Exhibit 10.2
Securities Purchase Agreement
The attached Securities 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 Post $ Amount Exact Name in Which Authorized Signature Print Name of Signature (if Print Name
Split Title is to be Held Signatory and Joint Tenants of above
Shares* Capacity in Which or Tenants in Signatory
Signed if an Entity Common)
6/7/2006 10,909,091 218,181 $600,000.00 Xxxxxxx Partners LP /s/ Xxxxxx X. Xxxxxxxxxx Xxxxxx X.
Xxxxxxxxxx, President
6/2/2006 7,272,727 145,454 $400,000.00 Xxxxxx X. Xxxxxx /s/ X.X. Xxxxxx Xxxxxx X. Xxxxxx
5/31/2006 3,636,364 72,727 $200,000.00 Xxxxxxx X. Xxxxxxx /s/ Xxxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxx
6/16/2006 3,636,364 72,727 $200,000.00 Nite Capital LP /s/ Xxxxx Xxxxxxx Xxxxx Xxxxxxx,
Manageing Partner
6/1/2006 3,636,363 72,727 $200,000.00 Xxxxxx X. Xxxxxxx /s/ Xxxxxx X Xxxxxxx Xxxxxx X Xxxxxxx
6/1/2006 3,636,363 72,727 $200,000.00 Shadow Capital LLC /s/ B. Xxxx Xxxxxxxxxxxx B. Xxxx Xxxxxxxxxxxx
6/1/2006 2,800,000 56,000 $154,000.00 Xxxx X. Xxxxxxx Trust /s/ Xxxx X. Xxxxxxx Xxxx X. Xxxxxxx, TTEE
6/6/2006 1,818,181 36,363 $100,000.00 Xxxxx Xxxxxx /s/ Xxxxx Xxxxxx Xxxxx Xxxxxx
6/1/2006 1,818,181 36,363 $100,000.00 Xxxx P & Xxxxxxxx A /s/ Xxxx X.Xxxxxx Xxxx X. Xxxxxx /s/ Xxxxxxxx Xxxxxxxx X.
Xxxxxx A. Xxxxxx Xxxxxx
6/1/2006 1,818,182 36,363 $100,000.00 Xxxxxxx Xx Xxxx /s/ Xxxxxxx Xx Xxxx Xxxxxxx Xx Xxxx /s/ Xxxxxxx Xx Xxxxxxx De
Xxxx Xxxx
6/1/2006 1,818,181 36,363 $100,000.00 Polaris Partners, LP /s/ Xxxxx Xxxxxxx /s/ Xxxxx Xxxxxxx,
General Partner
6/13/2006 1,363,636 27,272 $75,000.00 SEP FBO Xxxxxx Xxxxx /s/Xxxxxx Xxxxx Xxxxxx Xxxxx
Pershing LLC as
Custodian
6/3/2006 1,350,000 27,000 $74,250.00 Xxxxxxx E & Xxxxx T /s/ Xxxxxxx X Xxxx Xxxxxxx X Xxxx /s/ Xxxxx X. Xxxxx X. Xxxx
Cahr Cahr
5/31/2006 1,000,000 20,000 $55,000.00 Xxxxx Xxxxxx /s/ Xxxxx Xxxxxx Xxxxx Xxxxxx
6/14/2006 1,000,000 20,000 $55,000.00 Xxxx Xxxxx Penn Living /s/ Xxxx X. Xxxx Xxxx X. Xxxx, Trustee
Trust
6/14/2006 909,090 18,181 $50,000.00 Xxxxx Xxxxxxx /s/ Xxxxx X. Xxxxxxx Xxxxx X. Xxxxxxx
6/2/2006 909,091 18,181 $50,000.00 Xxxxxx X. Light /s/ Xxxxxx X. Light Xxxxxx X. Light
6/1/2006 909,090 18,181 $50,000.00 Xxxxx Random /s/ Xxxxx Random Xxxxx Random
6/1/2006 909,090 18,181 $50,000.00 Xxxxx Random - XXX Xxxxx Random Xxxxxxxx Xxxxx Random
6/5/2006 909,090 18,181 $50,000.00 Xxxxxx Xxxxxxxxxxx /s/ Xxxxxx Xxxxxxxxxxx Xxxxxx Xxxxxxxxxxx
6/12/2006 909,090 18,181 $50,000.00 Xxxxxx Xxxxx /s/ Xxxxxx Xxxxx Xxxxxx Xxxxx
6/6/2006 909,090 18,181 $50,000.00 Xxxxx X. Xxxxxx /s/ Xxxxx X. Xxxxxx Xxxxx X. Xxxxxx
6/6/2006 909,090 18,181 $50,000.00 Xxx Xxxxx Xx. /s/ Xxx Xxxxx Xx. Xxx Xxxxx Xx.
