Document:

ex10-1.htm

Exhibit 10.1

 

RESTRUCTURING AGREEMENT

This Agreement (“Agreement”) is entered into as of February __, 2015, by and between Park City Group, Inc., a Nevada corporation (the “Company”), and _________ (“Shareholder”).

RECITALS

WHEREAS, 600,000 shares of the Company’s preferred stock, par value $0.01 per share (“Preferred Stock”) is currently designated as Series B Convertible Preferred Stock (“Series B Preferred”);

WHEREAS, the Shareholder beneficially owns ______ shares of Series B Preferred, which shares of Series B Preferred currently accrue dividends, payable in cash, at a rate of 15% per annum until July 2015 when the dividend rate will increase to 18% per annum (the “Dividend Rate”);

WHEREAS, each share of Series B Preferred is currently convertible, at the option of the Shareholder, into 2.5 shares of the Company’s common stock, par value $0.01 per share (“Common Stock”), and has a stated value equal to $10.00 per share (“Stated Value”);

WHEREAS, in order to preserve the cash otherwise payable to the Shareholder as dividends on the Series B Preferred, and to reduce potential dilution to the Company’s issued and outstanding shares of Common Stock that would occur should the Shareholder choose to convert their shares of Series B Preferred into shares of Common Stock, the parties have agreed to amend the Certificate of Designation of the Relative Rights, Powers and Preference of the Series B Convertible Preferred Stock (the “Certificate of Designation”) in order to (the “Amendment”): (i) decrease the Dividend Rate to 7% per annum, if such dividends are paid by the Company in cash, and to 9% if such dividends are paid by the Company in PIK Shares (as defined below); (ii) allow the Company to pay accrued dividends on outstanding shares of Series B Preferred in either cash or by the issuance of additional shares of Series B Preferred (“PIK Shares”); (iii) eliminate the conversion feature of the Series B Preferred; and (iv) in order to ensure there are sufficient shares of Series B Preferred available for issuance as PIK Shares, increase the number of shares of Preferred Stock designated as Series B Preferred from 600,000 to 900,000; and

WHEREAS, in consideration for the Amendment, (i) the Holders will receive additional shares of Series B Preferred with a Stated Value equal to the amount that, but for the Series B Restructuring, would have been paid to the Holders as dividends over the next five years (the “Additional Series B Preferred”); and (ii) the Company will issue to the Shareholder a warrant to purchase that number of shares of Common Stock equal to the number of shares the Shareholder would otherwise be entitled to receive upon conversion of their shares of Series B Preferred (“Series B Warrant”), for $4.00 per share.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby agreed and acknowledged, the parties hereby agree as follows:

1.           Amended and Restated Certificate of Designation.

1.1           Amendment to Terms and Conditions of the Series B Preferred.  In reliance upon the representations, warranties, covenants, terms and conditions of this Agreement, the Company shall, and the Shareholder consents to, the filing of an amended and restated Certificate of Designation with the Nevada Secretary of State, titled the ‘First Amended and Restated Certificate of Designation of the Relative Rights, Powers and Preference of the Series B Preferred Stock’ and in substantially the form attached hereto as Exhibit A (the “Amended Certificate of Designation”), to effect the following changes:

(i)           amend the second paragraph of the Certificate of Designation, which paragraph sets forth the resolution of the Company’s Board of Directors designating shares of the Company’s preferred stock as Series B Preferred, to read as follows:

 

“By resolution, the Board of Directors of the Corporation has established, designated and fixed the terms, preferences, limitations and relative rights of up to nine hundred thousand (900,000) shares of the authorized and unissued preferred stock of the Corporation, par value $0.01 per share, as “Series B Preferred Stock” (the “Series B Preferred Stock”) with the following rights, preferences, powers, privileges and restrictions, qualifications and limitations:”

 

  

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(ii)           eliminate Section 4, titled “Optional Conversion and Adjustment to Conversion Price”, in order to terminate the convertibility feature of the Series B Preferred into shares of Common Stock;

(iii)           amend Section 1, Dividends, to read as follows:

“1.           Dividends.

