arizona State Credit Union

USC Credit Union

NuVision Federal Credit Union

Initial MH

Initial JDG

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EXHIBIT 10.50

LEASE CONTENTS

1. PARTIES

2. PREMISES LEASED

3. TERM OF LEASE

4. POSSESSION

5. RENT

6. SECURITY DEPOSIT

7. USES OF PREMISED

8. COMPLIANCE WITH LAW

9. CONDITION OF PREMISES

10. INSURANCE

11. INDEMNITY

12 . EXEMPTION OF LESSOR FROM LIABILITY

13. LESSOR'S OBLIGAIONS

14. LESSEE'S OBLIGATIONS

15. SURRENDER OF PREMISES

16. ALTERATIONS AND TENANT IMPROVEMENTS

17. TRADE FIXTURES

18. LIENS

19. UTILITIES

20. TAXES

21. LESSOR'S RIGHT OF ENTRY

22. CONDEMNATION

23. ASSIGNMENT AND SUBLEASES

24. SUBORDINATION OF LEASE

25. LESSEE'S BANKRUPTCY

26. LESSEE'S BREACH

27. LESSOR'S LIEN

28. PARTIAL AND TOTAL DESTRUCTION

29. CANCELLATION OF INSURANCE; INCRESE OFINSURANCERATES

30. SURRENDER

31. ATTORNEY'S FEES

32. NOTICE TO LESSEE

33. NOTICE TO LESSOR

34. WAIVER

35. HOLDING OVER

36. LATE CHARGES

37. INTEGRATED AGREEMENT; MODIFICATION

38. HAZARDOUS MATERIALS

39. OPTION TO RENEW

40. CONFIDENTIALITY

41. PROVISIONS ARE COVENANTS AND CONDITIONS

42. SIGNS

43. FLOODING

44. PREMISES

45. POSESSION

46. OBSTRUCTION

47. AGREEMENT WITH THE CITY OF SAN ANSELMO

48. SUCCESSORS

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1. PARTIES. This Lease, dated for reference purposes only June 5, 2014, (hereafter referred to as "Lease"), is made by and between Four Kays, (hereafter referred to as "Lessor"), and Touchpoint, Inc., (hereafter referred to as "Lessee").

2. PREMISES LEASED. Lessor hereby leases to Lessee and Lessee leases from Lessor, for the term, at the rental and upon all of the conditions set forth herein, a portion of the building commonly known as 249 Sir Francis Drake Blvd. located at 249 Sir Francis Drake Blvd., San Anselmo, County of Marin, California, consisting of approximately 370 square feet.

3. TERM OF LEASE. The term of this Lease shall be for a period of Two (2) years and Two (2) months commencing on July 1, 2014 and terminating on August 31, 2016.

4. POSSESSION. Lessee shall be entitled to take possession July 1, 2014 after execution of this Lease.

5. RENT. Lessee shall pay as rent for the Premises the rent amount set forth below, commencing 0 days after this Lease is signed by Lessee, and continuing on the first day of each and every month during the term of this Lease. Rent shall be payable to Four Kays, in care of John Kaufman, whose address is: 2 Magnolia Ave., San Anselmo, CA.

5.1 Minimum Monthly Rent. Lessee shall pay to Lessor as minimum monthly rent without deductions, set-off, prior notice or demand, the sum of $840. The minimum monthly rent shall be subject to an annual cost of living adjustment. The minimum monthly rent provided for in this subparagraph 5.1 shall be subject to an adjustment as of the first day of July of each year of the term commencing July 1, 2015 and each July 1 thereafter as follows:

5.2 The base for computing the adjustment is the All Urban Consumer Price Index (1984 equals 100) for the San Francisco Bay Area published by the United States Department of Labor, Bureau of Labor Statistics (Index) which was published for July, 2014 (Beginning Index). If the Index published for July the following year, (Extension Index) has increased over the Beginning Index, the minimum monthly rent for the following year commencing in July until the next adjustment shall be set by multiplying the minimum monthly rent set forth in subparagraph (5.1) above by a fraction, the numerator of which is the Extension Index and the denominator which is the Beginning Index. In no case shall the minimum monthly rent be less than the minimum monthly rent set forth in subparagraph (5.1) above. Prior to each July, Lessor shall notify Lessee in writing of the new adjusted minimum monthly rent, however, if the CPI information is not available by July of each year, Lessor shall use the most recently available CPI information.

If the Index is changed so that the base year differs from that used as of July 2014, the Index shall be converted in accordance with the conversion factor published by

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the United States Department of Labor, Bureau of Labor Statistics. If the Index is discontinued or revised during the term such other government index or computation with which it is replaces shall be used in order to obtain substantially the same result as would be obtained if the Index had not been discontinued or revised.

5.3 Monthly rent payable during any option year shall be payable as determined in Paragraph 39.

5.4 Monthly rent is due on the first day of each month and shall be considered late if received or if postmarked (if payment is made by U. S. Mail) after the fifth (5 ^th ) day of each month, and SHALL BE SUBJECT TO A LATE FEE EQUAL TO TEN PERCENT (10%) OF THE AMOUNT DUE (see Paragraph 36). ______ (Lessee initials)

6. SECURITY DEPOSIT.

6.1 Upon execution of this Lease, Lessee shall deposit with Lessor the sum of $1,680.00, as security for the faithful performance of the Lease for all the terms, covenants and conditions of this Lease, to be kept and performed by Lessee during the term hereof. If at any time during the term of this Lease any of the rent herein required shall be overdue and unpaid, then the Lessor may, at Lessor's option, appropriate and apply any portion of said deposit to the payment of any such overdue rent or other sum. In the event of the failure of Lessee to keep and perform all of the terms, covenants and conditions of this Lease to be kept and performed by Lessee, then at the option of Lessor said Lessor may appropriate and apply so much of said deposit as may be necessary to compensate Lessor for all loss or damage sustained or suffered by Lessor due to such breach on the part of the Lessee. Should the entire deposit, or any portion thereof, be so apportioned and applied by Lessor for the payment of overdue rent or other sums due and payable to Lessor by Lessee hereunder, then Lessee shall, upon written demand of Lessor, forthwith remit to Lessor a sufficient amount in cash to restore said security to the original security deposit. Lessee's failure to do so within thirty (30) days after receipt of such demand shall constitute a breach of this Lease. Should Lessee comply with all of the terms, covenants and conditions, and promptly pay all of the rental herein provided for, as the same falls due, and all other sums payable by Lessee to Lessor, said security deposit shall be repaid to Lessee upon termination of this Lease or any extension thereof.