6/1/2006 909,090 18,181 $49,999.95 Xxxxxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxxxx Xxxxxxx X. Xxxxxx
6/6/2006 909,090 18,181 $50,000.00 Norper Investments Inc /s/ Xxxxxx Xxxxx Xxxxxx Xxxxx,
President
6/1/2006 909,090 18,181 $50,000.00 Xxxx X. Xxxxxx /s/ Xxxx X. Xxxxxx Xxxx X. Xxxxxx
6/1/2006 909,090 18,181 $50,000.00 Xxxxxx Xxxxxx & Xxxxxx /s/ Xxxxxx Xxxxxx Xxxxxx Xxxxxx TR /s/ Xxxxxx T Xxxxxx X.
Xxxxxx Trust Xxxxxx Xxxxxx
6/6/2006 909,090 18,181 $50,000.00 Xxxxxxx Xxxxxxxxxx /s/ Xxxxxxx Xxxxxxxxxx Xxxxxxx Xxxxxxxxxx
6/7/2006 909,090 18,181 $50,000.00 Xxxxxx & Xxxxx Xxxxx /s/ Xxxxxx X. Xxxxx Xxxxxx X. Xxxxx /s/ Xxxxx X. Xxxxx X.
Xxxxx Xxxxx
6/14/2006 909,090 18,181 $50,000.00 Xxxxxx Xxxxxxxxx /s/ Xxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxxx
6/5/2006 909,090 18,181 $50,000.00 Xxxxxx X. XxXxxxx Trust /s/ Xxxxxx X. XxXxxxx Xxxxxx X. XxXxxxx /s/ Xxxxxx Xxxxxx
XxXxxxx XxXxxxx
6/1/2006 909,090 18,181 $50,000.00 Xxxxxx Xxxxx Xxxxxx & /s/ Xxxxxx Xxxxx Xxxxxx Xxxxxx Xxxxx Xxxxxx /s/ Xxxxxxx X. Xxxxxxx G.
Xxxxxxx X Xxxxxx JTWROS Xxxxxx Xxxxxx
6/2/2006 909,090 18,181 $50,000.00 Xxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxxxxx Xxxxx X. Xxxxxxx
6/5/2006 909,090 18,181 $50,000.00 Starr F. Xxxxxxxxx XXX /s/ Xxxxx X. Xxxxxxxxx Xxxxx X. Xxxxxxxxx
6/5/2006 909,090 18,181 $50,000.00 Xxxxx X. XxXxxxx Trust /s/ Xxxxxx X. XxXxxxx Xxxxxx X. XxXxxxx /s/ Xxxxxx Xxxxxx
XxXxxxx XxXxxxx
6/14/2006 909,090 18,181 $50,000.00 Xxxxxxx X Xxxxxx /s/ Xxxxxxx X Xxxxxx Xxxxxxx X Xxxxxx,
Living Trust TTEE
6/9/2006 900,000 18,000 $49,500.00 The Xxxxxxx X. Xxxxx /s/ Xxx X Xxxxx Xxx X Xxxxx, CO-TTEE
Rev Trust U A Dtd
6/26/01
6/14/2006 856,638 17,133 $47,115.12 Xxxxxxx X. Xxxxxxx /s/ Xxxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxx
6/13/2006 800,000 16,000 $44,000.00 Xxxxxx Xxxxxx & /s/ Xxxxxx X Xxxxxx Xxxxxx X Xxxxxx /s/ Xxxxxxx X. Xxxxxxx X.