(a)           Dividends.  (i) Except as otherwise provided herein, the holders of shares of Series B Preferred Stock shall be entitled to receive, out of funds legally available there for and as set forth in Section 1(a)(iii), dividends at the rate of seven percent (7.0%) per annum (the “Dividend Rate”) of the Series B Original Issue Price (as defined below) on each outstanding share of Series B Preferred Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization affecting such shares); provided, however, in the event the Company chooses to pay any outstanding dividend in accordance with Section 1(a)(iii), the Dividend Rate will be nine percent (9%) per annum.

(ii)           Dividends shall accrue and be payable (A) quarterly on January 2, April 1, July 1 and October 1 of each year (a “Dividend Payment Date”) and (B) on the Repurchase Date (as defined below). Dividends shall be payable in accordance with Section 1(a)(iii) below.  In the event any dividend payment is not paid within ten (10) days of the applicable Dividend Payment Date a late fee shall be assessed and paid to the dividend recipient in the amount of eighteen percent (18%) of the dividend amount.

(iii)           The Company may pay dividends accrued pursuant this Section 1(a) at each Dividend Payment Date to any holder in either (i) shares of Series B Preferred Stock, (ii) in cash or (iii) in some combination of Series B Preferred Stock and cash, provided that each holder shall receive the same combination of shares of Series B Preferred Stock and cash as all other holders on any Dividend Payment Date.”; and

(iii)           any other changes necessary to effect the changes contemplated by the Agreement.

1.2           Issuance of Additional Series B Preferred.  As consideration for the decrease of the Dividend Rate, the Company will deliver to the Shareholder ________ shares of Series B Preferred.

1.3           Issuance of Warrants in Lieu of Conversion Feature.   As consideration for the elimination of the conversion feature of the Series B Preferred, upon filing of the Amended and Restated Certificate of Designation with the Nevada Secretary of State, the Company will deliver to the Shareholder a Series B Warrant, in substantially the form attached hereto as Exhibit B, to purchase for a period of five years from the date of issuance, up to _________ shares of Common Stock at an exercise price of $4.00 per share (the “Series B Warrant(s)”).

2.           Representations and Warranties of the Shareholders.  The Shareholder makes the following representations and warranties to the Company:

2.1           Execution; Binding Agreement. This Agreement has been duly authorized, validly executed and delivered by the Shareholder and is a valid and binding agreement and obligation of the Shareholder, enforceable against the Shareholder in accordance with its terms, and the Shareholder has full power and authority to execute and deliver the Agreement and the documents contemplated hereby and to perform his obligations hereunder and thereunder.

2.2           Securities Laws. The Shareholder understands that the Additional Series B Preferred and Series B Warrant, and, when issued, shares of Common Stock issuable upon exercise of the Series B Warrants (collectively, the “Securities”), are or will be offered and sold to in reliance on specific provisions of federal and state securities laws and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of the Shareholder set forth herein for purposes of qualifying for exemptions from registration under the Securities Act of 1933, as amended (the “Securities Act”) and applicable state securities laws.

2.3           Accredited Investor. The Shareholder is an “accredited investor” as defined under Rule 501 of Regulation D promulgated under the Securities Act.

 

  

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2.4           Acquisition for Own Account. The Shareholder is and will be acquiring the Securities for his own account, for investment purposes, and not with a view to any resale or distribution in whole or in part, in violation of the Securities Act or any applicable securities laws; provided, however, that notwithstanding the foregoing, the Shareholder does not covenant to hold the Securities for any minimum period of time other than as required to forego any transaction that could result in short-swing profits, as defined by Section 16(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or as otherwise required by law.

