Document:

Exhibit 10.1

 

Stock Purchase Agreement

 

The attached Stock Purchase Agreement is identical in all material respects for each of the 100 accredited investors who participated in the offering except as to the parties thereto, the dates of execution, and other investment specific details. See table below.

 

  

	
            Date
 	
            Shares
 	
            $ Amount
 	
            Exact Name in Which Title is to be Held
 	
            Authorized Signature
 	
            Print Name of Signatory and Capacity in Which Signed if an Entity
 	
            Signature (if Joint Tenants or Tenants in Common)
 	
            Print Name of above Signatory
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
            6/20/2007
 	
            50,000
 	
            $500,000.00 
 	
            Hillson Partners LP
 	
            /s/ Daniel H Abramowitz
 	
            Daniel H Abramowitz, President of GP
 	
             
 	
             
 
	
            6/22/2007
 	
            40,000
 	
            $400,000.00 
 	
            Meadowbrook Opportunity Fund LLC
 	
            /s/ Michael Ragins
 	
            Michael Ragin, Manager
 	
             
 	
             
 
	
            6/11/2007
 	
            30,000
 	
            $300,000.00 
 	
            London Family Trust
 	
            /s/ Robert S London
 	
            Robert S London
 	
            /s/ Heath H London
 	
            Heath H London
 
	
            6/5/2007
 	
            25,000
 	
            $250,000.00 
 	
            Robert W Allen & Susan M Allen JTWROS
 	
            /s/ Robert W Allen
 	
            Robert W Allen
 	
            /s/ Susan M Allen
 	
            Susan M Allen
 
	
            6/20/2007
 	
            25,000
 	
            $250,000.00 
 	
            Neal Goldman
 	
            /s/ Neal Goldman
 	
            Neal Goldman
 	
             
 	
             
 
	
            6/8/2007
 	
            25,000
 	
            $250,000.00 
 	
            E H Arnold
 	
            /s/ Edward H Arnold
 	
            Edward H Arnold
 	
             
 	
             
 
	
            6/6/2007
 	
            25,000
 	
            $250,000.00 
 	
            Michael N Taglich
 	
            /s/ Michael N Taglich
 	
            Michael N Taglich
 	
             
 	
             
 
	
            6/7/2007
 	
            25,000
 	
            $250,000.00 
 	
            Robert F Taglich
 	
            /s/ Robert F Taglich
 	
            Robert F Taglich
 	
             
 	
             
 
	
            6/13/2007
 	
            20,000
 	
            $200,000.00 
 	
            Shadow Capital LLC Attn B Kent Garlinghouse
 	
            /s/ B Kent Garlinghouse
 	
            B Kent Garlinghouse, Manager
 	
             
 	
             
 

 

 

 

 

 

 

	
            6/1/2007
 	
            20,000
 	
            $200,000.00 
 	
            John R Bertsch Trust Dtd 12/4/2004 John R Bertsch Trustee
 	
            /s/ John R Bertsch 
 	
            John R Bertsch, Trustee
 	
             
 	
             
 
	
            6/19/2007
 	
            15,000
 	
            $150,000.00 
 	
            Sara Bower Penn TTEE Sara Bower Penn Living Trust Dtd 4/30/02
 	
            /s/ Sara J Penn
 	
            Sara J Penn, Trustee
 	
             
 	
             
 
	
            6/4/2007
 	
            15,000
 	
            $150,000.00 
 	
            Dennis Fortin
 	
            /s/ Dennis Fortin
 	
            Dennis Fortin
 	
             
 	
             
 
	
            6/19/2007
 	
            12,500
 	
            $125,000.00 
 	
            Susan Thorstenn & Magnus Thorstenn JTWROS
 	
            /s/ Magnus G Thorstenn
 	
            Magnus G Thorstenn
 	
            /s/ Susan E Thorstenn
 	
            Susan E Thorstenn
 
	
            6/15/2007
 	
            10,500
 	
            $105,000.00 
 	
            Paul Seid
 	
            /s/ Paul Seid
 	
            Paul Seid
 	
             
 	
             
 
	
            6/21/2007
 	
            10,000
 	
            $100,000.00 
 	
            John L Palazzola
 	
            /s/ John L Palazzola
 	
            John L Palazzola
 	
             
 	
             
 
	
            6/21/2007
 	
            10,000
 	
            $100,000.00 
 	
            Videotape Products, Inc
 	
            /s/ John L Palazzola
 	
            John L Palazzola, President
 	
             
 	
             
 
	
            6/12/2007
 	
            10,000
 	
            $100,000.00 
 	
            Clyde Berg
 	
            /s/ Clyde Berg
 	
            Clyde Berg
 	
             
 	
             
 
	
            6/19/2007
 	
            10,000
 	
            $100,000.00 
 	
            Lighthouse Capital LLC
 	
            /s/ Lloyd B Emberg
 	
            Lloyd B Emberg, Managing Member
 	
             
 	
             
 
	
            6/20/2007
 	
            10,000
 	
            $100,000.00 
 	
            Hillson Private Partners II, LLLP
 	
            /s/ Daniel H Abramowitz
 	
            Daniel H Abramowitz, President of GP
 	
             
 	
             
 
	
            6/21/2007
 	
            7,500
 	
            $75,000.00 
 	
            Sandra L Brecher
 	
            /s/ Sandra L Brecher
 	
            Sandra L Brecher
 	
             
 	
             
 
	
            6/5/2007
 	
            6,500
 	
            $65,000.00 
 	
            William C Steele TTEE William C Steele Living Trust UAD 5-11-98
 	
            /s/ William C Steele
 	
            William C Steele
 	
             
 	
             
 
	
            6/18/2007
 	
            6,000
 	
            $60,000.00 
 	
            Keith Becker
 	
            /s/ Keith Becker
 	
            Keith Becker
 	
             
 	
             
 
	
            6/20/2007
 	
            6,000
 	
            $60,000.00 
 	
            Glenn Schabel
 	
            /s/ Glenn Schabel
 	
            Glenn Schabel
 	
             
 	
             
 
	
            6/7/2007
 	
            5,600
 	
            $56,000.00 
 	
            Alvin R Bonnette Rev Trust U A Dtd 1/31/85 Alvin R Bonnette Trustee
 	
            /s/ Alvin R Bonnette
 	
            Alvin R Bonnette, Trustee
 	
             
 	
             
 
	
            6/7/2007
 	
            5,000
 	
            $50,000.00 
 	
            Thomas J Bean
 	
            /s/ Thomas J Bean
 	
            Thomas J Bean
 	
             
 	
             
 

 

 

 

 

 

 

	
            6/7/2007
 	
            5,000
 	
            $50,000.00 
 	
            Robert G Moussa
 	
            /s/ Robert G Moussa
 	
            Robert G Moussa
 	
             
 	
             
 
	
            6/7/2007
 	
            5,000
 	
            $50,000.00 
 	
            Biscayne National Corp
 	
            /s/ Milton J Wallace
 	
            Milton J Wallace, President
 	
             
 	
             
 
	
            6/13/2007
 	
            5,000
 	
            $50,000.00 
 	
            Albert Esposito & Margaret Esposito JTWROS
 	
            /s/ Albert J Esposito
 	
            Albert J Esposito
 	
            /s/ Margaret Esposito
 	
            Margaret Esposito
 
	
            6/18/2007
 	
            5,000
 	
            $50,000.00 
 	
            William P Kaiser
 	
            /s/ William P Kaiser
 	
            William P Kaiser
 	
             
 	
             
 
	
            6/15/2007
 	
            5,000
 	
            $50,000.00 
 	
            Peder G Larsen and Margaret S Larsen JTWROS
 	
            /s/ Margaret S Larsen
 	
            Margaret S Larsen
 	
            /s/ Peder G Larsen
 	
            Peder G Larsen
 
	
            6/19/2007
 	
            5,000
 	
            $50,000.00 
 	
            Mike Taglich POA Tag/Kent Partnership F/B/O Garlinghouse/M Taglich B Taglich
 	
            /s/ Michael Taglich
 	
            Michael Taglich
 	
             
 	
             
 
	
            6/19/2007
 	
            4,200
 	
            $42,000.00 
 	
            John P Junge & Sue H Junge TTEE FBO Junge Revocable Trust UAD 12-9-91
 	
            /s/ John P Junge
 	
            John P Junge, Trustee
 	
             
 	
             
 
	
            6/10/2007
 	
            4,200
 	
            $42,000.00 
 	
            RFS Trust U/A/D 12/30/96 Richard F Sherman TTEE
 	
            /s/ Richard F Sherman
 	
            Richard F Sherman
 	
             
 	
             
 
	
            6/11/2007
 	
            4,000
 	
            $40,000.00 
 	
            Richard A Kraemer Trust U A/D 12/12/96 Richard A Kraemer TTEE
 	
            /s/ Richard A Kraemer
 	
            Richard A Kraemer, Trustee
 	
             
 	
             
 
	
            6/13/2007
 	
            4,000
 	
            $40,000.00 
 	
            David L Allen 
 	
            /s/ David L Allen 
 	
            David L Allen 
 	
             
 	
             
 
	
            6/17/2007
 	
            4,000
 	
            $40,000.00 
 	
            Robert W Allen Jr
 	
            /s/ Robert W Allen Jr
 	
            Robert W Allen Jr
 	
             
 	
             
 
	
            6/5/2007
 	
            3,000
 	
            $30,000.00 
 	
            Mark Ravich
 	
            /s/ Mark Ravich
 	
            Mark Ravich
 	
             
 	
             
 
	
            6/11/2007
 	
            3,000
 	
            $30,000.00 
 	
            Frank M Durrance
 	
            /s/ Frank M Durrance
 	
            Frank M Durrance
 	
             
 	
             
 

 

 

 

 

 

 

	
            6/13/2007
 	
            3,000
 	
            $30,000.00 
 	
            Kenneth Bodenstein TR Kenneth Bodenstein TTEE Dtd 7/30/84
 	
            /s/ Kenneth A Bodenstein
 	
            Kenneth A Bodenstein, Trustee
 	
             
 	
             
 
