AGREEMENT AND PLAN OF MERGER

The parties to this Agreement and Plan of Merger are Park City Group, Inc. (the “Parent”), a Nevada corporation, PAII Transitory Sub, Inc. (the “Sub”), a Delaware corporation and wholly owned subsidiary of Parent, Prescient Applied Intelligence, Inc. (the “Company”), a Delaware corporation, and Randy Fields, an individual who serves as the Chairman and CEO of Parent (“Fields”).

The board of directors of each of the Parent, the Sub, and the Company have approved, and deem it advisable and in the best interests of its respective shareholders, to consummate the acquisition of the Company by the Parent by way of the merger (the "Merger") of the Sub with and into the Company in accordance with the General Corporation Law of the State of Delaware (the “DGCL”) and this Agreement.

Concurrent with the execution of this Agreement, Parent has purchased an aggregate of 715.96 shares, and intends to purchase in a separate transaction 382.536 shares (collectively, the “Privately Purchased Shares”) of the Company’s Series E Convertible Preferred Stock, par value $.001 per share, pursuant to separate securities purchase agreements between and among the Parent and the holders of such shares.

Accordingly, the parties agree as follows:

Section  1.1                                 The Merger .                                At the Effective Time (as defined in Section 1.2), the Sub shall be merged with and into the Company, in accordance with the DGCL, at which time the separate existence of the Sub shall cease, and the name of the Company, as the surviving corporation in the Merger (the "Surviving Corporation"), shall remain “Prescient Applied Intelligence, Inc.”   The Merger will have the effects set forth in the DGCL.

Section  1.2                                 Effective Time of the Merger .  The Merger will become effective upon the later of (a) the filing of a properly executed certificate of merger (the "Certificate of Merger") with the Secretary of State of the State of Delaware (the "Department of State") in accordance with the DGCL, or (b) such later date and time as may be set forth in the Certificate of Merger (the "Effective Time").

Section  2.1                                 Certificate of Incorporation .  The certificate of incorporation of the Sub in effect at the Effective Time will be the certificate of incorpora­tion of the Surviving Corporation, until thereafter amended in accordance with its terms and as provided in the DGCL.

Section  2.2                                 Bylaws .  The by-laws of the Sub in effect at the Effective Time will be the by-laws of the Surviving Corporation, until thereafter amended in accordance with its terms and as provided in the certificate of incorpora­tion and the DGCL.

Section  2.3                                 Directors and Officers of Surviving Corporation

(a)           The directors of the Sub at the Effective Time will be the initial directors of the Surviving Corporation and will hold office from the Effective Time until their respective successors are duly elected or appointed and qualify in the manner provided in the certificate of incorporation and by-laws of the Surviving Corporation or as otherwise provided by law.

(b)           The officers of the Company at the Effective Time will be the initial officers of the Surviving Corporation and will hold office from the Effective Time until their respective successors are duly elected or appointed and qualify in the manner provided in the certificate of incorporation and by-laws of the Surviving Corporation or as otherwise provided by law.

Section  3.1                                 Conversion of Shares

(a)           Subject to Sections 3.2 and 3.3, at the Effective Time, by virtue of the Merger and without any action on the part of the holder of shares of common stock, par value $.001 per share, of the Company (collectively, the "Common Shares"), each Common Share  issued and outstanding immediately prior to the Effective Time (other than any Dissenting Shares (as defined in Section 3.3) and other than Common Shares owned by the Parent or the Sub) (the “Outstanding Common Shares”) will be converted into the right to receive $.055 (the “Merger Consideration Per Common Share”) in cash and without interest upon surrender of the certificate formerly evidencing such Common Shares.  From and after the Effective Time, all Outstanding Common Shares shall no longer be outstanding and shall be deemed to be cancelled and retired and shall cease to exist, and each holder of a certificate evidencing Outstanding Common Shares shall cease to have any rights with respect to such Shares, except the right to receive the Merger Consideration Per Common Share in respect of those Shares, without interest, upon the surrender of such certificate in accordance with Section 3.2 or as otherwise provided by law.