Xxxxxxx Xxxx JTWROS Wolf Wolf
6/13/2006 800,000 16,000 $44,000.00 Xxxxxx X Xxxx /s/ Xxxxxx X Xxxx Xxxxxx X Xxxx
6/2/2006 727,272 14,545 $40,000.00 Xxxxxxx X. Xxxxxxxxx /s/ Xxxxxxx X. Xxxxxxxxx Xxxxxxx X. Xxxxxxxxx
6/3/2006 727,272 14,545 $40,000.00 Xxxxx-Xxxxxxxx Family /s/ Xxxxxxx X. Xxxxx Xxxxxxx X Xxxxx, /s/ M. M. Xxxxxxxx
Trust Trustee Xxxxxxxx Xxxxxxxx,
Xxxxxxxx Trustee
6/9/2006 600,000 12,000 $33,000.00 Xxxxxxx Xxxxxxxxx & /s/ Xxxxxxx Xxxxxxxxx Xxxxxxx Xxxxxxxxx /s/ Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxxxx Xxxxxxxxx Xxxxxxxxx
JT/WROS
6/8/2006 600,000 12,000 $33,000.00 Xxxxxxxx D /s/ Xxxxxxxx D Xxxxxxxx X
Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxx
6/1/2006 545,454 10,909 $30,000.00 Xxxxx X Xxxxxxx /s/ Xxxxx X Xxxxxxx Xxxxx X Xxxxxxx
6/2/2006 545,454 10,909 $30,000.00 Xxxxxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxxxx Xxxxxxx X. Xxxxxx
6/1/2006 500,000 10,000 $27,500.00 Xxxxxx D Van Roijen /s/ Xxxxxx D Van Roijen Xxxxxx D Van Roijen,
Jr. Trust DTD 12.14.72 rustee
6/2/2006 454,545 9,090 $25,000.00 Xxxxxxx X. Xxxxxxx /s/ Xxxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxx
6/2/2006 454,545 9,090 $25,000.00 Xxxxxxx Xxxxxxx /s/ Xxxxxxx Xxxxxxx Xxxxxxx Xxxxxxx
6/14/2006 454,546 $25,000.00 Xxxxxxx X Xxxxxxx /s/ Xxxxxxx X Xxxxxxx Xxxxxxx X Xxxxxxx
9,090
6/6/2006 454,545 $25,000.00 Xxxx Xxxxxx /s/ Xxxx Xxxxxx Xxxx Xxxxxx
9,090
6/5/2006 454,545 $25,000.00 Xxxxx X Xxxx /s/ Xxxxx X Xxxx Xxxxx X Xxxx
9,090
6/6/2006 454,545 $25,000.00 Wafgal Limited /s/ Xxxxx Xxxxxxxx Xxxxx Xxxxxxxx,
9,090 Managing Director
6/7/2006 400,000 $22,000.00 X X Xxxxxxxx /s/ X X Xxxxxxxx X X Xxxxxxxx
8,000
6/5/2006 400,000 $22,000.00 Xxxxxx X. Xxxxx, Xx. /s/ Xxxxxx X. Xxxxx, Xxxxxx X. Xxxxx, Xx.
8,000 Jr.
6/9/2006 400,000 $22,000.00 Xxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxxxxx Xxxxx X. Xxxxxxx
8,000
6/1/2006 400,000 $22,000.00 Xxxxx Xxxx /s/ Xxxxx Xxxx Xxxxx Xxxx
8,000
6/7/2006 400,000 $22,000.00 Xxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxxxxx Xxxxx X. Xxxxxxx
8,000
6/6/2006 400,000 $22,000.00 Xxxxx & Xxxxx Xxxxxx /s/ Xxxxx Xxxxxx Xxxxx Xxxxxx /s/ Xxxxx Xxxxx Xxxxxx
8,000 JTWRS Xxxxxx
6/5/2006 400,000 $22,000.00 Louis & Xxxxxx Xxxxxx /s/ Xxxxx Xxxxxx Xxxxx Xxxxxx, Trustee
8,000 Family Trust
6/6/2006 400,000 $22,000.00 Xxxx X. Rochester /s/ Xxxx X. Rochester Xxxx X. Rochester
8,000
6/6/2006 400,000 $22,000.00 Xxxxx Xxxxxx /s/ Xxxxx Xxxxxx Xxxxx Xxxxxx
8,000
5/6/2006 400,000 $22,000.00 Xxxxxxxx Xxxx Xxxxxxx /s/ Xxxxxxxx Xxxx Xxxxxxxx Xxxx Xxxxxxx
8,000 Xxxxxxx
6/9/2006 400,000 $22,000.00 Xxxxxxx X. Xxxxxxx & /s/ Xxxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxx /s/ Xxxxxxx X. Xxxxxxx X.
