STOCK PURCHASE AGREEMENT Dated August 28, 2008
Dated August 28,
2008
The
parties to this Stock Purchase Agreement (this “Agreement”) are Park City Group,
Inc., a Nevada corporation (the “Company”), and the Shareholder named on the
signature page of this Agreement (the “Shareholder”).
(i) Simultaneously
with the execution and delivery of this Agreement, (a) the Company
is acquiring from the Shareholder ______ shares Series E Convertible
Preferred Stock, par value $.001 per share (the “Series E Preferred Stock”), of
Prescient Applied Intelligence, Inc., a Delaware corporation (the “Target”), upon
payment of $_________ (___________), (b) the Company is entering into an
agreement and plan of merger with the Target and a wholly-owned subsidiary of
the Company (the “Merger Agreement”), and (c) the Company is entering into a
lock-up and voting agreement with the Shareholder and certain other shareholders
of the Target (the “LV Agreement”).
The
Company and the Shareholder are executing and delivering this Agreement in
reliance upon the exemption from registration afforded by Sections 4(1) and 4(2)
of the Securities Act of 1933 (the “Securities Act”).
(ii) Accordingly,
the parties agree as follows:
1. The
Purchase. Simultaneously with the execution and delivery of
this Agreement:
(a) the
Shareholder is assigning, transferring, and conveying to the Company all its
ownership and other rights in respect of, and is delivering to the Company
certificates evidencing the Series E Preferred Stock (the “Securities”), free
and clear of any lien, encumbrance and right of first refusal of any kind
(except for the LV Agreement and any restrictions imposed by federal and state
securities laws); and
(b) the
Company is delivering to the Shareholder, by wire transfer, the sum of
$_________.
The closing of the transactions
described above is taking place simultaneously with the execution and delivery
of this Agreement at the office of the Company at 0000 Xxxxxxxxx Xxxx, Xxxx
Xxxx, Xxxx 00000 at 9:00 a.m. on August 28, 2008.
|
|
2.
|
Representations and
Warranties
|
2.1 Representations and
Warranties of the Company. The Company represents and warrants
to the Shareholder as follows:
(a) Organization. The
Company is validly existing and in good standing under the law of the state of
Nevada, with the requisite corporate power and authority to own and use its
properties and to carry on 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 (i) any event affecting the business, results of
operations, assets or financial condition of the Company or its subsidiaries
that is material and adverse to the Company and its consolidated subsidiaries,
when taken as a whole, and/or (ii) any condition, circumstance, or situation
that would prohibit or otherwise materially interfere with the ability of the
Company from entering into and performing any of its obligations under this
agreement in any material respect.
(b)
Authorization;
Enforcement. The Company has the requisite corporate power and
authority to execute, deliver, and perform its obligations under this Agreement,
the Merger Agreement, and the LV Agreement (collectively, the “Transaction
Documents”). The execution, delivery, and performance of its
obligations under each of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated by the Transaction Documents
have been duly authorized by all necessary corporate action by the
Company. Each of the Transaction Documents has been duly executed by
the Company and constitutes the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, or similar laws.
(c) No
Conflicts. The execution, delivery, and performance of each of
the Transaction Documents by the Company and the consummation by the Company of
the transactions contemplated by each of the Transaction Documents do not and
will not (i) conflict with or violate any provision of the Company’s certificate
of incorporation or by-laws, (ii) conflict with, or
constitute a default (or an event that, with notice or lapse of time, or both,
would become a default) under, any agreement or instrument to which the Company
is a party or by which any property or asset of the Company is bound or (iii)
result in a violation of any law, rule, regulation, order, judgment, injunction,
or decree of any court or governmental authority to which the Company is
subject or by which any material property or asset of the Company is
bound.
(d) Brokers’
Fees. The Shareholder shall have no obligation with respect to
any fees or with respect to any claims made by or on behalf of any broker or
other person or entity for brokerage or similar fees in connection with the
transactions contemplated by the Transaction Documents.
(e) No
Consents. 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 purchase of the Securities or the consummation of any
other transaction contemplated by this Agreement (other than any filings which
may be required to be made by the Company with the Securities and Exchange
Commission or pursuant to any state or “blue sky” securities laws subsequent to
the closing of the transactions contemplated by this Agreement).