(b)           Subject to Sections 3.2 and 3.3, at the Effective Time, by virtue of the Merger and without any action on the part of the holder of shares of Series E Convertible Preferred Stock, par value $.001 per share, of the Company (collectively, the "Series E Shares"), each Series E Share issued and outstanding immediately prior to the Effective Time (other than any Dissenting Shares (as defined in Section 3.3) and other than any Series E Shares owned by the Parent or the Sub) (the “Outstanding Series E Shares”) will be converted into the right to receive $4,098.00 (the “Merger Consideration Per Series E Share”) in cash and without interest upon surrender of the certificate formerly evidencing such Series E Shares.   From and after the Effective Time, all converted Series E Shares shall no longer be outstanding and shall be deemed to be cancelled and retired and shall cease to exist, and each holder of a certificate evidencing converted Series E Shares shall cease to have any rights with respect to such Series E Shares, except the right to receive the Merger Consideration Per Series E Share in respect of those Series E Shares, without interest, upon the surrender of such certificate in accordance with Section 3.2 or as otherwise provided by law.  In connection with the Merger, the Certificate of Designation of the Relative Rights and Preferences of the Series E Convertible Preferred Stock shall be amended to provide that the Merger Agreement shall govern the powers, designation and preferences of the Series E Convertible Preferred Stock in the event the Merger is consummated.

(c)           Subject to Sections 3.2 and 3.3, at the Effective Time, by virtue of the Merger and without any action on the part of the holder of shares of Series G Convertible Preferred Stock, par value $.001 per share, of the Company (collectively, the "Series G Shares"), each Series G Share  issued and outstanding immediately prior to the Effective Time (other than any Dissenting Shares (as defined in Section 3.3) and any Series G  Shares owned by the Parent or the Sub) (the “Outstanding Series G  Shares”) will be converted into the right to receive $1,136.36 (the “Merger Consideration Per Series G Share” and together with the Merger Consideration Per Common Share and the Merger Consideration Per Series E Share, the “Merger Consideration”) in cash and without interest upon surrender of the certificate formerly evidencing such Series G Shares.  From and after the Effective Time, all converted Series G Shares shall no longer be outstanding and shall be deemed to be cancelled and retired and shall cease to exist, and each holder of a certificate evidencing converted Series G Shares shall cease to have any rights with respect to such Series G Shares, except the right to receive the Merger Consideration Per Series G Share in respect of those Series G Shares, without interest, upon the surrender of such certificate in accordance with Section 3.2 or as otherwise provided by law.  In connection with the Merger, the Certificate of Designation of the Relative Rights and Preferences of the Series G Convertible Preferred Stock shall be amended to provide that the Merger Agreement shall govern the powers, designation and preferences of the Series G Convertible Preferred Stock in the event the Merger is consummated

(d)           Each share of capital stock owned by the Company (or held in the treasury of the Company) or by the Parent or Sub immediately prior to the Effective Time will be cancelled and retired.

(e)           Each share of common stock, par value $0.01 per share, of the Sub issued and outstanding immediately prior to the Effective Time will be converted into one share of common stock of the Surviving Corporation.

Section  3.2                                 Exchange of Certificates    The procedures for exchanging Outstanding Common Shares for the Merger Consideration Per Common Share, Outstanding Series E Shares for the Merger Consideration Per Series E Share, and Outstanding Series G Shares for the Merger Consideration Per Series G Share pursuant to the Merger are as follows:

(a)            Exchange Agent .  At or prior to the Effective Time, the Parent shall deposit or cause to be deposited $4,787,833 (or such greater amount as shall be necessary to consummate the Merger and pay the full amount of the Merger Consideration) in immediately available funds with Computershare Trust or another bank or trust company selected by the Buyer and reasonably acceptable to the Company (the “ Exchange Agent ”), for the benefit of the holders of Common Shares, the Series E Shares and the Series G Shares outstanding immediately prior to the Effective Time, for payment through the Exchange Agent in accordance with this Section 3.2, which amount will be sufficient to make payment of the Merger Consideration Per Common Share, the Merger Consideration Per Series E Share, and the Merger Consideration Per Series G Share pursuant to Section 3.1 in exchange for all of the Outstanding Common Shares, Outstanding Series E Shares, and Outstanding Series G Shares (the “ Exchange Fund ”).

(b)            Exchange Procedures .  As soon as reasonably practicable, the Parent shall cause the Exchange Agent to mail to each holder of record of a certificate which immediately prior to the Effective Time represented outstanding Common Shares, Series E Shares, and Series G Shares (each, a “ Certificate ”) (i) a letter of transmittal in customary form and (ii) instructions for effecting the surrender of the Certificates in exchange for the Merger Consideration Per Common Share, the Merger Consideration Per Series E Share, and the Merger Consideration Per Series G Share  (as the case may be) payable with respect thereto.  Upon surrender of a Certificate for cancellation to the Exchange Agent, together with such letter of transmittal, duly executed, the holder of such Certificate shall be paid promptly in exchange therefor cash in an amount equal to the Merger Consideration Per Common Share, the Merger Consideration Per Series E Share, and the Merger Consideration Per Series G Share that such holder has the right to receive pursuant to the provisions of this Article III, and the Certificate so surrendered shall immediately be cancelled.  In the event of a transfer of ownership of Common Shares, Series E Shares and Series G Shares which is not registered in the transfer records of the Company, the Merger Consideration Per Common Share, the Merger Consideration Per Series E Share, or the Merger Consideration Per Series G Share may be paid to a person other than the person in whose name the Certificate so surrendered is registered, if such Certificate is presented to the Exchange Agent, accompanied by all documents required to evidence and effect such transfer and by evidence that any applicable stock transfer taxes have been paid.  Until surrendered as contemplated by this Section 3.2, each Certificate shall be deemed at any time after the Effective Time to represent only the right to receive upon such surrender the Merger Consideration Per Common Share, the Merger Consideration Per Series E Share, or the Merger Consideration Per Series G Share, as the case may be, as contemplated by this Section 3.2.