8,000 Xxxxxxx X. Xxxxxxx, Xxxxxxx Xxxxxxx
JTWROS
6/5/2006 400,000 $22,000.00 Xxxxxxx X. Xxxx /s/ Xxxxxxx X. Xxxx Xxxxxxx X. Xxxx
8,000
6/4/2006 400,000 $22,000.00 Xxxxxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxxxx Xxxxxxx X. Xxxxxx
8,000
6/8/2006 800,000 $22,000.00 Xxxxxx W Main TTEE /s/ Xxxxxx X. Main Xxxxxx X. Main TTEE
8,000 Under The Xxxxxx X.
Main Trust Dtd 9/7/05
6/1/2006 400,000 $22,000.00 Xxxxxx Xxxxx Xxxxx /s/ X.X. Xxxxx Xxxxxx X. Xxxxx
8,000
6/2/2006 400,000 $22,000.00 Xxxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxx Xxxxxx X. Xxxxxx
8,000
6/4/2006 400,000 $22,000.00 Xxxxxx X Xxxxxxxxxxx /s/ Xxxxxx X Xxxxxxxxxxx Xxxxxx X Xxxxxxxxxxx
8,000
6/3/2006 363,636 $20,000.00 Xxxxxx & Xxxxxxx Xxxx /s/ Xxxxxx X Xxxx Xxxxxx X Xxxx /s/ Xxxxxxx X. Xxxxxxx X.
7,272 JTWROS Xxxx Xxxx
6/6/2006 363,635 $19,999.93 Xxxxxxx G & Xxxx A /s/ Xxxxxxx X Xxxx Xxxxxxx X Xxxx /s/ Xxxx A Xxxx X Xxxx
7,272 Xxxx Xxxx
6/6/2006 363,636 $20,000.00 X X Xxxxx Xx. /s/ X X Xxxxx Xx. X X Xxxxx Xx.
7,272
6/5/2006 363,636 $20,000.00 Xxxxxxx Xxxxxxxxxxx /s/ Xxxxxxx Xxxxxxxxxxx Xxxxxxx Xxxxxxxxxxx
7,272
6/14/2006 300,000 $16,500.00 Bart & Xxxxx Xxxxx /s/ Xxxx Xxxxx Xxxx Xxxxx /s/ Xxxxx Xxxxx Xxxxx
6,000 JTWROS Xxxxx
6/6/2006 300,000 $16,500.00 Xx. Xxxxx X. Xxxxx /s/ Xx. Xxxxx X. Xxxxx Xx. Xxxxx X. Xxxxx
6,000
6/14/2006 300,000 $16,500.00 Xxxxxxx X. Xxxxx /s/ Xxxxxxx Xxxxx Xxxxxxx Xxxxx
6,000
6/6/2006 275,000 $15,125.00 Xxxxxxx X. Xxxxxxxx /s/ Xxxxxxx X. Xxxxxxxx Xxxxxxx X Xxxxxxxx,
5,500 Trust Xxxxxxx X. Trustee
Xxxxxxxx TTEE U/A
Dated 4/9/03
6/6/2006 200,000 $11,000.00 C Xxxx Xxxxx /s/ C Xxxx Xxxxx C Xxxx Xxxxx
4,000
6/3/2006 200,000 $11,000.00 Xxxxxxx X Xxxxxx /s/ Xxxxxxx X Xxxxxx Xxxxxxx X Xxxxxx
4,000
6/5/2006 200,000 $11,000.00 D & M Partners /s/ Xxxx Xxxxxxxx Xxxx Xxxxxxxx,
4,000 Partner
6/2/2006 200,000 $11,000.00 Xxxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxx Xxxxxx X. Xxxxxx
4,000
6/8/2006 200,000 $11,000.00 Xxxxxx Xxxxx /s/ Xxxxxx Xxxxx Xxxxxx Xxxxx
4,000
6/14/2006 200,000 $11,000.00 Janepapin Holdings, Inc /s/ Xxxxx Xxxxxx Xxxxx Xxxxxx
4,000