	
            5/12/2007
 	
            3,000
 	
            $30,000.00 
 	
            Brian F Leonard and Martha E Leonard JT TEN WROS
 	
            /s/ Brian F Leonard
 	
            Brian F Leonard
 	
            /s/ Martha E Leonard
 	
            Martha E Leonard
 
	
            6/19/2007
 	
            3,000
 	
            $30,000.00 
 	
            Mark C Ladendorf & Debra Ladendorf JTWROS 
 	
            /s/ Mark C Ladendorf
 	
            Mark C Ladendorf
 	
            /s/ Debra L Ladendorf
 	
            Debra L Ladendorf
 
	
            6/5/2007
 	
            3,000
 	
            $30,000.00 
 	
            B Roy Smith & Joyce L Smith JTWROS
 	
            /s/ Roy Smith
 	
            Roy Smith
 	
            /s/ Joyce Smith
 	
            Joyce Smith
 
	
            6/22/2007
 	
            2,800
 	
            $28,000.00 
 	
            Arthur H Finnel
 	
            /s/ Arthur H Finnel
 	
            Arthur H Finnel
 	
             
 	
             
 
	
            6/21/2007
 	
            2,800
 	
            $28,000.00 
 	
            Harvey Bibicoff and Jacqueline Bibicoff Trustees of the Bibicoff Family Trust Dtd May 16, 2000
 	
            /s/ Harvey Bibicoff
 	
            Harvey Bibicoff, Trustee
 	
             
 	
             
 
	
            6/1/2007
 	
            2,800
 	
            $28,000.00 
 	
            Michael P Hagerty
 	
            /s/ Michael P Hagerty
 	
            Michael P Hagerty
 	
             
 	
             
 
	
            6/5/2007
 	
            2,800
 	
            $28,000.00 
 	
            Robert Whitfield Donegan
 	
            /s/ Robert W Donegan
 	
            Robert W Donegan
 	
             
 	
             
 
	
            6/14/2007
 	
            2,800
 	
            $28,000.00 
 	
            Stephen Friedland and Linda Friedland JTWROS
 	
            /s/ Stephen Friedland
 	
            Stephen Friedland
 	
            /s/ Linda Friedland
 	
            Linda Friedland
 
	
            6/20/2007
 	
            2,800
 	
            $28,000.00 
 	
            James B Deutsch & Deborah M Deutsch JTWROS
 	
            /s/ James B Deutsch
 	
            James B Deutsch
 	
            /s/ Deborah M Deutsch
 	
            Deborah M Deutsch
 
	
            6/5/2007
 	
            2,800
 	
            $28,000.00 
 	
            Donald McCulloch & Jacqueline McCulloch JTWROS
 	
            /s/ Donald McCulloch
 	
            Donald McCulloch
 	
            /s/ Jacqueline McCulloch
 	
            Jacqueline McCulloch
 
	
            6/4/2007
 	
            2,500
 	
            $25,000.00 
 	
            Raymond M Beebe & Joan D Beebe JTWROS
 	
            /s/ Raymond M Beebe
 	
            Raymond M Beebe
 	
            /s/ Joan P Beebe
 	
            Joan P Beebe
 

 

 

 

 

 

 

	
            6/14/2007
 	
            2,500
 	
            $25,000.00 
 	
            Albert C Esposito Brooke Crowley Esposito JT TEN
 	
            /s/ Albert C Esposito
 	
            Albert C Esposito
 	
            /s/ Brooke V Crowley
 	
            Brooke V Crowley
 
	
            6/14/2007
 	
            2,500
 	
            $25,000.00 
 	
            Dr Baldev S Brar & Dr Gurmukh K Brar JT TENWROS
 	
            /s/ Baldev S Brar
 	
            Baldev S Brar
 	
            /s/ Gurmukh K Brar
 	
            Gurmukh K Brar
 
	
            6/21/2007
 	
            2,500
 	
            $25,000.00 
 	
            Robert G Paul
 	
            /s/ Robert G Paul
 	
            Robert G Paul
 	
             
 	
             
 
	
            6/4/2007
 	
            2,500
 	
            $25,000.00 
 	
            Applebaun Family LTD Partners Irving Applebaum General Ptnr
 	
            /s/ Irvine Applebaum 
 	
            Irvine Applebaum, General Partner
 	
             
 	
             
 
	
            6/11/2007
 	
            2,100
 	
            $21,000.00 
 	
            IRA FBO Russel J Bernier Pershing LLC as Custodian Rollover Account
 	
            /s/ Russell J Bernier
 	
            Russell J Bernier
 	
             
 	
             
 
	
            6/5/2007
 	
            2,000
 	
            $20,000.00 
 	
            Lawrence Kane
 	
            /s/ Larry Kane
 	
            Larry Kane
 	
             
 	
             
 
	
            6/8/2007
 	
            2,000
 	
            $20,000.00 
 	
            SEP FBO John Stevens Pershing LLC as Custodian
 	
            /s/ John Stevens
 	
            John Stevens
 	
             
 	
             
 
	
            6/11/2007
 	
            2,000
 	
            $20,000.00 
 	
            T Mark Sledge
 	
            /s/ T Mark Sledge
 	
            T Mark Sledge
 	
             
 	
             
 
	
            6/12/2007
 	
            2,000
 	
            $20,000.00 
 	
            William Kehl
 	
            /s/ William W Kehl
 	
            William W Kehl
 	
             
 	
             
 
	
            6/5/2007
 	
            2,000
 	
            $20,000.00 
 	
            Angus Bruce Lauralee Bruce
 	
            /s/ Angus Bruce
 	
            Angus Bruce
 	
            /s/ Lauralee Bruce
 	
            Lauralee Bruce
 
	
            6/8/2007
 	
            1,500
 	
            $15,000.00 
 	
            SEP FBO Ronald C Hintz Pershing LLC as Custodian
 	
            /s/ Ronald C Hintz 
 	
            Ronald C Hintz 
 	
             
 	
             
 
	
            6/8/2007
 	
            1,500
 	
            $15,000.00 
 	
            IRA FBO Arthur Resnikoff Pershing LLC as Custodian Rollover Account
 	
            /s/ Arthur Resnikoff
 	
            Arthur Resnikoff
 	
             
 	
             
 

 

 

 

 

 

 

	
            6/5/2007
 	
            1,400
 	
            $14,000.00 
 	
            Jeffrey L Sadar & Barbara A Sadar JTWROS
 	
            /s/ Jeffrey L Sadar
 	
            Barbara A Sadar
 	
            /s/ Barbara A Sadar
 	
             
 
	
            6/6/2007
 	
            1,400
 	
            $14,000.00 
 	
            Terry E Hagen and Dawn R Hagen as JTWROS
 	
            /s/ Terry E Hagen
 	
            Terry E Hagen
 	
            /s/ Dawn R Hagen
 	
            Dawn R Hagen
 
	
            6/5/2007
 	
            1,400
 	
            $14,000.00 
 	
            Tad Wilson
 	
            /s/ Tad Wilson
 	
            Tad Wilson
 	
             
 	
             
 
	
            6/14/2007
 	
            1,400
 	
            $14,000.00 
 	
            Robert B Cashion
 	
            /s/ Robert B Cashion
 	
            Robert B Cashion
 	
             
 	
             
 
	
            6/18/2007
 	
            1,400
 	
            $14,000.00 
 	
            John W Crow
 	
            /s/ John W Crow
 	
            John W Crow
 	
             
 	
             
 
	
            6/16/2007
 	
            1,400
 	
            $14,000.00 
 	
            Wulf Paulick & Renate Paulick JTWROS
 	
            /s/ Wulf Paulick
 	
            Wulf Paulick
 	
            /s/ Renate Paulick
 	
            Renate Paulick
 
	
            6/15/2007
 	
            1,400
 	
            $14,000.00 
 	
            Steve Redmon & Brenda Redmon JT TEN WROS
 	
            /s/ Steve Redmon
 	
            Steve Redmon
 	
            /s/ Breda Redmon
 	
            Breda Redmon
 
	
            6/19/2007
 	
            1,400
 	
            $14,000.00 
 	
            Kenneth J Feroldi Nancy J Feroldi JTWROS
 	
            /s/ Nancy J Feroldi
 	
            Nancy J Feroldi
 	
            /s/ Kenneth J Feroldi
 	
            Kenneth J Feroldi
 
	
            6/19/2007
 	
            1,400
 	
            $14,000.00 
 	
            IRA FBO Angel Rosario Pershing LLC as Custodian Rollover Account
 	
            /s/ Angel Rosario
 	
            Angel Rosario
 	
             
 	
             
 
	
            6/19/2007
 	
            1,400
 	
            $14,000.00 
 	
            David J Larkworthy TOD Dtd 1/20/06
 	
            /s/ David Larkworthy
 	
            David Larkworthy
 	
             
 	
             
 
	
            6/20/2007
 	
            1,400
 	
            $14,000.00 
 	
            Samuel L Box & Lisa Marsh Box JT TEN WROS
 	
            /s/ Samuel L Box
 	
            Samuel L Box
 	
            /s/ Lisa M Box
 	
            Lisa M Box
 
	
            6/18/2007
 	
            1,400
 	
            $14,000.00 
 	
            Elliot D Cohen & Bonnie S Cohen JTWROS
 	
            /s/ Elliot D Cohen
 	
            Elliot D Cohen
 	
            /s/ Bonnie S Cohen
 	
            Bonnie S Cohen
 
	
            6/19/2007
 	
            1,400
 	
            $14,000.00 
 	
            Peter S Gold 
 	
            /s/ Peter S Gold
 	
            Peter S Gold
 	
             
 	
             
 
	
            6/21/2007
 	
            1,400
 	
            $14,000.00 
 	
            Ronald Courey
 	
            /s/ Ronald Courey
 	
            Ronald Courey
 	
             
 	
             
 
	
            6/5/2007
 	
            1,200
 	
            $12,000.00 
 	
            Paul Berko
 	
            /s/ Paul Berko
 	
            Paul Berko
 	
             
 	
             
 
	
            6/22/2007
 	
            1,000
 	
            $10,000.00 
 	
            David G Linville
 	
            /s/ David G Linville
 	
            David G Linville
 	
             
 	
             
 

 

 

 

 

 

 

	
            6/15/2007
 	
            1,000
 	
            $10,000.00 
 	
            Joseph F Domenice
 	
            /s/ Joseph F Domenice
 	
            Joseph F Domenice
 	
             
 	
             
 
	
            6/5/2007
 	
            1,000
 	
            $10,000.00 
 	
            Darrell Frost
 	
            /s/ Darrell Frost
 	
            Darrell Frost
 	
             
 	
             
 
	
            6/5/2007
 	
            1,000
 	
            $10,000.00 
 	
            Charles M Thompson
 	
            /s/ Charles M Thompson
 	
            Charles M Thompson
 	
             
 	
             
 
