<SEC-DOCUMENT>0001415889-15-001232.txt : 20150403
<SEC-HEADER>0001415889-15-001232.hdr.sgml : 20150403
<ACCEPTANCE-DATETIME>20150402190832
ACCESSION NUMBER:		0001415889-15-001232
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20150331
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Material Modifications to Rights of Security Holders
ITEM INFORMATION:		Other Events
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20150403
DATE AS OF CHANGE:		20150402

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PARK CITY GROUP INC
		CENTRAL INDEX KEY:			0000050471
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374]
		IRS NUMBER:				371454128
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-34941
		FILM NUMBER:		15749757

	BUSINESS ADDRESS:	
		STREET 1:		299 S. MAIN STREET
		STREET 2:		SUITE 2370
		CITY:			SALT LAKE CITY
		STATE:			UT
		ZIP:			84111
		BUSINESS PHONE:		435-645-2100

	MAIL ADDRESS:	
		STREET 1:		299 S. MAIN STREET
		STREET 2:		SUITE 2370
		CITY:			SALT LAKE CITY
		STATE:			UT
		ZIP:			84111

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	FIELDS TECHNOLOGIES INC
		DATE OF NAME CHANGE:	20010626

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	AMERINET GROUP COM INC
		DATE OF NAME CHANGE:	19990803

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	EQUITY GROWTH SYSTEMS INC /DE/
		DATE OF NAME CHANGE:	19951214
</SEC-HEADER>
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<div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 12pt; FONT-WEIGHT: bold">SECURITIES AND EXCHANGE COMMISSION</font></div>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Washington, DC 20549</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 18pt; FONT-WEIGHT: bold">FORM 8-K</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">CURRENT REPORT</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Pursuant to Section&#160;13 or 15(d) of the</font></div>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Securities Exchange Act of 1934</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Date of Report (Date of earliest event reported): <font style="DISPLAY: inline; TEXT-DECORATION: underline">March 31, 2015</font></font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 18pt; FONT-WEIGHT: bold">PARK CITY GROUP, INC.</font></div>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">(Exact name of Registrant as specified in its Charter)</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; TEXT-DECORATION: underline"><font style="DISPLAY: inline">000-03718</font></font></div>
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">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):</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Item 1.01&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Entry into a Material Definitive Agreement.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Series B Restructuring</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On March 31, 2015, the holders of the Series B Convertible Preferred Stock of Park City Group, Inc. (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Company</font>&#8221;) (&#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Series B Preferred</font>&#8221;), consisting of the Chief Executive Officer, his spouse, and a director (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Holders</font>&#8221;), entered into Amendment No. 1 to Restructuring Agreement (&#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Amendment No. 1</font>&#8221;), pursuant to which the Holders consented to the amendment to the Series B Preferred restructuring consummated on February 4, 2015 (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Series B Restructuring</font>&#8221;)</font><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"> as follows: (i) the Series B Amendment was amended to (x) reduce the number of shares of the Company&#8217;s preferred stock designated thereunder from 900,000 to 600,000, (y) should the Company pay dividends on the Series B Preferred in additional shares of Series B Preferred (&#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">PIK Shares</font>&#8221;), shares of a newly created non-voting, non-convertible Series B-1 Preferred Stock shall be issued as PIK Shares, rather than shares of Series B Preferred, and (z) in the event any Holder elects to exercise any warrants issued in connection with the Series B Restructuring (&#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Series B Warrant</font>&#8221;), one share of Series B Preferred will be automatically converted into one share of Series B-1 Preferred for every 2.5 Series B Warrants received by such Holder; and (ii) shares of Series B-1 Preferred will be issued to the Holders in lieu of additional shares of Series B Preferred required to be issued in connection with the Series B Restructuring.&#160; Amendment No. 1 was consummated in order to avoid the increase in voting rights caused by the Series B Restructuring.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Item 3.03&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Material Modifications to Rights of Security Holders.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Series B Preferred Stock</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">In connection with the execution of Amendment No. 1, the Company filed with the Nevada Secretary of State (i) a Second Amended and Restated Certificate of Designation of the Relative Rights, Powers and Preferences of the Series B Preferred (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Second Series B Amendment</font>&#8221;), and (ii) a Certificate of Designation of the Relative Rights Powers and Preferences of the newly created Series B-1 Preferred (&#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Series B-1 Certificate</font>&#8221;). Other than as described above in Item 1.01 of this Current Report on Form 8-K, all other terms and conditions of the Series B Preferred remained the same.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Series B-1 Preferred Stock</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Series B-1 Certificate designates 300,000 shares of our preferred stock as Series B-1 Preferred.&#160;&#160;The following description of the Series B-1 Preferred is a summary only:</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Dividends</font>. Holders of the Series B-1 Preferred are entitled to receive cumulative dividends at the rate per share of 7% per annum if paid by the Company in cash, and 9% per annum if paid by the Company in additional shares of Series B-1 Preferred. Dividends are payable quarterly.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Voting Rights</font>. The Series B-1 Preferred do not have voting rights.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Liquidation</font>. Upon any Liquidation, the Holders of Series B-1 Preferred shall be entitled to receive out of the assets, whether capital or surplus, of the Company an amount equal to the greater of the stated value of the Series B-1 Preferred ($10.00 per share), plus any accrued and unpaid dividends thereon and any other fees or liquidated damages owing thereon, or such amount as would have been payable had each share of Series B-1 Preferred been converted into common stock immediately prior to such Liquidation. In either event, the amount paid shall be paid for each share of Series B-1 Preferred before any distribution or payment shall be made to the holders of any junior securities, and if the assets of the Company shall be insufficient to pay in full such amounts, then the entire assets to be distributed to the holders of the Series B-1 Preferred shall be ratably distributed among the holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full.</font></div>

