Exhibit 10.1
NOTE AND WARRANT PURCHASE AGREEMENT
THIS NOTE AND WARRANT PURCHASE AGREEMENT (this "Agreement") is made as
of the 16th day of August, 2002 (the "Effective Date") by and among PARK CITY
GROUP. INC. a Nevada corporation (the "Company"), and ________(the "Purchaser").
In consideration of the mutual covenants and agreements herein
contained, the parties hereto hereby agree as follows:
1. AMOUNT AND TERMS OF THE LOAN
1.1. The Loan. Subject to the terms of this Agreement, the Purchaser
agrees to purchase, for $____________, a note from the Company having a
face value equal to $_________ (the "Principal Amount") and shall
receive, upon the purchasing of such note and in consideration
therefor:
1.1.1. A promissory note in substantially the form attached
hereto as Exhibit A (the "Note").
1.1.2. A warrant (the "Warrant") to purchase shares (the
"Warrant Share Number") of common stock, par value $.01 per
share, of the Company (the "PCG Common Stock"). The Warrant
shall be in substantially the form attached hereto as Exhibit
B.
1.1.3. Value of Note and Warrant. The Company and the
Purchaser, having adverse interests and as a result of arm's
length bargaining, agree that Neither the Purchaser nor any
affiliated company has rendered any services to the Company in
connection with this Agreement. The aggregate fair market
value of the Note, if issued apart from the Warrant, is $ ,
and the aggregate fair market value of the Warrant, if issued
apart from the Note, is $ , or $0.02 per share covered by the
Warrant.
2. THE CLOSING
2.1. Closing Date. The closing of the purchase and sale of the Note and
the Warrant (the "Closing") shall be held on the Effective Date, or at
such other time as the Company and the Purchaser shall agree (the
"Closing Date").
2.2. Delivery. At the Closing (i) the Purchaser will deliver to the
Company a check or wire transfer of funds in the amount of the Loan
Amount; and (ii) the Company shall issue and deliver to the Purchaser
(a) a Note in favor of the Purchaser payable in the principal amount of
the Principal Amount and (b) a Warrant issued in the name of Purchaser
and exercisable for the Warrant Share Number of shares of Fields Common
Stock.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY
The Company hereby represents and warrants to the Purchaser as follows:
3.1. Corporate Power. The Company has, and will have at the Closing
Date, all requisite corporate power to execute and deliver this
Agreement and to carry out and perform its obligations under the terms
of this Agreement.
3.2. Authorization. All corporate action on the part of the Company,
its directors and its stockholders necessary for the authorization,
execution, delivery and performance of this Agreement by the Company
and the performance of the Company's obligations hereunder, has been
taken.
3.3. Offering. Assuming the accuracy of the representations and
warranties of the Purchaser contained in Section 4 hereof, the offer,
issue, and sale of the Notes and Warrants are and will be exempt from
the registration and prospectus delivery requirements of the Securities
Act of 1933, as amended (the "1933 Act"), and have been registered or
qualified (or are exempt from registration and qualification) under the
registration, permit, or qualification requirements of all applicable
state securities laws.
3.4. Financial Statements. The Company has previously made available to
the Purchaser, or indicated the online location of, a copy of its
audited financial statements (i) as of and for the fiscal year ended
December 31, 2000 and 1999 certified by Xxxxxxxx, Xxxxx & Co. the
"Audited 2000 Financials", and (ii) as of and for the six months ended
June 30, 2001 (the Audited 2001 Financials") certified by Xxxxxx & Co.,
and with true and complete copies of each registration statement and
proxy statement (including supplements and amendments thereto) filed by
the Company with the Securities and Exchange Commission (the "SEC")
since June 30, 2001 and of the following reports filed by the Company
with the SEC: the Company's Annual Reports on Form 10-K[SB] for each of
the two fiscal years in the periods ended December 31, 1999, and 2000,
and the six months ending June 30, 2001, and all Quarterly Reports on
Form 10-QSB and all Current Reports on Form 8-K filed after June 30,
2001 (the "SEC Filings"). The Company Financial Statements and the
audited year-end and unaudited interim financial statements and
schedules contained in the SEC Filings (or incorporated therein by
reference) were prepared in accordance with the books and records of
the Company in all material respects and were prepared in accordance
with generally accepted accounting principles applied on a consistent
basis throughout the periods involved, except as otherwise noted
therein and except that the unaudited interim financial statements were
or are subject to normal year-end and audit adjustments that in the
aggregate are not material. Each of the financial statements referred
to above fairly presents the financial position of the Company as of
the respective dates set forth therein or the results of operations and
changes in financial position of the Company for the respective fiscal
periods or as of the respective dates set forth therein, except that
the unaudited interim financial statements were or are subject to
normal year-end and audit adjustments that in the aggregate are not
material. Each such registration statement, proxy statement and SEC
Filing did not, on the date of effectiveness in the case of such
registration statements, on the date of mailing and on the date of any
stockholder meetings in the case of such proxy statements and on the
date of filing in the case of such SEC Filings, contain any 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, in
light of the circumstances under which they were made, not misleading.
