8-K

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 8-K
                                 CURRENT REPORT

                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

         Date of report (Date of earliest event reported) June 14, 2006

                        Commission File Number 000-03718

                              PARK CITY GROUP, INC.
        (Exact name of small business issuer as specified in its charter)

                  Nevada                                37-1454128
      (State or other jurisdiction of        (IRS Employer Identification No.)
       incorporation or organization)

              333 Main Street, P.O. Box 5000; Park City, Utah 84060
                    (Address of principal executive offices)


                                 (435) 649-2221
                         (Registrant's telephone number)



          (Former Name or Former Address, if Changed Since Last Report)


Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
    230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
    240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
    Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
    Act (17 CFR 240.13e-4(c))



Section 1 - Registrant's Business and Operations

Item 1.01 Entry Into a Material Definitive Agreement.

      On June 2 and 14, 2006, the Registrant entered into a purchase agreements
(the "Purchase Agreement"), with certain accredited investors (each an
"Investor") signatory thereto, pursuant to which the Registrant issued
87,272,742 shares of restricted common stock (the "Shares") for an aggregate
purchase price of $4,800,000 or $.055 per share. Commissions paid to Taglich
Brothers, Inc. associated with the sale totaled $384,000 in cash and a warrant
to purchase 8,727,273 shares of common stock. The remaining proceeds to the
company were approximately $4,400,000.

      On May 30, 2006 the Registrant entered into a Placement Agreement with
Taglich Brother, Inc. ("Taglich") Under this agreement Taglich will use its best
efforts to place the Registrants common stock. In return for these services
Taglich will receive a success fee of 8% of the gross proceeds from the sale of
the shares. Taglich will receive Warrants to purchase an amount of Common Stock
equal to 10% of the shares sold in this offering. The warrants will have a 5
year term and an exercise price of 110% of the closing bid price on the Common
Stock on the Final Closing Date. Taglich will also be reimbursed for its actual
and reasonable out-of-pocket expenses incurred in connection with this offering.

      The Registrant has agreed to file a registration statement with the
Securities and Exchange Commission in order to register the resale of the Shares
and the Warrant Shares (the "Registration Statement").

      The description of the foregoing transactions as described hereinabove is
qualified in its entirety by the Purchase Agreement, the Placement Agent
Agreement, and the Form of Warrant that are attached as exhibits to this Form
8-K.

Section 3 - Securities and Trading Markets

Item 3.02 Unregistered Sales of Equity Securities.

      On, June 14, 2006, the Registrant issued 87,272,742 shares of restricted
common stock for an aggregate purchase price of $4,800,000, pursuant to the
terms of the Purchase Agreement, as described under Item 1.01 above, and
incorporated into this item by reference.

      Commissions paid to Taglich Brothers, Inc. associated with the
sale totaled $384,000 in cash and a warrant to purchase 8,727,273 shares of
common stock. The remaining proceeds to the company were $4,400,000.

      All shares of common stock were issued in non-registered transactions
pursuant to the exemption from registration provided by Sections 4(2) and 4(6)
of the 1933 Securities Act, as amended, and Regulation D promulgated thereunder.

      The description of the foregoing transactions as described hereinabove is
qualified in its entirety by the Purchase Agreement and the Placement Agent
Agreement that are attached as exhibits to this Form 8-K.


Section 9 - Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

      (c) Exhibits.

                  10.1     Form of Securities Purchase Agreement, dated May 30,
                           2006
                  10.2     Placement Agent Agreement
                  10.3     Form of Warrant, dated June 14, 2006
                  20.1     Press Release - Park City Group Completes $4.8
                           Million Private Placement




                                   SIGNATURES

Pursuant to the requirements of the Securities Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.


Dated:  June 15, 2006                              PARK CITY GROUP, INC.

                                                   By: /s/ William Dunlavy     
                                                      CFO

                                       2

EX-10.1

                              PARK CITY GROUP, INC.


                         COMMON STOCK PURCHASE AGREEMENT



                         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 333 Main
Street, Park City, Utah 84060 (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 1933 Act) 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 1933 Act) 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
http://www.treas.gov/ofac 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
    http://www.federalreserve.gov/boarddocs/srletters/2001/sr0103a1.pdf.
(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 1933 Act) 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: Randy Fields" 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

EX-10.2

                               PLACEMENT AGREEMENT


         This PLACEMENT AGREEMENT (the "Agreement") dated as of the __ day of
May, 2006, by and between PARK CITY GROUP, INC., a Nevada corporation (the
"Company") and TAGLICH BROTHERS, INC. ("Placement Agent").

                              W I T N E S S E T H:

         WHEREAS, in reliance upon the representations, warranties, terms and
conditions hereinafter set forth, the Placement Agent will use its best efforts
to privately place a minimum principal amount of $750,000 (the "Minimum Amount")
and a maximum principal amount of $4,500,000 (the "Maximum Amount") of the
Company's common stock, $0.01 par value per share (the "Common Stock"), at a
purchase price (the "Purchase Price") equal to $0.055 per Share;

         WHEREAS, the Shares are being issued pursuant to the Company's
Confidential Private Offering Summary and exhibits thereto dated May 30, 2006,
as the same may be amended and/or supplemented from time to time, (collectively,
the "Memorandum"); and

         WHEREAS, the Shares are being issued pursuant to an exemption from the
registration requirements of the Securities Act of 1933, as amended (the "1933
Act").

         NOW, THEREFORE, in consideration of the premises and the respective
promises hereinafter set forth, the Company and the Placement Agent hereby agree
as follows:

         1. Agreement to Act as Placement Agent.

                  (a) The Placement Agent shall act on a best efforts basis and
does not guarantee that it will be able to raise new capital in any prospective
Offering. The Company acknowledges that any advice given by the Placement Agent
to the Company is solely for the benefit and use of the Board of Directors of
the Company and may not be used, reproduced, disseminated, quoted or referred to
without the Placement Agent's prior written consent.

                  (b) The term of The Placement Agent's non-exclusive engagement
will end at the end of the offering period as described in the Memorandum;
however, the Company may terminate the engagement at any time upon 30 days
written notice to the Placement Agent. Upon termination, the Placement Agent
will be entitled to collect all fees earned and expenses incurred through the
date of termination as set forth in Section 10.

         2. Representations and Warranties of the Company. The Company hereby
represents and warrants to and covenants and agrees with the Placement Agent, as
of the date hereof and as of the date of each Closing, as follows:

                  (a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada and is
qualified and in good standing as a foreign corporation in each jurisdiction in
which the nature of the business conducted by the Company or the property owned



or leased by the Company requires such qualification. Except as described in the
Memorandum, the Company has no subsidiaries and does not own any equity interest
and has not made any loans or advances to or guarantees of indebtedness to any
person, corporation, partnership or other entity.

                  (b) The capital structure of the Company is as described in
the Memorandum.

                  (c) The Company has the full right, power and authority to
execute, deliver and perform under this Agreement. This Agreement has been duly
executed by the Company and, at each Closing, the Shares being issued will have
been duly executed by the Company, and this Agreement and the transactions
contemplated by this Agreement have been duly authorized by all necessary
corporate action and each constitute, the legal, valid and binding obligations
of the Company, enforceable in accordance with their respective terms.

                  (d) All of the issued and outstanding shares of Common Stock
have been duly and validly authorized and issued, are fully paid and
nonassessable (with no personal liability attaching to the holders thereof or to
the Company) and are free from preemptive rights or rights of first refusal held
by any person. All of the issued and outstanding shares of Common Stock have
been issued pursuant to either a current effective registration statement under
the 1933 Act or an exemption from the registration requirements thereof, and
were issued in accordance with all applicable Federal and state securities laws.

                  (e) The Shares to be issued at each Closing have been duly and
validly authorized for issuance and, when issued pursuant to this Agreement will
be duly and validly authorized and issued, fully paid and nonassessable and free
from preemptive rights or rights of first refusal held by any person.

