Contract
THIS
NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS. THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE
MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO PROLINK HOLDINGS CORP. THAT SUCH REGISTRATION IS NOT
REQUIRED.
FOR
VALUE
RECEIVED, each of PROLINK HOLDINGS CORP., a Delaware corporation (the
“Parent”),
and
the other companies listed on Exhibit A attached hereto (such other companies
together with the Parent, each a “Company”
and
collectively, the “Companies”),
hereby jointly and severally promises to pay to CALLIOPE CAPITAL CORPORATION,
c/o Laurus Capital Management, LLC, 000 Xxxxxxx Xxxxxx, 00xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Fax: 000-000-0000 (the “Holder”)
or its
registered assigns or successors in interest, the sum of Four Million Dollars
($4,000,000), together with any accrued and unpaid interest hereon, on August
17, 2012 (the “Maturity
Date”)
if not
indefeasibly sooner paid in full.
Capitalized
terms used herein without definition shall have the meanings ascribed to such
terms in that certain Security Agreement dated as of the date hereof by and
among the Companies and the Holder (as amended, modified and/or supplemented
from time to time, the “Security
Agreement”).
The
following terms shall apply to this Secured Convertible Term Note (this
“Note”):
ARTICLE
I
CONTRACT
RATE AND AMORTIZATION
1.1 Contract
Rate.
Subject
to Sections 4.2 and 5.10, interest payable on the outstanding principal amount
of this Note (the “Principal
Amount”)
shall
accrue at a rate per annum equal to the “prime rate” published in The
Wall Street Journal
from
time to time (the “Prime
Rate”),
plus
two percent (2%) (the “Contract
Rate”).
The
Contract Rate shall be increased or decreased as the case may be for each
increase or decrease in the Prime Rate in an amount equal to such increase
or
decrease in the Prime Rate; each change to be effective as of the day of the
change in the Prime Rate. The Contract Rate shall not at any time be less than
nine percent (9%) or more than thirteen percent (13%). Interest shall be (i)
calculated on the basis of a 360 day year, and (ii) payable monthly, in arrears,
commencing on September 1, 2007, on the first business day of each consecutive
calendar month thereafter through and including the Maturity Date, and on the
Maturity Date, whether by acceleration or otherwise.
1.2 Contract
Rate Payments.
The
Contract Rate shall be calculated on the last business day of each calendar
month hereafter (other than for increases or decreases in the Prime Rate which
shall be calculated and become effective in accordance with the terms of Section
1.1) until the Maturity Date and shall be subject to adjustment as set forth
herein.
1.3 Principal
Payments.
Amortizing payments of the aggregate principal amount outstanding under this
Note at any time (the “Principal
Amount”)
shall
be made, jointly and severally, by the Companies on September 1, 2008 and on
the
first business day of each succeeding month thereafter through and including
the
Maturity Date (each, an “Amortization
Date”).
Subject to Article III below, commencing on the first Amortization Date, the
Company shall make monthly payments to the Holder on each Repayment Date, each
such payment in the amount of $83,333 together with any accrued and unpaid
interest on such portion of the Principal Amount plus any and all other unpaid
amounts which are then owing under this Note, the Security Agreement and/or
any
other Ancillary Agreement (collectively, the “Monthly
Amount”).
Any
outstanding Principal Amount together with any accrued and unpaid interest
and
any and all other unpaid amounts which are then owing by the Parent to the
Holder under this Note, the Security Agreement and/or any other Ancillary
Agreement shall be due and payable on the Maturity Date.
ARTICLE
II
CONVERSION
AND REDEMPTION
2.1 Payment
of Monthly Amount.
(a) Payment
in Cash or Common Stock.