	
            6/7/2007
 	
            1,000
 	
            $10,000.00 
 	
            Dr Richard V Nuttall & Annetta Mets Nuttall JTWROS
 	
            /s/ Richard V Nuttall
 	
            Richard V Nuttall
 	
            /s/ Annetta Mets Nuttall
 	
            Annetta Mets Nuttall
 
	
            6/12/2007
 	
            1,000
 	
            $10,000.00 
 	
            Barbara Susca
 	
            /s/ Barbara Susca
 	
            Barbara Susca
 	
             
 	
             
 
	
            6/15/2007
 	
            1,000
 	
            $10,000.00 
 	
            Walter E Beisler
 	
            /s/ Walter E Beisler
 	
            Walter E Beisler
 	
             
 	
             
 
	
            6/15/2007
 	
            1,000
 	
            $10,000.00 
 	
            Michael L Smith & Larry E Smith JT TEN WROS
 	
            /s/ Michael L Smith
 	
            Michael L Smith
 	
            /s/ Larry E Smith
 	
            Larry E Smith
 
	
            6/12/2007
 	
            1,000
 	
            $10,000.00 
 	
            Joseph Martha
 	
            /s/ Joseph A Martha
 	
            Joseph A Martha
 	
             
 	
             
 
	
            6/8/2007
 	
            1,000
 	
            $10,000.00 
 	
            Bart & Wendy Baker JTWROS
 	
            /s/ Bart Baker
 	
            Bart Baker
 	
            /s/ Wendy Baker
 	
            Wendy Baker
 
	
            6/16/2007
 	
            1,000
 	
            $10,000.00 
 	
            Mark Bourque
 	
            /s/ Mark S Bourque
 	
            Mark S Bourque
 	
             
 	
             
 
	
            6/13/2007
 	
            1,000
 	
            $10,000.00 
 	
            Tom C Mina
 	
            /s/ Thomas C Mina
 	
            Thomas C Mina
 	
             
 	
             
 
	
            6/15/2007
 	
            1,000
 	
            $10,000.00 
 	
            Ann B Oldfather
 	
            /s/ Ann B Oldfather
 	
            Ann B Oldfather
 	
             
 	
             
 
	
            6/15/2007
 	
            1,000
 	
            $10,000.00 
 	
            Ronald D Cowan
 	
            /s/ Ronald D Cowan
 	
            Ronald D Cowan
 	
             
 	
             
 
	
            6/15/2007
 	
            1,000
 	
            $10,000.00 
 	
            Powell Family Limited Partners C/O Ron Powell 
 	
            /s/ Ron Powell
 	
            Ron Powell, General Partner
 	
             
 	
             
 
	
            6/15/2007
 	
            1,000
 	
            $10,000.00 
 	
            John J Resich Jr TTEE John J Resich Jr RET Trust
 	
            /s/ John J Resich
 	
            John J Resich
 	
             
 	
             
 
	
            6/17/2007
 	
            1,000
 	
            $10,000.00 
 	
            Mary M Schnurer
 	
            /s/ Mary M Schnurer
 	
            Mary M Schnurer
 	
             
 	
             
 
	
            6/19/2007
 	
            1,000
 	
            $10,000.00 
 	
            Stephen C Radocchia
 	
            /s/ Stephen Radocchia
 	
            Stephen Radocchia
 	
             
 	
             
 
	
            6/19/2007
 	
            1,000
 	
            $10,000.00 
 	
            John Faure
 	
            /s/ John P Faure
 	
            John P Faure
 	
             
 	
             
 
	
            6/19/2007
 	
            1,000
 	
            $10,000.00 
 	
            Thomas R Jennett & Jodi K Jennett JT TEN WROS
 	
            /s/ Thomas R Jennett
 	
            Thomas R Jennett
 	
            /s/ Jodi K Jennett
 	
            Jodi K Jennett
 
	
            6/21/2007
 	
            1,000
 	
            $10,000.00 
 	
            Mavin J Loutsenhizer
 	
            /s/ Marvin J Loutsenhizer
 	
            Mavin J Loutsenhizer
 	
             
 	
             
 
	
            6/4/2007
 	
            1,000
 	
            $10,000.00 
 	
            Valdemar Skov
 	
            /s/ Valdemar A Skov
 	
            Valdemar A Skov
 	
             
 	
             
 
	
            6/1/2007
 	
            1,000
 	
            $10,000.00 
 	
            Peter Carroll & Maureen Carroll JT/WROS
 	
            /s/ Peter Carroll
 	
            Peter Carroll
 	
            /s/ Maureen Carroll
 	
            Maureen Carroll
 

 

 

 

 

 

PARK CITY GROUP, INC.

STOCK PURCHASE AGREEMENT

 

 

 

STOCK PURCHASE AGREEMENT

PARK CITY GROUP, INC.

STOCK PURCHASE AGREEMENT (as amended or supplemented from time to time, this “Agreement”) made as of ___________________, 2007, between PARK CITY GROUP, INC., a Nevada corporation, with its principal offices at 3160 Pinebrook Rd, Utah 84098 (the “Company”) and the undersigned (the “Subscriber”).

W I T N E S S E T H :

WHEREAS, the Company desires to issue, in a private placement, shares of Series A Convertible Preferred Stock, $0.01 par value per share (the “Preferred Stock”) at a price equal to $10.00 per share (as defined in the Memorandum), with a minimum aggregate purchase price of $1,000,000 (the “Minimum Amount”) of Preferred Stock and a maximum aggregate purchase price of $3,500,000 (the “Maximum Amount”) of Preferred Stock;

WHEREAS, Subscriber desires to acquire the number of shares of Preferred Stock (the “Shares”) having an aggregate purchase price set forth on the signature page hereof (the “Purchase Price”) together with warrants in the form attached hereto as Exhibit A (the “Warrants”) exercisable for 1,000 shares of common stock for each $14,000 in purchase price of Preferred Stock (the Shares and accompanying Warrants being herein referred to as the “Securities”).

NOW, THEREFORE, for and in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto do hereby agree as follows:

	
             
 	
            1.
 	
            SUBSCRIPTION FOR SECURITIES AND REPRESENTATIONS BY SUBSCRIBER.
 

1.1.         Subject to the terms and conditions hereinafter set forth, the Subscriber hereby subscribes for and agrees to purchase from the Company the Shares for the Purchase Price and the Company agrees to sell such Shares and issue Warrants in the amount referred to above to the Subscriber for the Purchase Price, subject to the Company’s right to sell to the Subscriber such lesser number of Shares (and issue a correspondingly smaller number of Warrants) as it may, in its sole discretion, deem necessary or desirable. As the Company will not issue fractional Shares, each Subscriber will be issued that number of whole Shares which the Purchase Price will purchase (to the extent accepted), rounded down to the next whole Share. Any portion of the Purchase Price not applied to the purchase of Shares
will be returned to the Subscriber, without interest. The Purchase Price is payable, at or prior to the closing of this Agreement, by wire transfer, subject to collection, as set forth in the “INSTRUCTIONS TO SUBSCRIBERS” contained in the Subscription Documents Booklet of which this Agreement is a part.

1.2.        The Subscriber recognizes that the purchase of the Securities involves a high degree of risk in that (i) the Securities have not been registered under the Securities Act of 1933, as amended (“1933 Act”), and the Company has no obligation to register the Securities, 

 

2

 

 

except as set forth in Section 3 of this Agreement; (ii) an investment in the Securities is highly speculative and only investors who can afford the loss of their entire investment should consider investing in the Company; (iii) the Subscriber may not be able to liquidate the Subscriber’s investment; and (iv) the Subscriber could sustain the loss of Subscriber’s entire investment. Such risks are more fully set forth in the Company’s Confidential Private Placement Memorandum dated May 31, 2007, including the Exhibits thereto (as amended or supplemented from time to time, collectively, the “Memorandum”).

1.3.        The private placement of the Shares by the Company (the “Private Placement Offering”) pursuant to the Memorandum shall continue for a period commencing on the date of the Memorandum and ending on the date set forth in the Memorandum.

1.4.        Treasury Department Circular 230 Disclosure. To ensure compliance with Treasury Department Circular 230, the Subscriber is hereby notified that: (i) any discussion of U.S. Federal tax issues in this Agreement or the Memorandum is not intended or written to be relied upon, and cannot be relied upon, by the Subscriber for the purpose of avoiding penalties that may be imposed on the Subscriber under the Internal Revenue Code of 1986, as amended (the “Code”); (ii) such discussion is included herein by the Company in connection with the promotion or marketing (within the meaning of Circular 230) by the Company of the transactions or matters addressed herein or therein; and (iii) the Subscriber should seek advice
based on its particular circumstances from an independent tax advisor.

	
             
 	
            1.5.
 	
            The Subscriber represents as follows:
 

(a)          The Subscriber represents that the Subscriber is an Accredited Investor (as defined in Rule 501 of Regulation D promulgated under the 1933 Act) as indicated by the Subscriber’s responses to the Confidential Investor Questionnaire, a copy of which is included in the Subscription Documents Booklet, and that the Subscriber is able to bear the economic risk of investment in the Securities. The Subscriber is not an officer, director or “affiliate” (as defined in Rule 403 under the 1933 Act) of the Company.

(b)          The Subscriber acknowledges that the Subscriber has significant prior investment experience, including investment in non-listed and non-registered securities. The Subscriber recognizes the highly speculative nature of this investment. The Subscriber acknowledges that the Subscriber has carefully read the Memorandum, including but not limited to, the Company’s Registration Statement on Form SB-2/A filed on January 19, 2007, Current Report on Form 8-K filed on March 26, 2007, and Quarterly Report on Form 10-QSB for the period ended March 31, 2007, and fully understands the contents thereof, and the Subscriber has not received any other offering literature or prospectus and no representations or warranties have been made to the Subscriber by the Company or its
employees, affiliates or agents, other than the representations set forth in the Memorandum.

(c)          The Subscriber acknowledges that the Securities were not offered to the Subscriber by any means of general solicitation or general advertising. In that regard, the Subscriber is not subscribing for the Securities: (i) as a result of, or subsequent to, becoming aware of any advertisement, article, notice or other communication published in any newspaper, magazine or similar medium, generally available electronic communication, broadcast over 

 

3

 

 

television or radio or generally available to the public on the internet or worldwide web; (ii) as a result of, or subsequent to, attendance at a seminar or meeting called by any of the means set forth in (i) above; or (iii) as a result of, or subsequent to, any solicitations by a person not previously known to the Subscriber in connection with investment in securities generally.

(d)          The Subscriber hereby acknowledges that the Private Placement Offering and the Memorandum have not been reviewed by the Securities and Exchange Commission (the “SEC”) or by a state securities regulator because it is intended to be a nonpublic offering pursuant to Sections 4(2) and 4(6) of the 1933 Act and Regulation D promulgated thereunder. The Subscriber represents and warrants that the Securities are being purchased for the Subscriber’s own account, for investment purposes only and not for distribution or resale to others. The Subscriber agrees that the Subscriber will not sell or otherwise transfer the Securities unless they are registered under the 1933 Act or unless an exemption from such registration is available.