Each SEC filing, as of the date of its filing, complied as to form with
the requirements of the Securities Exchange Act of 1934, as amended.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Company as follows:
4.1. Purchase for Own Account. The Purchaser is acquiring the Note, the
equity securities into which the Note may be converted, the Warrant and
the Fields Common Stock issuable upon exercise of the Warrant
(collectively, the "Securities") solely for its own account and
beneficial interest for investment and not for sale or with a view to
distribution of the Securities or any part thereof, has no present
intention of selling (in connection with a distribution or otherwise),
granting any participation in, or otherwise distributing the same, and
does not presently have reason to anticipate a change in such
intention. The Purchaser understands that the Securities have not been
registered under the 1933 Act and applicable state securities laws and,
therefore, cannot be resold unless they are subsequently registered
under the 1933 Act and applicable state securities laws or unless an
exemption from such registration is available. The Purchaser further
understands and agrees that, until so registered or transferred
pursuant to the provisions of Rule 144 under the Securities Act, such
securities shall bear a legend, prominently stamped or printed thereon,
reading substantially as follows:
"These securities have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), or
applicable state securities laws. These securities have been
acquired for investment and not with a view to their
distribution or resale, and may not be sold, pledged, or
otherwise transferred without an effective registration
statement for such securities under the Securities Act and
applicable state securities laws, or an opinion of counsel
satisfactory to the Corporation to the effect that such
registration is not required."
Such legend shall be removed when such securities may be sold pursuant
to Rule 144(k).
4.2. Information and Sophistication. The Purchaser acknowledges that it
has made inquiry concerning the Company, its business, operations,
financial condition and its personnel and received all the information
it has requested from the Company that it considers necessary or
appropriate for deciding whether to acquire the Securities. The
officers of the Company have made available to the Purchaser any and
all written information which the Purchaser has requested and have
answered to the Purchaser's satisfaction all inquiries made by the
Purchaser. The Purchaser represents that it has had an opportunity to
ask questions and receive answers from the Company regarding the terms
and conditions of the offering of the Securities and to obtain any
additional information necessary to verify the accuracy of the
information given the Purchaser. The Purchaser further represents that
it has such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risk of this investment
and that the Purchaser has the capacity to protect its own interests in
connection with the purchase of the Securities by reason of the
Purchaser's business or financial experience.
4.3. Ability to Bear Economic Risk. The Purchaser acknowledges that
investment in the Securities involves a high degree of risk, and
represents that it is able, without materially impairing its financial
condition, to hold the Securities for an indefinite period of time and
to suffer a complete loss of its investment.
4.4. Risk. The Company's operations are subject to all of the risks
inherent in any early-stage business enterprise and the likelihood of
the success of the Company must be evaluated in light of various
factors, including the need for additional capital to fund the
Company's activities, working capital deficits, competition with
established and well-financed entities, the need for further
refinements of the Company's products and services, changes in
technology, reliance on key personnel, changes in markets generally for
the Company's products and services, and changes and uncertainties in
the securities markets. There can be no assurance that the Company will
be able to generate sufficient revenues to support its operations
and/or achieve profitable results.
4.5. Accredited Investor Status. The Purchaser is an "accredited
investor" as such term is defined in Rule 501 under the Securities Act.
4.6. Further Assurances. The Purchaser agrees and covenants that at any
time and from time to time it will promptly execute and deliver to the
Company such further instruments and documents and take such further
action as the Company may reasonably require in order to carry out the
full intent and purpose of this Agreement.
5. MISCELLANEOUS
5.1. Binding Agreement. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any third party any
rights, remedies, obligations, or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement.
5.2. Governing Law. This Agreement shall be governed by and construed
under the laws of the State of Utah as applied to agreements among Utah
residents, made and to be performed entirely within the State of Utah.
5.3. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
5.4. Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
5.5. Notices. Any notice required or permitted under this Agreement
shall be given in writing and shall be deemed effectively given upon
personal delivery or upon deposit with the United States Post Office,
postage prepaid, addressed to the Company 000 Xxxx Xxxxxx Xxxxx #000;
X.X. Xxx 0000; Xxxx Xxxx, XX 00000, or to the Purchaser at
_____________________________________, or at such other address as such
party may designate by ten (10) days advance written notice to the
other party.
5.6. Modification; Waiver. No modification or waiver of any provision
of this Agreement or consent to departure therefrom shall be effective
unless in writing and approved by the Company and the Purchaser.
5.7 Entire Agreement. This Agreement and the Exhibits hereto constitute
the full and entire understanding and agreement between the parties
with regard to the subjects hereof and no party shall be liable or
bound to any other in any manner by any representations, warranties,
covenants and agreements except as specifically set forth herein.
5.8 Purchaser's Expenses. The Company will pay Purchaser's reasonable
out-of-pocket expenses associated with this Loan, including, but not
limited to, expenses of counsel; provided, however, that all Purchasers
work with the Company's financial advisor and such advisor's counsel in
such efforts.
IN WITNESS WHEREOF, the parties have executed this NOTE AND WARRANT PURCHASE
AGREEMENT as of the date first written above.
COMPANY:
PARK CITY GROUP INC.
By:_______________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer, President
PURCHASER:________________________________
NAME _____________________________________
By: ______________________________________
Name:_____________________________________
Title: An Individual