6.2 Lessor shall not be required to pay Lessee interest on the security deposit, nor shall Lessor be required to place the deposit in a trustee account.

7. USE OF PREMISES.

7.1 Lessee agrees to use and occupy the premises during the term hereof for the purpose of office and conference, storage and packaging and for no other purpose whatever without the written consent of Lessor. Lessee shall not use, or permit said premises, or any part thereof, to be used, for any purpose or purposes other than the purpose or purposes for which the said premises are hereby leased, and no use shall be

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made or permitted to be made of the said premises, or acts done, which will increase the rate of insurance upon the building in which said premises may be located over the standard rate of insurance prevailing in the area in which the premises are located, or cause a cancellation of any part thereof, or make it impossible for Lessor to obtain an insurance policy covering said building or any part thereof.

7.2 Lessee shall at all times conduct business in the Premises under the name Touchpoint Inc.. Lessee acknowledges that Lessor may grant to other tenants in the Building, and may grant to additional tenants in the Building, exclusive rights to conduct certain businesses and sell certain products. Accordingly, the permissible use set forth in this paragraph is not to be expanded except with Lessor's specific written consent, which consent Lessor will grant or deny in its sole discretion after giving consideration as such factors, by example and without limitation, tenant mix, types of products available in the Building, type of lease, and impact of use on other tenants. Lessee shall not, without the prior express written consent of Lessor, conduct on or from the Premises any activity or other business for which Lessor may from time to time grant exclusive rights to other tenants in the Building provided Lessee is given written notice thereof and such exclusive rights are not inconsistent with the specific permissible use set forth in this paragraph.

7.3 In no event shall Lessor be liable to Lessee for monetary damages or for any other form of compensation in the event an existing or future tenant in the building conducts business activities similar to or in competition with Lessee.

8. COMPLIANCE WITH LAW. Lessee shall, at Lessee's expense, comply promptly with all applicable statutes, ordinances, rules, regulations, orders and requirements (including ADA requirements) in effect during the term or any part of the term hereof regulating the use by Lessee of the Premises. Lessee shall not use or permit the use of the Premises in any manner that will tend to create waste or nuisance or, if there shall be more than one tenant of the building containing the Premises, which shall tend to disturb such other tenants.

9. CONDITION OF PREMISES. Upon taking possession of the Premises, Lessee acknowledges that the Premises are in good condition, and are in compliance with all applicable zoning, municipal, county and state laws, ordinances and regulations governing and regulating the use of the Premises, and accepts this Lease subject thereto and to all matters disclosed thereby and by any Exhibits attached hereto. Lessee shall be responsible for all tenant improvements in order to make the Premises suitable for Lessee's use. Lessee acknowledges that neither Lessor nor Lessor's agent has made any representation or warranty as to the suitability of the Premises for the conduct of Lessee's business.

10. INSURANCE

10.1 Landlord shall maintain , as a part of Operating Expenses, fire and extended coverage insurance on the Building in an amount equal to the full replacement cost of the Building, subject to such deductibles as Landlord may determine. Landlord

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shall not be obligated to insure, and shall not assume any liability of risk of loss for, any of Tenant's furniture, equipment, machinery, goods, supplies, improvements or alterations upon the Premises. Such insurance shall be maintained with an insurance company selected, and in amounts desired, by Landlord or Landlord's mortgagee, and payment for losses thereunder shall be made solely to Landlord subject to the rights of the holder of any mortgage or deed of trust which may now or hereafter encumber the Building. Landlord shall also maintain, as a part of Operating Expenses, commercial general liability insurance in an amount not less than $1,000,000.00 per occurrence and $2,000,000.00 general aggregate, with an insurance company selected by Landlord. Additionally Landlord may maintain such additional insurance, including, without limitation, earthquake insurance, flood insurance, liability insurance and/or rent insurance, as Landlord may in its sole discretion elect. The cost of all such additional insurance shall also be part of the Operating Expenses. Any or all of Landlord's insurance may be provided by blanket coverage maintained by Landlord or any affiliate of Landlord under its insurance program for its portfolio of properties or by Landlord or any affiliate of Landlord's program of self insurance, and in such event Operating Expenses shall include the portion of the reasonable cost of blanket insurance or self-insurance that is allocated to the Building.

10.2 Tenant, at its own expense, shall maintain with licensed insurers authorized to do business in the State of California and which are rated A- and have a financial size category of at least VIII in the most recent Best's Key Rating Guide, or any successor thereto (or if there is none, an organization having a national reputation), (a) commercial general liability insurance, including Broad Form Property Damage and Contractual Liability with the following minimum limits: General Aggregate $1,000,000.00; Products/Completed Operations Aggregate $1,000,000.00; Each Occurrence $1,000,000.00; Personal and Advertising Injury $1,000,000.00; Medical Payments $5,000.00 per person, (b) Workers' Compensation with statutory limits; (c) Employer's Liability insurance with the following limits: Bodily injury by disease per person $1,000,000.00; Bodily injury by accident policy limit $1,000,000.00; Bodily injury by disease policy limit $1,000,000.00; (d) property insurance on special causes of loss insurance form covering any and all personal property of Tenant including but not limited to alterations, improvements, betterments, furniture, fixtures and equipment in an amount not less than their full replacement cost, with a deductible not to exceed $5,000.00 ; and at all times during the Term, such insurance shall be maintained, and Tenant shall cause a current and valid certificate of such policies to be deposited with Landlord. If Tenant fails to have a current and valid certificate of such policies on deposit with Landlord at all times during the Term and such failure is not cured within three (3) business days following Tenant's receipt of notice thereof from Landlord, Landlord shall have the right, but not the obligation, to obtain such an insurance policy, and Tenant shall be obligated to pay Landlord the amount of the premiums applicable to such insurance within ten (10) days after Tenant's receipt of Landlord's request for payment thereof. Said policy of liability insurance shall name Landlord, Landlord's managing agent and Tenant as the insureds and shall be noncancellable with respect to Landlord except after thirty (30) days' written notice from the insurer to Landlord.