2
(f)
Litigation. There
is no action, suit, claim, investigation or proceeding pending or, to the
knowledge of the Company, threatened against the Company which questions the
validity of this Agreement, the Transaction Documents or the transactions
contemplated hereby or any action taken or to be taken pursuant
thereto. There is no action, suit, claim, investigation or proceeding
pending or, to the knowledge of the Company, threatened, against or involving
the Company or any subsidiary, or any of their respective properties or assets
which, if adversely determined, is reasonably likely to result in a Material
Adverse Effect.
(g) Compliance with Securities
Laws. The Company has complied and will comply with all
applicable federal and state securities laws in connection with the purchase of
the Securities hereunder. The Company acknowledges that the
Securities were not offered to it by means of any form of general or public
solicitation or general advertising, or publicly disseminated advertisements or
sales literature, including (i) any advertisement, article, notice or other
communication published in any newspaper, magazine, Internet website or similar
media, or broadcast over television or radio, or (ii) any seminar or meeting to
which representatives of the Company were invited by any of the foregoing means
of communications. The Company, in making the decision to purchase
the Securities, has relied upon independent investigation made by it and has not
relied on any information or representations made by third parties.
(h) Acquisition for
Investment. The Company is purchasing the Securities solely
for its own account and not with a view to, or for sale in connection with,
public sale or distribution thereof. The Company does not have a
present intention to sell any of the Securities, nor a present arrangement
(whether or not legally binding) or intention to effect any distribution of any
of the Securities to or through any person or entity; provided, however, that by
making the representations herein, the Company does not agree to hold the
Securities for any minimum or other specific term and reserves the right to
dispose of the Securities at any time in accordance with Federal and state
securities laws applicable to such disposition. The Company
acknowledges that it (i) has such knowledge and experience in financial and
business matters such that it is capable of evaluating the merits and risks of
an investment in the Target, (ii) is able to bear the financial risks associated
with an investment in the Securities and (iii) has been given full access to
such records of the Target and its subsidiaries and to the partners and officers
of the Target and its subsidiaries as it has deemed necessary or appropriate to
conduct its due diligence investigation.
(i) Rule
144. The Company understands that the Securities must be held
indefinitely unless such Securities are registered under the Securities Act or
an exemption from registration is available. The Company acknowledges
that it is familiar with Rule 144 of the rules and regulations of the Securities
and Exchange Commission (the “Commission”), as
amended, promulgated pursuant to the Securities Act (“Rule 144”), and that
it has been advised that Rule 144 permits resales only under certain
circumstances. The Company understands that to the extent that Rule
144 is not available, the Company will be unable to sell any Securities without
either registration under the Securities Act or the existence of another
exemption from such registration requirement.
3
(j) Accredited
Investor. The Company is an “accredited investor” (as defined
in Rule 501 of Regulation D), and the Company has such experience in business
and financial matters that it is capable of evaluating the merits and risks of
an investment in the Securities. The Company acknowledges that an
investment in the Securities is speculative and involves a high degree of
risk.
(k) General. The
Company understands that the Securities are being offered and sold in reliance
on a transactional exemption from the registration requirements of federal and
state securities laws and the Shareholder is relying upon the truth and accuracy
of the representations, warranties, agreements, acknowledgments and
understandings of the Company set forth herein in order to determine the
applicability of such exemptions and the suitability of the Company to acquire
the Securities. The Company understands that no United States federal
or state agency or any government or governmental agency has passed upon or made
any recommendation or endorsement of the Securities.
2.2 Representations and
Warranties of the Shareholder. The Shareholder represents and
warrants to the Company as follows:
(a) Ownership of Securities;
Agreements. The Securities are being assigned, transferred,
and conveyed to the Company are owned by the Shareholder free and clear of any
lien, and are not subject to any voting, transfer, or other restriction,
encumbrance, or agreement of any kind whatsoever, except for the LV Agreement
and any restrictions imposed by federal and state securities laws.
(b) Enforcement. This
Agreement has been duly executed by the Shareholder and constitutes the valid
and binding obligation of the Shareholder enforceable against the Shareholder in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium, or similar
laws.