(e)          The Subscriber understands that the Securities have not been registered under the 1933 Act by reason of a claimed exemption under the provisions of the 1933 Act which depends, in part, upon the Subscriber’s investment intention. In this connection, the Subscriber understands that it is the position of the SEC that the statutory basis for such exemption would not be present if the Subscriber’s representation merely meant that the Subscriber’s present intention was to hold the Securities for a short period, such as the capital gains period of tax statutes, for a deferred sale, for a market rise, assuming that a market develops, or for any other fixed period. The Subscriber realizes that, in the view of the SEC, a purchase now with an intent to resell after a pre-determined
amount of time would represent a purchase with an intent inconsistent with the Subscriber’s representations and warranties to the Company, and the SEC might regard such a sale or disposition as a deferred sale to which such exemptions are not available.

(f)           The Subscriber understands that Rule 144 (the “Rule”) promulgated by the SEC under the 1933 Act requires, among other conditions, a one (1) year holding period prior to the resale (in limited amounts) of securities acquired in a non-public offering without having to satisfy the registration requirements under the 1933 Act. The Subscriber understands that the Company makes no representation or warranty regarding its fulfillment in the future of any reporting requirements under the Securities Exchange Act of 1934, as amended, or its dissemination to the public of any current financial or other information concerning the Company, as is required by the Rule as one of the conditions of its availability. The Subscriber understands and hereby acknowledges that the Company is
the only entity that can register the Securities (and the common stock issuable upon conversion or exercise thereof) under the 1933 Act and that the Company is under no obligation to register the same under the 1933 Act, with the exception of certain registration rights set forth in Section 3 of this Agreement. The Subscriber acknowledges that the Company may, if it desires, permit the transfer of the Securities out of the Subscriber’s name only when the Subscriber’s request for transfer is accompanied by an opinion of counsel reasonably satisfactory to the Company that neither the sale nor the proposed transfer results in a violation of the 1933 Act or any applicable state “blue sky” laws and subject to the provisions of Section 1.4(g) of this Agreement.

 

4

 

 

 

(g)          The Subscriber consents to the placement of a legend on any certificate or other document evidencing the Securities stating that they are “restricted securities” (as defined in the Rule) and may only be publicly offered and sold pursuant to an effective registration statement filed with the SEC or pursuant to an exemption from the registration requirements.

(h)          The Subscriber understands that the Company will review this Agreement and the Confidential Investor Questionnaire; and it is further agreed that the Company reserves the unrestricted right to reject or limit any subscription for any reason or for no reason and to close the Private Placement Offering at any time.

(i)           The Subscriber hereby represents that the address of the Subscriber furnished by the Subscriber at the end of this Agreement is the Subscriber’s principal residence, if the Subscriber is an individual, or its principal business address, if the Subscriber is a corporation or other entity.

(j)           The Subscriber and its advisors, if any, have had a reasonable opportunity to ask questions of and receive answers from the Company concerning the Company and the Private Placement Offering, and all such questions, if any, have been answered to the full satisfaction of the Subscriber and its advisors, if any; and the Company shall provide the Subscriber or its advisors, if any, with the opportunity to ask additional questions of and receive answers (all of which information shall be limited to information in the public realm) from the Company concerning the Company during the period which the Subscriber owns the Shares.

(k)          The Subscriber is not relying on the Placement Agent or the Company with respect to any legal or tax considerations involved in the purchase, ownership and disposition of the Shares.

(l)           The Subscriber has such knowledge and expertise in financial and business matters that the Subscriber is capable of evaluating the merits and risks involved in an investment in the Shares. All information that the Subscriber has provided concerning the Subscriber and the Subscriber’s financial position (including, without limitation, information in this Agreement or in the Confidential Investor Questionnaire included in the Subscription Documents Booklet) is true, correct and complete.

(m)         The Subscriber has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder; and this Agreement is a legally binding obligation of the Subscriber in accordance with its terms.

(n)          Except as set forth in the Memorandum no representations or warranties have been made to the Subscriber by the Company, the Placement Agent (as defined in the Memorandum) or any of their respective agents, employees or affiliates and in entering into this transaction, the Subscriber is not relying on any information, other than that contained in the Memorandum or the results of an independent investigation by the Subscriber.

(o)          The Subscriber agrees that the Subscriber will not sell or otherwise transfer the Shares unless they are registered under the 1933 Act and applicable state “blue sky” laws or unless an exemption from such registration is available. The Subscriber represents and 

 

5

 

 

warrants that (i) the Subscriber has adequate means of providing for the Subscriber’s current needs and possible personal contingencies; (ii) the Subscriber has no need for liquidity in this investment; (iii) the Subscriber is able to bear the substantial economic risk of an investment in the Shares for an indefinite period; and (iv) at the present time the Subscriber could afford a complete loss of such investment.

(p)          It is understood that all documents, records and books pertaining to this investment have been made available for the inspection by the Subscriber’s attorney and/or accountant and the Subscriber, and that the books and records of the Company will be available upon reasonable notice during business hours at its principal place of business.

(q)          The Subscriber acknowledges and agrees that any changes made by the Subscriber to any of the documents delivered to the Subscriber in connection with the Private Placement Offering shall not be effective unless the Company consents to such changes.

(r)           The Subscriber understands that it and its representative(s) could be subject to fines, penalties and other liabilities under applicable securities laws if the Subscriber or its representative(s), while in possession of any material, non-public information that may be contained in the Memorandum, trade in the Common Stock or other securities of the Company or communicate such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to trade in such Common Stock or other securities. The Subscriber agrees that it and its representative(s) will refrain from trading in the Common Stock or other securities of the Company until such time as they are no longer prohibited from trading in such Common Stock or other securities
under all applicable securities laws (whether because the Company has publicly disclosed all material information in the Memorandum, the Memorandum no longer containing material non-public information or otherwise).

(s)           In the event that the Subscriber is acting as agent, representative or nominee for another party (each, a “Beneficial Owner”), the Subscriber understands and acknowledges that the representations, warranties and agreements made herein are made by the Subscriber: (i) with respect to the Subscriber; and (ii) with respect to each Beneficial Owner of the Shares subscribed for hereby. The Subscriber represents and warrants that he, she or it has all requisite power and authority from said Beneficial Owner(s) to execute and perform the obligations under this Agreement and has anti-money laundering policies and procedures in place reasonably designed to verify the identity of each Beneficial Owner and the sources of each Beneficial Owner’s funds. Such policies and
procedures are properly enforced and are consistent with anti-money laundering/OFAC laws (as defined below) such that the Company may rely on this representation. The Subscriber agrees, except to the extent specifically prohibited by applicable law, to indemnify the Company, the Placement Agent and their respective officers and agents for any and all costs, fees and expenses (including reasonable legal fees and disbursements) in connection with any damages resulting from the Subscriber’s or any Beneficial Owner’s misrepresentation or misstatement contained herein, or the assertion of the Subscriber’s lack of proper authorization from each Beneficial Owner of the Shares subscribed for hereby to enter into this Agreement or perform the obligations thereof.

 

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(t)           Prospective Subscribers should check the Treasury Department’s Office of Foreign Assets Control (“OFAC”) website at http://www.treas.gov/ofac before making the following representations.

The Subscriber represents that the Purchase Price was not directly or indirectly derived from activities that may contravene U.S. Federal, state and international laws and regulations, including anti-money laundering laws.

OFAC prohibits, among other things, the engagement in transactions with, and the provisions of services to, certain foreign countries, territories, entities and individuals. The lists of OFAC prohibited countries, territories, persons and entities can be found on the OFAC website.

The Subscriber hereby represents and warrants, to the best of its knowledge, that none of:

	
             
 	
            (i)
 	
            the Subscriber;
 

	
             
 	
            (ii)
 	
            any person controlling, controlled by or under common control with, the Subscriber;
 

	
             
 	
            (iii)
 	
            if the Subscriber is a privately held entity, any person having a beneficial interest in the Subscriber; or
 

	
             
 	
            (iv)
 	
            any person for whom the Subscriber is acting as agent or nominee in connection with this investment
 

(A) is a country, territory, individual or entity named on an OFAC list, or is an individual or entity that resides or has a place of business in a country or territory named on such lists;

(B) is a senior foreign political figure1, or any immediate family member2 or close associate3 of a senior foreign political figure within the meaning of the Department of Treasury’s Guidance on Enhanced Scrutiny for Transactions That May Involve

 

_________________________

1              A “senior foreign political figure” is defined as a current or former senior official in the executive, legislative, administrative, military or judicial branches of a non-U.S. government (whether elected or not), a senior official of a major non-U.S. political party, or a senior executive of a non-U.S. government-owned corporation.  In addition, a “senior foreign political figure” includes any corporation, business or other entity that has been formed by, or for the benefit of, a senior foreign political figure.

	
            2 
 	
            “Immediate family” of a senior foreign political figure typically includes the figure’s parents, siblings, spouse, children and in-laws.
 

3              A “close associate” of a senior foreign political figure is a person who is widely and publicly known to maintain an unusually close relationship with the senior foreign political figure, and includes a person who is in a position to conduct substantial domestic and international financial transactions on behalf of the senior foreign political figure.

 

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the Proceeds of Foreign Official Corruption4 and as referenced in the USA PATRIOT Act of 2001, as amended (the “Patriot Act”);5 or

(C) is a “foreign shell bank”6 and does not transact business with a “foreign shell bank”.

The Subscriber agrees to notify the Company promptly should the Subscriber become aware of any change in the information set forth in these representations. 

The Subscriber understands that the Company may not accept any portion of the Purchase Price if the Subscriber cannot make the representation set forth above or if the information provided to the Company is incomplete or is deemed suspicious.

If the Subscriber is an investment entity, then the Subscriber hereby represents and warrants to the Company that the Subscriber is aware of the requirements of the Patriot Act, the regulations administered by OFAC and other applicable U.S. Federal, state or non-U.S. anti-money laundering laws and regulations (as amended, collectively, the “anti-money laundering/OFAC laws”). The Subscriber further warrants and represents that it has anti-money laundering policies and procedures in place reasonably designed to verify the identity of its beneficial owners and/or underlying investors (as applicable) and their sources of funds. Such policies and procedures are properly enforced and are consistent with the anti-money laundering/OFAC laws. The Subscriber hereby warrants to the Company that, to the best of its knowledge, the Subscriber’s beneficial owners and/or underlying
investors (as applicable) are not individuals, entities or countries that may subject the Company to criminal or civil violations of any anti-money laundering/OFAC laws. The Subscriber hereby acknowledges and agrees that the Company, or any other party on behalf of the Company, may be required and shall be entitled to reveal any information regarding the Company and the Subscriber’s investment in the Company, including details of the Subscriber’s identity, to their regulators and/or any other government agency within their jurisdiction, as they shall, in their sole and absolute discretion, consider appropriate.