                  (f) The following financial statements of the Company
(hereinafter collectively, the "Financial Statements") are included in the
Memorandum: (i) consolidated balance sheets as of June 30, 2005, and
consolidated statements of operations, shareholders' equity and cash flows for
the fiscal year ended June 30, 2005, and the related notes thereto, which have
been audited by HJ & Associates, independent certified public accountants, (ii)
consolidated balance sheets as of June 30, 2004, and consolidated statements of
operations, shareholders' equity and cash flows for the fiscal year ended June
30, 2004, and the related notes thereto, which have been audited by HJ &
Associates, independent certified public accountants, and (iii) unaudited
balance sheet as of March 31, 2006, December 31, 2005, and September 30, 2005,
and unaudited statement of operations, stockholders' equity and cash flows for
the fiscal quarter ended March 31, 2006, December 31, 2005, and September 30,
2005, and the related notes thereto, which have been prepared by the Company.
The Financial Statements, which are included in the Company's Form 10KSB Annual
Report for the year ended June 30, 2005 (the "Form 10KSB"), the Company's Form
10QSB Quarterly Report for the fiscal quarter ended September 30, 2005, and the
Company's Form 10QSB Quarterly Report for the fiscal quarter ended December 31,
2005 (collectively the "Forms 10QSB"), and March 31, 2006, were prepared in



accordance with generally accepted accounting principles consistently applied
and present and reflect fairly the financial position of the Company at the
respective balance sheet dates and the results of its operations and cash flows
for the periods then ended, provided, however, that the financial statements
included in the Forms 10QSB are subject to normal year-end adjustments and lack
footnotes and other presentation items. During the period of HJ & Associates'
engagement as the Company's independent certified public accountants, there has
been no disagreements between the accounting firm and the Company on any matters
of accounting principles or practices, financial statement disclosure or
auditing scope or procedure and no events required to be reported on a current
report on Form 8-K relating to the relationship between the Company and the
accounting firm. The Company has made and kept books and records and accounts
which are in reasonable detail and which fairly and accurately reflect the
activities of the Company, subject only to year-end adjustments.

                  (g) The Company has good and marketable title to all of its
material property and assets and, except as set forth in the Memorandum or the
financial statements of the Company (the "Financial Statements"), none of such
property or assets of the Company are subject to any lien, mortgage, pledge,
encumbrance or other security interest.

                  (h) Except as may be disclosed in the Memorandum, since March
31, 2006, there has not been any material adverse change in the financial
condition or in the operations, business or prospects of the Company from that
shown in the Financial Statements or any damage or destruction, not covered by
insurance, which affects the business, property or assets of the Company.

                  (i) Except as set forth in the Exhibits to the Memorandum, the
Company has not filed any Current Reports on Form 8-K or other reports filed
with the Securities and Exchange Commission (the "SEC") subsequent to April 26,
2006.

                  (j) Neither the execution or delivery of this Agreement, the
Common Stock or the Placement Agent Warrants by the Company nor the performance
by the Company of the transactions contemplated by this Agreement or the
Placement Agent Warrants: (i) requires the consent, waiver, approval, license or
authorization of or filing with or notice to any person, entity or public
authority (except any filings required by Federal or state securities laws,
which filings have been or will be made by the Company on a timely basis); (ii)
violates or constitutes a default under or breach of any law, rule or regulation
applicable to the Company; or (iii) conflicts with or results in a breach or
termination of any provision of, or constitutes a default under, or will result
in the creation of any lien, charge or encumbrance upon any of the property or
assets of the Company with or without the giving of notice, the passage of time
or both, pursuant to (A) the Company's articles of incorporation (as amended) or
by-laws, (B) any mortgage, deed of trust, indenture, note, loan agreement,
security agreement, contract, lease, license, alliance agreement, joint venture
agreement, or other agreement or instrument, or (C) any order, judgment, decree,
statute, regulation or any other restriction of any kind or character to which
the Company is a party or by which any of the assets of the Company may be
bound.

                  (k) Except as described in the Memorandum, The Company does
not have any indebtedness to any officer, director, 5% stockholder or other
Affiliate (as defined in the Rules and Regulations of the SEC under the 1933
Act) of the Company.



                  (l) The Company is in compliance with all laws, rules and
regulations of all Federal, state, local and foreign government agencies having
jurisdiction over the Company or affecting the business, assets or properties of
the Company, except where the failure to comply has not and will not have a
material adverse effect on the business, financial condition or results of
operations of the Company, taken as a whole (a "Material Adverse Effect"). The
Company possesses all licenses, permits, consents, approvals and agreements
(collectively, "Licenses") which are required to be issued by any and all
applicable Federal, state, local or foreign authorities necessary for the
operation of its business and/or in connection with its assets or properties,
except where the failure to possess such Licenses has not and will not have a
Material Adverse Effect.

                  (m) The Company is not in default under any note, loan
agreement, security agreement, mortgage, contract, franchise agreement,
distribution agreement, lease, alliance agreement, joint venture agreement,
other agreement, license, permit, consent, approval or instrument to which it is
a party, and no event has occurred which, with or without the lapse of time or
giving of notice, or both, would constitute such default thereof by the Company
or would cause acceleration of any obligation of the Company or would adversely
affect the business, operations, or financial condition of the Company, except
where such default or event, whether with or without the lapse of time or giving
of notice, or both, has not and will not have a Material Adverse Effect. To the
best of the knowledge of the Company, no party to any note, loan agreement,
security agreement, mortgage, contract, franchise agreement, distribution
agreement, lease, alliance agreement, joint venture agreement, other agreement,
license, permit, consent, approval or instrument with or given to the Company is
in default thereunder and no event has occurred with respect to such party,
which, with or without the lapse of time or giving of notice, or both, would
constitute a default by such party or would cause acceleration of any
obligations of such party.

                  (n) To the best of the Company's knowledge, no officer,
director or 5% stockholder of the Company and no Affiliate of any such person
either (i) holds any interest in any corporation, partnership, business, trust,
sole proprietorship or any other entity which is engaged in a business similar
to that conducted by the Company (other than a passive immaterial interest in a
public company engaged in any such business) or (ii) engages in business with
the Company.

                  (o) There are no material (i.e., involving an asserted
liability in excess of twenty-five thousand dollars ($25,000)) claims, actions,
suits, proceedings or labor disputes, inquiries or investigations (whether or
not purportedly on behalf of the Company), pending or, to the best of the
Company's knowledge, threatened, against the Company, at law or in equity or by
or before any Federal, state, county, municipal or other governmental
department, the SEC, the National Association of Securities Dealers, Inc.,
board, bureau, agency or instrumentality, domestic or foreign, whether legal or
administrative or in arbitration or mediation, nor is there any basis for any
such action or proceeding. Neither the Company, nor any of its assets are



subject to, nor is the Company in default with respect to, any order, writ,
injunction, judgment or decree that could adversely affect the financial
condition, business, assets or prospects of the Company.

                  (p) The accounts receivable of the Company represent
receivables generated from the sale of goods and services in the ordinary course
of business. The Company knows of no material disputes concerning accounts
receivable of the Company not disclosed in the Memorandum.

                  (q) The accounts payable of the Company represent bona fide
payables to third parties incurred in the ordinary course of business and
represent bona fide debts for services and/or goods provided to the Company.

                  (r) Except as set forth in the Memorandum, the Company does
not have (i) any written employment contracts or oral employment contracts not
terminable at will by the Company with any 5% percent shareholder, officer or
director of the Company; (ii) any consulting agreement or other compensation
agreement with any 5% percent shareholder, officer or director of the Company;
or (iii) any agreement or contract with any 5% percent shareholder, officer or
director of the Company that will result in the payment by the Company or the
creation of any commitment or obligation (absolute or contingent), of the
Company to pay any severance, termination, "golden parachute," or similar
payment to any present or former personnel of the Company following termination
of employment. No director, executive officer or other key employee of the
Company has advised the Company that he or she intends to resign as director
and/or executive officer of the Company or to terminate his or her employment
with the Company.

                  (s) Except as set forth in the Memorandum, the Company is not
a party to a labor agreement with respect to any of its employees with any labor
organization, union, group or association and there are no employee unions (nor
any similar labor or employee organizations). There is no labor strike or labor
stoppage or slowdown pending, or, to the knowledge of the Company, threatened
against the Company, nor has the Company experienced in the last five (5) years
any work stoppage or other labor difficulty. The Company is in compliance with
all applicable laws, rules and regulations regarding employment practices,
employee documentation, terms or conditions of employment and wage and hours and
the Company is not engaged in any unfair labor practices, except where the
failure to comply has not and will not have a Material Adverse Effect. There are
no unfair labor practice charges or complaints against the Company pending
before the National Labor Relations Board or any other governmental agency.