2.5           Securities Act Exemption. The offer and sale of the Securities is intended to be exempt from registration under the Securities Act, by virtue of Section 3(a)(9) and/or Section 4(2) thereof and Regulation D promulgated thereunder. The Shareholder understands that the Securities purchased hereunder are “restricted securities,” as that term is defined in the Securities Act and the rules thereunder, have not been registered under the Securities Act, and that none of the Securities can be sold or transferred unless they are first registered under the Securities Act and such state and other securities laws as may be applicable or the Company receives an opinion of counsel reasonably acceptable to the Company that an exemption from registration under the Securities Act is available (and then the Securities may be sold or transferred only in compliance with such exemption and all applicable state and other securities laws).

3.           Representations, Warranties and Covenants of the Company.  The Company makes the following representations and warranties to the Shareholder, and covenants as follows for the benefit of the Shareholder:

3.1           Incorporation. The Company has been duly incorporated and is validly existing and in good standing under the laws of the state of Nevada, with full corporate power and authority to own, lease and operate its properties and to conduct its business as currently conducted, and is duly registered and qualified to conduct its business and is in good standing in each jurisdiction or place where the nature of its properties or the conduct of its business requires such registration or qualification, except where the failure to register or qualify would not have a Material Adverse Effect. For purposes of this Agreement, “Material Adverse Effect” shall mean any material adverse effect on the business, operations, properties, prospects, or financial condition of the Company and its subsidiaries and/or any condition, circumstance, or situation that would prohibit or otherwise materially interfere with the ability of the Company to perform any of its obligations under this Agreement.

3.2           Authorization of Securities. The Securities have been duly authorized by all necessary corporate action and, when paid for or issued in accordance with the terms hereof, the Securities shall be validly issued, fully paid and non-assessable, free and clear of all liens, encumbrances and rights of refusal of any kind.

3.3           Execution; Binding Agreement. This Agreement has been duly authorized, validly executed and delivered on behalf of the Company and is a valid and binding agreement and obligation of the Company enforceable against the Company in accordance with its terms, and the Company has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder and thereunder.

3.4           No Conflicts. The execution and delivery of the Agreement and the consummation of the transactions contemplated by this Agreement will not: (i) conflict with or result in a breach of or a default under any of the terms or provisions of, (A) the Company's articles of incorporation or by-laws, or (B) of any material provision of any indenture, deed of trust or other material agreement or instrument to which the Company is a party or by which it or any of its material properties or assets is bound, (ii) result in a violation of any provision of any law, statute, rule, regulation, or any existing applicable decree, judgment or order by any court, federal or state regulatory body, administrative agency, or other governmental body having jurisdiction over the Company, or any of its material properties or assets or (iii) result in the creation or imposition of any material lien, charge or encumbrance upon any material property or assets of the Company or any of its subsidiaries pursuant to the terms of any agreement or instrument to which any of them is a party or by which any of them may be bound or to which any of their property or any of them is subject except in the case of clauses (i)(B), (ii) or (iii) for any such conflicts, breaches, or defaults or any liens, charges, or encumbrances which would not have a Material Adverse Effect.

3.5           Securities Act Exemption. The delivery and issuance of the Securities in accordance with the terms of and in reliance on the accuracy of the Shareholder’s representations and warranties set forth in this Agreement will be exempt from the registration requirements of the Securities Act.

3.6           Governmental Approvals. No consent, approval or authorization of or designation, declaration or filing with any governmental authority on the part of the Company is required in connection with the valid execution and delivery of this Agreement or the offer, sale or issuance of the Securities or the consummation of any other transaction contemplated by this Agreement.

 

  

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3.7           Compliance with Securities Laws. The Company has complied and will comply with all applicable federal and state securities laws in connection with the offer, issuance and delivery of the Securities hereunder. Neither the Company nor anyone acting on its behalf, directly or indirectly, has or will sell, offer to sell or solicit offers to buy any of the Securities, or similar securities to, or solicit offers with respect thereto from, or enter into any preliminary conversations or negotiations relating thereto with, any person, or has taken or will take any action so as to bring the issuance and sale of any of the Securities under the registration provisions of the Securities Act and applicable state securities laws. Neither the Company nor any of its affiliates, nor any person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with the offer or sale of any of the Securities.