	
             
 	
            2.
 	
            TERMS OF SUBSCRIPTION.
 

The Private Placement Offering of the Shares is being made on a “best efforts” basis as more particularly set forth in the Memorandum.

	
             
 	
            3.
 	
            REGISTRATION RIGHTS.
 

3.1.        As soon as possible after the Final Closing Date, but in no event later than 45 days after the Final Closing Date (regardless of whether the Maximum Amount of Shares shall have been sold), the Company shall, at its sole cost and expense, file a registration

 

_________________________

4              For a more extensive discussion of the preceding terms and definitions, see http://www.federalreserve.gov/boarddocs/srletters/2001/sr0103a1.pdf.

5               The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56 (2001).

	
            6   
 	
            A “foreign shell bank” is a foreign bank that does not have a physical presence in any country.
 

 

 

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statement (as amended or supplemented from time to time, the “Registration Statement”) on the appropriate form under the 1933 Act with the SEC covering all of the shares of common stock issuable upon conversation or exercise of the Securities or upon exercise of the Placement Agent Warrant as described in the Memorandum (the “Registrable Securities”) for all holders thereof, time being of the essence. The Company will use best efforts to have the Registration Statement declared effective, and to keep the Registration Statement effective until the earlier of (x) two years after the Final Closing Date, (y) the date when all the Registrable Securities have been sold or (z) the date on which the Registrable Securities may be sold without any restriction pursuant to the Rule 144. If the Registration Statement is not filed within 45 days after the Final Closing Date, the
Company will pay to each Investor a cash amount of two percent (2.0%) of such Investor’s Purchase Price investment. In addition, if the Registration Statement is not declared effective, or the Registrable Securities may not be sold without any restriction pursuant to the Rule 144, within 180 days after the filing date, the Company will pay to each Investor a cash amount of two percent (2.0%) of such Investor’s Purchase Price (to the extent accepted) for each thirty (30) day period, or any part thereof, beyond such 180 day period, until the Registration Statement is declared effective. The maximum cash payments to each Investor pursuant to these provisions are twelve percent (12.0%) of such Investor’s Purchase Price, as the case may be. 

3.2.        In the event the Company effects any registration under the 1933 Act of any Registrable Securities pursuant to Section 3.1 or 3.7 of this Agreement, the Company shall indemnify, to the extent permitted by law, and hold harmless each person whose Registrable Securities are included in such registration statement (each, a “Seller”), any underwriter, any officer, director, employee or agent of any Seller or underwriter, and each other person, if any, who controls any Seller or underwriter within the meaning of Section 15 of the 1933 Act, against any losses, claims, damages, liabilities, judgment, fines, penalties, costs and expenses, joint or several, or actions in respect thereof (collectively, the “Claims”), to which each such indemnified party becomes subject, under the 1933 Act
or otherwise, insofar as such Claims arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or any amendment or supplement thereto or any document filed under a state securities or blue sky law (as amended or supplemented from time to time, collectively, the “Registration Documents”) or insofar as such Claims arise out of or are based upon the omission or alleged omission to state in any Registration Document a material fact required to be stated therein or necessary to make the statements made therein not misleading, and will reimburse any such indemnified party for any legal or other expenses or disbursements reasonably incurred by such indemnified party in investigating or defending any such Claim; provided that the Company shall not be liable in any such case to a particular indemnified party to the extent such Claim is based upon an untrue statement or alleged untrue
statement of a material fact or omission or alleged omission of a material fact made in any Registration Document in reliance upon and in conformity with written information furnished to the Company by or on behalf of such indemnified party specifically for use in the preparation of such Registration Document.

3.3.        In connection with any registration statement in which a Seller is participating, such Seller, severally and not jointly, shall indemnify, to the extent permitted by law, and hold harmless the Company, each of its directors, each of its officers who have signed such registration statement, each other person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act, each other Seller and each underwriter, any officer, 

 

9

 

 

director, employee or agent of any such other Seller or underwriter and each other person, if any, who controls such other Seller or underwriter within the meaning of Section 15 of the 1933 Act against any Claims to which each such indemnified party may become subject under the 1933 Act or otherwise, insofar as such Claims (or actions in respect thereof) are based upon any untrue statement or alleged untrue statement of any material fact contained in any Registration Document, or insofar as any Claims are based upon the omission or alleged omission to state in any Registration Document a material fact required to be stated therein or necessary to make the statements made therein not misleading, and will reimburse any such indemnified party for any legal or other expenses or disbursements reasonably incurred by such indemnified party in investigating or defending any such claim; provided, however, that such
indemnification or reimbursement shall be payable only if, and to the extent that, any such Claim arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any Registration Document in reliance upon and in conformity with written information furnished to the Company by such Seller specifically for use in the preparation thereof.

3.4.        Any person entitled to indemnification under Section 3.2 or 3.3 of this Agreement shall notify promptly the indemnifying party in writing of the commencement of any Claim if a claim for indemnification in respect thereof is to be made against an indemnifying party under this Section 3.4, but the omission of such notice shall not relieve the indemnifying party from any liability which it may have to any indemnified party otherwise than under Section 3.2 or 3.3 of this Agreement, except to the extent that such failure shall materially adversely affect any indemnifying party or its rights hereunder. In case any action is brought against the indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in, and, to the
extent that it chooses, to assume the defense thereof with counsel reasonably satisfactory to the indemnified party; and, after notice from the indemnifying party to the indemnified party that it so chooses, the indemnifying party shall not be liable for any legal or other expenses or disbursements subsequently incurred by the indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that (i) if the indemnifying party fails to take reasonable steps necessary to defend diligently the Claim within twenty (20) days after receiving notice from the indemnified party that the indemnified party believes it has failed to do so; (ii) if the indemnified party who is a defendant in any action or proceeding which is also brought against the indemnifying party reasonably shall have concluded that there are legal defenses available to the indemnified party which are not available to the indemnifying party; or (iii) if representation of
both parties by the same counsel is otherwise inappropriate under applicable standards of professional conduct, the indemnified party shall have the right to assume or continue its own defense as set forth above (but with no more than one firm of counsel for all indemnified parties in each jurisdiction, except to the extent any indemnified party or parties reasonably shall have concluded that there are legal defenses available to such party or parties which are not available to the other indemnified parties or to the extent representation of all indemnified parties by the same counsel is otherwise inappropriate under applicable standards of professional conduct) and the indemnifying party shall be liable for any reasonable expenses therefor; provided, that no indemnifying party shall be subject to any liability for any settlement of a Claim made without its consent (which may not be unreasonably withheld, delayed or conditioned). If the indemnifying party assumes the defense of any
Claim hereunder, such indemnifying party shall not enter into any settlement without the consent of the indemnified party if such settlement attributes liability to the indemnified party.

 

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3.5.        If for any reason the indemnity provided in Section 3.2 or 3.3 of this Agreement is unavailable, or is insufficient to hold harmless, an indemnified party, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of any Claim in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party on the one hand and the indemnified party on the other from the transactions contemplated by this Agreement. If, however, the allocation provided in the immediately preceding sentence is not permitted by applicable law, or if the indemnified party failed to give the notice required by Section 3.4 of this Agreement, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable in respect of any Claim shall be deemed to include any legal or other expenses or disbursements reasonably incurred by such indemnified party in connection with investigating or defending any such Claim. Notwithstanding the foregoing, no underwriter or controlling person thereof, if any, shall be required to contribute, in
respect of such underwriter’s participation as an underwriter in the Private Placement Offering, any amount in excess of the amount by which the total price at which the Registrable Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligation of any underwriters to contribute pursuant to this Section 3.5 shall be several in proportion to their respective underwriting commitments and not joint.

3.6.        The provisions of Section 3.2 through 3.5 of this Agreement shall be in addition to any other rights to indemnification or contribution which any indemnified party may have pursuant to law or contract and shall remain operative and in full force and effect regardless of any investigation made or omitted by or on behalf of any indemnified party and shall survive the transfer of the Registrable Securities by any such party.

3.7.        If and whenever the Company is required by the provisions of this Section 3 to use its best efforts to register any Registrable Securities under the 1933 Act, the Company shall, as expeditiously as possible under the circumstances:

(a)          Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its best efforts to cause such registration statement to become effective as soon as possible after filing and remain effective.

(b)          Subject to Section 3.1 of this Agreement, prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement current and 

 

11

 

 

effective and to comply with the provisions of the 1933 Act, and any regulations promulgated thereunder, with respect to the sale or disposition of all Registrable Securities covered by the registration statement required to effect the distribution of the securities, but in no event shall the Company be required to do so for a period of more than two (2) years following the effective date of the registration statement.

(c)          Furnish to the Sellers participating in the offering, applicable copies (in reasonable quantities) of summary, preliminary, final, amended or supplemented prospectuses, in conformity with the requirements of the 1933 Act and any regulations promulgated thereunder, and other documents as reasonably may be required in order to facilitate the disposition of the securities, but only while the Company is required under the provisions hereof to keep the registration statement current.

(d)          Use its best efforts to register or qualify the Registrable Securities covered by such registration statement under such other securities or blue sky laws of such jurisdictions of the United States as the Sellers participating in the offering shall reasonably request, and do any and all other acts and things which may be reasonably necessary to enable each participating Seller to consummate the disposition of the Registrable Securities in such jurisdictions.

(e)          Notify each Seller selling Registrable Securities, at any time when a prospectus relating to any such Registrable Securities covered by such registration statement is required to be delivered under the 1933 Act, of the Company’s becoming aware that the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and promptly prepare and furnish to each such Seller selling Registrable Securities a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to the purchasers of such Registrable Securities, such
prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing.

(f)           As soon as practicable after the effective date of the registration statement, and in any event within eighteen (18) months thereafter, make generally available to the Sellers participating in the offering an earnings statement (which need not be audited) covering a period of at least twelve (12) consecutive months beginning after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the 1933 Act, including, at the Company’s option, Rule 158 thereunder. To the extent that the Company files such information with the SEC in satisfaction of the foregoing, the Company need not deliver the above referenced earnings statement to the Seller.