                  (t) Except as disclosed in the Memorandum, there is no
employee pension, retirement or other benefit plans, maintained, contributed to
or required to be contributed to by the Company covering any employee or former
employee of the Company. The Company has no material liability or obligation of
any kind or nature, whether accrued or contingent, matured or unmatured, known
or unknown, under any provision of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA") or any provision of the Internal Revenue Code of
1986, as amended, specifically relating to persons subject to ERISA.



                  (u) The Company has timely filed or will timely file with the
appropriate taxing authorities all returns in respect of taxes required to be
filed through the date hereof and has timely paid or will timely pay all taxes
that it is required to pay or has established an adequate reserve therefore.
There are no pending or, to the knowledge of the Company, threatened audits,
investigations or claims for or relating to any liability of the Company in
respect of taxes.

                  (v) The Company has no liabilities of any kind or nature
whether accrued or contingent, matured or unmatured, known or unknown, except as
set forth in the Memorandum and those liabilities incurred by the Company in the
ordinary course of business since March 31, 2006.

                  (w) There are no finder's fees or brokerage commissions
payable with respect to the transactions contemplated by this Agreement due to
the actions of the Company, except as provided in Paragraph 9 of this Agreement.

                  (x) Except as set forth in the Memorandum, the Company is not
currently and has not during the past six (6) months been engaged in
negotiations with respect to: (i) any merger or consolidation of the Company
where the Company would not be the surviving entity; or (ii) the sale of the
Company or any of its assets other than sales in the ordinary course of
business.

                  (y) The Company has the right to conduct its business in the
manner in which its business has been heretofore conducted. To the knowledge of
the Company, the conduct of such businesses by the Company does not violate or
infringe upon the patent, copyright, trade secret or other proprietary rights of
any third party, and the Company has not received any notice of any claim of any
such violation or infringement.

                  (z) The Company is currently in compliance in all respects
with all applicable Environmental Laws (as defined below), including, without
limitation, obtaining and maintaining in effect all permits, licenses, consents
and other authorizations required by applicable Environmental Laws, and the
Company is currently in compliance with all such permits, licenses, consents and
other authorizations, except where the failure to comply does not and will not
have a Material Adverse Effect. The Company has not received notice from any
property owner, landlord, tenant or Governmental Authority (as defined below)
that Hazardous Wastes (as defined below) are being improperly used, stored or
disposed of at any property currently or formerly owned or leased by the Company
or that any soil or ground water contamination has emanated from any such
property. For purposes hereof, the term "Environmental Laws" means,
collectively, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, the Superfund Amendments and Reauthorization
Act of 1986, as amended, the Resource Conservation and Recovery Act, as amended,
the Toxic Substances Act, as amended, the Clean Air Act, as amended, the Clean



Water Act, as amended, any other "Superfund" or "Superlien" law or any other
Federal, state or local statute, law, ordinance, code, rule, regulation, order
or decree regulating, relating to, or imposing liability or standards of conduct
concerning any hazardous, toxic or dangerous waste, substance, or material, as
now or at any time hereafter in effect. For purposes hereof, the term
"Governmental Authority" shall mean the Federal Government of the United States
of America, any state or any political subdivision of the Federal Government or
any state, including but not limited to courts, departments, commissions,
boards, bureaus, agencies, ministries or other instrumentalities. For purposes
hereof, the term "Hazardous Wastes" shall mean any regulated quantity of
hazardous substances as listed by the Environmental Protection Agency (the
"EPA") and the list of toxic pollutants designated by the United States Congress
and/or the EPA or defined by any other Federal, state or local statute, law,
ordinance, code, rule, regulation, order, or decree regulating, relating to or
imposing liability for standard of conduct concerning any hazardous, toxic
substance or material.

                  (aa) The information contained in the Memorandum, taken
together, describe in all material respects the business and financial condition
of the Company, and such material, taken together, does not contain any
misstatement of a material fact or omit to state a material fact necessary to
make the information not misleading. The Investors and the Placement Agent shall
be entitled to rely on such material notwithstanding any investigation they or
any of them may have made.

                  (bb) The Financial Statements included in the Memorandum
present fairly the financial position of the Company as of the dates indicated
and the results of its operations for the periods specified. The historical
financial information included in the Memorandum has been derived from the
accounting records of the Company and presents fairly the information shown
thereby. The assumptions underlying pro forma financial information included in
the Memorandum are reasonable and are set forth in the Memorandum.

                  (cc) The Placement Agent Warrants have been authorized for
issuance to the Placement Agent or its designees. The Warrant Shares, when
issued and delivered against payment therefor in accordance with the terms
thereof, will be duly and validly issued, fully paid, nonassessable and free of
preemptive rights or rights of first refusal held by any person, and all
corporate action required to be taken for the authorization and issuance of the
Placement Agent Warrants and the Warrant Shares has been validly and
sufficiently taken. The execution by the Company of the Placement Agent Warrants
has been duly authorized by all required action of the Company and, when so
executed and delivered, will constitute the valid and binding obligations of the
Company, enforceable against the Company in accordance with their respective
terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors' rights
and to general equity principles.

         3. Representations, Warranties and Covenants of Placement Agent.

                  (a) Placement Agent hereby represents and warrants that it is
duly authorized to execute this Agreement and perform its duties hereunder, and
the execution and delivery by Placement Agent of this Agreement and the
consummation of the transactions contemplated by this Agreement have been
authorized by all necessary corporate action and will not result in any
violation of, or be in conflict with, or constitute a default under, Placement



Agent's Articles of Incorporation or By-Laws, any agreement or instrument to
which Placement Agent is a party or Placement Agent's property is bound, or any
judgment, decree, order or any statute, rule or regulation applicable to
Placement Agent.

                  (b) In offering the Shares for sale, Placement Agent will not
offer the Shares for sale, or solicit any offers to buy any Shares, or otherwise
negotiate with any person in respect of the Shares, on the basis of any
communications or documents relating to the Shares or any investment therein or
to the Company or investment therein, other than the Memorandum and any other
document satisfactory in form and substance to the Company. Placement Agent will
promptly deliver a copy of each amendment or supplement to the Memorandum (i) to
all offerees then being or thereafter solicited by Placement Agent, and (ii) to
each person who has subscribed for Shares prior to the receipt by such person of
such amendment or supplement.

                  (c) In offering the Shares for sale, Placement Agent shall
conduct such sales in the manner described in the Memorandum.

         4. Covenants of the Company.

                  (a) In connection with the Proposed Offering, the Company will
at all times comply with all requirements imposed upon it by the Act, as now and
hereafter amended, and by all applicable state securities laws and regulations,
to permit the continuance of offers and sales of the Units in accordance with
the provisions hereof and the Memorandum. During such period, the Company will
amend and supplement the Memorandum in order to make the Memorandum comply with
the requirements of the Act.

                  (b) If at any time it is known or believed that any event
occurred as a result of which the Memorandum or any representation or warranty
contained in this section includes an untrue statement of a material fact or, in
view of the circumstances under which they were made, omits to state any
material fact necessary to make the statements therein not misleading, the
Company will notify The Placement Agent (unless the information shall have been
received in writing from the Company) and will prepare an amended or
supplemented Memorandum which will correct such statement or omission.

                  (c) The Company will not make any offers or sales of any
security (other than the Shares) under circumstances that would cause the
Proposed Offering to fail to qualify for an exemption from the registration
requirements of applicable federal and state securities laws .

                  (d) The Company agrees at all times as long as the Placement
Agent Warrants may be exercised, to keep reserved from the authorized and
unissued Common Stock, such number of shares of Common Stock as may be, from
time to time, issuable upon exercise of the Placement Agent Warrants

         5. Survival of Representations and Warranties and Indemnification. The
representations, warranties and covenants of the Company and Placement Agent set
forth in Sections 2, 3 and 4 of this Agreement shall survive the execution and
delivery of the Shares. The indemnification obligations of the Company as set



forth in the indemnification rider identified as Appendix II (as amended or
supplemented from time to time, the "Indemnification Rider") to that certain
engagement letter between the Company and the Placement Agent, dated April 24,
2006 (as amended or supplemented from time to time) is hereby incorporated by
reference in its entirety as if more fully set forth herein, and the provisions
of the Indemnification Rider shall apply and be applicable to, among other
things, all representations and warranties of the Company.