3. Repurchase
Option. In the event of a Parent Default (as such term is
defined in the Merger Agreement), the parties agree and acknowledge that the
Target shall have the right and option (the “Option”), but not the obligation,
to repurchase all of the Securities from the Company for the sum of $.001 per
share of Series E Preferred Stock (the “Exercise Price”). In the
event of a Parent Default, Target shall promptly deliver to the Company a
written notice of such Parent Default (“Default Notice”). Target
shall have ten (10) business days from the date of delivery of the Default
Notice to deliver to the Company a written notice of exercise (“Option Notice”),
and the closing of the exercise of the Option shall occur within ten (10)
business days from the date of delivery of the Option Notice. At such
closing, the Company shall sell to the Target the Securities upon tender to the
Company of the Exercise Price. Upon payment of the Exercise Price,
the Company shall deliver to the Target the certificates representing the
Securities in proper form duly endorsed for transfer, free of all liens,
encumbrances and rights of first refusal of every nature. The Company
shall not assign, sell, hypothecate or otherwise transfer the Securities until
such time as the merger is consummated under the Merger Agreement.
4. Miscellaneous
(a) Amendments to this
Agreement. No amendment or waiver of any provision of this
Agreement nor consent to any departure therefrom shall in any event bind a
party, unless the same shall be in writing and signed by the party to be
charged, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
4
(b) Notices. All
notices and other communications provided for hereunder shall, unless otherwise
stated herein, be in writing (including by facsimile transmission) and shall be
mailed, sent, or delivered at or to the address or facsimile number of the
respective party or parties set forth on the signature page hereof, or at or to
such other address or facsimile number as such party or parties shall have
designated by 10 days’ advance written notice to the other party or
parties. All such notices and communications shall be effective
(i) if delivered by hand, when delivered; (ii) if sent by mail, upon
the earlier of the date of receipt or five business days after deposit in the
mail, first class (or air mail, with respect to communications to be sent to or
from the United States), postage prepaid; and (iii) if sent by facsimile,
when sent.
(c)
No
Waiver. No failure on the part of a party to this Agreement to
exercise, and no delay in exercising, any right, remedy, power, or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, remedy, power, or privilege preclude any other or
further exercise thereof or the exercise of any other right, remedy, power, or
privilege.
(d)
Benefits of
Agreement. This Agreement is entered into for the sole
protection and benefit of the parties hereto and their successors and assigns,
and no other person or entity shall be a direct or indirect beneficiary of, or
shall have any direct or indirect cause of action or claim in connection with,
this Agreement.
(e)
Governing Law;
Jurisdiction. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New York without giving
effect to the rules governing the conflicts of laws. Each of the
parties consents to the exclusive jurisdiction of the Federal courts whose
districts encompass any part of the County of New York located in the City of
New York 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. Each party waives its right to a trial by
jury. Each party to this Agreement irrevocably consents 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 any party to
serve process in any other manner permitted by law.
(f)
Severability. Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under all applicable laws and
regulations. If, however, any provision of this Agreement shall be
prohibited by or invalid under any such law or regulation in any jurisdiction,
it shall, as to such jurisdiction, be deemed modified to conform to the minimum
requirements of such law or regulation, or, if for any reason it is not deemed
so modified, it shall be ineffective and invalid only to the extent of such
prohibition or invalidity without affecting the remaining provisions of this
Agreement, or the validity or effectiveness of such provision in any other
jurisdiction.
5
(g) Counterparts. This
Agreement may be executed in counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute one
and the same Agreement.
(h) Entire
Agreement. This Agreement constitutes the entire agreement of
the parties with respect to the matters set forth herein and supersedes any
prior agreements, commitments, discussions, or understandings, oral or written,
with respect thereto.
| [signature page follows] |
6
| PARK CITY GROUP, INC. | |||
|
By
|
|||
| Xxxxxxx X. Xxxxxx | |||
|
Chairman
and Chief Executive Officer
|
|||
|
Address:
|
|||
|
0000
Xxxxxxxxx Xxxx
|
|||
|
Xxxx
Xxxx, Xxxx 00000
|
|||
|
Facsimile:
(000) 000-0000
|
|||
|
SHAREHOLDER:
|
|||
|
By:
|
|||
7