6/2/2006 200,000 $11,000.00 Xxxx E & Xxxxxxxx N /s/ Xxxx X Xxxx Xxxx X Xxxx /s/ Xxxxxxxx N Xxxxxxxx N
4,000 Xxxx Xxxx Xxxx
6/3/2006 200,000 $11,000.00 Xxxx Xxxxx /s/ Xxxx Xxxxx Xxxx Xxxxx
4,000
6/6/2006 200,000 $11,000.00 Xxxxxx X. Xxxxxxxxxxx /s/ Xxxxxx X. Xxxxxx X. Xxxxxxxxxxx
4,000 Xxxxxxxxxxx
6/2/2006 200,000 $11,000.00 Xxxxxx Xxxxxx /s/ Xxxxxx Xxxxxx Xxxxxx Xxxxxx
4,000
6/6/2006 200,000 $11,000.00 Xxxxxxx Xxxxxxx /s/ Xxxxxxx Xxxxxxx Xxxxxxx Xxxxxxx
4,000 Cleveland Cleveland Cleveland
6/6/2006 200,000 $11,000.00 Xxxx & Xxxx /s/ Xxxx X Xxxx Xxxx X Xxxx /s/ Xxxx Xxxx Xxxx Xxxx
4,000 Wood JTWROS
6/14/2006 200,000 $11,000.00 Xxxxxx X Xxxxxxxxxxxx /s/ Xxxxxx J Xxxxxx X Xxxxxxxxxxxx
4,000 Xxxxxxxxxxxx
6/6/2006 200,000 $11,000.00 Xxxxxxx X. Xxxxxxx /s/ Xxxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxx
4,000
6/2/2006 200,000 $11,000.00 Xxxxxx X. Xxxx /s/ Xxxxxx X. Xxxx Xxxxxx X. Xxxx
4,000
6/6/2006 200,000 $11,000.00 Xxxxxx Xxxxx /s/ Xxxxxx Xxxxx Xxxxxx Xxxxx
4,000
6/2/2006 200,000 $11,000.00 The Xxxx Family Trust /s/ Xxxxx X. Xxxx Xxxxx X. Xxxx TTEE /s/ Xxxxxxxx Xxxxxxxx Jo
4,000 Xxxxx X. Xxxx & Xx Xxxx Xxxx TTEE
Xxxxxxxx Xxxx TTEE DTD
6/12/99
6/6/2006 200,000 $11,000.00 Xxxxxx & Xxxxxx /s/ Xxxxxx Xxxxxxx Xxxxxx Xxxxxxx /s/ Xxxxxx Xxxxxx
4,000 Xxxxxxx JTWROS Xxxxxxx Xxxxxxx
6/6/2006 200,000 $11,000.00 Xxxxxx Xxxxxxx XXX /s/ Xxxxxx Xxxxxxx Xxxxxx Xxxxxxx
4,000
6/2/2006 200,000 $11,000.00 Xxxxxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxxxx Xxxxxxx X. Xxxxxx
4,000
5/30/2006 182,000 $10,010.00 Angus & Xxxxxxxx Xxxxx /s/ Xxxxx Xxxxx Xxxxx Xxxxx /s/ Xxxxxxxx Xxxxxxxx
3,640 Xxxxx Xxxxx
6/5/2006 181,818 $10,000.00 Xxxxx & Xxxxx Xxxxxxx /s/ Xxxxx Xxxxxxx Xxxxx Xxxxxxx /s/ Xxxxx Xxxxx Xxxxxxx
3,636 JTWROS Xxxxxxx
6/1/2006 181,818 $10,000.00 Xxxxxx X. Xxxxxxx /s/ Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxxx,
3,636 Trust Trustee
* Effective August 11, 2006, Park City Group, Inc. affected a 1 for 50 reverse stock split. This column
is for information purposes only and was not part of original documents.
COMMON STOCK PURCHASE AGREEMENT
PARK CITY GROUP, INC.