         6. Use of Proceeds. The net proceeds to the Company from the sale of
the Minimum Amount of Common Stock and the Maximum Amount of Common Stock are
estimated to be approximately $640,000 and $4,090,000, respectively, after
deducting the fees and expenses associated with the Private Placement Offering.
The net proceeds from the sale of the Shares will be used by the Company as
disclosed in the Offering Materials.

         7. Unregistered Securities. None of the Shares or the Warrant Shares
have been registered under the 1933 Act, in reliance upon the applicability of
Section 4(2), 4(6) and/or Rule 506 of Regulation D of the 1933 Act to the
transactions contemplated hereby. The certificates representing the Shares and
the Warrant Shares will bear an investment legend stating that they are
"restricted securities" (as defined in Rule 144 under the Securities Act) 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.

         8. Registration Rights and "Piggy-Back" Registration Rights.

                  (a) As soon as possible after the Final Closing Date, but in
no event later than thirty (30) 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 and
the Warrant Shares (collectively, the "Registrable Securities") for all holders
of the Shares and the Placement Agent Warrants (collectively, the "Registered
Holders"), 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 forty-five (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 (to the extent accepted) until the Registration Statement is
filed. In addition, if the Registration Statement is not declared effective
within 180 days of 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 (to the extent
accepted), as the case may be. No penalties shall be payable in relation to the
Warrant Shares.

                  (b) In the event the Company effects any registration under
the 1933 Act of any Registrable Securities pursuant to Paragraphs 7(a) above or
7(g) below, the Company shall indemnify, to the extent permitted by law, and
hold harmless each Registered Holder whose Registrable Securities are included
in the registration statement associated with such registration (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
such 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.

                  (c) 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.

                  (d) Any person entitled to indemnification under Paragraphs
7(b) or 7(c) above 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 Paragraph 7(d), 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
Paragraph 7(b) or 7(c) above, 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.

                  (e) If for any reason the indemnity provided in Paragraphs
7(b) or 7(c) above 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 Paragraph
7(d) above, 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 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 1933 Act) 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 paragraph (e) shall be several in
proportion to their respective underwriting commitments and not joint.

                  (f) The provisions of Paragraphs 7(b) through 7(e) 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.

                  (g) The Registered Holders shall have certain "piggy-back"
registration rights with respect to the Registrable Securities as hereinafter
provided:

                           (1) If at any time or from time to time after a
three-year anniversary date of the Final Closing, the Company determines to
register Common Stock for its own account for a public offering or for the
account of any of its stockholders to publicly sell their shares of Common
Stock, other than a registration on Form S-1 or S-8 relating solely to employee
stock option or purchase plans, the Company will promptly notify each Registered
Holder of such registration.

                           (2) If within five (5) days after such notice from
the Company a Registered Holder gives notice to the Company of such Registered
Holder's desires to have all of the Registered Holder's Registrable Securities
included in a registration statement, then the Company shall include such
Registered Holder's Registrable Securities in such registration statement, at
the Company's sole cost and expense, subject to the remaining terms of this
Section 3.7. If a Registered Holder fails to give such notice within such



period, such Registered Holder shall not have the right to have such Registered
Holder's Registrable Securities registered pursuant to such registration
statement.

                           (3) The Company at its expense will keep such
registration effective for a period of 180 days or until all of the selling
securities holders named in such registration statement relating thereto have
completed the distribution described in such registration statement, whichever
first occurs, and will furnish such number of prospectuses and other documents
incident thereto as such selling securities holders from time to time may
reasonably request.

                           (4) If a registration statement relates to an
underwritten offering, and the underwriter shall determine in writing that the
total number of shares of Common Stock to be included in the offering, including
the Registrable Securities, shall exceed the amount which the underwriter deems
to be appropriate for the offering, the number of shares of the Registrable
Securities shall be reduced in the same proportion as the remainder of the
shares in the offering and each Registered Holder's Registrable Securities
included in such registration statement will be reduced proportionately. For
this purpose, if other securities in such registration statement are derivative
securities, their underlying shares shall be included in the computation. The
Registered Holders shall enter into such agreements as may be reasonably
required by the underwriters and the Registered Holders shall pay to the
underwriters commissions relating to the sale of their respective Registrable
Securities.

                           (5) The Registered Holder shall furnish in writing to
the Company such information as the Company shall reasonably require in
connection with any registration statement.

                  (h) If and whenever the Company is required by the provisions
of this Paragraph 7 to use its best efforts to register any Registrable
Securities under the 1933 Act, the Company shall, as expeditiously as possible
under the circumstances:

                           (1) 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.

                           (2) Subject to Paragraph 7(a), 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 such 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 such registration statement.

                           (3) 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 such registration statement current.

                           (4) 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.

                           (5) 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.

                           (6) As soon as practicable after the effective date
of such 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
such 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 Sellers.

                           (7) 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 such 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 such 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 Paragraph confidential.



                           (8) Provide a transfer agent and registrar located in
the United States for all such Registrable Securities covered by such
registration statement not later than the effective date of such registration
statement.

                           (9) List the Registrable Securities covered by such
registration statement on such exchanges and/or on the NASDAQ as the Common
Stock is then currently listed upon.

                           (10) 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.


                                    (i) The Company acknowledges that there is
no adequate remedy at law for failure by it to comply with the provisions of
this Paragraph 8 and that such failure would not be adequately compensable in
damages, and therefore agrees that its obligations and agreements contained in
this Paragraph 7 may be specifically enforced. In the event that the Company
shall fail to file such registration statement when required pursuant to
Paragraph 8(a) above or to keep any registration statement effective as provided
in this Paragraph or otherwise fails to comply with its obligations and
agreements in this Paragraph 8, 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 Paragraph 7, 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.

         9. Conditions. The following obligations of the Company shall be
satisfied or fulfilled on or prior to the date of each Closing, unless otherwise
agreed to in writing by the Placement Agent:

                  (a) The Company shall have delivered to the Placement Agent,
at the Initial Closing, (i) a currently-dated long-form good standing
certificate or telegram from the Secretary of State where the Company is



incorporated and each other jurisdiction in which the Company is qualified to do
business as a foreign corporation; (ii) the articles of incorporation (as
amended) of the Company, as currently in effect, certified by the Secretary of
State of the state where the Company is incorporated; (iii) by-laws of the
Company certified by the secretary of the Company; and (iv) certified
resolutions of the Board of Directors of the Company approving this Agreement,
the sale of the Common Stock and the Placement Agent Warrants, and the
registration of the Registrable Securities.

                  (b) There shall have occurred no event which has a Material
Adverse Effect on the Company or any of its businesses, assets, prospects or the
Company's securities since the date of this Agreement.

                  (c) No litigation or administrative proceeding shall have been
threatened or commenced against the Company which (i) seeks to enjoin or
otherwise prohibit or restrict the consummation of the transactions contemplated
by this Agreement or (ii) if adversely determined, would have a Material Adverse
Effect on the Company or the Company's securities.

                  (d) The Company shall have delivered to the Placement Agent a
certificate of its principal executive and financial officers as to the matters
set forth in paragraphs 8(a), (b) and (c) of this Agreement and to the further
effect that (i) the Company is not in default, in any respect, under any note,
loan agreement, security agreement, mortgage, deed of trust, indenture,
contract, alliance agreement, lease, license, joint venture agreement, other
agreement or other instrument to which it is a party, except as disclosed in the
Financial Statements or the Memorandum and except where such default has not and
will not have a Material Adverse Effect; (ii) the Company's representations and
warranties contained in this Agreement are true and correct in all respects on
such date with the same force and effect as if made on such date, (iii) there
has been no amendment or changes to the Company's articles of incorporation or
by-laws or authorizing resolutions from those delivered pursuant to Paragraph
8(a) of this Agreement; and (iv) no event has occurred which, with or without
the lapse of time or giving of notice, or both, would constitute a breach of
default thereof by the Company, or would cause acceleration of any obligation of
the Company, or could adversely affect the business, operations, financial
condition or prospects of the Company.

                  (e) The Placement Agent shall have received the opinion of Bud
Headman of Cohne, Rappaport & Segal, P.C, counsel for the Company, dated as of
the Closing date in form and substance reasonably satisfactory to the Placement
Agent and its counsel.