(g)          Upon request, deliver promptly to counsel of each Seller participating in the offering copies of all correspondence between the SEC and the Company, its counsel or auditors and all memoranda relating to discussions with the SEC or its staff with respect to the registration statement and permit each such Seller to do such investigation at such Seller’s sole cost and expense, upon reasonable advance notice, with respect to information contained in or omitted from the registration statement as it deems reasonably necessary. Each 

 

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Seller agrees that it will use its best efforts not to interfere unreasonably with the Company’s business when conducting any such investigation and each Seller shall keep any such information received pursuant to this Section 3 confidential.

(h)          Provide a transfer agent and registrar located in the United States for all such Shares covered by such registration statement not later than the effective date of such registration statement.

(i)           Pay all Registration Expenses (as defined below) incurred in connection with a registration of Registrable Securities, whether or not such registration statement shall become effective; provided that each Seller shall pay all underwriting discounts, commissions and transfer taxes, and their own counsel and accounting fees, if any, relating to the sale or disposition of such Seller’s Registrable Securities pursuant to such registration statement. As used herein, “Registration Expenses” means any and all reasonable and customary expenses incident to performance of or compliance with the registration rights set forth herein, including, without limitation, (i) all SEC and stock exchange or National Association of Securities Dealers, Inc. (“NASD”) registration
and filing fees, (ii) all fees and expenses of complying with state securities or blue sky laws (including reasonable fees and disbursements of counsel for the underwriters in connection with blue sky qualifications of the Registrable Securities but no other expenses of or disbursements by the underwriters or their counsel), (iii) all printing, messenger and delivery expenses, and (iv) the reasonable fees and disbursements of counsel for the Company and the Company’s independent public accountants.

(j)           Pay all NASD filing expenses (including NASD filing fees and legal fees of counsel to the Placement Agent in connection with such filing) incurred in connection with filings that are required by Rule 2710 of the NASD so that NASD members (including without limitation the Placement Agent) may resell Registrable Securities pursuant to an effective registration statement without further filings under such rule by them.

3.8.        The Company acknowledges that there is no adequate remedy at law for failure by it to comply with the provisions of this Section 3 and that such failure would not be adequately compensable in damages, and therefore agrees that its obligations and agreements contained in this Section 3 may be specifically enforced. In the event that the Company shall fail to file such registration statement when required pursuant to Section 3.1 of this Agreement or to keep any registration statement effective as provided in this Section 3 or otherwise fails to comply with its obligations and agreements in this Section 3, then, in addition to any other rights or remedies the Registered Holders may have at law or in equity, including, without limitation, the right of rescission, the Company shall indemnify and hold
harmless the Registered Holders from and against any and all manner or loss which they may incur as a result of such failure. In addition, the Company shall also reimburse the Registered Holders for any and all reasonable legal fees, expenses and disbursements incurred by them in enforcing their rights pursuant to this Section 3, regardless of whether any litigation was commenced; provided, however, that the Company shall not be liable for the fees and expenses of more than one law firm, which firm shall be designated by the Placement Agent.

 

13

 

 

 

	
             
 	
            4.
 	
            MISCELLANEOUS.
 

4.1.        All notices, consents and other communications under this Agreement shall be in writing and shall be deemed to have been duly given (a) when delivered by hand, (b) one (1) business day after the business day of transmission if sent by telecopier (with receipt confirmed), provided that a copy is mailed by certified mail, return receipt requested, or (c) one (1) business day after the business day of deposit with the carrier, if sent for next business day delivery by Express Mail, Federal Express or other recognized express delivery service (receipt requested), in each case addressed to the Company at the address indicated on the first page of this Agreement marked “Attention: Randy Fields” and to the Subscriber at the Subscriber’s address indicated on the last page of this Agreement
(or to such other addresses and/or telecopier numbers as a party may designate as to itself by notice to the other parties).

4.2.        This Agreement shall not be changed, modified or amended except by a writing signed by the parties, and this Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by the parties.

4.3.        This Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them.

4.4.         Notwithstanding the place where this Agreement may be executed by any of the parties hereto, the parties expressly agree that all the terms and provisions hereof shall be construed in accordance with and governed by the laws of the State of New York without regard to New York conflict of law rules. The parties hereby agree that any dispute which may arise between them arising out of or in connection with this Agreement shall be adjudicated before a court located in New York and they hereby submit to the exclusive jurisdiction of the courts of the State of New York and of the Federal courts in New York with respect to any action or legal proceeding commenced by any party, and irrevocably waive any objection they now or hereafter may have respecting the venue of any such action or proceeding
brought in such a court or respecting the fact that such court is an inconvenient forum, relating to or arising out of this Agreement or any acts or omissions relating to the sale of the Shares hereunder, and consent to the service of process in any such action or legal proceeding by means of registered or certified mail, return receipt requested, in case of the address set forth below or such other address as a party shall furnish in writing to the other parties.

4.5.        This Agreement may be executed in counterparts. Upon the execution and delivery of this Agreement by the Subscriber, this Agreement shall become a binding obligation of the Subscriber with respect to the purchase of the Shares as herein provided; subject, however, to the right hereby reserved to the Company to enter into the same agreements with other subscribers and to add and/or to delete other persons as subscribers.

 

14

 

 

 

4.6.        The holding of any provision of this Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Agreement, which shall remain in full force and effect.

4.7.        It is agreed that a waiver by either party of a breach of any provision of this Agreement shall not operate, or be construed, as a waiver of any subsequent breach by that same party.

4.8.        The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Agreement.

 

*** THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK ***

 

 

15

 

 

 

ALL INVESTORS MUST COMPLETE THIS PAGE

 

IN WITNESS WHEREOF, the parties have executed this Agreement on _____________________, 2007.

 

_________ Shares x $10.00 per Share =  $_______________ (minimum subscription = $10,000)

 

                                          
                                          
                                          
                                          
                     

                                        Exact Name in Which Title is to be Held

 

                                          
                                          
                                          
                                          
                    

                       (Authorized Signature)

 

 

	
             
 	
                
 

                                                              Print Name of Signatory and Capacity in which

                Signed if an Entity

 

 

	
             
 	
              
 

                                                                   Signature (if Joint Tenants or Tenants in Common)

 

                                          
                                          
                                          
                                          
          

                                    Print Name of above Signatory

 

SUBSCRIPTION ACCEPTED:

PARK CITY GROUP, INC.

By: ___________________________

Name:

Title:

 

Date:___________________________

_______________________________

Aggregate Purchase Price Accepted

 

16

 

 

 

EXHIBIT A

Form of Warrant

 

 

 

17Exhibit 10.2

 

Warrant to Purchase Common Stock

 

The attached Warrant to Purchase Common Stock is identical in all material respects for each of the individuals to which they were issued except as to the parties thereto, initial exercise date and the number of warrant shares granted. See table below.

 

	
            Holder
 	
            Initial Exercise Date
 	
            Warrant Shares
 
	
            Meadowbrook Opportunity Fund LLC
 	
            6/22/2007
 	
            28,571
 
	
            Arthur H Finnel
 	
            6/22/2007
 	
            2,000
 
	
            David G Linville
 	
            6/22/2007
 	
            714
 
	
            Sandra L Brecher
 	
            6/21/2007
 	
            5,357
 
	
            Joseph F Domenice
 	
            6/15/2007
 	
            714
 
	
            Thomas J Bean
 	
            6/7/2007
 	
            3,571
 
	
            John L Palazzola
 	
            6/21/2007
 	
            7,143
 
	
            Videotape Products, Inc
 	
            6/21/2007
 	
            7,143
 
	
            Harvey Bibicoff and Jacqueline Bibicoff Trustees of the Bibicoff Family Trust Dtd May 16, 2000
 	
            6/21/2007
 	
            2,000
 
	
            Raymond M Beebe & Joan D Beebe JTWROS
 	
            6/4/2007
 	
            1,786
 
	
            Michael P Hagerty
 	
            6/1/2007
 	
            2,000
 
	
            Darrell Frost
 	
            6/5/2007
 	
            714
 
	
            Lawrence Kane
 	
            6/5/2007
 	
            1,429
 
	
            Jeffrey L Sadar & Barbara A Sadar JTWROS
 	
            6/5/2007
 	
            1,000
 
	
            Charles M Thompson
 	
            6/5/2007
 	
            714
 
	
            SEP FBO John Stevens Pershing LLC as Custodian
 	
            6/8/2007
 	
            1,429
 
	
            Dr Richard V Nuttall & Annetta Mets Nuttall JTWROS
 	
            6/7/2007
 	
            714
 
	
            Mark Ravich
 	
            6/5/2007
 	
            2,143
 
	
            Terry E Hagen and Dawn R Hagen as JTWROS
 	
            6/6/2007
 	
            1,000
 
	
            Robert G Moussa
 	
            6/7/2007
 	
            3,571
 
	
            Alvin R Bonnette Rev Trust U A Dtd 1/31/85 Alvin R Bonnette Trustee
 	
            6/7/2007
 	
            4,000
 
	
            Tad Wilson
 	
            6/5/2007
 	
            1,000
 
	
            Robert W Allen & Susan M Allen JTWROS
 	
            6/5/2007
 	
            17,857
 
	
            Robert Whitfield Donegan
 	
            6/5/2007
 	
            2,000
 
	
            Frank M Durrance
 	
            6/11/2007
 	
            2,143
 
	
            SEP FBO Ronald C Hintz Pershing LLC as Custodian
 	
            6/8/2007
 	
            1,071
 
	
            Richard A Kraemer Trust U A/D 12/12/96 Richard A Kraemer TTEE
 	
            6/11/2007
 	
            2,857
 
	
            T Mark Sledge
 	
            6/11/2007
 	
            1,429
 
	
            Barbara Susca
 	
            6/12/2007
 	
            714
 
	
            Albert C Esposito Brooke Crowley Esposito JT TEN
 	
            6/14/2007
 	
            1,786
 
	
            Biscayne National Corp
 	
            6/7/2007
 	
            3,571
 
	
            Robert B Cashion
 	
            6/14/2007
 	
            1,000
 
	
            Shadow Capital LLC Attn B Kent Garlinghouse
 	
            6/13/2007
 	
            14,286
 
	
            Dr Baldev S Brar & Dr Gurmukh K Brar JT TENWROS
 	
            6/14/2007
 	
            1,786
 
	
            Walter E Beisler
 	
            6/15/2007
 	
            714
 
	
            Michael L Smith & Larry E Smith JT TEN WROS
 	
            6/15/2007
 	
            714
 
	
            Joseph Martha
 	
            6/12/2007
 	
            714
 
	
            Stephen Friedland and Linda Friedland JTWROS
 	
            6/14/2007
 	
            2,000
 
	
            David L Allen 
 	
            6/13/2007
 	
            2,857
 
	
            Kenneth Bodenstein TR Kenneth Bodenstein TTEE Dtd 7/30/84
 	
            6/13/2007
 	
            2,143
 
	
            IRA FBO Arthur Resnikoff Pershing LLC as Custodian Rollover Account
 	
            6/8/2007
 	
            1,071
 

 