 (b)            Transfer Books; No Further Ownership Rights in the Outstanding Shares .  At the Effective Time, the stock transfer books of the Company will be closed, and thereafter there will be no further registration of transfers of the Outstanding Common Shares, Outstanding Series E Shares or Outstanding Series G Shares (collectively, the “Outstanding Shares”) on the records of the Company.  From and after the Effective Time, the holders of Certificates evidencing Outstanding Common Shares, Outstanding Series E Shares or Outstanding Series G Shares ease to have any rights with respect to such Outstanding Shares, except as otherwise provided in this Agreement or by applicable law.

(c)            Withholding .  The Parent may deduct and withhold from the Merger Consideration otherwise payable pursuant to this Agreement to any holder of any Outstanding Shares such amounts as the Parent is required to deduct and withhold under applicable law with respect to the making of such payment.  To the extent that amounts are so withheld by the Parent, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of Outstanding Shares in respect of whom such deduction and withholding was made by the Parent.

Section  3.3                                 Dissenting Shares .  Notwithstanding anything in this Agreement to the contrary, no Outstanding Shares the holder of which has complied with the applicable provisions of the DGCL as to dissenter's rights ("Dissenting Shares") shall be deemed converted into and to represent the right to receive the Merger Consideration, and the holders of Dissenting Shares, if any, will be entitled to payment, solely from the Surviving Corporation, of the appraised value of such Dissenting Shares, to the extent permitted by and in accordance with the applicable provisions of the DGCL; provided, however , that (a) if any holder of Dissenting Shares shall, under the circumstances permitted by the DGCL, subsequently deliver a written withdrawal of that holder’s demand for appraisal of such Dissenting Shares, or (b) if any holder fails to establish that holder’s entitlement to rights to payment as provided in the applicable provisions of the DGCL, or (c) if neither any holder of Dissenting Shares nor the Surviving Corporation has filed a petition demanding a determination of the value of all Dissenting Shares within the time provided in the applicable provisions of the DGCL, such holder or holders shall forfeit such right to payment  for such Dissenting Shares pursuant to the DGCL, and each such Outstanding Share will not be considered a Dissenting Share but will thereupon be converted into the right to receive the Merger Consideration.

Section 3.4                                 Options . Immediately prior to the Effective Time, each outstanding option to acquire Common Shares  held by any Company employee or by any other person (each, an “ Option ”) granted or assumed under the 1999 Stock Option/Stock Issuance Plan or the 2007 Equity Incentive Plan (collectively, as amended, the “ Stock Plans ”), whether or not then exercisable, shall be cancelled by the Company, and the holder thereof shall be entitled to receive as soon as practicable after the Effective Time from the Parent following the Merger in consideration for such cancellation an amount in cash equal to the product of (a) the number of Common Shares previously subject to each such Option and (b) the excess, if any, of the Merger Consideration Per Common Share over the exercise price per Common Share previously subject to such Option (collectively, the “ Option Consideration ”) (it being understood that if any such exercise price exceeds the Merger Consideration Per Common Share, the amount payable in respect of such Option shall be zero), reduced by the amount of any withholding or other Taxes required by Law to be withheld; it being understood that with respect to an Option held by a person whose employment by the Company was terminated prior to the Effective Time, consideration shall only be paid with respect to the portion of such Option that was outstanding immediately prior to the Effective Time and was vested as of the time such person’s employment relationship with the Company terminated. The Company shall use such procedures as it deems necessary and consistent with the terms of the respective Stock Plan to implement the provisions contemplated herein.  Immediately prior to the Effective Time, the Company shall deposit in a bank account an amount of cash, if any, equal to the Option Consideration for the payment of any options that are eligible for Option Consideration (subject to any applicable withholding Tax), together with instructions that such cash be promptly distributed following the Effective Time to the holders of such options that are eligible for Option Consideration in accordance with this Section 3.4.