3.8           Exchange Act Registration of Common Stock. The Company shall cause its Common Stock to continue to be registered under Section 12(b) or 12(g) of the Exchange Act, and shall not take any action or file any document (whether or not permitted by the Securities Act or the rules promulgated thereunder) to terminate or suspend its reporting and filing obligations under the Exchange Act and the Securities Act. The Company will take all action necessary to continue the listing or trading of its Common Stock on the NASDAQ Capital Market or such other exchange or market on which the Common Stock is trading.

4.           Miscellaneous.

4.1             Governing Law; Consent to Jurisdiction.  This Agreement shall be governed by and interpreted in accordance with the laws of the State of Utah without giving effect conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The Shareholder and the Company consent to the exclusive jurisdiction of the federal courts whose districts encompass any part of the State of Utah in connection with any dispute arising under this Agreement and hereby waives, to the maximum extent permitted by law, any objection, including any objection based on forum non conveniens, to the bringing of any such proceeding in such jurisdictions. THE SHAREHOLDER AND THE COMPANY HEREBY WAIVE ITS RIGHT TO A TRIAL BY JURY. The Shareholder and the Company irrevocably consent to the service of process in any such proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to such party at its address set forth herein. Nothing herein shall affect the right of the Shareholder or the Company to serve process in any other manner permitted by law.

4.2             Notices.  All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, express overnight courier, registered first class mail, initially to the address set forth below, and thereafter at such other address, notice of which is given in accordance with the provisions of this Section 4.2. All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; when receipt is acknowledged, if faxed; or when actually received or refused if sent by other means.

If to the Company:

Park City Group, Inc.

299 South Main Street, Suite 2370

Salt Lake City, Utah 84111

Attention: Chief Financial Officer

with a copy to:

Disclosure Law Group

600 West Broadway, Suite 700

San Diego, California 92101

Attention: Daniel W. Rumsey

If to the Shareholder:

________________________

________________________

________________________

 

  

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4.3               Entire Agreement.  This Agreement constitute the entire understanding and agreement of the Shareholder and the Company with respect to the subject matter hereof and supersede all prior and/or contemporaneous oral or written proposals or agreements relating thereto all of which are merged herein.

4.4               Amendments.  This Agreement may not be amended or any provision hereof waived in whole or in part, except by a written amendment signed by the Shareholder and the Company.

4.5               Counterparts.  This Agreement may be executed by facsimile signature and in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.

4.6               Assignments; Successors and Assigns.  This Agreement shall be binding on and inure to the benefit of the successors and assigns of the Shareholder and the Company.  The Company may not assign its rights and obligations hereunder to any person or entity.  The Shareholder may assign its rights and obligations hereunder to any affiliate of the Shareholder without the consent of the Company, and the Shareholder may assign any Securities to any person or entity without the consent of the Company.

[signature page follows]

  

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IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement as of the date first set forth above.

	 	
PARK CITY GROUP, INC.

 

 

	 	  
	 	
Name:

Title:

 

 

	 	
SHAREHOLDER:

 

	 	  
	 	  
	 	
Name:

[Signature Page to Restructuring Agreement]

 

 

-6-ex10-2.htm

Exhibit 10.2

 

THE SECURITIES REPRESENTED BY THIS WARRANT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS.  SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

 

	
Dated: February __, 2015

	
Warrant Number: «IDNo»

 

WARRANT TO PURCHASE

COMMON STOCK OF

PARK CITY GROUP, INC.

This certifies that __________________, or assigns (collectively, the “Holder”), for value received, is entitled to purchase, at an exercise price per share equal to $4.00 (the “Exercise Price”), from PARK CITY GROUP, INC., a Nevada corporation (the “Company”), up to _______ shares of fully paid and nonassessable shares of the Company’s Common Stock (the “Common Stock”).