COMMON STOCK PURCHASE AGREEMENT (as amended or supplemented from time
to time, this "Agreement") made as of this ____ day of May, 2006, between PARK
CITY GROUP, INC., a Nevada corporation, with its principal offices at 000 Xxxx
Xxxxxx, Xxxx Xxxx, Xxxx 00000 (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 common stock, $0.01 par value per share (the "Common Stock") at a price equal
to $0.055 per share (as defined in the Memorandum), with a minimum aggregate
purchase price of $750,000 (the "Minimum Amount") of Common Stock and a maximum
aggregate purchase price of $4,500,000 (the "Maximum Amount") of Common Stock;
WHEREAS, Subscriber desires to acquire the number of shares of Common
Stock (the "Shares") having an aggregate purchase price set forth on the
signature page hereof (the "Purchase Price").
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 of Common Stock for the Purchase Price and the Company agrees to sell
such Shares to the Subscriber for the Purchase Price, subject to the Company's
right to sell to the Subscriber such lesser number of Shares 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 Shares involves
a high degree of risk in that (i) the Shares have not been registered under the
Securities Act of 1933, as amended ("1933 Act"), and the Company has no
obligation to register the Shares, except as set forth in Section 3 of this
Agreement; (ii) an investment in the Shares is highly speculative and only
investors who can afford the loss of their entire investment should consider
investing in the Company and the Shares; (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 __, 2006,
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 0000 Xxx) 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 Shares. The Subscriber is not an officer, director or
"affiliate" (as defined in Rule 403 under the 0000 Xxx) 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
Annual Report on Form 10KSB for the year ended June 30, 2005, the Company's
Quarterly Report on Form 10QSB for the period ended September 30, 2005, the
Company's Quarterly Report on Form 10QSB for the period ended December 31, 2005,
the Company's Quarterly Report on Form 10QSB for the period ended March 31,
2006, and the Company's Forms 8-K, dated April 17, 2006 and April 25, 2006, 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 Shares 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 Shares:
(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
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 Shares 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 Shares unless they are registered under the 1933 Act or unless an
exemption from such registration is available.
(e) The Subscriber understands that the Shares 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 Shares 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 Shares
under the 1933 Act and that the Company is under no obligation to register the
Shares 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 Shares 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.
(g) The Subscriber consents to the placement of a legend on
any certificate or other document evidencing the Shares stating that the Shares
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 has 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 the Company shall provide the
Subscriber 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, the
Company or any information in the Memorandum with respect to any legal,
investment or tax considerations involved in the purchase, ownership and
disposition of the Shares. The Subscriber has relied solely upon the advice of,
or has consulted with, in regard to the legal, investment and tax considerations
involved in the purchase, ownership and disposition of the Shares, the
Subscriber's legal counsel, business and/or investment adviser, accountant and
tax advisor.
(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 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.
(t) Prospective Subscribers should check the Treasury
Department's Office of Foreign Assets Control ("OFAC") website at
xxxx://xxx.xxxxx.xxx/xxxx 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 figure(1), or any
immediate family member(2) or close associate(3) of a senior foreign political
figure within the meaning of the Department of Treasury's Guidance on Enhanced
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(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.
Scrutiny for Transactions That May Involve the Proceeds of Foreign Official
Corruption(4) 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 promptly notify the Company 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 Common Stock shall have been sold), the Company shall, at its
sole cost and expense, file a registration 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 for all holders of the
- -------------------
(4) For a more extensive discussion of the preceding terms and definitions, see
xxxx://xxx.xxxxxxxxxxxxxx.xxx/xxxxxxxxx/xxxxxxxxx/0000/xx0000x0.xxx.
(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.
Shares, 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) three 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 penalty of two percent (2%) of such Investor's Purchase Price
investment. In addition, if the Registration Statement is not declared effective
within 180 days after the filing date, (i) the Company will pay to each Investor
a cash penalty of two percent (2%) 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 is
twenty-four percent (24%) 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 Investor whose Shares 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, 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.
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 0000 Xxx) 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 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 three (3) 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 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) List the Shares covered by such registration statement on
such exchanges and/or on the NASDAQ as the Common Stock is then currently listed
upon.
(j) 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. 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.
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.
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: Xxxxx Xxxxxx" 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.
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 ***
ALL INVESTORS MUST COMPLETE THIS PAGE
IN WITNESS WHEREOF, the parties have executed this Agreement on
___________________, 2006.
_______ Shares x $0.055 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