                  (f) The Company shall have prepared and filed or delivered to
counsel for filing with the SEC and any states in which such filing is required,
a Form D relating to the sale of the Common Stock and such other documents and
certificates as are required.

                  (g) Subscriptions for at least the Minimum Amount of Common
Stock shall have been accepted by the Company.



                  (h) The Company will announce its intention to effect a
reverse stock split, in a ratio to be determined by mutual agreement with the
Placement Agent. The Company will use its best efforts and in a timely fashion
seek majority shareholder consent and file required shareholder notice with the
SEC in the form of a Schedule 14C in connection with the reverse split.

                  (i) In addition to the right of the Placement Agent to
terminate this Agreement and not consummate the transactions contemplated by
this Agreement as a result of the failure of the Company to comply with any of
its obligations set forth in this Agreement, this Agreement may be terminated by
the Placement Agent by written notice to the Company at any time prior to the
Initial Closing if, in the Placement Agent's sole judgment, (i) the Company
shall have sustained a loss that is material to the Company, whether or not
insured, by reason of fire, earthquake, flood, accident or other calamity, or
from any labor dispute or court or government action, order or decree; (ii)
trading in securities on any exchange or system shall have been suspended or
limited either generally or specifically with respect to the Common Stock; (iii)
material governmental restrictions have been imposed on trading in securities
generally or specifically with respect to the Common Stock (not in force and
effect on the date of this Agreement); (iv) a banking moratorium shall have been
declared by Federal or New York State authorities; (v) an outbreak of major
international hostilities or other national or international calamity shall have
occurred; (vi) the Congress of the United States or any state legislative body
shall have passed or taken any action or measure, or such bodies or any
governmental body or any authoritative accounting institute, or board, or any
governmental executive shall have adopted any orders, rules or regulations,
which the Placement Agent reasonably believes is likely to have a Material
Adverse Effect on the business, financial condition or financial statements of
the Company or the market for the Common Stock; (vii) the Common Stock shall
have been delisted from the exchange on which it currently listed, or the
Company shall have received notice from such exchange advising the Company of
its intention to have the Common Stock delisted from such exchange, whether
conditional or otherwise, or the Company shall fail to meet the requirements for
continued listing on such exchange; or (viii) there shall have been, in the
Placement Agent's judgment, a material decline in the Dow Jones Industrial Index
or the market price of the Common Stock at any time subsequent to the date of
this Agreement.

         10. Indemnification.

                  (a) Indemnification by Company. The Company agrees to
indemnify and hold harmless Placement Agent, its officers, directors and agents
from and against any and all loss, liability, claim, damage and expense
whatsoever arising out of (1) a breach or alleged breach by the Company of any
warranty set forth in Section 2, (2) failure or alleged failure by the Company
to comply with the provisions of Section 2, or (3) any untrue statement or
alleged untrue statement of a material fact contained in the Memorandum or the
omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage,



liability or expense arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission contained in the
material furnished to the Company by Placement Agent on Placement Agent's
behalf, specifically for inclusion therein, which relates to Placement Agent's
activities pursuant to this Agreement.

                  (b) Indemnification by Placement Agent. Placement Agent agrees
to indemnify and hold harmless the Company (its officers, directors and agents)
and each person, if any, who controls any of the foregoing within the meaning of
the 1933 Act to the same extent as the indemnity from the Company described
above against any and all loss, liability, claim, damage and expense whatsoever
(or actions in respect thereto) arising out of or based upon any
misrepresentation or alleged misrepresentation, failure or alleged failure by
Placement Agent to comply with the covenants and agreements set forth in Section
3.

         11. Fees.

                  (a) As disclosed in the Memorandum, a fee ("Success Fee")
equal to eight percent (8%) of the gross proceeds through the sale of the Shares
shall be payable to the Placement Agent.

                  (b) In addition to the sums payable to the Placement Agent as
provided elsewhere herein, the Placement Agent shall be entitled to receive at
the Closing, as additional compensation for its services, warrants (the
"Placement Agent Warrants") with a five (5) year term for the purchase of an
amount of Common Stock equal to ten percent (10.0%) of the Shares sold in this
Offering. The exercise price of the Placement Agent Warrants will initially be
equal to one-hundred ten percent (110%) of the closing bid price of the Common
Stock on the Final Closing Date.

                  (c) The Company also agrees to pay to the Placement Agent, a
cash fee equal to eight (8.0%) percent of the gross proceeds, if any, received
subsequent to the termination of the Offering from any party introduced to the
Company by the Placement Agent during the Offering Period; provided that such
proceeds are received by the Company within one year of the date of such
introduction and that the Placement Agent has promptly notified the Company that
such introduction has been made

                  (d) Upon closing, the Company will reimburse the Placement
Agent for up to $50,000 of its actual and reasonable out-of-pocket expenses
incurred in connection with Offering, including fees and expenses of its
counsel.

                  (e) The Company shall pay any fees required in connection with
the qualification of the sale of the Shares under the state securities or "blue
sky" laws of any state which the Placement Agent reasonably deems necessary.

                  (f) All payments in connection with the sale of the Shares
shall be made pursuant to the terms and conditions of the escrow agreement



between Placement Agent and CSC Trust Company of Delaware, an executed copy of
which has been delivered to and acknowledged by the Company.

         12. The Placement Agent and the Company mutually agree that they will
not disclose any confidential information received from the other party to
others, except with the written permission of the other party or as such
disclosure may be required by law.

         13. Notices. All notices provided for in this Agreement shall be in
writing signed by the party giving such notice, and delivered personally or sent
by overnight courier or messenger against receipt thereof or sent by registered
or certified mail, return receipt requested, or by facsimile transmission, if
confirmed by mail as provided in this Section 12. Notices shall be deemed to
have been received on the date of personal delivery or facsimile or, if sent by
certified or registered mail, return receipt requested, shall be deemed to be
delivered on the third business day after the date of mailing. Notices shall be
sent to the following addresses:

                To the Company:

                PARK CITY GROUP, INC.
                333 Main Street
                Suite 300
                Park City, UT 84060
                Facsimile: (435) 645-2110
                Attention:  Randy Fields

                To Placement Agent:

                TAGLICH BROTHERS, INC.
                 405 Lexington Avenue, 51st Floor
                New York, NY 10174
                Facsimile: (212) 661-6824
                Attention: Robert Schroeder

                With a copy to:

                EDWARDS ANGELL PALMER & DODGE LLP
                90 State House Square
                Hartford, CT  06103
                Facsimile: (860) 527-4198
                Attention:  Mark Seiger, Esq.

or to such other address as any party shall designate in the manner provided in
this Section 12.



         14. Miscellaneous.

                  (a) This Agreement constitutes the entire agreement between
the parties relating to the subject matter hereof and supercedes any and all
prior or contemporaneous oral and prior written agreements and understandings.
This Agreement may not be modified or amended nor may any right be waived except
by a writing which expressly refers to this Agreement, states that it is a
modification, amendment or waiver and is signed by all parties with respect to a
modification or amendment or the party granting the waiver with respect to a
waiver. No course of conduct or dealing and no trade custom or usage shall
modify any provisions of this Agreement.

                  (b) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within such state. Each party hereby consents to
the exclusive jurisdiction of the Federal and state courts situated in New York
County, New York in connection with any action arising out of or based upon this
Agreement and the transactions contemplated by this Agreement.

                  (c) This Agreement shall be binding upon and inure to the
benefit of the parties hereto, and their respective personal representatives,
successors and permitted assigns.

                  (d) In the event that any provision of this Agreement becomes
or is declared by a court of competent jurisdiction to be illegal, unenforceable
or void, this Agreement shall continue in full force and effect without said
provision.

                  (e) Each party shall, without payment of any additional
consideration by any other party, at any time on or after the date of any
Closings take such further action and execute such other and further documents
and instruments as the other party may request in order to provide the other
party with the benefits of this Agreement.

                  (f) The captions and headings contained herein are solely for
convenience and reference and do not constitute a part of this Agreement.

                  (g) All references to any gender shall be deemed to include
the masculine, feminine or neuter gender, the singular shall include the plural
and the plural shall include the singular.

                  (h) This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same document.



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

PARK CITY GROUP, INC.                           TAGLICH BROTHERS, INC.