 

This Warrant shall be exercisable at any time from time to time from and after the date of issuance hereof (the “Issuance Date”) up to and including 5:00 p.m. (Pacific Time) on (i) the earlier to occur of December __, 2019, or (ii), subject to the provisions of Section __ below, the date that the Holder is no longer the registered owner of shares of the Company’s Series B Preferred Stock (“Series B Preferred”) (such earlier date being referred to herein as the “Expiration Date”), upon surrender to the Company at its principal office (or at such other location as the Company may advise the Holder in writing) of this Warrant properly endorsed with (i) the Notice of Exercise attached hereto duly completed and executed and (ii) payment pursuant to Section 2 of the aggregate Exercise Price for the number of shares for which this Warrant is being exercised determined in accordance with the provisions hereof. The Exercise Price and the number of shares purchasable hereunder are subject to adjustment as provided in Section 4 of this Warrant.

 

In the event the Company elects to redeem all (but not less than all) of the outstanding shares of Series B Preferred for cash (“Redemption”), and this Warrant has not otherwise been exercised in whole or in part, the Company shall, within 30 days after the date of redemption of the Series B Preferred (the “Redemption Date”), redeem this Warrant by paying to the holder of record hereof an amount of cash equal to the Black Scholes Value of the remaining unexercised portion of this Warrant on the Redemption Date.  “Black Scholes Value” means the value of this Warrant based on the Black Scholes Option Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”) determined as of the Redemption Date for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the Redemption and the Expiration Date, (B) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as of the trading day immediately following the public announcement of the Redemption, (C) the effective price paid per share of Common Stock paid to holders of Series B Preferred in connection with the Redemption, and (D) a remaining option time equal to the time between the date of the public announcement of the Redemption and the Expiration Date.

 

1.            Exercise; Issuance of Certificates; Acknowledgement.  This Warrant is exercisable at the option of the holder of record hereof, at any time or from time to time from or after the Issuance Date up to the Expiration Date for all or any part of the Warrant Shares (but not for a fraction of a share), which may be purchased hereunder.  The Company agrees that the shares of Common Stock purchased under this Warrant shall be and are deemed to be issued to the Holder hereof as the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered, properly endorsed, the completed, executed Notice of Exercise delivered and payment made for such shares.  Certificates for the shares of the Common Stock so purchased, together with any other securities or property to which the Holder hereof is entitled upon such exercise, shall be delivered to the Holder hereof by the Company’s transfer agent at the Company’s expense within a reasonable time after the rights represented by this Warrant have been so exercised.  Each certificate so delivered shall be in such denominations of the Warrant Shares as may be requested by the Holder hereof and shall be registered in the name of such Holder.  In case of a purchase of less than all the Warrant Shares, the Company shall execute and deliver to Holder within a reasonable time an Acknowledgement in the form attached hereto indicating the number of Warrant Shares which remain subject to this Warrant, if any.

 

2.            Payment for Shares.

 

2.1           The aggregate purchase price for Warrant Shares being purchased hereunder may be paid either by check, cash or wire transfer of immediately available funds.

  

  

  

2.2           Notwithstanding anything contained herein to the contrary, the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the Exercise Price, elect instead to receive upon such exercise that number of shares of Common Stock determined according to the following formula:

 

Net Number = (A x B) - (A x C)

B

For purposes of the foregoing formula:

 

	
  

	
A = the total number of shares with respect to which this Warrant is then being exercised.

 

	
  

	
B = the closing sale price of the Common Stock on the date immediately preceding the date that the Notice of Exercise is delivered to the Company.

 

	
  

	
C = the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.