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10.3 Tenant shall adjust annually the amount of coverage established in Paragraph 10.2 hereof to such amount as in Landlord's reasonable opinion, adequately protects Landlord's interest; provided the same is consistent with the amount of coverage customarily required of comparable tenants in Comparable Buildings.

10.4 Notwithstanding anything herein to the contrary, Landlord and Tenant each hereby waives any and all rights of recovery, claim, action, or cause of action against the other, its agents, employees, licensees, or invitees for any loss or damage to or at the Premises or the Building or any personal property of such party therein or thereon by reason of fire, the elements, or any other cause which would be insured against under the terms of (i) fire and extended coverage insurance or (ii) the liability insurance referred to in Paragraph 10.2, to the extent of such insurance, regardless of cause or origin, including omission of the other party hereto, its agents, employees, licensees, or invitees. Landlord and Tenant covenant that no insurer shall hold any right of subrogation against either of such parties with respect thereto. This waiver shall be ineffective against any insurer of Landlord or Tenant to the extent that such waiver is prohibited by the laws and insurance regulations of the State of California. The parties hereto agree that any and all such insurance policies required to be carried by either shall be endorsed with a subrogation clause, substantially as follows: "This insurance shall not be invalidated should the insured waive, in writing prior to a loss, any and all right of recovery against any party for loss occurring to the property described therein, " and shall provide that such party's insurer waives any right of recovery against the other party in connection with any such loss or damage.

In the event Tenant's occupancy or conduct of business in or on the Premises, whether or not Landlord has consented to the same, results in any increase in premiums for the insurance carried from time to time by Landlord with respect to the Building, Tenant shall pay any such increase in premiums as Rent within ten (10) days after bills for such additional premiums shall be rendered by Landlord. In determining whether increased premiums are a result of Tenant's use or occupancy of the Premises, a schedule issued by the organization computing the insurance rate on the Building showing the various components of such rate, shall be conclusive evidence of the several items and charges which make up such rate. Tenant shall promptly comply with all reasonable requirements of the insurance authority or of any insurer now or hereafter in effect relating to the Premises.

10.5 Lessor will carry a flood insurance policy that covers flood damage to the premises which are normally the responsibility of the tenant (Paragraph 14). Carpets are a tenant responsibility in a flood as is all tenant property, installed and not. In case of a flood, tenant shall immediately clear the premises of any tenant property needed to access repairs.

11. INDEMNITY. Lessee shall indemnify, defend and hold harmless Lessor from and against any and all claims arising from Lessee's use of the Premises, or from the conduct of Lessee's business or from any activity, work or thing done, permitted or suffered by Lessee in or about the Premises or elsewhere and shall further indemnify and

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hold harmless Lessor from and against any and all claims arising from any breach or default in the performance of any obligation on Lessee's part to be performed under the terms of this Lease, or arising from any negligence of Lessee, or any of Lessee's agents, contractors or employees and from and against all costs, attorneys' fees, expenses and liabilities incurred in the defense of any such claim or any action or proceeding brought thereon, and in case any action or proceeding be brought against Lessor by reason of any such claim, Lessee, upon notice from Lessor, shall defend the same at Lessee's expense by counsel satisfactory to Lessor. Lessee, as a material part of the consideration to Lessor, hereby assumes all risk of damage to property or injury to persons in, upon or about the Premises arising from any cause and Lessee hereby waives all claims in respect thereof against Lessor.

12. EXEMPTION OF LESSOR FROM LIABILITY. Lessee, as a material part of the consideration to be rendered to Lessor, hereby waives all claims against Lessor for damage to goods, ware and merchandise and all other personal property in, upon or about said Premises and for injuries to persons in or about said Premises, from any cause arising at any time and Lessee will hold Lessor exempt and harmless for any damage or injury to any person or to the goods, wares and merchandise and all other personal property of any person arising from the use of the Premises by Lessee or from the failure of Lessee to keep the Premises in good condition and repair as herein provided.

13. LESSOR'S OBLIGATIONS. Except as otherwise provided in this Lease, Lessor shall keep in good order, condition and repair the foundations, exterior walls (excluding the interior surface of exterior walls and excluding all windows, doors, plate glass and show cases), and plumbing systems, and the roof of the Premises. However, Lessor shall not be responsible for maintenance if the defect or repair is caused by the negligence of Lessee or Lessee's invitees. Lessor shall not be responsible to Lessee or any other party whatsoever for any damage or injury caused by Lessor's failure to keep or maintain the foregoing in good repair unless Lessee shall forthwith give Lessor written notice of the need to repair said portions of said Premises and then only if Lessor fails to make said repairs within a reasonable time after receiving written notice.

14. LESSEE'S OBLIGATIONS. Lessee, at Lessee's sole cost and expense shall repair and maintain the interior portion of the Premises, whether or not such portion of the Premises requiring repair, or the means of repairing the same are reasonable or readily accessible to Lessee, and whether or not the need for such repairs occurs as a result of Lessee's use, any prior use, the elements or the age of such potion of the Premises, (except those portions which Lessor agrees to maintain as set forth in paragraph 13 above) together with the appurtenances thereto, including but not limited to all glass, glazing, skylights, signs, painting and/or decorating of interior walls and partitions, doors, and electrical system, and all interior building appliances, lighting fixtures, ceilings, floors (including carpeting) and agrees to keep the same in a good, safe and sanitary condition. Lessee hereby waives all right to make repairs at the expense of Lessor as provided in §1941 and 1942 of the California Civil Code and Lessee waives any rights which Lessee may have under said sections.

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14.1 The foregoing notwithstanding, Lessee will not be responsible for any plumbing or sewage facilities that may be embedded in concrete or underground excepting where such repairs are required by reason of Lessee's neglect or Lessee's operation.

14.2 Lessee shall not have the right to place, construct, inscribe or paint on the Premises, including the exterior walls and roof of the building, any sign, without the prior written consent of Lessor first had and obtained.

14.3 Lessee shall not allow refuse, garbage or trash to accumulate outside the Premises, sidewalks, and common areas adjacent to the Premises.

15. SURRENDER OF PREMISES. Lessee agrees that upon the last day of the term hereof or upon sooner termination of this Lease to surrender said Premises and said appurtenances to Lessor in the same condition as received by Lessee, ordinary wear and tear excepted.