 

 

 

 

 

	
            Bart & Wendy Baker JTWROS
 	
            6/8/2007
 	
            714
 
	
            Mark Bourque
 	
            6/16/2007
 	
            714
 
	
            William Kehl
 	
            6/12/2007
 	
            1,429
 
	
            Clyde Berg
 	
            6/12/2007
 	
            7,143
 
	
            London Family Trust
 	
            6/11/2007
 	
            21,429
 
	
            Keith Becker
 	
            6/18/2007
 	
            4,286
 
	
            Tom C Mina
 	
            6/13/2007
 	
            714
 
	
            Albert Esposito & Margaret Esposito JTWROS
 	
            6/13/2007
 	
            3,571
 
	
            John W Crow
 	
            6/18/2007
 	
            1,000
 
	
            Wulf Paulick & Renate Paulick JTWROS
 	
            6/16/2007
 	
            1,000
 
	
            Ann B Oldfather
 	
            6/15/2007
 	
            714
 
	
            Brian F Leonard and Martha E Leonard JT TEN WROS
 	
            5/12/2007
 	
            2,143
 
	
            Steve Redmon & Brenda Redmon JT TEN WROS
 	
            6/15/2007
 	
            1,000
 
	
            Ronald D Cowan
 	
            6/15/2007
 	
            714
 
	
            Powell Family Limited Partners C/O Ron Powell 
 	
            6/15/2007
 	
            714
 
	
            John J Resich Jr TTEE John J Resich Jr RET Trust
 	
            6/15/2007
 	
            714
 
	
            IRA FBO Russel J Bernier Pershing LLC as Custodian Rollover Account
 	
            6/11/2007
 	
            1,500
 
	
            William P Kaiser
 	
            6/18/2007
 	
            3,571
 
	
            Mary M Schnurer
 	
            6/17/2007
 	
            714
 
	
            Stephen C Radocchia
 	
            6/19/2007
 	
            714
 
	
            Paul Seid
 	
            6/15/2007
 	
            7,500
 
	
            Kenneth J Feroldi Nancy J Feroldi JTWROS
 	
            6/19/2007
 	
            1,000
 
	
            Neal Goldman
 	
            6/20/2007
 	
            17,857
 
	
            Peder G Larsen and Margaret S Larsen JTWROS
 	
            6/15/2007
 	
            3,571
 
	
            John Faure
 	
            6/19/2007
 	
            714
 
	
            Sara Bower Penn TTEE Sara Bower Penn Living Trust Dtd 4/30/02
 	
            6/19/2007
 	
            10,714
 
	
            Lighthouse Capital LLC
 	
            6/19/2007
 	
            7,143
 
	
            IRA FBO Angel Rosario Pershing LLC as Custodian Rollover Account
 	
            6/19/2007
 	
            1,000
 
	
            Robert W Allen Jr
 	
            6/17/2007
 	
            2,857
 
	
            David J Larkworthy TOD Dtd 1/20/06
 	
            6/19/2007
 	
            1,000
 
	
            Samuel L Box & Lisa Marsh Box JT TEN WROS
 	
            6/20/2007
 	
            1,000
 
	
            Glenn Schabel
 	
            6/20/2007
 	
            4,286
 
	
            Thomas R Jennett & Jodi K Jennett JT TEN WROS
 	
            6/19/2007
 	
            714
 
	
            John P Junge & Sue H Junge TTEE FBO Junge Revocable Trust UAD 12-9-91
 	
            6/19/2007
 	
            3,000
 
	
            Mavin J Loutsenhizer
 	
            6/21/2007
 	
            714
 
	
            Mike Taglich POA Tag/Kent Partnership F/B/O Garlinghouse/M Taglich B Taglich
 	
            6/19/2007
 	
            3,571
 
	
            Elliot D Cohen & Bonnie S Cohen JTWROS
 	
            6/18/2007
 	
            1,000
 
	
            James B Deutsch & Deborah M Deutsch JTWROS
 	
            6/20/2007
 	
            2,000
 
	
            Peter S Gold 
 	
            6/19/2007
 	
            1,000
 
	
            Mark C Ladendorf & Debra Ladendorf JTWROS 
 	
            6/19/2007
 	
            2,143
 
	
            Hillson Partners LP
 	
            6/20/2007
 	
            35,714
 
	
            Hillson Private Partners II, LLLP
 	
            6/20/2007
 	
            7,143
 
	
            Ronald Courey
 	
            6/21/2007
 	
            1,000
 
	
            Robert G Paul
 	
            6/21/2007
 	
            1,786
 
	
            RFS Trust U/A/D 12/30/96 Richard F Sherman TTEE
 	
            6/10/2007
 	
            3,000
 
	
            Dennis Fortin
 	
            6/4/2007
 	
            10,714
 
	
            John R Bertsch Trust Dtd 12/4/2004 John R Bertsch Trustee
 	
            6/1/2007
 	
            14,286
 
	
            Applebaun Family LTD Partners Irving Applebaum General Ptnr
 	
            6/4/2007
 	
            1,786
 

 

 

 

 

 

 

	
            William C Steele TTEE William C Steele Living Trust UAD 5-11-98
 	
            6/5/2007
 	
            4,643
 
	
            Donald McCulloch & Jacqueline McCulloch JTWROS
 	
            6/5/2007
 	
            2,000
 
	
            E H Arnold
 	
            6/8/2007
 	
            17,857
 
	
            Michael N Taglich
 	
            6/6/2007
 	
            17,857
 
	
            Angus Bruce Lauralee Bruce
 	
            6/5/2007
 	
            1,429
 
	
            Valdemar Skov
 	
            6/4/2007
 	
            714
 
	
            Peter Carroll & Maureen Carroll JT/WROS
 	
            6/1/2007
 	
            714
 
	
            Robert F Taglich
 	
            6/7/2007
 	
            17,857
 
	
            B Roy Smith & Joyce L Smith JTWROS
 	
            6/5/2007
 	
            2,143
 
	
            Paul Berko
 	
            6/5/2007
 	
            857
 
	
            Susan Thorstenn & Magnus Thorstenn JTWROS
 	
            6/19/2007
 	
            8,929
 

 

 

 

 

 

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES

COMMON STOCK PURCHASE WARRANT

To Purchase [       ] Shares of Common Stock of

Park City Group, Inc.

THIS COMMON STOCK PURCHASE WARRANT CERTIFIES that, for value received, _____________________ (the “Holder”), is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after [          ] (the “Initial Exercise Date”) and on or prior to the close of business on the Termination Date (as defined below) but not thereafter, to subscribe for and purchase from Park City Group, Inc., a corporation incorporated in the State of Delaware (the “Company”), up to [      ] shares (the “Warrant Shares”) of Common Stock, of the Company (the “Common Stock”). The purchase
price of one share of Common Stock (the “Exercise Price”) under this Warrant shall be $4.00, subject to adjustment hereunder. The Exercise Price and the number of Warrant Shares for which the Warrant is exercisable shall be subject to adjustment as provided herein. As used herein “Termination Date” shall mean the earlier of (i) May 31, 2011 and (ii) the 31st day after the 20th  Trading Day within any consecutive 30-Trading Day period on which the Company’s Common Stock has a closing price of at least $8.00 (as adjusted proportionately with any adjustments to the Exercise Price pursuant to Section 11 hereof), provided that no Termination Date shall occur pursuant to this clause (ii) unless and until (A) a registration statement covering the Warrant Shares is then effective and the prospectus contained
therein does not contain a misstatement of a material fact or fail to state a material fact required to be stated therein in order to make the statements made therein not misleading and (B) the Holder has actually received 20 days’ advance notice of the pending Termination Date. In the event that a Termination Date occurs because of clause (ii) above, the Company shall pay the Holder, within twenty (20) days of such Termination Date, one cent ($0.01) per Warrant Share not issued due to exercise of the Warrant. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Stock Purchase Agreement (the “Purchase Agreement”), dated o, 2007, between the Company and the purchasers signatory thereto.

 

 

	
             
 	
            1
 

 

 

 

1.     Title to Warrant. Prior to the Termination Date and subject to compliance with applicable laws and Section 7 of this Warrant, this Warrant and all rights hereunder are transferable, in whole or in part, at the office or agency of the Company by the Holder in person or by duly authorized attorney, upon surrender of this Warrant together with the Assignment Form annexed hereto properly endorsed. The transferee shall sign an investment letter in form and substance reasonably satisfactory to the Company.

2.     Authorization of Shares. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

	
             
  	
            3.
 	
            Exercise of Warrant.
 

(a)  Except as provided in Section 4 herein, exercise of the purchase rights represented by this Warrant may be made at any time or times on or after the Initial Exercise Date and on or before the Termination Date by the surrender of this Warrant and the Notice of Exercise Form annexed hereto duly executed, at the office of the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of such Holder appearing on the books of the Company) and upon payment of the Exercise Price of the shares thereby purchased by wire transfer or cashier’s check drawn on a United States bank or by means of a cashless exercise pursuant to Section 3(d), the Holder shall be entitled to receive a certificate for the number of Warrant Shares so purchased. Certificates for shares purchased hereunder shall be
delivered to the Holder within fifteen (15) Trading Days after the date on which this Warrant shall have been exercised as aforesaid. This Warrant shall be deemed to have been exercised and such certificate or certificates shall be deemed to have been issued, and the Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised by payment to the Company of the Exercise Price and all taxes required to be paid by the Holder, if any, pursuant to Section 5 prior to the issuance of such shares, have been paid. “Trading Day” means a day on which the NASDAQ Stock Market is open for the transaction of business.

 

(b)          If this Warrant shall have been exercised in part, the Company shall, at the time of delivery of the certificate or certificates representing Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant. 

(c)          If the Company fails to deliver to the Holder a certificate or certificates representing the Warrant Shares pursuant to Section 3(a) of this Warrant by 

 

	
             
 	
            2
 

 

 

the close of business on the fifth Trading Day after the date of exercise, then the Holder will have the right to rescind such exercise.