3.            Shares to be Fully Paid; Reservation of Shares.  The Company covenants and agrees that all shares of Common Stock which may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be duly authorized, validly issued, fully paid and nonassessable and free from all preemptive rights of any shareholder and free of all taxes, liens and charges with respect to the issue thereof.  The Company further covenants and agrees that during the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized and reserved, for the purpose of issue or transfer upon exercise of the subscription rights evidenced by this Warrant, a sufficient number of shares of authorized but unissued shares of Common Stock, or other securities and property, when and as required to provide for the exercise of the rights represented by this Warrant.

 

4.            Adjustment of Exercise Price and Number of Shares.  The Exercise Price and the number of shares purchasable upon the exercise of this Warrant shall be subject to adjustment from time to time upon the occurrence of certain events described in this Section 4.  Upon each adjustment of the Exercise Price, the Holder of this Warrant shall thereafter be entitled to purchase, at the Exercise Price resulting from such adjustment, the number of shares obtained by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of shares purchasable pursuant hereto immediately prior to such adjustment, and dividing the product thereof by the Exercise Price resulting from such adjustment.

 

4.1           Subdivisions, Combinations and Dividends.  In case the Company shall at any time subdivide its outstanding shares of Common Stock into a greater number of shares or pay a dividend in Common Stock in respect of outstanding shares of Common Stock, the Exercise Price in effect immediately prior to such subdivision or at the record date of such dividend shall be proportionately reduced, and conversely, in case the outstanding shares of the Common Stock of the Company shall be combined into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall be proportionately increased.

 

4.2           Reclassification.  If any reclassification of the capital stock of the Company shall be effected in such a way that holders of Common Stock shall be entitled to receive stock, securities, or other assets or property, then, as a condition of such reclassification, lawful and adequate provisions shall be made whereby the Holder hereof shall thereafter have the right to purchase and receive (in lieu of the shares of the Common Stock immediately theretofore purchasable and receivable upon the exercise of the rights represented hereby) such shares of stock, securities or other assets or property as may be issued or payable with respect to or in exchange for a number of outstanding shares of such Common Stock equal to the number of shares of such Common Stock immediately theretofore purchasable and receivable upon the exercise of the rights represented hereby.  In any reclassification described above, appropriate provision shall be made with respect to the rights and interests of the Holder of this Warrant to the end that the provisions hereof (including, without limitation, provisions for adjustments of the Exercise Price and of the number of shares purchasable and receivable upon the exercise of this Warrant) shall thereafter be applicable, as nearly as may be, in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise hereof.

 

4.3           Notice of Adjustment.  Upon any adjustment of the Exercise Price or any increase or decrease in the number of shares purchasable upon the exercise of this Warrant, the Company shall give written notice thereof, by first class mail postage prepaid, addressed to the registered Holder of this Warrant at the address of such Holder as shown on the books of the Company.  The notice shall be signed by the Company’s chief financial officer and shall state the Exercise Price resulting from such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of this Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based.

 

  

  

  

4.4           Other Notices.  If at any time:

 

(1)           the Company shall declare any cash dividend upon its Common Stock;

 

(2)           there shall be a Change of Control; or

 

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

 

then, in any one or more of said cases, the Company shall give, by first class mail, postage prepaid, addressed to the Holder of this Warrant at the address of such Holder as shown on the books of the Company, (a) at least twenty (20) days prior written notice of the date on which the books of the Company shall close or a record shall be taken for such dividend or for determining rights to vote in respect of any such Change of Control or dissolution, liquidation or winding-up, and (b) in the case of any such Change of Control or dissolution, liquidation or winding-up, at least twenty (20) days prior written notice of the date when the same shall take place; provided, however, that the Holder shall make a best efforts attempt to respond to such notice as early as possible after the receipt thereof.  Any notice given in accordance with the foregoing clause (a) shall also specify, in the case of any such dividend, the date on which the holders of Common Stock shall be entitled thereto.  Any notice given in accordance with the foregoing clause (b) shall also specify the date on which the holders of Common Stock shall be entitled to exchange their Common Stock for securities or other property deliverable upon such Change of Control, dissolution, liquidation, winding-up or conversion, as the case may be.