Section 3.5                                 Warrants .  Each warrant to purchase Common Shares that is outstanding as of the Effective Time (each, a “Warrant”) shall be converted at the Effective Time into the right to receive a cash amount, if any, equal to the Warrant Consideration (as defined below) for each Common Share then subject to such Warrant.  Prior to the Effective Time, the Company shall take all necessary action and timely provide all notices to effect the conversion of such Warrants as contemplated by this Section 3.5.  Promptly following the Effective Time, the Company shall deposit in a bank account an amount of cash, if any, equal to the sum of the aggregate Warrant Consideration for each such Warrant then outstanding (subject to any applicable withholding Tax), together with instructions that such cash be promptly distributed following the Effective Time to the holders of such Warrants in accordance with this Section 3.5.  For purposes of this Agreement, “Warrant Consideration” means, with respect to Common Share issuable under a particular Warrant, an amount equal to the excess, if any, of: (i) the Merger Consideration per Common Share, over (ii) the exercise price payable in respect of such Common Share issuable under such Warrant (it being understood that if the exercise price payable in respect of such Common Share issuable under such Warrant exceeds the Merger Consideration per share, the Warrant Consideration in respect of such Warrants shall be zero).

Section  3.5                                 Closing .  The Closing of the transactions contemplated by this Agreement (the "Closing") will take place at the office of the Parent  at 3160 Pinebrook Road, Park City, Utah  84098, at 10:00 a.m., local time, on the later of (a) the date of the shareholders' meeting  or written consent referred to in Section  6.3 or (b) the day on which the conditions set forth in Article VII are satisfied or waived, or at such other date, time, and place as the Parent and the Company agree.  At the Closing, the parties shall take all action and execute and deliver all documents and instruments (including, without limitation, the Certificate of Merger) required to effect the Merger as promptly as possible.

The Parent and Sub, jointly and severally represent and warrant to the Company as follows:

Section  4.1                                 Existence and Corporate Power of the Parent and Sub .  The Parent is a corporation validly existing and in good standing under the law of state of Nevada, and has the corporate power to execute, deliver, and perform its obligations under this Agreement.  The Sub is a corporation validly existing and in good standing under the law of the state of Delaware, and has the corporate power to execute, deliver, and perform its obligations under this Agreement.

Section  4.2                                 Authority .    The execution, delivery, and performance of its obligations under this Agreement by each of the Parent and the Sub have been duly authorized by its board of directors, and by the Parent as the sole shareholder of the Sub, and no other corporate proceedings on the part of the Parent or the Sub are necessary to authorize the execution, delivery, or performance of this Agreement.  This Agreement has been duly and validly executed and delivered by each of the Parent and the Sub and constitutes a valid and binding agreement of each of the Parent and the Sub, enforceable against each in accordance with its terms, except insofar as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting creditors' rights generally, or principles governing the availability of equitable remedies.

Section  4.3                                 Consents and Approvals; No Violations .  Except for the filing and recordation of a certificate of merger under the DGCL and any filings under applicable securities laws, no filing with, and no permit, authorization, consent, or approval of, any public body or authority is necessary for the consummation by the Parent and the Sub of the transactions contemplated by this Agreement.  Neither the execution and delivery of this Agreement by the Parent or the Sub nor the performance  by the Parent or the Sub of its obligations under this Agreement will (a) conflict with or result in any breach of any provisions of its certificate of incorporation or bylaws, (b) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default under, any agreement or other instrument to which it is a party or by which it or any of its assets may be bound, or (c) violate any order, writ, injunction, decree, statute, rule, or regulation applicable to it or its assets.

Section 4.4                                 Brokers .                      No broker, finder, or financial advisor is entitled to any brokerage, finders, or other fee or commission in connection with the Merger or the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Parent or the Sub.

The Company represents and warrants as of the date of this Agreement to the Parent and the Sub as follows:

Section  5.1                                 Existence and Corporate Power of the Company .  The Company is a corporation validly existing and in good standing under the law of the state of Delaware, and has the corporate power to execute, deliver, and perform its obligations under this Agreement.

Section  5.2                                 Authority .    The execution, delivery, and performance of its obligations under this Agreement by the Company have been duly authorized by its board of directors, and, subject to approval by the Company’s shareholders at the meeting referred to in Section 6.3, no other corporate proceedings on the part of the Company are necessary to authorize the execution, delivery, or performance of this Agreement.  This Agreement has been duly and validly executed and delivered by Company and constitutes a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except insofar as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting creditors' rights generally, or principles governing the availability of equitable remedies.

Section  5.3                                 Consents and Approvals; No Violations .  Except for the filing and recordation of a certificate of merger under the DGCL and any filings under applicable securities laws, no filing with, and no permit, authorization, consent, or approval of, any public body or authority is necessary for the consummation by the Company of the transactions contemplated by this Agreement.  Neit