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<div><font style="FONT-STYLE: italic; DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">a)&#160;&#160;</font></div>
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<div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="FONT-STYLE: italic; DISPLAY: inline">Stock Dividends and Stock Splits</font>. If the Company (A) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of common stock on shares of common stock or any other common stock equivalents; (B) subdivides outstanding shares of common stock into a larger number of shares; (C) combines (including by way of a reverse stock split) outstanding shares of common stock into a smaller number of shares; or (D) issues, in the event of a reclassification of shares of the common stock, any shares of capital stock of the Company, then the conversion price shall be adjusted accordingly.</font></div>
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<div style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="FONT-STYLE: italic; DISPLAY: inline">Merger or Reorganization</font>. If the Company is involved in any reorganization, recapitalization, reclassification, consolidation or merger in which our common stock is converted into or exchanged for securities, cash or other property than each shares of Series B-1 Preferred shall be convertible into the kind and amount of securities, cash or other property that a holder of the number of shares of common stock issuable upon conversion of one share of Series B-1 Preferred prior to any such merger or reorganization would have been entitled to receive pursuant to such transaction.</font></div>
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="BACKGROUND-COLOR: #ffffff; DISPLAY: inline">The foregoing descriptions of Amendment No. 1 to Restructuring Agreement, the </font>Second Amended and Restated Certificate of Designation of the Relative Rights, Powers and Preferences of the Series B Preferred Stock and <font style="BACKGROUND-COLOR: #ffffff; DISPLAY: inline">the Series B-1 Certificate do not purport to be complete, and are qualified in their entirety by reference to the full text of the documents, attached as exhibits to this Current Report on Form 8-K, each of which are incorporated by reference herein.</font></font></div>

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<div style="TEXT-INDENT: 27pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">PARK CITY GROUP, INC.</font></div>
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Date: April 2, 2015</font></div>
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">By:</font></div>
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;/s/ Edward L. Clissold</font></div>
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Edward L. Clissold</font></div>
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<div style="TEXT-ALIGN: center"><font style="FONT-WEIGHT: bold">EXHIBIT INDEX</font></div>

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<td width="11%" style="BORDER-BOTTOM: black 2px solid"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Exhibit Number</font></td>
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<td width="88%" style="BORDER-BOTTOM: black 2px solid"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Description</font></td>
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<td width="11%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">4.1</font></td>
<td width="1%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;</font></td>
<td width="88%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Second Amended and Restated Certificate of Designation of the Relative Rights, Powers and Preferences of the Series B Preferred Stock</font></td>
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<td width="11%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">4.2</font></td>
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<td width="88%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Certificate of Designation of the Relative Rights, Powers and Preferences of the Series B-1 Preferred Stock</font></td>
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<td width="11%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">10.1</font></td>
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<td width="88%"><font style="FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Amendment No. 1 to Restructuring Agreement</font></td>
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<TYPE>EX-4.1
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<DESCRIPTION>SECOND AMENDED AND RESTATED CERTIFICATE OF DESIGNATION OF THE RELATIVE RIGHTS, POWERS AND PREFERENCES OF THE SERIES B PREFERRED STOCK
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">EXHIBIT 4.1</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">PARK CITY GROUP, INC.</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">SECOND AMENDED AND RESTATED</font></div>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">CERTIFICATE OF DESIGNATION</font></div>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">OF THE RELATIVE RIGHTS, POWERS AND PREFERENCES</font></div>

<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">OF THE SERIES B PREFERRED STOCK</font></div>

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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Pursuant to Section 78.1955 of the Nevada Revised Statutes</font></div>

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<div style="TEXT-INDENT: 45pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Pursuant to the authority granted in the Certificate of Incorporation of Park City Group, Inc., a Nevada corporation (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Corporation</font>&#8221;), the Corporation is authorized to establish and issue in series, up to 30,000,000 shares of preferred stock and to designate the terms, preferences, limitations and relative rights of each series thereof.</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">By resolution, the Board of Directors of the Corporation has established, designated and fixed the terms, preferences, limitations and relative rights of up to six hundred thousand (600,000) shares of the authorized and unissued preferred stock of the Corporation, par value $0.01 per share, as &#8220;Series B Preferred Stock&#8221; (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Series B Preferred Stock</font>&#8221;) with the following rights, preferences, powers, privileges and restrictions, qualifications and limitations:</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">1.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Dividends</font>.</font></div>

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<div style="TEXT-INDENT: 72pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Dividends</font>.&#160;&#160;(i) Except as otherwise provided herein, the holders of shares of Series B Preferred Stock shall be entitled to receive, out of funds legally available there for and as set forth in Section 1(a)(iii), dividends at the rate of seven percent (7.0%) per annum (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Dividend Rate</font>&#8221;) of the Series B Original Issue Price (as defined below) on each outstanding share of Series B Preferred Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization affecting such shares); <font style="FONT-STYLE: italic; DISPLAY: inline">provided</font>, <font style="FONT-STYLE: italic; DISPLAY: inline">however, </font>in the event the Company chooses to pay any outstanding dividend in accordance with Section 1(a)(iii), the Dividend Rate will be nine percent (9%) per annum.</font></div>

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<div style="TEXT-INDENT: 108pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(ii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Dividends shall accrue and be payable (A) quarterly on January&#160;2, April 1, July 1 and October 1 of each year (a &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Dividend Payment Date</font>&#8221;) and (B) on the Repurchase Date (as defined below). Dividends shall be payable in accordance with Section 1(a)(iii) below.&#160;&#160;In the event any dividend payment is not paid within ten (10) days of the applicable Dividend Payment Date a late fee shall be assessed and paid to the dividend recipient in the amount of eighteen percent (18%) of the dividend amount.</font></div>