 

5.            No Voting or Dividend Rights.  Nothing contained in this Warrant shall be construed as conferring upon the Holder hereof the right to vote or to consent to receive notice as a shareholder of the Company or any other matters or any rights whatsoever as a shareholder of the Company.  No dividends or interest shall be payable or accrued in respect of this Warrant or the interest represented hereby or the shares purchasable hereunder until, and only to the extent that, this Warrant shall have been exercised.

 

6.            Warrants Transferable.  Subject to compliance with applicable federal and state securities laws, this Warrant and all rights hereunder may be transferred, in whole or in part, without charge to the holder hereof (except for transfer taxes), upon the prior written consent of the Company and, thereafter, upon surrender of this Warrant properly endorsed and compliance with the provisions hereof.  Each taker and holder of this Warrant, by taking or holding the same, consents and agrees that this Warrant, when endorsed in blank, shall be deemed negotiable, and that the holder hereof, when this Warrant shall have been so endorsed, may be treated by the Company, at the Company’s option, and all other persons dealing with this Warrant as the absolute owner hereof for any purpose and as the person entitled to exercise the rights represented by this Warrant, or to the transfer hereof on the books of the Company and notice to the contrary notwithstanding; but until such transfer on such books, the Company may treat the registered owner hereof as the owner for all purposes.

 

7.            Lost Warrants.  Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and, in the case of any such loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory to the Company, or in the case of any such mutilation upon surrender and cancellation of such Warrant, the Company, at its expense, will make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant.

 

8.            Modification and Waiver.  Any term of this Warrant may be amended and the observance of any term of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the Holder hereof.  Any amendment or waiver effected in accordance with this paragraph shall be binding upon the Company and the Holder.

 

9.            Notices.  All notices and other communications from the Company to the Holder, or vice versa, shall be deemed delivered and effective when given personally or mailed by first-class registered or certified mail, postage prepaid, at such address as may have been furnished to the Company or the Holder, as the case may be, in writing by the Company or such holder from time to time.

 

10.            Titles and Subtitles; Governing Law; Venue.  The titles and subtitles used in this Warrant are used for convenience only and are not to be considered in construing or interpreting this Warrant.  This Warrant is to be construed in accordance with and governed by the internal laws of the State of Utah without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of Utah to the rights and duties of the Company and the Holder.  All disputes and controversies arising out of or in connection with this Warrant shall be resolved exclusively by the state and federal courts located in Salt Lake County in the State of Utah, and each of the Company and the Holder hereto agrees to submit to the jurisdiction of said courts and agrees that venue shall lie exclusively with such courts.

 

[Signature Page Follows]

  

  

  

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its officers, thereunto duly authorized as of the date first above written.

 

 

	 	
PARK CITY GROUP, INC.

 

 

	 	By:	 
	 	Name:	 
	 	Title:	 

 

  

  

  

NOTICE OF EXERCISE

 

(To be signed only upon exercise of Warrant)

To:  PARK CITY GROUP, INC.

 

(1)           The undersigned hereby elects to purchase ________ Warrant Shares of the Company 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):

 

[  ] in lawful money of the United States; or

 

[  ] [if permitted] the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2.2, to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2.2.

 

(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: 

 

_______________________________

DATED:  ________________

[NAME OF HOLDER]

By:                                                                           

Name:                                                                      

Its:                                                                           

  

  

  

ACKNOWLEDGMENT

 

To:  [name of Holder]

 

The undersigned hereby acknowledges that as of the date hereof, __________________ (___________) shares of Common Stock remain subject to the right of purchase in favor of __________________ pursuant to that certain Warrant to Purchase Common Stock of Park City Group, Inc. Number ____ dated as of __________, 2014.

 

DATED:  ________________

PARK CITY GROUP, INC.

By:                                                                           

Name:                                                                      

Title:

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