If the
Monthly Amount (or a portion of such Monthly Amount if not all of the Monthly
Amount may be converted into shares of Common Stock pursuant to Section 3.2)
is
required to be paid in cash pursuant to Section 2.1(b), then the Company
shall pay the Holder an amount in cash equal to 100% of the Monthly Amount
(or
such portion of such Monthly Amount to be paid in cash) due and owing to the
Holder on the Amortization Date. If the Monthly Amount (or a portion of such
Monthly Amount if not all of the Monthly Amount may be converted into shares
of
Common Stock pursuant to Section 3.2) is required to be paid in shares of Common
Stock pursuant to Section 2.1(b), the number of such shares to be issued by
the
Company to the Holder on such Amortization Date (in respect of such portion
of
the Monthly Amount converted into shares of Common Stock pursuant to Section
2.1(b)), shall be the number determined by dividing (i) the portion of the
Monthly Amount converted into shares of Common Stock, by (ii) the then
applicable Fixed Conversion Price. For purposes hereof, subject to Section
3.6
hereof, the initial “Fixed
Conversion Price”
means
(i) with respect to the first $1,333,333 of the Principal Amount, $1.40; (ii)
with respect to the next $1,333,333 of the Principal Amount, $1.50; and (iii)
with respect to the remaining $1,333,334 of the Principal Amount,
$1.67.
(b) Monthly
Amount Conversion Conditions.
Subject
to Sections 2.1(a), 2.2, and 3.2 hereof, the Holder shall convert into
shares of Common Stock all or a portion of the Monthly Amount due on each
Amortization Date if the following conditions (the “Conversion
Criteria”)
are
satisfied: (i) the average closing price of the Common Stock as reported by
Bloomberg, L.P. on the Principal Market for the five (5) trading days
immediately preceding such Amortization Date shall be greater than or equal
to
118% of the Fixed Conversion Price and (ii) the amount of such conversion does
not exceed twenty five percent (25%) of the aggregate dollar trading volume
of
the Common Stock for the period of twenty-two (22) trading days immediately
preceding and including such Amortization Date. If subsection (i) of the
Conversion Criteria is met but subsection (ii) of the Conversion Criteria is
not
met as to the entire Monthly Amount, the Holder shall convert only such part
of
the Monthly Amount that meets subsection (ii) of the Conversion Criteria. Any
portion of the Monthly Amount due on an Amortization Date that the Holder has
not been able to convert into shares of Common Stock due to the failure to
meet
the Conversion Criteria, shall be paid in cash by the Companies, jointly and
severally, within three (3) business days of such Amortization
Date.
2
2.2 No
Effective Registration.
Notwithstanding anything to the contrary herein, the Parent shall not be
permitted to pay any part of its obligations or the obligations of any other
Company to the Holder hereunder in shares of Common Stock if (i) there fails
to
exist an effective current Registration Statement (as defined in the
Registration Rights Agreement) covering the resale of the shares of Common
Stock
to be issued in connection with such payment and there fails to exist an
exemption from registration for resale available pursuant to Rule 144 of the
Securities Act and in respect of the Common Stock to be issued in connection
with such payment or (ii) an Event of Default (as hereinafter defined) exists
and is continuing, unless such Event of Default is cured within any applicable
cure period or otherwise waived in writing by the Holder.
2.3 Optional
Redemption in Cash.
The
Companies may prepay this Note (“Optional
Redemption”)
by
paying to the Holder a sum of money equal to (a) one hundred percent (100%)
of
the Principal Amount outstanding at such time if such payment occurs prior
to
the first anniversary of the Closing Date, (b) one hundred five percent (105%)
of the Principal Amount outstanding at such time if such payment occurs on
or
after the first anniversary of the Closing Date and prior to the second
anniversary of the Closing Date, (c) one hundred fifteen percent (115%) of
the
Principal Amount outstanding at such time if such payment occurs on or after
the
second anniversary of the Closing Date and prior to the third anniversary of
the
Closing Date and (d) one hundred twenty percent (120%) of the Principal Amount
outstanding if such payment occurs on or after the third anniversary of the
Closing Date, in each case, together with accrued but unpaid interest thereon
and any and all other sums due, accrued or payable to the Holder arising under
this Note, the Security Agreement or any other Ancillary Agreement (the
“Redemption
Amount”)
outstanding on the Redemption Payment Date (as defined below). The Companies
shall deliver to the Holder a written notice of redemption (the “Notice
of Redemption”)
specifying the date for such Optional Redemption (the “Redemption
Payment Date”),
which
date shall be ten (10) business days after the date of the Notice of Redemption
(the “Redemption
Period”).