16. ALTERATIONS AND TENANT IMRPOVEMENTS.

16.1 Lessee shall not make nor permit to be made any repairs, alterations, modifications, additions, utility installations (including power panels) in or about said Premises without the prior written consent of Lessor. Any repairs, modifications, additions, alterations or utility installations, including power panels, made by Lessee in or about said Premises, except movable furniture and trade fixtures, shall become a part of the realty and belong to Lessor unless otherwise agreed to in writing by the parties. Carpeting installed on any surface is part of the realty and belongs to the Lessor. Any such approved repairs, modifications, alterations, additions or utility installations shall be made at Lessee's expense.

16.2 As a material part of the consideration for this Lease, Lessee hereby covenants and agrees that Lessee, at Lessee's sole cost and expense, and without any cost or liability to Lessor, may remodel, renovate, and refurbish the interior of the Premises pursuant to plans and specifications to be provided to Lessor for Lessor's approval, such approval not to be unreasonably withheld. All work shall be done in accordance with the approved plans and specifications, and all applicable building and zoning codes, ordinances, and regulations.

16.3 Lessee accepts and takes possession of the Premises in their present "As Is" condition and shall be solely responsible for making all improvements required for Lessee's use and occupancy. For any improvements to be made by Lessee, during the term of this Lease, Lessee shall prepare and submit to Lessor for approval preliminary plans and specifications prepared by licensed space planners, architects, or engineers in forms suitable for obtaining building permits, covering construction work to be performed in the Premises by Lessee. Lessor shall have a period of five (5) business days after delivery to Lessor of such plans and specifications in which to approve or disapprove the plans and specifications. If Lessor fails to respond to Lessee within such time period,

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Lessor shall be deemed to have approved the plans and specifications. In the event any corrections are required by Lessor, Lessee shall promptly revise or correct the plans and/or specifications and shall submit such revisions or corrections to Lessor. Approval will be evidenced by endorsement to that effect on a set of the working plans and specifications. Lessor may refuse approval of Lessee's preliminary plans and specifications if Lessor shall determine that said plans and specifications do not conform to the high standards of design, motif, and décor adopted by Lessor and by other tenants in the Building. All improvements to be completed by Lessee shall be completed by and pursuant to the plans and specifications approved by Lessor and prepared by space planners, architects, or engineers in forms suitable for obtaining buildings permits prior to the commencement of any work. Lessee shall give Lessor ten (10) days notice prior to commencing any construction of improvements in order to allow Lessor the opportunity to record and post a Notice of Non-Responsibility.

16.4 Lessee shall be solely responsible for and shall promptly pay all costs of designing, constructing, and installing Lessee's improvements. "Improvements" and/or "tenant improvements" as used in this paragraph 16 shall include, without limitation, the renovation and repair of the existing construction, the installation of interior walls, partitions, floor coverings, counters, lighting fixtures, electrical and plumbing fixtures and modifications, exterior painting and modification, including permit fees, labor, materials, construction supplies, sub-contracts, and sewer and water connection fees (if any) for the Premises. Lessee shall arrange, contract for, and supervise the construction and installation of Lessee improvements. Lessee shall provide Lessor with a copy of the final notice of completion and/or final inspection.

17. TRADE FIXTURES. All trade fixtures, together with movable furniture may, at the end of this Lease, be moved from said Premises at Lessee's expense provided that Lessee shall pay such damage forthwith upon demand by the Lessor. As to removal of trade fixtures, Lessor may require Lessee, at Lessee's expense, to restore said Premises to their condition as of the date of the execution of this Lease, reasonable wear and tear excepted.

18. LIENS. Lessee shall keep said Premises free of mechanic's or materialmen's judgments and all tax liens arising out of work done for or debts or taxes incurred by Lessee. If Lessor discharges any such lien, Lessee agrees to save Lessor harmless therefrom and to pay Lessor the cost of discharging such lien with interest at ten (10) percent per annum from the date Lessor discharges such lien, together with Lessor's costs and reasonable attorneys' fees in connection with the settlement, trial or appeal of any such lien matter, payable with the next installment of rent due.

19. UTILITIES. Lessee, from the time it first enters the premises for the purpose of setting fixtures, or from the commencement of the term of this Lease, whichever date shall first occur, and throughout the term of this Lease, shall pay for gas, heat, light, power, telephone service and all other services supplied to or consumed in or on the leased premises. Lessee pays 0% of ELECTRIC bill shared with Marin

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Coffee Roasters or Four Kays unless a sub-meter is installed in which case Lessee shall pay their proportional use of the shared bill.

20. TAXES.

20.1 Personal Property Taxes. Lessee shall be liable for all taxes levied against personal property and trade fixtures on or about the demised Premises, including, but without prejudice to the generality of the foregoing, shelves, counters, vaults, vault doors, wall safes, partitions, fixtures, machinery, equipment and atmospheric coolers and if any such taxes on Lessee's personal property or trade fixtures are levied against Lessor or Lessor's property, and if Lessor pays the same, which Lessor shall have the right to do regardless of the validity of such levy, or if the assessed value of Lessor's Premises is increased by the inclusion therein of a value placed on such property of Lessee and if Lessor pays the taxes based on such increased assessment, which Lessor shall have the right to do, regardless of the validity thereof, Lessee, upon demand shall, as the case may be, repay to Lessor the taxes so levied against Lessor, or the proportion of such taxes resulting from such increase in the assessment.

20.2 There is no 20.2

21. LESSOR'S RIGHT OF ENTRY. Lessee agrees that Lessor and Lessor's agents may enter into and upon the Premises at reasonable times for the purpose of inspecting the same and to show said Premises to prospective purchasers or for the purpose of maintaining the building in which said Premises are situated or for the purpose of making repairs, alterations or additions or utility installations to any other part of said building, including the erection and maintenance of such scaffolding, ladders, fences and props as may be required or for the purpose of posting notices of non-liability for alterations, additions, repairs or utility installations or for the purpose of placing upon the property in which said Premises are located any ordinary "For Sale" signs without any rebate of rent or liability to Lessee for damage or interference with the quiet enjoyment of said Premises; Lessee shall permit Lessor within sixty (60) days prior to the expiration of this Lease to place upon the Premises ordinary "For Lease" signs, and to show said Premises to prospective Lessees during reasonable business hours.