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<div style="TEXT-INDENT: 108pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(iii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The Company may pay dividends accrued pursuant this Section 1(a)&#160;at each Dividend Payment Date to any holder in either (i) shares of the Company&#8217;s Series B-1 Preferred Stock, (ii) in cash or (iii) in some combination of Series B-1 Preferred Stock and cash, provided that each holder shall receive the same combination of shares of Series B-1 Preferred Stock and cash as all other holders on any Dividend Payment Date.</font></div>

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<div style="TEXT-INDENT: 144pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">A.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Series B Original Issue Price</font>&#8221; shall be $10.00 per share (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization affecting such shares).</font></div>

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<div style="TEXT-INDENT: 99pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Priority in Payment of Dividends</font>.&#160;&#160;The Corporation shall not declare, pay or set aside any Distributions (as defined below) on any shares of the Corporation&#8217;s common stock, par value $0.01 per share (&#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Common Stock</font>&#8221;) or on any other class or series of stock of the Corporation ranking on liquidation junior to the Series B Preferred Stock (such Common Stock and other stock being collectively referred to as &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Junior Stock</font>&#8221;) without the vote or written consent of the holders of a majority of the then outstanding shares of Series B Preferred Stock.&#160;&#160;Subject to such approval of the holders of Series B Preferred Stock, the Corporation shall not declare, pay or set aside any distributions on shares of Common Stock or on any other Junior Stock unless the holders of Series B Preferred Stock then outstanding shall have first received, or shall simultaneously receive, a distribution in cash in respect of each outstanding share of Series B Preferred Stock in an amount at least equal to the amount specified in Subsection 1(a) plus the product obtained by multiplying (i) the per share amount of the distributions to be declared, paid or set aside for the Common Stock by (ii) the number of shares of Common Stock into which such shares of Series B Preferred Stock are then eligible for repurchase in accordance with Subsection 4.&#160;&#160;Notwithstanding the foregoing provisions of this Subsection 1(b), the Corporation may declare and pay cash dividends upon the Common Stock; provided that the Average Closing Price for the ten (10) trading days preceding the declaration of such dividend shall equal or exceed $10.70 per share, and the Corporation shall have given the holders of the Series B Preferred Stock thirty (30) days written notice of the establishment of the record date for the payment of such dividend.</font></div>

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<div style="TEXT-INDENT: 99pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Definition of Distribution</font>.&#160;&#160;For purposes of this Subsection&#160;1, unless the context requires otherwise, &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">distribution</font>&#8221; shall mean the transfer of cash or property without consideration, whether by way of dividend or otherwise, payable other than in Common Stock or other securities of the Corporation, or the purchase or redemption of shares of the Corporation for cash or property, including any such transfer, purchase or redemption by a subsidiary of the Corporation, but excluding repurchases or redemptions of Common Stock (i) held prior to the original issue date of the Series B Preferred Stock by employees or directors of, or consultants to, the Corporation upon termination of their employment or services pursuant to restricted stock agreements approved by the Board of Directors providing for such repurchase by the Corporation or any subsidiary; (ii) in liquidation or dissolution of the Corporation; and (iii) pursuant to any agreements containing a right of first refusal provision in favor of the Corporation.</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">2.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Liquidation Rights</font>.</font></div>

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<div style="TEXT-INDENT: 72pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Liquidation Preference</font>.&#160;&#160;Upon any liquidation, dissolution, or winding up of the Corporation, whether voluntary or involuntary, including any transaction which is deemed to be a liquidation, dissolution, or winding up of the Corporation pursuant to Subsection 2(c) below (a &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Liquidation Event</font>&#8221;), the holders of shares of Series B Preferred Stock then outstanding shall be entitled to be paid out of the assets and funds of the Corporation available for distribution to its stockholders before any distribution or payment shall be made to any holders of Common Stock or any Junior Stock an amount equal to $10.00 per share (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization affecting such shares), <font style="FONT-STYLE: italic; DISPLAY: inline">plus</font>, until the date fixed for payment, all declared and all accrued but unpaid dividends on such share of Series B Preferred Stock (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Series B Liquidation Amount</font>&#8221;).&#160;&#160;If upon any such Liquidation Event the remaining assets of the Corporation available for distribution to its stockholders shall be insufficient to pay the holders of shares of Series B Preferred Stock the full amount to which they shall be entitled, the holders of shares of Series B Preferred Stock and any other class or series of stock ranking on liquidation on a parity with the Series B Preferred Stock shall share ratably in any distribution of the remaining assets and legally available funds of the Corporation in proportion to their respective amounts that would otherwise be payable in respect of the shares held by them upon such distribution if the entire Series B Liquidation Amount and such pari passu payments on such other class or series of stock were paid in full.</font></div>

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<div style="TEXT-INDENT: 72pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Payments to Holders of Junior Stock</font>. After the payment of all preferential amounts required to be paid to the holders of Series B Preferred Stock and any other class or series of stock of the Corporation ranking on liquidation senior to or on a parity with the Series B Preferred Stock, upon a Liquidation Event, the holders of shares of Junior Stock then outstanding shall be entitled to receive the remaining assets and funds of the Corporation available for distribution to its stockholders.</font></div>

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<div style="TEXT-INDENT: 108pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Unless the holders of a majority of the then outstanding shares of Series B Preferred Stock otherwise elect by giving written notice thereof to the Corporation at least ten (10) days before the effective date of a Company Sale (as defined below), such Company Sale shall be deemed to be a Liquidation Event for purposes of this Subsection 2, and all consideration payable to the stockholders of the Corporation (in the case of an acquisition or disposition as set forth in subclauses (A) and (B)), and all consideration payable to the Corporation, together with all other available assets of the Corporation (in the case of an asset sale as set forth in subclauses (C) and (D)), net of all corporate taxes, fees and costs associated with such Company Sale and all costs of winding up the Corporation&#8217;s business, shall be distributed to the holders of capital stock of the Corporation in accordance with Subsections 2(a) and 2(b) above.&#160;&#160;A &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Company Sale</font>&#8221; means:</font></div>

