LOCK-UP AND VOTING AGREEMENT
This Lock-up and Voting Agreement, dated as
of August __, 2008, (this " Agreement "), is entered into by
and among Park City Group, Inc., a Nevada corporation ("
Parent ") and those stockholders of Prescient Applied
Intelligence, Inc., a Delaware corporation (the " Company
"),whose signatures appear on the signature pages hereof (each a "
Company Stockholder " and collectively the " Company
Stockholders "). All capitalized terms used herein without
definition having the respective meanings ascribed to them in the
Merger Agreement (as defined below).
Recitals
Prior to the
execution of this Agreement, the Company Stockholders own shares of
the Company’s common stock (“ Common Stock
”), the Company’s Series E Preferred Stock (“
Series E Stock ”), and the Company’s Series G
Preferred Stock (“ Series G Stock ”). The number
of shares of Common Stock, Series E Stock and Series G Stock owned
by each of the Company Stockholders prior to the execution of this
Agreement is set forth on the signature page of this Agreement
(“ Signature Page ”) adjacent to the name of
each Company Stockholder.
The Common Stock and
Series G Stock of the Company is hereafter jointly referred to as
the “ Company Stock ”). The Common Stock and
Series G Stock of the Company owned by a Company Stockholder is
hereafter jointly referred to as the “ Stockholder Company
Shares ”).
Contemporaneous with
the execution and delivery of this Agreement, Parent and the
Company Stockholders have entered into a Stock Purchase Agreement
pursuant to which the Parent has agreed to purchase, and has
purchased, all of the Series E Stock owned by each of the Company
Stockholders.
Each of the Company
Stockholders continues to own the shares of Series G Stock and
Common Stock set forth on the Signature Page.
Contemporaneous with
the execution and delivery of this Agreement, Parent, PAII
Transitory Sub, Inc., a Delaware corporation and a wholly-owned
subsidiary of the Parent (" Sub "), and the Company have
entered into an Agreement and Plan of Merger, of even date herewith
(the " Merger Agreement ").
As a condition and
inducement to Parent and Sub entering into the Merger Agreement and
incurring the obligations set forth therein, the Company
Stockholders have agreed to vote and to cause to be voted all
shares of Company Common Stock and Series G Preferred Stock now
owned or hereafter acquired by them, for and in favor of the merger
of the Company with and into Sub contemplated by the Merger
Agreement (the " Merger "), and have agreed to the other
terms and provisions contained herein;
NOW, THEREFORE, in
consideration of the premises and the respective covenants and
agreements set forth herein and in the Merger Agreement, the
parties hereto, intending to be legally bound hereby, agree as
follows:
1.
Definitions . Each term used herein with its initial
letter capitalized and not otherwise defined shall have the meaning
assigned to such term in the Merger Agreement. The following terms
shall have the respective meanings set forth below:
(a) "
Disposition " shall mean any sale, exchange,
assignment, gift, pledge, mortgage, hypothecation, transfer or
other disposition or encumbrance of all or any part of the rights
and incidents of ownership of the Common Stock and the Series G
Stock, including the right to vote, and the right to possession of
the Common Stock and Series G Stock as collateral for indebtedness,
whether such transfer is outright or conditional, or for or without
consideration.
(b)
"Term" shall mean the period commencing on the date
hereof and continuing until the first to occur of (i) the Effective
Time of the Merger, or (c) the termination of the Merger Agreement
in accordance with its terms.
2. Voting of
Stockholder Company Shares . Each of the Company
Stockholders hereby agrees that, during the Term, at any meeting
(whether annual or special and whether or not an adjourned or
postponed meeting) of the holders of Company Stock, however called,
or in connection with any written consent of the holders of Company
Stock, such Company Stockholder will appear at the meeting or
otherwise cause the Stockholder Company Shares now owned or
hereafter acquired by such Company Stockholder to be counted as
present thereat for purposes of establishing a quorum and vote or
consent (or cause to be voted or consented) the Stockholder’s
Company Shares:
(a) in favor of the
adoption of the Merger Agreement and the approval of all other
actions contemplated by the Merger Agreement and this Agreement and
any actions required in furtherance thereof and hereof;
(b) against any
action or agreement that would result in a breach in any respect of
any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement; and
(c) against any
action involving the Company or its subsidiaries which is intended,
or could reasonably be expected, to impede, interfere with, delay,
postpone, or materially adversely affect the transactions
contemplated by the Merger Agreement.
3. Restriction
on Disposition of Stockholder’s Company
Shares . Each of the Company Stockholders hereby agrees
that, during the Term, such Company Stockholder will not make,
offer to make, agree to make, or suffer any Disposition of his, her
or its Stockholder Company Shares or any interest therein. The
restrictions contained in this Section 3 shall not apply to (a) a
Disposition under a Company Stockholder's will or pursuant to the
laws of descent and distribution, (b) a Disposition to any
affiliates of a Company Stockholder, so long as, in each case, the
transferee(s) deliver to Parent and Sub an executed written
instrument agreeing to be bound by the terms of this Agreement as
if such transferee(s) were the Company Stockholder, (c) a gift or
other transfer by a Company Stockholder to an immediate family
member (i.e., a spouse, child, parent, grandparent or sibling) or a
family trust for the benefit of such Company Stockholder
or immediate family member(s), so long as, in each case, the
transferee(s) deliver to Parent and Sub an executed written
instrument agreeing to be bound by the terms of this Agreement as
if such transferee(s) were the Company Stockholder, or (d) a
Disposition pursuant to a qualified domestic relations order.
4. Restriction
Proxies and Non-Interference . Each of the Company
Stockholders hereby agrees that, during the Term, such Company
Stockholder will not:
(a) grant any
proxies or powers or attorney that would permit any such proxy or
attorney-in-fact to take any action inconsistent herewith;
(b) deposit his, her
or its Stockholder Company Shares into a voting trust or enter into
a voting agreement with respect to such Stockholder Company Shares
in either case providing for the voting or consenting of such
shares in a manner inconsistent herewith; or
(c) take any action
that would make any representation or warranty of such Company
Stockholder contained herein untrue or incorrect or would result in
a breach by such Company Stockholder of its obligations under this
Agreement.
Each Company
Stockholder further agrees not to enter into any agreement or
understanding with any person or entity, the effect of which would
be inconsistent with or violative of any provision contained in
this Agreement.
5. Covenants,
Representations and Warranties of Company
Stockholders. Each Company Stockholder
(severally, and not jointly and severally) hereby represents and
warrants to, and agrees with, Parent and Sub as follows:
(a) Ownership
of Shares . Such Company Stockholder is the sole record and
beneficial owner of that number of shares of Company Stock set
forth next to such Company Stockholder's name on the Signature Page
(other than to the extent that (i) shares held by an entity may be
deemed to be beneficially owned by certain persons in control of
such