Exhibit 10.20
 
THIS PROMISSORY NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, OR QUALIFIED UNDER ANY STATE
SECURITIES LAWS. THIS PROMISSORY NOTE MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR QUALIFICATION OR AN EXEMPTION THEREFROM UNDER
SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
 
PROMISSORY NOTE

$1,622,863
 
June 30, 2013
   
Salt Lake City, Utah

 
FOR VALUE RECEIVED, ReposiTrak, Inc., a Utah corporation, (the “Company”),
promises to pay to the order of Park City Group, Inc., or its registered assigns
(“Holder”), the principal sum of One million Six hundred Twenty-two thousand
Eight hundred Sixty-three Dollars ($1,622,863), on the earlier to occur of April
30, 2015 or the date of termination of that certain Omnibus Subscription,
Management and Option Agreement, dated as of the date hereof, by and between the
Company and Holder (the “Subscription Agreement”) (the “Maturity Date”),
together with interest thereon as provided in Section 2 of this Promissory Note
(this “Note”).
 
1. Definitions. For purposes of this Note, the following terms shall have the
following meanings:
 
“Business Day” means any day which is not a Saturday or Sunday or a legal
holiday on which national banks are authorized or required to be closed.
 
“Governmental Authority” means any federal, state, local or other governmental
department, commission, board, bureau, agency or other instrumentality or
authority, domestic or foreign, exercising executive, legislative, judicial,
regulatory or administrative authority or functions of or pertaining to
government.
 
“Material Adverse Effect” means any event, matter, condition or circumstance
which (i) has or would reasonably be expected to have a material adverse effect
on the business, properties, operations, condition (financial or otherwise) or
prospects of the Company and its Subsidiaries, taken as a whole; (ii) would
materially impair the ability of the Company or any other Person to perform or
observe their respective obligations under or in respect of this Note;
(iii) would materially impair the rights and remedies of Holder under this Note;
or (iv) affects the legality, validity, binding effect or enforceability of this
Note.
 
“Organic Document” means, relative to any Person, its articles or certificate of
incorporation, or certificate of limited partnership or formation, its bylaws,
partnership or operating agreement or other organizational documents, and all
stockholders agreements, voting trusts and similar arrangements applicable to
any of its capital stock, partnership interests or other ownership interests.
 
“Outstanding Balance” means the outstanding principal balance of this Note
together with all accrued but unpaid interest hereunder.
 
“Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any department, agency
or political subdivision thereof.
 
       2. Payment of Interest, Warrant.
 
(a) Interest Generally. Interest shall accrue on the outstanding principal
amount of this Note at a rate equal to 8% per annum (computed on the basis of
actual calendar days elapsed and a year of 365 days) payable in kind, as an
addition to the outstanding principal amount due hereunder, monthly in arrears
on the last day of each calendar month (each such date, an “Interest Payment
Date”). The Company may elect to pay interest in cash on the outstanding
principal balance of this Note on any Interest Payment Date.

 
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(b) Default Interest. Upon the occurrence and during the continuance of any
Event of Default, the Outstanding Balance under this Note shall bear interest at
a rate per annum equal to 2% plus the rate otherwise applicable to this Note.
Such incremental interest (i.e., the additional 2% added during the continuance
of an Event of Default) shall be payable in cash.
 
(c) Warrant.   As additional consideration for the issuance of this Note, the
Company shall issue to Holder a warrant exercisable for 300,000 shares of the
Company’s Common Stock (the “Warrant”).  The Warrant shall have a term of nine
years from the date of issuance, and shall have an aggregate exercise price of
$350,000, or $1.17 per share.
 
3. Payments.
 
(a) Form of Payment. All payments of cash interest and principal shall be in
lawful money of the United States of America by a check drawn on the account of
the Company and sent via overnight courier service to Holder at such address as
previously provided to the Company in writing (which address, in the case of
Holder as of the date of issuance hereof, shall initially be the address for
Holder as set forth in this Note); provided that Holder may elect to receive a
payment of cash via wire transfer of immediately available funds by providing
the Company with prior written notice setting out such request and Holder’s wire
transfer instructions.  All payments shall be applied first to accrued interest,
and thereafter to principal.
 
(b) Prepayment. The Company shall have the right to prepay the Outstanding
Balance owed under this Note in whole or in part at any time.

4. Representations and Warranties. The Company hereby makes the following
representations and warranties to Holder:
 
(a) Organization, Good Standing and Qualification. The Company is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, and has all requisite power and authority to
execute, deliver and perform its obligations under this Note. The Company is
qualified to do business and is in good standing in each jurisdiction in which
the failure so to qualify or be in good standing would have a Material Adverse
Effect, and has all requisite power and authority to own its assets and carry on
its business.
 