By:_______________________________              By:___________________________
Name:                                           Name:
Title:                                          Title:

EX-10.3

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES

                          COMMON STOCK PURCHASE WARRANT


                    To Purchase [ ] Shares of Common Stock of

                              Park City Group, Inc.

         THIS COMMON STOCK PURCHASE WARRANT CERTIFIES that, for value received,
_____________________ (the "Holder"), is entitled, upon the terms and subject to
the limitations on exercise and the conditions hereinafter set forth, at any
time on or after May __, 2006 (the "Initial Exercise Date") and on or prior to
the close of business on May __, 2011 (the "Termination Date") but not
thereafter, to subscribe for and purchase from Park City Group, Inc., a
corporation incorporated in the State of Nevada (the "Company"), up to [ ]
shares (the "Warrant Shares") of Common Stock, of the Company (the "Common
Stock"). The purchase price of one share of Common Stock (the "Exercise Price")
under this Warrant shall be $____, subject to adjustment hereunder. The Exercise
Price and the number of Warrant Shares for which the Warrant is exercisable
shall be subject to adjustment as provided herein. Capitalized terms used and
not otherwise defined herein shall have the meanings set forth in that certain
Common Stock Purchase Agreement (the "Purchase Agreement"), dated May __, 2006,
between the Company and the purchasers signatory thereto.

         1. Title to Warrant. Prior to the Termination Date and subject to
compliance with applicable laws and Section 7 of this Warrant, this Warrant and
all rights hereunder are transferable, in whole or in part, at the office or
agency of the Company by the Holder in person or by duly authorized attorney,
upon surrender of this Warrant together with the Assignment Form annexed hereto
properly endorsed. The transferee shall sign an investment letter in form and
substance reasonably satisfactory to the Company.

         2. Authorization of Shares. The Company covenants that all Warrant
Shares which may be issued upon the exercise of the purchase rights represented
by this Warrant will, upon exercise of the purchase rights represented by this

                                       1


Warrant, be duly authorized, validly issued, fully paid and nonassessable and
free from all taxes, liens and charges in respect of the issue thereof (other
than taxes in respect of any transfer occurring contemporaneously with such
issue).

         3. Exercise of Warrant.

         (a) Except as provided in Section 4 of this Warrant, exercise of the
purchase rights represented by this Warrant, in whole or in part, may be made at
any time or times on or after the Initial Exercise Date and on or before the
Termination Date by the surrender of this Warrant and the Notice of Exercise
Form annexed hereto duly executed, at the office of the Company (or such other
office or agency of the Company as it may designate by notice in writing to the
registered Holder at the address of such Holder appearing on the books of the
Company) and upon payment of the Exercise Price (as defined below) for the
number of Warrant Shares with respect to which this Warrant is then being
exercised, payable at the Holder's election (i) by certified or official bank
check or by wire transfer to an account designated by the Company, (ii) by
"cashless exercise" by surrender to the Company for cancellation of a portion of
this Warrant representing that number of unissued Warrant Shares which is equal
to the quotient obtained by dividing (A) the product obtained by multiplying the
Exercise Price by the number of Warrant Shares being purchased upon such
exercise by (B) the Per Share Market Value as of the date of such exercise, or
(iii) by a combination of the foregoing methods of payment selected by the
Holder. In any case where the consideration payable upon such exercise is being
paid in whole or in part pursuant to the provisions of clause (ii) of this
Section 3(a), such exercise shall be accompanied by written notice from the
Holder of this Warrant specifying the manner of payment thereof and containing a
calculation showing the number of Warrant Shares with respect to which rights
are being surrendered thereunder and the net number of shares to be issued after
giving effect to such surrender. "Per Share Market Value" means on any
particular date (A) the closing price per share of the Common Stock on such date
on the OTC Bulletin Board or another registered national stock exchange on which
the Common Stock is then listed, or if there is no such price on such date, then
the closing price on such exchange or quotation system on the date nearest
preceding such date, or (B) if the Common Stock is not then reported by the OTC
Bulletin Board or the Pink Sheets LLC (or any similar organization or agency
succeeding to its functions of reporting prices), then the average of the "Pink
Sheet" quotes for the relevant conversion period, as determined in good faith by
the Holder, or (C) if the Common Stock is not then publicly traded, the fair
market value of a share of Common Stock as determined by an Independent
Appraiser selected in good faith by the Holder; provided, however, that the
Company, after receipt of the determination by such Independent Appraiser, shall
have the right to select an additional Independent Appraiser, in which case, the
fair market value shall be equal to the average of the determinations by each
such Independent Appraiser; and provided, further that all determinations of the
Per Share Market Value shall be appropriately adjusted for any stock dividends,
stock splits or other similar transactions during such period. The determination
of fair market value by an Independent Appraiser shall be based upon the fair
market value of the Company determined on a going concern basis as between a
willing buyer and a willing seller and taking into account all relevant factors
determinative of value, and shall be final and binding on all parties. In
determining the fair market value of any shares of Common Stock, no

                                       2


consideration shall be given to any restrictions on transfer of the Common Stock
imposed by agreement or by Federal or state securities laws, or to the existence
or absence of, or any limitations on, voting rights. "Independent Appraiser"
means a nationally recognized or major regional investment banking firm or firm
of independent certified public accountants of recognized standing (which may be
the firm that regularly examines the financial statements of the Company) that
is regularly engaged in the business of appraising the capital stock or assets
of corporations or other entities as going concerns, and which is not affiliated
with either the Company or the Holder.

         (b) Upon payment of the Exercise Price pursuant to Section 3(a) of this
Warrant, the Holder shall be entitled to receive a certificate for the number of
Warrant Shares so purchased. Certificates for shares purchased hereunder shall
be delivered to the Holder within five (5) Trading Days after the date on which
this Warrant shall have been exercised as aforesaid. This Warrant shall be
deemed to have been exercised and such certificate or certificates shall be
deemed to have been issued, and the Holder or any other person so designated to
be named therein shall be deemed to have become a holder of record of such
shares for all purposes, as of the date the Warrant has been exercised, by
payment to the Company of the Exercise Price and all taxes required to be paid
by the Holder, if any, pursuant to Section 5 of this Warrant, prior to the
issuance of such shares. "Trading Day" means (i) a day on which the Common Stock
is traded on the OTC Bulletin Board, or (ii) if the Common Stock is not listed
on the OTC Bulletin Board, a day on which the Common Stock is traded on any
other registered national stock exchange, or (iii) if the Common Stock is not
traded on the OTC Bulletin Board or any other registered national stock
exchange, a day on which the Common Stock is quoted in the over-the-counter
market as reported by the Pink Sheets LLC (or any similar organization or agency
succeeding its functions of reporting prices); provided, however, that in the
event that the Common Stock is not listed or quoted as set forth in (i), (ii)
and (ii) of this Section 3(b), then Trading Day shall mean any day except
Saturday, Sunday and any day which shall be a legal holiday or a day on which
banking institutions in the State of New York are authorized or required by law
or other government action to close.

         (c) If the Company fails to deliver to the Holder a certificate or
certificates representing the Warrant Shares pursuant to Section 3(b) of this
Warrant by the close of business on the fifth Trading Day after the date of
exercise, then the Holder will have the right to rescind such exercise. In
addition, if the Company fails to deliver to the Holder a certificate or
certificates representing the Warrant Shares pursuant to an exercise by the
close of business on the fifth Trading Day after the date of exercise, and if
after such fifth Trading Day the Holder is required by its broker to purchase
(in an open market transaction or otherwise) shares of Common Stock to deliver
in satisfaction of a sale by the Holder of the Warrant Shares which the Holder
anticipated receiving upon such exercise (a "Buy-In"), then the Company shall
(i) pay in cash to the Holder the amount by which (x) the Holder's total
purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the
number of Warrant Shares that the Company was required to deliver to the Holder
in connection with the exercise at issue times (B) the price at which the sell
order giving rise to such purchase obligation was executed, and (ii) at the

                                       3


option of the Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored or deliver to
the Holder the number of shares of Common Stock that would have been issued had
the Company timely complied with its exercise and delivery obligations
hereunder. For example, if the Holder purchases Common Stock having a total
purchase price of $11,000 to cover a Buy-In with respect to an attempted
exercise of Warrant Shares with an aggregate sale price giving rise to such
purchase obligation of $10,000, under clause (i) of the immediately preceding
sentence the Company shall be required to pay the Holder $1,000. The Holder
shall provide the Company written notice indicating the amounts payable to the
Holder in respect of the Buy-In, together with applicable confirmations and
other evidence reasonably requested by the Company. Nothing herein shall limit a
Holder's right to pursue any other remedies available to it hereunder, at law or
in equity including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company's failure to timely deliver
certificates representing Warrant Shares upon exercise of this Warrant as
required pursuant to the terms hereof.