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<div style="TEXT-INDENT: 180pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(1)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;the Corporation is a constituent party, or</font></div>

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<div style="TEXT-INDENT: 180pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(2)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;a subsidiary of the Corporation is a constituent party and either (x) the Corporation issues shares of its capital stock pursuant to such merger or consolidation, or (y) as a result of such merger or consolidation of a subsidiary, the Corporation&#8217;s ownership interest in the surviving entity is reduced; provided that neither Subsection 2(c)(i)(A)(1) nor subsection 2(c)(i)(A)(2) above shall include any such merger or consolidation involving the Corporation or a subsidiary in which the holders of capital stock of the Corporation immediately prior to such merger or consolidation continue to hold immediately following such merger or consolidation at least a majority of the voting power of (xx) the surviving or resulting entity or (yy) if the surviving or resulting entity is a wholly-owned subsidiary of another entity immediately following such merger or consolidation, the parent entity of such surviving or resulting entity;</font></div>

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<div style="TEXT-INDENT: 144pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(B)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;the disposition by holders of the Corporation&#8217;s then outstanding capital stock of at least a majority of the then outstanding equity voting power of the Corporation in a single or a series of related transactions;</font></div>

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<div style="TEXT-INDENT: 144pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(C)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;the sale, lease or other disposition of all or substantially all of the assets of the Corporation in a single transaction or series of related transactions (except any such sale to a wholly-owned subsidiary of the Corporation unless such sale, lease or other disposition is followed by a subsequent disposition or transfer of at least a majority of the then outstanding equity voting power of the Corporation or such subsidiary in a single or a series of related transactions); or</font></div>

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<div style="TEXT-INDENT: 144pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(D)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;the disposition by exclusive license, sale, assignment or otherwise of all, substantially all or a significant portion of the intellectual property rights of the Corporation, except for non-exclusive licenses granted under such intellectual property rights in the ordinary course of business.</font></div>

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<div style="TEXT-INDENT: 108pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(ii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The Corporation shall deliver written notice to the holders of shares of Series B Preferred Stock at least twenty (20) days prior to the effective date of a Company Sale, which notice shall contain all the material terms and conditions of such Company Sale, and any additional information concerning the terms of the Company Sale and the value of the assets of the Corporation as may reasonably be requested by the holders of Series B Preferred Stock in order to assist them in determining whether to treat such event as a Liquidation Event; provided that the requirement that such notice be delivered may be waived at any time by the holders of a majority of the then outstanding shares of Series B Preferred Stock.&#160;&#160;The Corporation shall not effect any Company Sale pursuant to Subsection 2(c)(i)(A) above unless (A) the agreement or plan of merger or consolidation provides that the consideration payable to the stockholders of the Corporation shall be allocated among the holders of capital stock of the Corporation in accordance with Subsections 2(a) and 2(b) above or (B) the holders of a majority of the then outstanding shares of Series B Preferred Stock specifically consent in writing to the allocation of such consideration in a manner different from that provided in Subsections 2(a) and 2(b) above.</font></div>

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<div style="TEXT-INDENT: 108pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(iii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;In the event of a Company Sale pursuant to Subsection 2(c)(i)(B),&#160;&#160;2(c)(i)(C) or 2(c)(i)(D) above, if the Corporation does not effect a dissolution of the Corporation under the Nevada Revised Statutes within sixty (60) days after such Company Sale, then (A) the Corporation shall deliver a written notice to each holder of Series B Preferred Stock no later than the 60<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">th</font> day after the Company Sale advising such holders of their right (and the requirements to be met to secure such right) pursuant to the terms of the following clause (B) to require the redemption of such shares of Series B Preferred Stock, and (B) if the holders of a majority of the then outstanding shares of Series B Preferred Stock so request in a written instrument delivered to the Corporation not later than the later of 75 days after such Company Sale or thirty (30) days after receipt of such notice by the holders of Series B Preferred Stock, the Corporation shall use the consideration received by the Corporation for such Company Sale (net of any liabilities associated with the assets sold or technology licensed, as determined in good faith by the Board of Directors of the Corporation), to the extent legally available there for (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Net Proceeds</font>&#8221;), to redeem, on the later of the 90<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">th</font> day after such Company Sale or fifteen (15) days after receipt of such request (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Liquidation Redemption Date</font>&#8221;), all outstanding shares of Series B Preferred Stock at a price per share equal to the Series B Liquidation Amount.&#160;&#160;In the event of a redemption pursuant to the preceding sentence, if the Net Proceeds are not sufficient to redeem all outstanding shares of Series B Preferred Stock, the Corporation shall redeem a pro rata portion of each holder's shares of Series B Preferred Stock. The following provisions shall apply to the redemption of the Series B Preferred Stock pursuant to this Subsection 2(c)(iii):</font></div>

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<div style="TEXT-INDENT: 144pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(A)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;From and after the Liquidation Redemption Date, unless there shall be a default in payment of the Series B Liquidation Amount, all rights of each holder with respect to shares of Series B Preferred Stock redeemed on the Liquidation Redemption Date shall cease (except the right to receive the Series B Liquidation Amount without interest upon surrender of the certificate or certificates there for), and such shares shall not be deemed to be outstanding for any purpose whatsoever.</font></div>