A
Notice of Redemption shall not be effective with respect to any portion of
this
Note for which the Holder has previously delivered a Notice of Conversion (as
hereinafter defined) or for conversions elected to be made by the Holder
pursuant to Section 3.3 during the Redemption Period. The Redemption Amount
shall be determined as if the Holder’s conversion elections had been completed
immediately prior to the date of the Notice of Redemption. On the Redemption
Payment Date, the Redemption Amount must be paid in good funds to the Holder.
In
the event the Companies fail to pay the Redemption Amount on the Redemption
Payment Date as set forth herein, then such Redemption Notice will be null
and
void.
3
ARTICLE
III
HOLDER’S
CONVERSION RIGHTS
3.1 Optional
Conversion.
Subject
to the terms set forth in this Article III, on or after August __, 2008, the
Holder shall have the right, but not the obligation, to convert all or any
portion of the issued and outstanding Principal Amount and/or accrued interest
and fees due and payable into fully paid and nonassessable shares of Common
Stock at the applicable Fixed Conversion Price. The shares of Common Stock
to be
issued upon such conversion are herein referred to as, the “Conversion
Shares.”
3.2 Conversion
and Trading Limitations.
(a) Notwithstanding
anything herein to the contrary, in no event shall the Holder be entitled to
exercise any portion of this Note in excess of that portion of this Note upon
exercise of which the sum of (1) the number of shares of Common Stock
beneficially owned by the Holder and its Affiliates (other than shares of Common
Stock which may be deemed beneficially owned through the ownership of the
unexercised portion of this Note or the unexercised or unconverted portion
of
any other security of the Holder subject to a limitation on conversion analogous
to the limitations contained herein) and (2) the number of shares of Common
Stock issuable upon the exercise of the portion of this Note with respect to
which the determination of this proviso is being made, would result in
beneficial ownership by the Holder and its Affiliates of any amount greater
than
9.99% of the then outstanding shares of Common Stock (whether or not, at the
time of such exercise, the Holder and its Affiliates beneficially own more
than
9.99% of the then outstanding shares of Common Stock). As used herein, the
term
“Affiliate”
means
any person or entity that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with
a
person or entity, as such terms are used in and construed under Rule 144 under
the Securities Act. For purposes of the second preceding sentence,
beneficial ownership shall be determined in accordance with Section 13(d) of
the
Securities Exchange Act of 1934, as amended, and Regulations 13D-G thereunder,
except as otherwise provided in clause (1) of such sentence. For any
reason at any time, upon written or oral request of the Holder, the Company
shall within one (1) business day confirm orally and in writing to the Holder
the number of shares of Common Stock outstanding as of any given date. The
limitations set forth herein (x) shall automatically become null and void
following notice to the Company upon the occurrence and during the continuance
of an Event of Default (as defined in the Security Agreement) and (y) may be
waived by the Holder upon provision of no less than sixty-one (61) days prior
written notice to the Company; provided, however, that, such written notice
of
waiver shall only be effective if delivered at a time when no indebtedness
(including, without limitation, principal, interest, fees and charges) of the
Company of which the Holder or any of its Affiliates was, at any time, the
owner, directly or indirectly is outstanding. .
(b) Trading
Limitation.
Notwithstanding anything herein to the contrary, the Holder shall not, on any
trading day, trade shares of the Common Stock issued to the Holder pursuant
to
this Note on the Principal Market in which such Common Stock is listed in excess
of ten percent (10%) of the average daily trading volume of the Common Stock
for
the period of ten (10) trading days immediately preceding such trading
date.
4
3.3 Mechanics
of Xxxxxx’s Conversion.