         (d) If this Warrant shall have been exercised in part, the Company
shall, at the time of delivery of the certificate or certificates representing
Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder
to purchase the unpurchased Warrant Shares called for by this Warrant, which new
Warrant shall in all other respects be identical with this Warrant.

         4. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which Holder would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.

         5. Charges, Taxes and Expenses. Issuance of certificates for Warrant
Shares shall be made without charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such certificate, all
of which taxes and expenses shall be paid by the Company, and such certificates
shall be issued in the name of the Holder or in such name or names as may be
directed by the Holder; provided, however, that in the event certificates for
Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the
Assignment Form attached hereto duly executed by the Holder; and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.

         6. Closing of Books. The Company will not close its stockholder books
or records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.

         7. Transfer, Division and Combination.

         (a) Subject to compliance with any applicable securities laws and the
conditions set forth in Sections 1 and 7(e) hereof and to the provisions of
Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder are
transferable, in whole or in part, upon surrender of this Warrant at the

                                       4


principal office of the Company, together with a written assignment of this
Warrant substantially in the form attached hereto duly executed by the Holder or
its agent or attorney and funds sufficient to pay any transfer taxes payable
upon the making of such transfer. Upon such surrender and, if required, such
payment, the Company shall execute and deliver a new Warrant or Warrants in the
name of the assignee or assignees and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled. A Warrant, if properly assigned, may be
exercised by a new holder for the purchase of Warrant Shares without having a
new Warrant issued.

         (b) This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Warrants are
to be issued, signed by the Holder or its agent or attorney. Subject to
compliance with Section 7(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice.

         (c) The Company shall prepare, issue and deliver at its own expense
(other than transfer taxes) the new Warrant or Warrants under this Section 7.

         (d) The Company agrees to maintain, at its aforesaid office, books for
the registration and the registration of transfer of the Warrants.

         (e) If, at the time of the surrender of this Warrant in connection with
any transfer of this Warrant, the transfer of this Warrant shall not be
registered pursuant to an effective registration statement under the Securities
Act and under applicable state securities or blue sky laws, the Company may
require, as a condition of allowing such transfer (i) that the Holder or
transferee of this Warrant, as the case may be, furnish to the Company a written
opinion of counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions) to the effect that
such transfer may be made without registration under the Securities Act and
under applicable state securities or blue sky laws, (ii) that the holder or
transferee execute and deliver to the Company an investment letter in form and
substance acceptable to the Company and (iii) that the transferee be an
"accredited investor" as defined in Rule 501(a) promulgated under the Securities
Act.

         8. No Rights as Shareholder until Exercise. This Warrant does not
entitle the Holder to any voting rights or other rights as a shareholder of the
Company prior to the exercise hereof. Upon the surrender of this Warrant and the
payment of the aggregate Exercise Price (or by means of a cashless exercise),
the Warrant Shares so purchased shall be and be deemed to be issued to such
Holder as the record owner of such shares as of the close of business on the
later of the date of such surrender or payment.

                                       5


         9. Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or stock
certificate.

         10. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be
taken or such right may be exercised on the next succeeding day not a Saturday,
Sunday or legal holiday.

         11. Adjustments of Exercise Price and Number of Warrant Shares. The
number and kind of securities purchasable upon the exercise of this Warrant and
the Exercise Price shall be subject to adjustment from time to time upon the
happening of any of the following. In case the Company shall (i) pay a dividend
in shares of Common Stock or make a distribution in shares of Common Stock to
holders of its outstanding Common Stock, (ii) subdivide its outstanding shares
of Common Stock into a greater number of shares, (iii) combine its outstanding
shares of Common Stock into a smaller number of shares of Common Stock, or (iv)
issue any shares of its capital stock in a reclassification of the Common Stock,
then the number of Warrant Shares purchasable upon exercise of this Warrant
immediately prior thereto shall be adjusted so that the Holder shall be entitled
to receive the kind and number of Warrant Shares or other securities of the
Company which it would have owned or have been entitled to receive had such
Warrant been exercised in advance thereof. Upon each such adjustment of the kind
and number of Warrant Shares or other securities of the Company which are
purchasable hereunder, the Holder shall thereafter be entitled to purchase the
number of Warrant Shares or other securities resulting from such adjustment at
an Exercise Price per Warrant Share or other security obtained by multiplying
the Exercise Price in effect immediately prior to such adjustment by the number
of Warrant Shares purchasable pursuant hereto immediately prior to such
adjustment and dividing by the number of Warrant Shares or other securities of
the Company that are purchasable pursuant hereto immediately after such
adjustment. An adjustment made pursuant to this paragraph shall become effective
immediately after the effective date of such event retroactive to the record
date, if any, for such event.

         12. Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of its property, assets or business to
another corporation and, pursuant to the terms of such reorganization,
reclassification, merger, consolidation or disposition of assets, shares of
common stock of the successor or acquiring corporation, or any cash, shares of
stock or other securities or property of any nature whatsoever (including
warrants or other subscription or purchase rights) in addition to or in lieu of
common stock of the successor or acquiring corporation ("Other Property"), are
to be received by or distributed to the holders of Common Stock of the Company,
then the Holder shall have the right thereafter to receive upon exercise of this

                                       6


Warrant, the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and Other
Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a Holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event. In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate (as determined in good faith by resolution of the Board of
Directors of the Company) in order to provide for adjustments of Warrant Shares
for which this Warrant is exercisable which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 12. For purposes of
this Section 12, "common stock of the successor or acquiring corporation" shall
include stock of such corporation of any class which is not preferred as to
dividends or assets over any other class of stock of such corporation and which
is not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are convertible into or
exchangeable for any such stock, either immediately or upon the arrival of a
specified date or the happening of a specified event and any warrants or other
rights to subscribe for or purchase any such stock. The foregoing provisions of
this Section 12 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or disposition of assets.

         13. Notice of Adjustment. Whenever the number of Warrant Shares or
number or kind of securities or other property purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted, as herein provided, the Company
shall give notice thereof to the Holder, which notice shall state the number of
Warrant Shares (and other securities or property) purchasable upon the exercise
of this Warrant and the Exercise Price of such Warrant Shares (and other
securities or property) after such adjustment, setting forth a brief statement
of the facts requiring such adjustment and setting forth the computation by
which such adjustment was made.

         14. Notice of Corporate Action. If at any time:

                  (a) the Company shall take a record of the holders of its
         Common Stock for the purpose of entitling them to receive a dividend or
         other distribution, or any right to subscribe for or purchase any
         evidences of its indebtedness, any shares of stock of any class or any
         other securities or property, or to receive any other right, or

                  (b) there shall be any capital reorganization of the Company,
         any reclassification or recapitalization of the capital stock of the
         Company or any consolidation or merger of the Company with, or any
         sale, transfer or other disposition of all or substantially all the
         property, assets or business of the Company to, another corporation, or

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

                                       7


then, in any one or more of such cases, the Company shall give to Holder (i) at
least 10 calendar days' prior written notice of the date on which a record date
shall be selected for such dividend, distribution or right or for determining
rights to vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 10
calendar days' prior written notice of the date when the same shall take place.
Such notice in accordance with the foregoing clause also shall specify (i) the
date on which any such record is to be taken for the purpose of such dividend,
distribution or right, the date on which the holders of Common Stock shall be
entitled to any such dividend, distribution or right, and the amount and
character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their Warrant Shares for securities or other property
deliverable upon such disposition, dissolution, liquidation or winding up. Each
such written notice shall be sufficiently given if addressed to Holder at the
last address of Holder appearing on the books of the Company and delivered in
accordance with Section 17(d).

         15. Authorized Shares. The Company covenants that during the period the
Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant. The Company
further covenants that its issuance of this Warrant shall constitute full
authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such
Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Trading Market upon
which the Common Stock may be listed.