(b) Corporate Power and Authorization; Consents. The execution, delivery and
performance by the Company of this Note have been duly authorized by all
necessary action of the Company and do not and will not (i) contravene the terms
of the Company’s Organic Documents; (ii) result in a breach of, or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any lease, instrument, contract or other agreement to which the Company is a
party or by which its properties may be bound or affected; (iii) necessitate the
consent, approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any Governmental Authority or any third
party; or (iv) violate any provision of any law, rule, regulation, order,
judgment, decree or the like binding on or affecting the Company, except in the
case of each of clauses (ii), (iii) and (iv), such as would not result in a
Material Adverse Effect.
 
(c) Enforceability. This Note constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms
 
5. Covenants. So long as any indebtedness under this Note remains outstanding,
the Company shall provide to Holder, as soon as possible and in any event within
three (3) days after the occurrence thereof, written notice of an Event of
Default, which notice sets forth the details of such event and the action which
is proposed to be taken by the Company with respect thereto.

 
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6. Default.
 
(a) Events of Default. For purposes of this Note, any of the following events
which shall occur shall constitute an “Event of Default”:
 
(i) any indebtedness under this Note is not paid when and as the same shall
become due and payable, whether at maturity, by acceleration, thirty (30) days
following notice of prepayment or otherwise;
 
(ii) default shall occur in the observance or performance of the covenant,
obligation or agreement of the Company contained in Section 5 above, any other
provision of this Note, or any term or condition set forth in the Subscription
Agreement, and such default shall continue uncured for a period of thirty
(30) days;
 
(iii) the Company shall (A) apply for or consent to the appointment of a
receiver, trustee, custodian or liquidator of itself or any part of its
property, (B) become subject to the appointment of a receiver, trustee,
custodian or liquidator for itself or any part of its property, (C) make an
assignment for the benefit of creditors, (D) institute any proceedings under the
United States Bankruptcy Code or any other federal or state bankruptcy,
reorganization, receivership, insolvency or other similar law affecting the
rights of creditors generally, or file a petition or answer seeking
reorganization or an arrangement with creditors to take advantage of any
insolvency law, or file an answer admitting the material allegations of a
bankruptcy, reorganization or insolvency petition filed against it, or
(E) become subject to any involuntary proceedings under the United States
Bankruptcy Code or any other federal or state bankruptcy, reorganization,
receivership, insolvency or other similar law affecting the rights of creditors
generally; or
 
(iv) the Company shall liquidate, wind up or dissolve (or suffer any
liquidation, wind-up or dissolution), or take any action to authorize any of
such actions or events;
 
 (b) Consequences of Events of Default.
 
(i) If an Event of Default shall occur for any reason, whether voluntary or
involuntary, and the same shall be continuing, Holder may, upon notice or demand
by delivering a default notice to the Company (“Default Notice”), declare the
Outstanding Balance under this Note to be due and payable, whereupon the
Outstanding Balance under this Note shall be and become immediately due and
payable, and the Company shall immediately pay to Holder the entire Outstanding
Balance. The Parties agree and acknowledge that the Note shall not be in
default, and the entire Outstanding Balance payable Holder hereunder shall not
be due and payable, unless and until the Holder hereof has delivered a Default
Notice to the Company.  Upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Company under the United States Bankruptcy
Code, then the Outstanding Balance under this Note shall automatically be due
immediately without notice of any kind. The Company agrees to pay Holder all
out-of-pocket costs and expenses incurred by Holder (including attorney’s fees)
in connection with the enforcement or protection of its rights in relation to
this Agreement, including any suit, action, claim or other activity of Holder to
collect the Outstanding Balance under this Note or any portion thereof, or in
connection with the transactions contemplated hereby.
 
(ii)  Notwithstanding the foregoing Section 6(b)(i), if the Default Notice is
due to the failure to pay any indebtedness under this Note as required by
Section 6(a)(i), the Company shall have a one-time right of ninety (90) days
following the date in which a payment under this Note is due in which to cure
the Event of Default by the payment to the Holder of at least twenty-five
percent (25%) of the Outstanding Balance due Holder under the terms of this Note
(the “Cure Amount”).  If after the payment of the Cure Amount, there remains an
Outstanding Balance, the Maturity Date shall be automatically extended for one
year from the date of payment of the Cure Amount.
 