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<div style="TEXT-INDENT: 144pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(B)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Prior to the distribution or redemption provided for in this Subsection 2(c)(iii), the Corporation shall not expend or dissipate the consideration received for such Company Sale, except to discharge all corporate taxes, fees, costs and expenses incurred in connection with such Company Sale or winding up of the Corporation&#8217;s business.</font></div>

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<div style="TEXT-INDENT: 108pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(iv)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The amount deemed paid or distributed to the holders of Series B Preferred Stock upon any such Company Sale shall be the cash or the value of the property, rights or securities distributed to such holders by the Corporation or by the acquiring person, firm or other entity.&#160;&#160;The value of such property, rights or other securities (&#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Property Valuations</font>&#8221;) shall be determined on the basis of a valuation of the Corporation as a going concern, without attributing any discount for lack of liquidity or lack of control and shall be agreed upon by the Corporation and the holders of a majority of the then outstanding shares of Series B Preferred Stock or, if no such agreement is reached, by a mutually acceptable third-party appraiser.&#160;&#160;Whenever a determination with respect to a Property Valuation or the Net Proceeds is made, the Corporation shall provide prompt notice of the determination of such valuation, and all underlying assumptions and calculations, to all holders of Series B Preferred Stock.</font></div>

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<div style="TEXT-INDENT: 108pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Protective Provisions</font>.&#160;&#160;In addition to any other rights provided by law, the Corporation shall not, by merger, consolidation, recapitalization, reclassification or otherwise, take any of the following actions without first obtaining the affirmative vote or written consent of the holders of a majority of the then outstanding shares of Series B Preferred Stock consenting or voting (as the case may be) separately as a class:</font></div>

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<div style="TEXT-INDENT: 108pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;alter or change the rights, preferences or privileges of the Series B Preferred Stock; or</font></div>

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<DOCUMENT>
<TYPE>EX-4.2
<SEQUENCE>3
<FILENAME>ex4-2.htm
<DESCRIPTION>CERTIFICATE OF DESIGNATION OF THE RELATIVE RIGHTS, POWERS AND PREFERENCES OF THE SERIES B-1 PREFERRED STOCK
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">PARK CITY GROUP, INC.</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">By resolution, the Board of Directors of the Corporation has established, designated and fixed the terms, preferences, limitations and relative rights of up to three hundred thousand (300,000) shares of the authorized and unissued preferred stock of the Corporation, par value $0.01 per share, as &#8220;Series B-1 Preferred Stock&#8221; (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Series B-1 Preferred Stock</font>&#8221;) with the following rights, preferences, powers, privileges and restrictions, qualifications and limitations:</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">1.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Dividends</font>.</font></div>

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<div style="TEXT-INDENT: 72pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Dividends</font>.&#160;&#160;(i) Except as otherwise provided herein, the holders of shares of Series B-1 Preferred Stock shall be entitled to receive, out of funds legally available there for and as set forth in Section 1(a)(iii), dividends at the rate of seven percent (7.0%) per annum (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Dividend Rate</font>&#8221;) of the Stated Value (as defined below) on each outstanding share of Series B-1 Preferred Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization affecting such shares); <font style="FONT-STYLE: italic; DISPLAY: inline">provided</font>, <font style="FONT-STYLE: italic; DISPLAY: inline">however, </font>in the event the Company chooses to pay any outstanding dividend in accordance with Section 1(a)(iii), the Dividend Rate will be nine percent (9%) per annum.</font></div>

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<div style="TEXT-INDENT: 108pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(ii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Dividends shall accrue and be payable (A) quarterly on January&#160;2, April 1, July 1 and October 1 of each year (a &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Dividend Payment Date</font>&#8221;) and (B) on the Repurchase Date (as defined below). Dividends shall be payable in accordance with Section 1(a)(iii) below.&#160;&#160;In the event any dividend payment is not paid within ten (10) days of the applicable Dividend Payment Date a late fee shall be assessed and paid to the dividend recipient in the amount of eighteen percent (18%) of the dividend amount.</font></div>

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<div style="TEXT-INDENT: 108pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(iii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The Company may pay dividends accrued pursuant this Section 1(a)&#160;at each Dividend Payment Date to any holder in either (i) shares of Series B-1 Preferred Stock, (ii) in cash or (iii) in some combination of Series B-1 Preferred Stock and cash, provided that each holder shall receive the same combination of shares of Series B-1 Preferred Stock and cash as all other holders on any Dividend Payment Date.</font></div>

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<div style="TEXT-INDENT: 144pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">A.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Stated Value</font>&#8221; of the Series B-1 Preferred Stock shall be $10.00 per share (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization affecting such shares).</font></div>

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<div style="TEXT-INDENT: 99pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <font style="DISPLAY: inline; TEXT-DECORATION: underline">Priority in Payment of Dividends</font>.&#160;&#160;The Corporation shall not declare, pay or set aside any Distributions (as defined below) on any shares of the Corporation&#8217;s common stock, par value $0.01 per share (&#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Common Stock</font>&#8221;) or on any other class or series of stock of the Corporation ranking on liquidation junior to the Series B-1 Preferred Stock (such Common Stock and other stock being collectively referred to as &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Junior Stock</font>&#8221;) without the vote or written consent of the holders of a majority of the then outstanding shares of Series B-1 Preferred Stock.&#160;&#160;Subject to such approval of the holders of Series B-1 Preferred Stock, the Corporation shall not declare, pay or set aside any distributions on shares of Common Stock or on any other Junior Stock unless the holders of Series B-1 Preferred Stock then outstanding shall have first received, or shall simultaneously receive, a distribution in cash in respect of each outstanding share of Series B-1 Preferred Stock in an amount at least equal to the amount specified in Subsection 1(a) plus the product obtained by multiplying (i) the per share amount of the distributions to be declared, paid or set aside for the Common Stock by (ii) the number of shares of Common Stock into which such shares of Series B-1 Preferred Stock are then eligible for repurchase in accordance with Subsection 4.&#160;&#160;Notwithstanding the foregoing provisions of this Subsection 1(b), the Corporation may declare and pay cash dividends upon the Common Stock; provided that the Average Closing Price for the ten (10) trading days preceding the declaration of such dividend shall equal or exceed $10.70 per share, and the Corporation shall have given the holders of the Series B-1 Preferred Stock thirty (30) days written notice of the establishment of the record date for the payment of such dividend.</font></div>