22. CONDEMNATION. As used herein, the word "condemned" is coextensive with the phrase "right of eminent domain," i.e., the right of people or government to take property for government use and shall include the intention to condemn expressed in writing as well as the filing of any action or proceeding for condemnation.

22.1 In the event that any action or proceeding is commenced for the condemnation, in exercise of the right of eminent domain, of the demised Premises or if Lessor is advised in writing by any government (federal, state or municipal) or any agency or department or bureau thereof, or any entity or body having the right or power of condemnation, of its intention to condemn said demised Premises at the time thereof, or if the demised Premises or any part or section thereof be condemned through such action, then and in any of said events:

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22.1.1 The term of this Lease shall continue under the terms and conditions herein specified until such time as the condemnor actually takes possession of the demised Premises, or gives either Lessor or Lessee thirty (30) days' written notice of intention to take such possession.

22.1.2 Lessor may, without any obligation or liability to Lessee and without affecting the validity and existence of this Lease other than as hereafter expressly provided, agree to sell and/or convey to the condemnor, without first requiring that any action or proceeding be instituted, or, if such action or proceeding shall have been instituted, without requiring any trial or hearing thereof, the Lessor is expressly empowered to stipulate to judgment therein that the demised Premises sought by the condemnor is free from this Lease and the rights of Lessee, excepting only as hereinafter in paragraph 22.1.3 provided.

22.1.3 Lessee shall have no claim against Lessor nor be entitled to any part of portion of the amount that may be paid or awarded as a result of the sale, for the reasons as aforesaid, or condemnation of the demised Premises, Lessee hereby assigning, transferring and setting over unto Lessor its interest, of any, which Lessee would but for this provision have in, to, upon or against the demised Premises, or the amount agreed to be paid and/or awarded and paid to Lessor, excepting only that Lessee shall be entitled to seek to recover against the condemnor, and Lessor shall have no claim therefor or thereto in the following:

22.1.3.1 Lessee's trade fixtures and any removable structures and improvements erected and made by Lessee to or upon the demised Premises which Lessee is or shall be entitled to remove upon the expiration of the term of this Lease.

22.1.3.2 Costs of removing Lessee's business from the demised Premises to a new location.

22.2 Each party waives the provision of CCP §1265.130 allowing either party to petition the Superior Court to terminate this Lease in the event of a partial taking of the Premises.

23. ASSIGNMENT AND SUBLEASES. Lessee shall not assign this Lease or any interest therein and shall not sublet said Premises or any part thereof or any right or privilege appurtenant thereto, or suffer any other person (the agents and servants of Lessee excepted) to occupy or use said Premises, or any portion thereof, without the prior written consent of Lessor first had and obtained and a consent to one assignment, subletting or use by any other person shall not be deemed to be a consent to any subsequent assignment, subletting or use by another person, or to release Lessee from any liability hereunder. Any such assignment or subletting without such consent shall be void, and shall not alter the primary liability of Lessee under this Lease. This Lease shall not, nor shall any interest therein be assignable as to the Lessee's interest by operation of law, assignment for the benefit of creditors, voluntary or involuntary bankruptcy or

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reorganization or otherwise, without the prior written consent of Lessor.

23.1 Lessor shall not arbitrarily withhold its consent if: (1) the proposed assignment or sublease is to a financially responsible person or concern; (2) the proposed assignee has the requisite business experience required to operate the business to be conducted on the Premises; (3) the use of the Premises by the proposed assignee is compatible with the other tenants in the building of which the Premises are a part; and (4) the use of the Premises by the proposed assignee shall not require substantial structural changes to the Premises; and (5) Lessee shall guarantee any such assignment or subletting. All rents received by Lessee from its subtenants in excess of rent payable by Lessee to Lessor under this Lease shall be paid to Lessor, or any sums to be paid by an assignee to Lessee in consideration of the assignment of this Lease shall be paid to Lessor.

23.2 If Lessee requests Lessor to consent to a proposed assignment or subletting, Lessee shall pay to Lessor, whether or not consent is ultimately given, Lessor's reasonable attorneys' fees incurred in connection with each such request.

23.3 As an express condition of Lessor's consent to a subletting of the Premises, Lessee agrees that the monthly rental may be adjusted to reflect fair market value rent as of the date of the subletting. In the event Lessee and Lessor do not agree as to what constitutes the fair market rental value as of the date of subletting, the fair market rental value shall be determined as provided in paragraph 39.

After the monthly rent for the extended term has been set, the appraisers shall immediately notify the parties. If Lessee objects to the monthly rent that has been set, Lessee shall have the right to have this Lease expire at the end of the term, provided that Lessee pays all the costs in connection with the appraisal procedure that set the monthly rent. Lessee's election to allow this Lease to expire at the end of the term must be exercised within ten (10) days after receipt of notice from the appraisers of the monthly rent for the extended term.

24. SUBORDINATION OF LEASE. Lessee agrees that Lessor may hypothecate, pledge or transfer this Lease for any lawful purpose. This Lease is subject to any mortgages, trust deeds or other liens which are or may be against said Premises or the building in which said Premises are located. Lessee agrees that Lessee shall, upon request, execute such documents as may be necessary to make the rights given to Lessee hereunder subordinate to any such mortgages, deeds of trust, or other liens now against said Premises or the building in which said Premises are located. If Lessor fails to pay any part or all taxes against said real property or installments on any mortgage or trust deed against said real property which will interfere with Lessee's right to possession, Lessee may pay the same and deduct the amount paid from the next rent due. In order that Lessor may obtain a loan against said Premises, or the building in which they are situated, at all times during the term of this Lease, Lessee agrees to furnish Lessor with Lessee's financial statements required for loan application.

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25. LESSEE'S BANKRUPTCY. If Lessee suffers the appointment of a receiver to take possession of substantially all of Lessee's assets and such receiver is now removed within thirty (30) days from the date of his appointment or if Lessee makes a general assignment for the benefit of creditors, or if Lessee files a petition in bankruptcy or reorganization or if there is filed against Lessee an involuntary petition in bankruptcy or for reorganization, then in such event Lessor may, at Lessor's option terminate and cancel this Lease together with any right or rights whatsoever which Lessee may have hereunder.