(d)          If, but only if, at any time after one year from the date of issuance of this Warrant there is no effective Registration Statement registering the resale of the Warrant Shares by the Holder, this Warrant may also be exercised at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a certificate for the number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

(A) = the Closing Price on the Trading Day immediately preceding the date of such election;

 

(B) =  the Exercise Price of this Warrant, as adjusted; and 

 

(X) = the number of Warrant Shares issuable upon exercise of this Warrant in accordance with the terms of this Warrant by means of a cash exercise rather than a cashless exercise.

 

4.     No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price.

5.     Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder; and the Company may require, as a
condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.

6.     Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

	
             
  	
            7.
 	
            Transfer, Division and Combination.
 

(a)          Subject to compliance with any applicable securities laws and the conditions set forth in Sections 1 and 7(e) hereof and to the provisions of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer 

 

	
             
 	
            3
 

 

 

taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. A Warrant, if properly assigned, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued. 

(b)          This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 7(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice.

 

(c)          The Company shall prepare, issue and deliver at its own expense (other than transfer taxes) the new Warrant or Warrants under this Section 7.

 

(d)          The Company agrees to maintain, at its aforesaid office, books for the registration and the registration of transfer of the Warrants.

(e)          If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws, the Company may require, as a condition of allowing such transfer (i) that the Holder or transferee of this Warrant, as the case may be, furnish to the Company a written opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that such transfer may be made without registration under the Securities Act and under applicable state securities or blue sky laws, (ii) that the holder or transferee execute and
deliver to the Company an investment letter in form and substance acceptable to the Company and (iii) that the transferee be an “accredited investor” as defined in Rule 501(a) promulgated under the Securities Act.

8.     No Rights as Shareholder until Exercise. This Warrant does not entitle the Holder to any voting rights or other rights as a shareholder of the Company prior to the exercise hereof. Upon the surrender of this Warrant and the payment of the aggregate Exercise Price (or by means of a cashless exercise), the Warrant Shares so purchased shall be and be deemed to be issued to such Holder as the record owner of such shares as of the close of business on the later of the date of such surrender or payment. 

9.     Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender 

 

	
             
 	
            4
 

 

 

and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

10.  Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall be a Saturday, Sunday or a legal holiday, then such action may be taken or such right may be exercised on the next succeeding day not a Saturday, Sunday or legal holiday.

11.  Adjustments of Exercise Price and Number of Warrant Shares. The number and kind of securities purchasable upon the exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time upon the happening of any of the following. In case the Company shall (i) declare a dividend or other distribution in shares of Common Stock or other securities or property of the Company to holders of its outstanding Common Stock, (ii) subdivide its outstanding shares of Common Stock into a greater number of shares, (iii) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock, or (iv) issue any shares of its capital stock in a reclassification of the Common Stock, then the number of Warrant Shares purchasable upon exercise of this Warrant immediately prior
thereto shall be adjusted so that the Holder shall be entitled to receive the kind and number of Warrant Shares or other securities of the Company which it would have owned or have been entitled to receive had such Warrant been exercised in advance thereof. Upon each such adjustment of the kind and number of Warrant Shares or other securities of the Company which are purchasable hereunder, the Holder shall thereafter be entitled to purchase the number of Warrant Shares or other securities resulting from such adjustment at an Exercise Price per Warrant Share or other security obtained by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of Warrant Shares purchasable pursuant hereto immediately prior to such adjustment and dividing by the number of Warrant Shares or other securities of the Company that are purchasable pursuant hereto immediately after such adjustment. An adjustment made pursuant to this paragraph shall become effective
immediately after the effective date of such event retroactive to the record date, if any, for such event.

12.  Reorganization, Reclassification, Merger, Consolidation or Disposition of Assets. In case the Company shall reorganize its capital, reclassify its capital stock, consolidate or merge with or into another corporation (where the Company is not the surviving corporation or where there is a change in or distribution with respect to the Common Stock of the Company), or sell, transfer or otherwise dispose of its property, assets or business to another corporation and, pursuant to the terms of such reorganization, reclassification, merger, consolidation or disposition of assets, shares of common stock of the successor or acquiring corporation, or any cash, shares of stock or other securities or property of any nature whatsoever (including warrants or other subscription or purchase rights) in addition to or in lieu
of common stock of the successor or acquiring corporation (“Other Property”), are to be received by or distributed to the holders of Common Stock of the Company, then the Holder shall have the right thereafter to receive upon exercise of this Warrant, the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and Other Property receivable upon or as a result of such reorganization, reclassification, merger, consolidation or disposition of assets by a Holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event. In case of any such reorganization, 

 

	
             
 	
            5
 

 

 

reclassification, merger, consolidation or disposition of assets, the successor or acquiring corporation (if other than the Company) shall expressly assume the due and punctual observance and performance of each and every covenant and condition of this Warrant to be performed and observed by the Company and all the obligations and liabilities hereunder, subject to such modifications as may be deemed appropriate (as determined in good faith by resolution of the Board of Directors of the Company) in order to provide for adjustments of Warrant Shares for which this Warrant is exercisable which shall be as nearly equivalent as practicable to the adjustments provided for in this Section 12. For purposes of this Section 12, “common stock of the successor or acquiring corporation” shall include stock of such corporation of any class which is not preferred as to dividends or assets over any other class
of stock of such corporation and which is not subject to redemption and shall also include any evidences of indebtedness, shares of stock or other securities which are convertible into or exchangeable for any such stock, either immediately or upon the arrival of a specified date or the happening of a specified event and any warrants or other rights to subscribe for or purchase any such stock. The foregoing provisions of this Section 12 shall similarly apply to successive reorganizations, reclassifications, mergers, consolidations or disposition of assets. 

 

13.  Notice of Adjustment. Whenever the number of Warrant Shares or number or kind of securities or other property purchasable upon the exercise of this Warrant or the Exercise Price is adjusted, as herein provided, the Company shall give notice thereof to the Holder, which notice shall state the number of Warrant Shares (and other securities or property) purchasable upon the exercise of this Warrant and the Exercise Price of such Warrant Shares (and other securities or property) after such adjustment, setting forth a brief statement of the facts requiring such adjustment and setting forth the computation by which such adjustment was made.

	
             
  	
            14.
 	
            Notice of Corporate Action. If at any time:
 

(a)          the Company shall take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend or other distribution, or any right to subscribe for or purchase any evidences of its indebtedness, any shares of stock of any class or any other securities or property, or to receive any other right, or

 

(b)          there shall be any capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company or any consolidation or merger of the Company with, or any sale, transfer or other disposition of all or substantially all the property, assets or business of the Company to, another corporation or,

 

(c)          there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company;

 

then, in any one or more of such cases, the Company shall give to Holder (i) at least 10 calendar days’ prior written notice of the date on which a record date shall be selected for such dividend, distribution or right or for determining rights to vote in respect of any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, liquidation or winding up, and 

 

	
             
 	
            6
 

 

 

(ii) in the case of any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up, at least 30 calendar days’ prior written notice of the date when the same shall take place. Such notice in accordance with the foregoing clause also shall specify (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, the date on which the holders of Common Stock shall be entitled to any such dividend, distribution or right, and the amount and character thereof, and (ii) the date on which any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up is to take place and the time, if any such time is to be fixed, as of which the holders of Common Stock shall be entitled to exchange their Warrant Shares for securities or other
property deliverable upon such disposition, dissolution, liquidation or winding up. Each such written notice shall be sufficiently given if addressed to Holder at the last address of Holder appearing on the books of the Company and delivered in accordance with Section 17(d).

15.  Authorized Shares. The Company covenants that during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of
the Trading Market upon which the Common Stock may be listed. 

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (a) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (b) take all such action as may
be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant, and (c) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant.

 

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

 

 

	
             
 	
            7
 

 

 

 

16.  Registration Rights. The Warrant Shares shall be entitled to the registration rights as set forth in Section 3 of that certain Stock Purchase Agreement, dated as of [                ], by and between the Company and the purchasers signatory thereto. Such registration rights are incorporated herein by this reference as if such provisions had been set forth herein full. 

	
             
  	
            17.
 	
            Miscellaneous.
 

(a)          Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Purchase Agreement.

(b)          Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state and federal securities laws.

(c)          Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies, notwithstanding all rights hereunder terminate on the Termination Date. If the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its
rights, powers or remedies hereunder.

(d)          Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement; provided upon any permitted assignment of this Warrant, the assignee shall promptly provide the Company with its contact information.

(e)          Limitation of Liability. No provision hereof, in the absence of any affirmative action by Holder to exercise this Warrant or purchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

(f)           Remedies. Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate.

(g)          Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company and the successors and permitted assigns 

 

	
             
 	
            8
 

 

 

of Holder. The provisions of this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant and shall be enforceable by any such Holder or holder of Warrant Shares.

(h)          Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

(i)           Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

(j)           Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

********************

 

	
             
 	
            9
 

 

 

 

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized.

 

	
            Dated:  [  
 	
            ], 2007
 	
             

	
             
 	
            Park City Group, Inc.
 
				

 

 

 

	
             
 	
            By:
 	
             

	
             
 	
            Name:
 
	
             
 	
            Title:
 	
             

					

 

 

	
             
 	
            10
 

 

 

 

                

NOTICE OF EXERCISE

 

	
             
 	
            To:
 	
            Park City Group, Inc.
 

 

(1)   The undersigned hereby elects to purchase ________ Warrant Shares of Park City Group, Inc. pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

	
             
 	
            (2)
 	
            Payment shall take the form of (check applicable box):
 

o in lawful money of the United States; or

o the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 3(d), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 3(d).

(3)   Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other name as is specified below:

	
             
 	
            _______________________________
 

 

 

The Warrant Shares shall be delivered to the following:

 

	
             
 	
            _______________________________
 

 

	
             
 	
            _______________________________
 

 

	
             
 	
            _______________________________
 

 

 (4)  Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

 

	
             
 	
            [PURCHASER]
 

 

 

	
             
 	
            By: ______________________________
 
	
             
 	
            Name:
 	
             

	
             
 	
            Title:
 	
             

					

 

	
             
 	
            Dated:  ________________________
 

 

 

 

 

 

ASSIGNMENT FORM

 

(To assign the foregoing warrant, execute

this form and supply required information. 

Do not use this form to exercise the warrant.)

 

 

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

_______________________________________________ whose address is

 

_______________________________________________________________.

 

 

_______________________________________________________________

 

	
             
 	
            Dated:  ______________, _______
 

 

 

	
             
 	
            Holder’s Signature:
 	
            _____________________________
 

 

	
             
 	
            Holder’s Address:
 	
            _____________________________
 

 

	
             
 	
            _____________________________
 

 

 

Signature Guaranteed:  ___________________________________________

 

NOTE:  The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.

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