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<div style="TEXT-INDENT: 108pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The &#8220;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Series B-1 Original Issue Date</font>&#8221; shall mean March 31, 2015.</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">2.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Liquidation Rights</font>.</font></div>

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<div style="TEXT-INDENT: 72pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Liquidation Preference</font>.&#160;&#160;Upon any liquidation, dissolution, or winding up of the Corporation, whether voluntary or involuntary, including any transaction which is deemed to be a liquidation, dissolution, or winding up of the Corporation pursuant to Subsection 2(c) below (a &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Liquidation Event</font>&#8221;), the holders of shares of Series B-1 Preferred Stock then outstanding shall be entitled to be paid out of the assets and funds of the Corporation available for distribution to its stockholders before any distribution or payment shall be made to any holders of Common Stock or any Junior Stock an amount equal to $10.00 per share (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization affecting such shares), <font style="FONT-STYLE: italic; DISPLAY: inline">plus</font>, until the date fixed for payment, all declared and all accrued but unpaid dividends on such share of Series B-1 Preferred Stock (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Series B-1 Liquidation Amount</font>&#8221;).&#160;&#160;If upon any such Liquidation Event the remaining assets of the Corporation available for distribution to its stockholders shall be insufficient to pay the holders of shares of Series B-1 Preferred Stock the full amount to which they shall be entitled, the holders of shares of Series B-1 Preferred Stock and any other class or series of stock ranking on liquidation on a parity with the Series B-1 Preferred Stock shall share ratably in any distribution of the remaining assets and legally available funds of the Corporation in proportion to their respective amounts that would otherwise be payable in respect of the shares held by them upon such distribution if the entire Series B-1 Liquidation Amount and such pari passu payments on such other class or series of stock were paid in full.</font></div>

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<div style="TEXT-INDENT: 72pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Payments to Holders of Junior Stock</font>. After the payment of all preferential amounts required to be paid to the holders of Series B-1 Preferred Stock and any other class or series of stock of the Corporation ranking on liquidation senior to or on a parity with the Series B-1 Preferred Stock, upon a Liquidation Event, the holders of shares of Junior Stock then outstanding shall be entitled to receive the remaining assets and funds of the Corporation available for distribution to its stockholders.</font></div>

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<div style="TEXT-INDENT: 108pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Unless the holders of a majority of the then outstanding shares of Series B-1 Preferred Stock otherwise elect by giving written notice thereof to the Corporation at least ten (10) days before the effective date of a Company Sale (as defined below), such Company Sale shall be deemed to be a Liquidation Event for purposes of this Subsection 2, and all consideration payable to the stockholders of the Corporation (in the case of an acquisition or disposition as set forth in subclauses (A) and (B)), and all consideration payable to the Corporation, together with all other available assets of the Corporation (in the case of an asset sale as set forth in subclauses (C) and (D)), net of all corporate taxes, fees and costs associated with such Company Sale and all costs of winding up the Corporation&#8217;s business, shall be distributed to the holders of capital stock of the Corporation in accordance with Subsections 2(a) and 2(b) above.&#160;&#160;A &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Company Sale</font>&#8221; means:</font></div>

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<div style="TEXT-INDENT: 180pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(2)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;a subsidiary of the Corporation is a constituent party and either (x) the Corporation issues shares of its capital stock pursuant to such merger or consolidation, or (y) as a result of such merger or consolidation of a subsidiary, the Corporation&#8217;s ownership interest in the surviving entity is reduced; provided that neither Subsection 2(c)(i)(A)(1) nor subsection 2(c)(i)(A)(2) above shall include any such merger or consolidation involving the Corporation or a subsidiary in which the holders of capital stock of the Corporation immediately prior to such merger or consolidation continue to hold immediately following such merger or consolidation at least a majority of the voting power of (xx) the surviving or resulting entity or (yy) if the surviving or resulting entity is a wholly-owned subsidiary of another entity immediately following such merger or consolidation, the parent entity of such surviving or resulting entity;</font></div>

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<div style="TEXT-INDENT: 144pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(B)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;the disposition by holders of the Corporation&#8217;s then outstanding capital stock of at least a majority of the then outstanding equity voting power of the Corporation in a single or a series of related transactions;</font></div>

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<div style="TEXT-INDENT: 144pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(D)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;the disposition by exclusive license, sale, assignment or otherwise of all, substantially all or a significant portion of the intellectual property rights of the Corporation, except for non-exclusive licenses granted under such intellectual property rights in the ordinary course of business.</font></div>

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<div style="TEXT-INDENT: 108pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(ii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The Corporation shall deliver written notice to the holders of shares of Series B-1 Preferred Stock at least twenty (20) days prior to the effective date of a Company Sale, which notice shall contain all the material terms and conditions of such Company Sale, and any additional information concerning the terms of the Company Sale and the value of the assets of the Corporation as may reasonably be requested by the holders of Series B-1 Preferred Stock in order to assist them in determining whether to treat such event as a Liquidation Event; provided that the requirement that such notice be delivered may be waived at any time by the holders of a majority of the then outstanding shares of Series B-1 Preferred Stock.&#160;&#160;The Corporation shall not effect any Company Sale pursuant to Subsection 2(c)(i)(A) above unless (A) the agreement or plan of merger or consolidation provides that the consideration payable to the stockholders of the Corporation shall be allocated among the holders of capital stock of the Corporation in accordance with Subsections 2(a) and 2(b) above or (B) the holders of a majority of the then outstanding shares of Series B-1 Preferred Stock specifically consent in writing to the allocation of such consideration in a manner different from that provided in Subsections 2(a) and 2(b) above.</font></div>