(iii) Holder shall also have any other rights that Holder may have been afforded
under any contract or agreement at any time and any other rights that Holder may
have pursuant to applicable law.

 
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7. Lost, Stolen, Destroyed or Mutilated Note. In case this Note shall be
mutilated, lost, stolen or destroyed, the Company shall issue a new Note of like
date, tenor and denomination and deliver the same in exchange and substitution
for and upon surrender and cancellation of such mutilated Note, or in lieu of
this Note being lost, stolen or destroyed, upon receipt of evidence satisfactory
to the Company of such loss, theft or destruction.

8. Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH
CANNOT BE WAIVED, THE COMPANY (BY ITS EXECUTION HEREOF) AND HOLDER (BY ITS
ACCEPTANCE OF THIS NOTE) WAIVES AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER
AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN
RESPECT OF ANY ISSUE OR ACTION ARISING OUT OF OR BASED UPON OR RELATING TO THIS
NOTE OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE TRANSACTIONS
CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING.
 
9. Governing Law. This Note shall be deemed to be a contract made under the laws
of the State of Utah and for all purposes shall be governed by, construed under,
and enforced in accordance with the laws of the State of Utah.
 
10. Amendment and Waiver. Any term of this Note may be amended and the
observance of any term of this Note may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and Holder.
 
11. Notices. Any notice or other communication in connection with this Note may
be made and is deemed to be given as follows: (i) if in writing and delivered in
person or by courier, on the date when it is delivered; (ii) if by facsimile,
when received at the correct number (proof of which shall be an original
facsimile transmission confirmation slip or equivalent); or (iii) if sent by
certified or registered mail or the equivalent (return receipt requested), on
the date such mail is delivered, unless the date of that delivery is not a
Business Day or that communication is delivered on a Business Day but after the
close of business on such Business Day in which case such communication shall be
deemed given and effective on the first following Business Day. Any such notice
or communication given pursuant to this Note shall be addressed to the intended
recipient at its address or number (which may be changed by either party at any
time) specified as follows:

If to the Company:
 
ReposiTrak, Inc.
299 S. Main Street, Ste. 2300
Salt Lake City, UT 84111
Facsimile No.:
Telephone No.:  _____________
Attention: Chief Executive Officer
   
With a copy to:
 
 
____________________
____________________
____________________
   
If to Holder:
 
 
Park City Group, Inc.
299 S. Main Street
Suite 2370
Salt Lake City, Utah 84111
Facsimile No.: 435-645-2100
Telephone No.:

 
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With a copy to:
 
Disclosure Law Group
501 West Broadway, Suite 800
San Diego, CA 92101
Facsimile No.: 619-330-2101
Telephone No.: 619-795-1134
Attn:  Daniel W. Rumsey, Managing Partner

 
12. Severability. If at any time any provision of this Note shall be held by any
court of competent jurisdiction to be illegal, void or unenforceable, such
provision shall be of no force and effect, but the illegality or
unenforceability of such provision shall have no effect upon the legality or
enforceability of any other provision of this Note.
 
13. Assignment. The provisions of this Note shall be binding upon and inure to
the benefit of each of the Company and Holder and their respective successors
and assigns, provided that the Company shall not have the right to assign its
rights and obligations hereunder or any interest herein. This Note may not be
endorsed, assigned and transferred in whole or in part by Holder to any other
Person without the written consent of the Company.
 
14. Remedies Cumulative; Failure or Indulgence Not a Waiver. The remedies
provided in this Note shall be cumulative and in addition to all other remedies
available under this Note. No failure or delay on the part of Holder in the
exercise of any power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other right,
power or privilege.
 
15. Entire Agreement. This Note contains the entire understanding of the parties
with respect to the subject matter hereof and supersedes all prior agreements,
understandings, discussions and representations, oral or written, with respect
to such matters, which the parties acknowledge have been merged into this Note.
 
16. Waiver of Notice. To the extent permitted by law, the Company hereby waives
demand, notice, protest and all other demands and notices in connection with the
delivery, acceptance, performance, default or enforcement of this Note.
 
IN WITNESS WHEREOF, each of the undersigned has caused this Note to be duly
executed by its officers, thereunto duly authorized as this, the 20th day of
September, 2013.

   
REPOSITRAK, INC.
       
By:
 
/s/ Rich McKeown
 
Name:
 
Rich McKeown
 
Title:
 
CEO/ President
     
 
PARK CITY GROUP, INC.
     
By:
 
/s/ Randy Fields
 
Name:
 
Randy Fields
 
Title:
 
Chief Executive Officer