26. LESSEE'S BREACH. If Lessee fails to pay rent when the same becomes due, time being expressly declared to be of the essence of this Lease, or if Lessee fails to perform any other covenant, condition or obligation required of Lessee, or if Lessee abandons said Premises (abandonment being defined herein as Lessee's failure to have any employee in said Premises, or Lessee's failure to use said Premises for five (5) consecutive days provided in either event Lessee is at the same time in default in the payment of rent), Lessor, in addition to any other legal remedies Lessor may have, shall have the option to do any one or all of the following to the extent that they are not inconsistent:

26.1 Immediately re-enter and remove all persons and property from said Premises, storing said property in a public warehouse or elsewhere at Lessee's expense without liability on the part of Lessor.

26.2 Collect by suit or otherwise each installment of rent or other sum as it becomes due or enforce by writ or otherwise any covenant or condition or term of this Lease required to be performed by Lessee.

26.3 Terminate this Lease in which event Lessee agrees to immediately surrender possession of said Premises and to pay Lessor all damages Lessor may incur by reason of Lessee's default including the cost of recovering possession of said Premises and including the worth at the time of such termination of the excess if any of the amount of rent and charges equivalent to the rent reserved in this Lease for the remainder of the stated term over the then reasonable rental value of said Premises for the remainder of said term, and Lessor shall have all of the rights and remedies provided by California Civil Code Section 1951.2, including, but not limited to, the right to terminate Lessee's right to possession and to recover the worth at the time of award of the amount by which the unpaid rent, additional rent, and other charges for the balance of the term after the time of award exceeded the amount of rental loss for the same period that Lessee proves could be reasonably avoided, as computed pursuant to subsection (b) of section 1951.2.

26.4 Should Lessor elect to re-enter as herein provided, or should Lessor take possession pursuant to legal proceedings or pursuant to any notice provided for by law, Lessor may either terminate this Lease or may from time to time, without terminating

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this Lease, re-let said Premises, or any part thereof for the account of Lessee either in Lessor's name or otherwise, upon such terms and conditions and for such period (whether longer than the balance of the term hereof of not) as Lessor may deem advisable, either with or without any equipment or fixtures that may be situated thereon or therein, in which event the rents received on any such re-letting during the balance of the term of this Lease or any part thereof shall be applied first to the expenses of re-letting and collection, including necessary renovation and alteration of the Premises and a reasonable attorneys' fee and any real estate commission actually paid and, thereafter, toward payment of all sums due or to become due to Lessor hereunder, and if a sufficient sum shall not be thus realized to pay such rent and other charges, Lessee shall pay to Lessor monthly any deficiency and Lessor may sue therefor as each monthly deficiency shall arise; such monthly deficiencies shall be paid punctually when due, as herein provided, notwithstanding the fact that Lessor may have received rental in excess of the monthly rental herein stipulated in previous months and notwithstanding the fact that Lessor may thereafter receive monthly rental in excess of the monthly payments herein specified during subsequent months. No re-entry or taking possession of said Premises shall terminate this Lease unless written notice of such intention is given to Lessee. Unpaid installments of rent or other sums shall bear interest at the highest legal rate from the date due.

26.5 Lessor has all of the remedies described in California Civil Code Section 1951.4 (providing that Lessor may continue the Lease in effect after the Lessee's breach and abandonment and recover rent as it becomes due, if Lessee has the right to sublet or assign the Lease, subject to reasonable limitations).

27. LESSOR'S LIEN. If Lessee is in default under any covenant, term or condition of this Lease or has abandoned said Lease, including paragraphs 25 and 26 above, Lessee hereby grants to Lessor a lien upon any personal property or trade fixtures of Lessee in said Premises which lien Lessor may satisfy by selling said personal property and trade fixtures at public or private sale without notice to Lessee and from the proceeds of said sale satisfy first any costs of storage, removal and sale and any other debts due from Lessee to Lessor and secondly satisfy the total amount of unpaid rent due and hold any balances for the account of Lessee. This lien shall accrue to Lessor's benefit whenever Lessee is in default and when Lessor exercises any right which Lessor may have at law or remedy which Lessor may have, including paragraphs 25 and 26 above.

28. PARTIAL AND TOTAL DESTRUCTION.

28.1 Destruction Arising from Risk Covered by Insurance. If a partial destruction of said Premises or the building containing the same occurs during said term, arising out of risks covered by fire and extended coverage insurance or if said partial destruction damages exterior walls, roof or cement embedded non-accessible plumbing, which requires repairs to either said Premises or said building, Lessor shall forthwith make such repairs required provided such repairs can be made within 180 days under the

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laws and regulations of authorized public authorities, but such partial destruction (including any destruction necessary in order to make repairs required by any such destruction) shall in no way void this Lease, except that Lessee shall be entitled to a proportionate reduction of rent while such repairs are being made, based upon the extent to which the making of such repairs shall interfere with the business carried on by Lessee in said Premises provided that in making such repairs, Lessor shall be obligated to replace only such glazing as shall be damaged by fire and other damaged glazing shall be replaced by Lessee. If such repairs cannot be made within 180 days, Lessor may, at Lessor's option, make the same within a reasonable time, this Lease continuing in full force and effect and the rent to be proportionately abated, as in this paragraph provided; or if Lessor does not elect to make such repairs which cannot be made within 180 days, or such repairs cannot be made under such laws and regulations, this Lease may be terminated at the option of either party. In respect to any partial destruction, including any destruction necessary in order to make repairs required by any such destruction, which Lessor is obligated to repair or may elect to repair under the terms of this paragraph, the provisions of §§ 1932(2) and 1933(4) of the California Civil Code are waived by Lessee. If said destruction or damage is sustained and occurs during the last six months of the term of this Lease, Lessor, at Lessor's option, may terminate and cancel this Lease. A total destruction of said Premises (including any total destruction required by any authorized public authority) shall terminate this Lease.

28.2 Damage Arising from Risk Not Covered by Insurance. If during the term the Premises or the building and other improvements in which the Premises are located are totally or partially destroyed from a risk not covered by fire or extended coverage insurance, rendering the Premises totally or partially inaccessible or unusable, Lessor may restore the Premises or the building and other improvements in which the Premises are located to substantially the same condition as they were in immediately before destruction. At the election of Lessor, such destruction may terminate this Lease. If Lessor elects to restore the Premises or the building, and if damage to Lessee's property is extensive and not covered by insurance required to be carried by Lessee under this Lease, and it causes Lessee extreme financial distress, then Lessee may terminate this Lease by written notice to Lessor. If the existing laws do not permit the restoration, either party can terminate this Lease immediately by giving notice to the other party. If the cost of restoration exceeds ten (10) percent of the then replacement value of the Premises or the building and other improvements in which the Premises are located that are destroyed, Lessor can elect to terminate this Lease by giving notice to Lessee within thirty (30) days after determining the restoration cost and replacement value.