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<div style="TEXT-INDENT: 108pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(iii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;In the event of a Company Sale pursuant to Subsection 2(c)(i)(B),&#160;&#160;2(c)(i)(C) or 2(c)(i)(D) above, if the Corporation does not effect a dissolution of the Corporation under the Nevada Revised Statutes within sixty (60) days after such Company Sale, then (A) the Corporation shall deliver a written notice to each holder of Series B-1 Preferred Stock no later than the 60<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">th</font> day after the Company Sale advising such holders of their right (and the requirements to be met to secure such right) pursuant to the terms of the following clause (B) to require the redemption of such shares of Series B-1 Preferred Stock, and (B) if the holders of a majority of the then outstanding shares of Series B-1 Preferred Stock so request in a written instrument delivered to the Corporation not later than the later of 75 days after such Company Sale or thirty (30) days after receipt of such notice by the holders of Series B-1 Preferred Stock, the Corporation shall use the consideration received by the Corporation for such Company Sale (net of any liabilities associated with the assets sold or technology licensed, as determined in good faith by the Board of Directors of the Corporation), to the extent legally available there for (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Net Proceeds</font>&#8221;), to redeem, on the later of the 90<font style="DISPLAY: inline; FONT-SIZE: 70%; VERTICAL-ALIGN: text-top">th</font> day after such Company Sale or fifteen (15) days after receipt of such request (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Liquidation Redemption Date</font>&#8221;), all outstanding shares of Series B-1 Preferred Stock at a price per share equal to the Series B-1 Liquidation Amount.&#160;&#160;In the event of a redemption pursuant to the preceding sentence, if the Net Proceeds are not sufficient to redeem all outstanding shares of Series B-1 Preferred Stock, the Corporation shall redeem a pro rata portion of each holder's shares of Series B-1 Preferred Stock. The following provisions shall apply to the redemption of the Series B-1 Preferred Stock pursuant to this Subsection 2(c)(iii):</font></div>

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<div style="TEXT-INDENT: 144pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(A)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;From and after the Liquidation Redemption Date, unless there shall be a default in payment of the Series B-1 Liquidation Amount, all rights of each holder with respect to shares of Series B-1 Preferred Stock redeemed on the Liquidation Redemption Date shall cease (except the right to receive the Series B-1 Liquidation Amount without interest upon surrender of the certificate or certificates there for), and such shares shall not be deemed to be outstanding for any purpose whatsoever.</font></div>

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<div style="TEXT-INDENT: 144pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(B)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Prior to the distribution or redemption provided for in this Subsection 2(c)(iii), the Corporation shall not expend or dissipate the consideration received for such Company Sale, except to discharge all corporate taxes, fees, costs and expenses incurred in connection with such Company Sale or winding up of the Corporation&#8217;s business.</font></div>

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<div style="TEXT-INDENT: 108pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(iv)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The amount deemed paid or distributed to the holders of Series B-1 Preferred Stock upon any such Company Sale shall be the cash or the value of the property, rights or securities distributed to such holders by the Corporation or by the acquiring person, firm or other entity.&#160;&#160;The value of such property, rights or other securities (&#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Property Valuations</font>&#8221;) shall be determined on the basis of a valuation of the Corporation as a going concern, without attributing any discount for lack of liquidity or lack of control and shall be agreed upon by the Corporation and the holders of a majority of the then outstanding shares of Series B-1 Preferred Stock or, if no such agreement is reached, by a mutually acceptable third-party appraiser.&#160;&#160;Whenever a determination with respect to a Property Valuation or the Net Proceeds is made, the Corporation shall provide prompt notice of the determination of such valuation, and all underlying assumptions and calculations, to all holders of Series B-1 Preferred Stock.</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">4.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Repurchase</font>.&#160;&#160;The Corporation will review, from time to time, but not less than semiannually, the replacement or refinancing of the Series B-1 Preferred Stock with either equity or debt, on terms found to be advantageous to the Corporation.&#160;&#160;The Corporation shall have the right to redeem any or all of the outstanding shares of Series B-1 Preferred Stock for cash at any time upon at least ten (10) days written notice to the holders of the Series B-1 Preferred Stock stating the date upon which the repurchase will occur (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Repurchase Date</font>&#8221;).&#160;&#160;The redemption price shall be equal to $10.70 per share plus accrued and unpaid dividends to the date of redemption (collectively, the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Redemption Price</font>&#8221;).</font></div>