         Except and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including, without limitation, amending its
certificate of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of Holder as set forth in this
Warrant against impairment. Without limiting the generality of the foregoing,
the Company will (a) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (b) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant, and (c) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be necessary
to enable the Company to perform its obligations under this Warrant.

         Before taking any action which would result in an adjustment in the
number of Warrant Shares for which this Warrant is exercisable or in the

                                       8


Exercise Price, the Company shall obtain all such authorizations or exemptions
thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.

         16. Registration Rights. The Warrant Shares shall be entitled to the
registration rights and piggy-back registration rights as set forth more fully
in that certain Placement Agreement, dated May __, 2006, between the Company and
the Holder. Such registration rights and piggy-back registration rights are
incorporated herein by this reference as if such provisions had been set forth
herein full.

         17. Timely Reports. The Company agrees to use its best efforts to file
timely all reports required to be filed pursuant to Sections 13 or 15 of the
Securities Exchange Act of 1934, as amended, and to provide such information as
will permit the Holder to sell this Warrant or any Warrants Shares in accordance
with Rule 144 under the Securities Act.

         18. Miscellaneous.

         (a) Jurisdiction. All questions concerning the construction, validity,
enforcement and interpretation of this Warrant shall be determined in accordance
with the provisions of the Purchase Agreement.

         (b) Restrictions. The Holder acknowledges that the Warrant Shares
acquired upon the exercise of this Warrant, if not registered, will have
restrictions upon resale imposed by state and federal securities laws.

         (c) Nonwaiver and Expenses. No course of dealing or any delay or
failure to exercise any right hereunder on the part of Holder shall operate as a
waiver of such right or otherwise prejudice Holder's rights, powers or remedies,
notwithstanding all rights hereunder terminate on the Termination Date. If the
Company willfully and knowingly fails to comply with any provision of this
Warrant, which results in any material damages to the Holder, the Company shall
pay to Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys' fees, including
those of appellate proceedings, incurred by Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.

         (d) Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder by the Company shall be
delivered in accordance with the notice provisions of the Purchase Agreement;
provided upon any permitted assignment of this Warrant, the assignee shall
promptly provide the Company with its contact information.

         (e) Limitation of Liability. No provision hereof, in the absence of any
affirmative action by Holder to exercise this Warrant or purchase Warrant
Shares, and no enumeration herein of the rights or privileges of Holder, shall
give rise to any liability of Holder for the purchase price of any Common Stock
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.

                                       9


         (f) Remedies. Holder, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Warrant and hereby agrees to
waive the defense in any action for specific performance that a remedy at law
would be adequate.

         (g) Successors and Assigns. Subject to applicable securities laws, this
Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the successors
and permitted assigns of Holder. The provisions of this Warrant are intended to
be for the benefit of all Holders from time to time of this Warrant and shall be
enforceable by any such Holder or holder of Warrant Shares.

         (h) Amendment. This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and the Holder.

         (i) Severability. Wherever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Warrant.

         (j) Headings. The headings used in this Warrant are for the convenience
of reference only and shall not, for any purpose, be deemed a part of this
Warrant.

                              ********************

                                       10


         IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized.


Dated:  May __, 2006                       Park City Group, Inc.



                                            By:________________________________
                                            Name:
                                            Title:

                                       11


                               NOTICE OF EXERCISE


To:      Park City Group, Inc.

         (1) The undersigned hereby elects to purchase ________ Warrant Shares
of Park City Group Inc. pursuant to the terms of the attached Warrant (only if
exercised in full), and tenders herewith payment of the exercise price in full,
together with all applicable transfer taxes, if any.

         (2) Payment shall take the form of (check applicable box):

                  [ ] in lawful money of the United States; or

                  [ ] the cancellation of such number of Warrant Shares as is
                  necessary, in accordance with the formula set forth in
                  subsection 3(a), to exercise this Warrant with respect to the
                  maximum number of Warrant Shares purchasable pursuant to the
                  cashless exercise procedure set forth in subsection 3(a).

         (3) Please issue a certificate or certificates representing said
Warrant Shares in the name of the undersigned or in such other name as is
specified below:

                  ________________________________________

The Warrant Shares shall be delivered to the following:

                  ________________________________________
                  ________________________________________
                  ________________________________________
                  ________________________________________

         (4) Accredited Investor. The undersigned is an "accredited investor" as
defined in Regulation D promulgated under the Securities Act of 1933, as
amended.

                                            [PURCHASER]


                                            By: ______________________________
                                            Name:
                                            Title:

                                            Dated:  __________________________



                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)



         FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to


_______________________________________________________________ whose address is

_______________________________________________________________________________.



________________________________________________________________________________

                                                 Dated:  ______________, _______


                           Holder's Signature:__________________________________

                           Holder's Address:____________________________________
                                            ____________________________________


Signature Guaranteed:  ___________________________________________


NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.

EX-20.1

Contact:
John McNamara
Cameron Associates
(212) 245-8800 Ext. 205
john@cameronassoc.com


            Park City Group Completes $4.8 Million Private Placement

               Company Enhances Working Capital as CEO Sees Rapid
                                 Industry Growth

PARK CITY UT, - June 15, 2006 - Park City Group, Inc. (OTCBB: PKCY) today
announced it raised $4.3 million through the private placement of common stock
with accredited investors. The first release of $1.425 million occurred on June
3, 2006. On June 14, 2006, the company received the balance of $2.938 million.
The Company issued 87,272,742 common shares at $.055 per share raising
approximately $4.8 million before deducting commissions and other expenses. The
net proceeds from the private placement will be used for working capital and
general corporate purposes. Taglich Brothers acted as the Company's placement
agent.

Randall Fields, Park City Group chairman and chief executive officer, said,
"This financing provides us with a significantly stronger balance sheet that
will assist us in the continued execution of our business plan. We are very
pleased that Taglich Brothers introduced our company to the high quality,
long-term investors who participated in this deal, and we look forward to our
association with their fine organization."

Fields continued, "Our markets are projected to grow substantially in the coming
years as supermarkets, grocers, convenience stores and other retail customers
grapple with the imperative to more profitably manage perishables and labor
costs. As retailers recognize the solutions Park City Group offers, it is
critical that we have the working capital strength necessary to grow with our
client's demands for service. The added funds will help us greatly expand our
development activities, our marketing and our services activities and the action
represents a strong step towards what we ultimately hope to be a listing on a
national stock exchange."

The shares of common stock have not been registered under the Securities Act of
1933 and may not be subsequently offered or sold by the investors in the United
States absent registration or an applicable exemption from the registration
requirements. Park City Group has agreed to file a registration statement
covering resale of the common stock by investors. This press release does not
constitute an offer to sell or the solicitation of an offer to buy any security
and shall not constitute an offer, solicitation or sale of any securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of such jurisdiction.


About Park City Group
- ---------------------
Park City Group, Inc. develops and markets patented computer software that helps
its retail customers to increase their sales while reducing their inventory and
labor costs: the two largest, controllable expenses in the retail industry. The
technology has its genesis in the operations of Mrs. Fields Cookies, co-founded
by Randy Fields, CEO of Park City Group, Inc. Industry leading customers such as
The Home Depot, Victoria's Secret, The Limited, Anheuser Busch Entertainment and
Tesco Lotus benefit from our software. To find out more about Park City Group
(OTCBB: PKCY) visit our website at www.parkcitygroup.com.

Statements in this press release that relate to Park City Group's future plans,
objectives, expectations, performance, events and the like are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 and the Securities Exchange Act of 1934. Future events, risks and
uncertainties, individually or in the aggregate, could cause actual results to
differ materially from those expressed or implied in these statements. Those
factors could include changes in economic conditions that may change demand for
the Company's products and services and other factors discussed in the
"forward-looking information" section and the "risk factor" section of the
management's discussion and analysis included in the Company's report on Form
10-K for the year ended June 30, 2003 filed with the Securities and Exchange
Commission. This release is comprised of interrelated information that must be
interpreted in the context of all of the information provided and care should be
exercised not to consider portions of this release out of context. Park City
Group uses paid services of investor relations organizations to promote the
Company to the investment community. Investments in any company should be
considered speculative and prior to acquisition, should be thoroughly
researched. Park City Group does not intend to update these forward-looking
statements prior to announcement of quarterly or annual results.