28.3 Lessee's Responsibility. Paragraph 16 of this Lease notwithstanding, if Lessor is required or elects to restore the Premises as provided in paragraphs 28.1 and 28.2, Lessor shall not be required to restore alterations made by Lessee, Lessee's improvements, Lessee's trade fixtures and Lessee's personal property, such excluded items being the sole responsibility of Lessee to restore.

28.4 Wavier of Subrogation. The parties release each other, and their respective authorized representatives, from any claims for damage to any person or to the

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Premises and the building and other improvements in which the Premises are located, and to the fixtures, personal property, Lessee's improvements and alterations of either Lessor or Lessee in or about the Premises and the building and other improvements in which the Premises are located that are caused by or result from risks insured against under any insurance policies carried by the parties and in force at the time of any such damage.

28.4.1 Each party shall cause each insurance policy obtained by it to provide that the insurance company waives all right of recovery by way of subrogation against either party in connection with any damage covered by any policy. Neither party shall be liable to the other for any damage caused by fire or any of the risks insured against under any insurance policy required by this Lease. If any insurance policy cannot be obtained with a waiver of subrogation, or is obtainable only by the payment of an additional premium charge above that charged by insurance companies issuing policies without waiver of subrogation, the party undertaking to obtain the insurance shall notify the other party of this fact. The other party shall have a period of ten (10) days after receiving the notice either to place the insurance with a company that is reasonably satisfactory to the other party and that will carry the insurance with a waiver of subrogation, or to agree to pay the additional premium if such a policy is obtainable at additional cost. If the insurance cannot be obtained or the party in whose favor a waiver of subrogation is desired refuses to pay the additional premium charged, the other party is relieved of the obligation to obtain a waiver of subrogation rights with respect to the particular insurance involved.

29. CANCELLATION OF INSURANCE; INCREASE IN INSURANCE RATES. Lessee shall not do, bring, or keep anything in or about the Premises that will cause a cancellation of any insurance covering the Premises

29.1 If the rate of any insurance carried by Lessor is increased as a result of Lessee's use, Lessee shall pay to Lessor within ten days before the date Lessor is obligated to pay a premium on the insurance, or within ten days after Lessor delivers to Lessee a certified statement from Lessor's insurance carrier stating that the rate increase was caused solely by an activity of Lessee on the Premises as permitted in this Lease, whichever date is later, a sum equal to the difference between the original premium and the increased premium.

30. SURRENDER. The voluntary or other surrender of this Lease by Lessee, or a mutual cancellation thereof, shall not work a merger and shall, at the option of Lessor, terminate all or any existing subtenancies or may, at the option of Lessor, operate as an assignment to Lessor of any or all of such subtenancies.

31. ATTORNEYS' FEES. If either party to this Lease brings an action to enforce the terms hereof or declare rights hereunder the prevailing party in such action shall be entitled to reasonable attorneys' fees as fixed by the Court incurred in the trial or appeal of such matter.

32. NOTICE TO LESSEE. All notices to be given to Lessee including any notice referred to in §1162 of the California Code of Civil Procedure may be given in writing and served personally or by depositing the same in the United States mail, postage prepaid, and addressed to Lessee at said Premises, whether or not Lessee has departed from, abandoned or vacated said Premises.

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33. NOTICE TO LESSOR. All notices to be given to Lessor shall be deemed given if and when mailed by certified or registered mail, postage prepaid, addressed to Lessor at the following address: 2 Magnolia Ave., San Anselmo CA 94960.

34. WAIVER. The waiver by Lessor of any breach of any term, covenant or condition herein contained shall not be deemed to be a waiver of any subsequent breach of any term, covenant or conditions hereof.

35. HOLDING OVER. If Lessee holds over after the termination of this Lease, Lessee shall become a tenant from month to month only upon each and all of the terms herein provided as may be applicable to such month-to-month tenancy and any such holding over shall not constitute an extension of this Lease. During such holding over, Lessee shall pay rent at a monthly rate equal to the monthly rent being paid during the last year of this Lease.

36. LATE CHARGES. Lessee acknowledges that late payment by Lessee to Lessor of rent will cause Lessor to incur costs not contemplated by this Lease, the exact amount of such costs being extremely difficult and impracticable to fix. Such costs include, without limitation, processing and accounting charges and late charges that may be imposed on Lessor by the terms of any encumbrance and note secured by any encumbrance covering the Premises. Therefore, if any installment of rent due from Lessee is not received by Lessor (or postmarked) within five (5) days of its due date, Lessee shall pay to Lessor an additional sum of ten percent (10%) of the overdue rent as a late charge. The parties agree that this late charge represents a fair and reasonable estimate of the costs that Lessor will incur by reason of late payment by Lessee. Acceptance of any late charge shall not constitute a waiver of Lessee's default with respect to the overdue amount, or prevent Lessor from exercising any of the other rights and remedies available to Lessor.

37. INTEGRATED AGREEMENT; MODIFICATION. This Lease contains all agreements of the parties; there are no oral agreements and this Lease cannot be amended or modified except by a written agreement.

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38. HAZARDOUS MATERIALS. Lessor and Lessee agree as follows with respect to the existence or "use" of "hazardous materials" (as hereinafter defined) on the Premises:

38.1 Lessee, at Lessee's sole cost, shall comply with all laws, regulations and requirements relating to the storage, use, handling, treatment or disposal of hazardous materials.

38.2 Lessee agrees that Lessee will not allow any hazardous materials to be placed or accumulate on the leased property by either Lessee, its agents, employees or invitees.

38.3 Lessee agrees that Lessee will be responsible for any hazardous materials placed on the property (starting from the time Lessee first occupies the property as Lessee) by Lessee, Lessee's agents, employees, contractors, licensees or invitees or if any materials are placed on the Premises, Lessee shall take such action as may be necessary to clean up such contamination.

38.4 As used herein the term "hazardous materials" means any hazardous or toxic substance, material or waste the storage, use or disposition of which is or becomes regulated by any local or regional governmental authority, the State of California, or the United States Government.