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<TYPE>EX-10.1
<SEQUENCE>4
<FILENAME>ex10-1.htm
<DESCRIPTION>AMENDMENT NO. 1 TO RESTRUCTURING AGREEMENT
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<div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold"><font style="DISPLAY: inline">EXHIBIT 10-1</font></font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">This Amendment No. 1 to the Restructuring Agreement (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Amendment</font>&#8221;) first entered into by _________ (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Shareholder</font>&#8221;) and Park City Group, Inc., a Nevada corporation (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Company</font>&#8221;) on February 4, 2015 (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Agreement</font>&#8221;), is entered into as of March 31, 2015.&#160;&#160;Unless otherwise specified herein, all capitalized terms set forth in this Amendment shall have the meanings ascribed to them in the Agreement.</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold">WHEREAS, </font>the Company and the Shareholder first entered into the Agreement in order to approve of an amendment to the Certificate of Designation of the Relative Rights, Powers and Preference of the Series B Preferred (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">First Series B Amendment</font>&#8221;), in order to: (i) reduce the rate at which the Company&#8217;s Series B Preferred Stock (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Series B Preferred</font>&#8221;) accrues dividends from 15% per annum (which interest rate increases to 18% on July 1, 2015) to 7% per annum if paid by the Company in cash, or 9% if paid by the Company in PIK Shares (as defined below); (ii) allow the Company to pay accrued dividends on outstanding shares of Series B Preferred in either cash or by the issuance of additional shares of Series B Preferred (&#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">PIK Shares</font>&#8221;); (iii) eliminate the conversion feature of the Series B Preferred; and (iv) increase the number of shares of the Company's preferred stock designated as Series B Preferred from 600,000 to 900,000 shares to provide for the potential issuance of PIK Shares;</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold">WHEREAS</font>, in consideration for entering into the Agreement, the Shareholder received: (i) ________ additional shares of Series B Preferred Stock, which shares have a stated value equal to the amount that, but for the Series B Restructuring, would have been paid to the Shareholder as dividends over the next five years (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Additional Shares</font>&#8221;); and (ii) five-year warrants (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Series B Warrants</font>&#8221;) to purchase ________ shares of the Company&#8217;s common stock, par value $0.01 per share (&#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Common Stock</font>&#8221;), for $4.00 per share (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Warrant Shares</font>&#8221;), an amount and per share purchase price equal to what the Shareholder would otherwise be entitled to receive upon conversion of their shares of Series B Preferred;</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold">WHEREAS</font>, to address issues raised by the NASDAQ Stock Market, the exchange on which the Company&#8217;s Common Stock currently trades, the Company now desires to: (i) file the Certificate of Designation of the Relative Rights, Powers and Preference of the Series B-1 Preferred Stock, in substantially the form attached hereto as <font style="DISPLAY: inline; TEXT-DECORATION: underline">Exhibit A</font> (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Series B-1 COD</font>&#8221;), designate 300,000 shares of preferred stock as Series B-1 Preferred Stock (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Series B-1 Preferred</font>&#8221;), which shares of Series B-1 Preferred shall not be entitled to any general voting rights and will rank pari pasu with the Series B Preferred; (ii) amend the First Series B Amendment, in substantially the form attached hereto as <font style="DISPLAY: inline; TEXT-DECORATION: underline">Exhibit B</font> (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Second Series B Amendment</font>&#8221;), to (x) reduce the number of shares of the Company&#8217;s Preferred Stock designated thereunder from 900,000 to 600,000, (y) require that, should the Company pay dividends on the Series B Preferred in PIK Shares, shares of Series B-1 Preferred shall be issued, rather than shares of Series B Preferred, and (z) in the event any Holder elects to exercise a Series B Warrant, cause the automatic conversion of one share of Series B Preferred into one share of Series B-1 Preferred for every 2.5 Warrant Shares received by such Holder in connection with the exercise (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Automatic Series B Conversion</font>&#8221;); and (ii) amend the Agreement to provide for the issuance of the Additional Shares as shares of Series B-1 Preferred;</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold">WHEREAS</font>, the Shareholder now desire to execute this Amendment in order to approve of the filing of the Series B-1 COD and the creation of the Series B-1 Preferred, filing of the Second Series B Amendment with the Nevada Secretary of State and to amend the Agreement to provide for the issuance of the Additional Shares in shares of Series B-1 Preferred.</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">1.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="FONT-STYLE: italic; DISPLAY: inline">Creation of Series B-1 Preferred</font>.&#160;&#160;In reliance upon the representations, warranties, covenants, terms and conditions of this Agreement, the Company shall, and the Shareholder consents to, the filing of the Certificate of Designation of the Relative Rights, Powers and Preference of the Series B-1 Preferred Stock, in substantially the form attached hereto as <font style="DISPLAY: inline; TEXT-DECORATION: underline">Exhibit A</font> (the &#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Series B-1 COD</font>&#8221;), and to the designation of 300,000 shares of preferred stock as Series B-1 Preferred Stock.</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">2.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="FONT-STYLE: italic; DISPLAY: inline">Amendment to the Terms and Conditions of the Series B Preferred.&#160;&#160;</font>In reliance upon the representations, warranties, covenants, terms and conditions of this Agreement, the Company shall, and the Shareholder consents to, the filing of an amendment to the First Series B Amendment with the Nevada Secretary of State, titled the &#8216;Second Amended and Restated Certificate of Designation of the Relative Rights, Powers and Preference of the Series B Preferred Stock&#8217; and in substantially the form attached hereto as <font style="DISPLAY: inline; TEXT-DECORATION: underline">Exhibit A</font>, to effect the following changes:</font></div>

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<div style="TEXT-INDENT: 108pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;amend the second paragraph of the Certificate of Designation, which paragraph sets forth the resolution of the Company&#8217;s Board of Directors designating shares of the Company&#8217;s preferred stock as Series B Preferred, to read as follows:</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#8220;4.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Conversion</font>.&#160;&#160;In the event any holder of Series B Preferred Stock elects to exercise a Series B-1 Warrant for shares of the Company&#8217;s common stock, $0.01 par value (&#8220;<font style="FONT-STYLE: italic; DISPLAY: inline">Warrant Shares</font>&#8221;), that number of shares of Series B Preferred Stock held by such holder that possess Common Voting Rights equal to the number of Warrant Shares issued upon exercise of the Warrant shall automatically and without further action required by the Holder or the Company convert into an identical number of shares of the Company&#8217;s Series B-1 Preferred Stock.&#8221;</font></div>

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<div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">3.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Section 1.2 of the Agreement is hereby replaced, in its entirety, with the following:</font></div>

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