39. OPTION TO RENEW. Lessee is given the option to extend the term of this Lease for one (1) additional three (3) year period following the expiration of the initial term, provided Lessee has not been late in payment of monthly rent (resulting in the service of a three-day notice) more than five (5) times during the initial term or the first extended term of this Lease. The option to renew is conditioned by giving notice of exercise of the option ("Option Notice") to Lessor at least (9) nine months but not more than twelve (12) months before the expiration of the initial term or any extended term, provided that, if Lessee is in default on the date of giving the Option Notice, the Option Notice shall be ineffective, or if Lessee is in default on the date the extended term is to commence, the extended term shall not commence and this Lease shall expire at the end of the initial term or first extended term. If notification of Lessee's intention to exercise said option is not so given and received, this option shall automatically expire. The monthly rent for the extended term shall be payable as follows:

39.1 Within thirty (30) days after Lessee exercises the option to renew this lease, and prior to the commencement of the extended term, the parties shall meet and determine whether or not they can agree upon the new monthly rent based on the fair market rental value for the premises at the time extended term is to commence. In the event the parties cannot agree on the new monthly rent, the monthly rent for the extended period shall be the prevailing fair market rental value for the San Anselmo Avenue area, as determined by appraisal described as follows. However, in no event shall the monthly rent for the extended term be less than the monthly rent paid during the last year of the initial term.

39.2 Within ten (10) days after the determination by the parties that they cannot agree upon a mutual agreeable fair market rental value, each party shall select a licensed real estate broker familiar with the San Anselmo Avenue area and commercial rents in said area. The two (2) brokers shall then meet within twenty (20) days thereafter in order to determine the prevailing fair market rental for the San Anselmo Avenue area. In the event the two (2) selected real estate brokers cannot mutually agree upon the prevailing fair market rental value for the San Anselmo Avenue area, they shall then select a third broker, and the majority of appraisals of value and the average of the three appraisals of value by the three brokers shall then establish and constitute the prevailing fair market rental. Provided, however, should the appraisal of any one of the brokers selected by the parties differ by more than ten percent (10%) from the appraisal of the third (3 ^rd ) broker, such appraisal shall be excluded from consideration and the average of the two remaining appraisals shall constitute the prevailing fair market rental. "Appraisal" or "Opinion" are used in this subparagraph shall be calculated on the basis of price per square foot, modified gross. Each party should bear the cost of the broker which he/she retains pursuant to this paragraph and one-half (1/2) of the cost of the third broker. The fair market rental value, as determined by said brokers, shall be the monthly rental payable commencing the first year of the extended term. Notwithstanding the foregoing, the monthly rent as determined by said brokers shall not be less than the monthly rent paid during the last year of the initial term.

39.3 The monthly rental payable during the ensuing years of the extended term, i.e., years two (2) through five (5) shall be adjusted pursuant to the change and the consumer price index as set forth in paragraph 5.2.

40. CONFIDENTIALITY. The terms and conditions of this Lease and the negotiations shall remain confidential between the parties.

41. PROVISIONS ARE COVENANTS AND CONDITIONS. All provisions whether covenants or conditions on the part of Lessee shall be deemed to be both covenants and conditions.

42. SIGNS. Lessee shall be permitted to place a sign on the front and/or side of the building, provided Lessee first receives Lessor's consent and Lessee complies with all local statutes, ordinances, and regulations.

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43. FL OODING : It is acknowledged by the Lessee that the Premises experienced flooding in the winter of 1982 and 2005.

44. PREMISES: It is understood and agreed upon between Lessor and Lessee that the final square footage of the Premises and the common area shall be arrived at by Lessor's architect.

45. POSSESSION: If the Landlord, for any reason whatsoever, cannot deliver possession of the said Premises to the Tenant at the commencement of the term hereof, this Lease shall not be void or voidable, nor shall Landlord be liable to Tenant for any loss or damage resulting therefrom, nor shall the expiration date of the above term be in any way extended, but in that event, all rent shall be abated during the period between the commencement of said term and the time when Landlord delivers possession.

In the event that Landlord shall permit Tenant to occupy the Premises prior to the commencement date of the term, such occupancy shall be subject to all the provisions of this Lease. Said early possession shall not advance the termination date hereinabove provided.

46. OBSTRUCTIONS: Lessee shall not obstruct the sidewalks and paved areas adjacent to the demised premises or any portion of the property on which the demised premises are situated, excepting those areas assigned for the Lessee's loading or storage.

47. AGREEMENT WITH THE CITY OF SAN ANSELMO: Lessee takes possession subject to the provision of that certain Contract of Indemnification (January 9, 1973) with the City of San Anselmo, copy of which is attached hereto, recorded in Marin County in Book 2660 at page 286. This applies only to leases in the 540 San Anselmo Ave. building.

48. SUCCESSORS: All the terms, covenants and conditions hereof shall be binding upon and inure to the benefit of the heirs, executors, administrators, successors and assigns of the parties hereto, provided that nothing in this paragraph shall be deemed to permit any assignment, subletting, occupancy or use contrary to the provisions of paragraph 23.

49. Lessor shall negotiate a mutual agreement with Cora Nelson for dual use of the Premises. That agreement shall describe but not be limited to the space to be used, time of use, cost, and manner in which the space can be used.

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IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease the day and year first hereinabove written.

LESSOR:	LESSEE:
Four Kays	Michael Hinshaw

JOHN KAUFMAN
John Kaufman	BY: MICHAEL HINSHAW
	__________________________________, Its President

Date: 6/30/14	Date: 6/30/14

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EXHIBIT 31.1

SARBANES-OXLEY SECTION 302(a) CERTIFICATION

I, Michael Hinshaw, certify that:

1.	I have reviewed this Form 10-Q for the period ended June 30, 2014 of Touchpoint Metrics, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	July 31, 2014	MICHAEL HINSHAW
		Michael Hinshaw
		Principal Executive Officer and Principal Financial Officer

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. Section 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Touchpoint Metrics, Inc. (the "Company") on Form 10-Q for the period ended June 30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the "report"), I, Michael Hinshaw, Chief Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

	(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

	(2)	The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated this 31st day of July, 2014.

	MICHAEL HINSHAW
	Michael Hinshaw
	Chief Executive Officer and Chief Financial Officer