In the
event that the Holder elects to convert this Note into Common Stock, the Holder
shall give notice of such election by delivering an executed and completed
notice of conversion in substantially the form of Exhibit B hereto (appropriate
completed) (“Notice
of Conversion”)
to the
Parent and such Notice of Conversion shall provide a breakdown in reasonable
detail of the Principal Amount, accrued interest and fees that are being
converted. On each Conversion Date (as hereinafter defined) and in accordance
with its Notice of Conversion, the Holder shall make the appropriate reduction
to the Principal Amount, accrued interest and fees as entered in its records
and
shall provide written notice thereof to the Parent within two (2) business
days
after the Conversion Date. Each date on which a Notice of Conversion is
delivered or transmitted by facsimile to the Parent in accordance with the
provisions hereof shall be deemed a Conversion Date (the “Conversion
Date”).
Pursuant to the terms of the Notice of Conversion, the Parent will issue
instructions to the transfer agent accompanied by an opinion of counsel within
one (1) business day of the date of the delivery to the Parent of the Notice
of
Conversion and shall cause the transfer agent to transmit the certificates
representing the Conversion Shares to the Holder by crediting the account of
the
Holder’s designated broker with the Depository Trust Corporation (“DTC”)
through its Deposit Withdrawal Agent Commission (“DWAC”)
system
within three (3) business days after receipt by the Parent of the Notice of
Conversion (the “Delivery
Date”).
In
the case of the exercise of the conversion rights set forth herein the
conversion privilege shall be deemed to have been exercised and the Conversion
Shares issuable upon such conversion shall be deemed to have been issued upon
the date of receipt by the Parent of the Notice of Conversion. The Holder shall
be treated for all purposes as the record holder of the Conversion Shares,
unless the Holder provides the Parent written instructions to the
contrary.
3.4 Late
Payments.
The
Companies understand that a delay in the delivery of the Conversion Shares
in
the form required pursuant to this Article beyond the Delivery Date could result
in economic loss to the Holder. As compensation to the Holder for such loss,
in
addition to all other rights and remedies which the Holder may have under this
Note, applicable law or otherwise, the Companies shall, jointly and severally,
pay late payments to the Holder for any late issuance of Conversion Shares
in
the form required pursuant to this Article II upon conversion of this Note,
in
the amount equal to $250 per business day after the Delivery Date. The Companies
shall, jointly and severally, make any payments incurred under this Section
in
immediately available funds upon demand.
3.5 Conversion
Mechanics.
The
number of shares of Common Stock to be issued upon each conversion of this
Note
shall be determined by dividing that portion of the principal and interest
and
fees to be converted, if any, by the then applicable Fixed Conversion Price.
In
the event of any conversions of a portion of the outstanding Principal Amount
pursuant to this Article III, such conversions shall be deemed to constitute
conversions of the outstanding Principal Amount applying to Monthly Amounts
for
the remaining Amortization Dates in chronological order.
3.6 Adjustment
Provisions.
The
Fixed Conversion Price and number and kind of shares or other securities to
be
issued upon conversion determined pursuant to this Note shall be subject to
adjustment from time to time upon the occurrence of certain events during the
period that this conversion right remains outstanding, as follows:
5
(a) Reclassification.
If the
Parent at any time shall, by reclassification or otherwise, change the Common
Stock into the same or a different number of securities of any class or classes,
this Note, as to the unpaid Principal Amount and accrued interest thereon,
shall
thereafter be deemed to evidence the right to purchase an adjusted number of
such securities and kind of securities as would have been issuable as the result
of such change with respect to the Common Stock (i) immediately prior to or
(ii)
immediately after, such reclassification or other change at the sole election
of
the Holder.
(b) Stock
Splits, Combinations and Dividends.
If the
shares of Common Stock are subdivided or combined into a greater or smaller
number of shares of Common Stock, or if a dividend is paid on the Common Stock
or any preferred stock issued by the Parent in shares of Common Stock, the
Fixed
Conversion Price shall be proportionately reduced in case of subdivision of
shares or stock dividend or proportionately increased in the case of combination
of shares, in each such case by the ratio which the total number of shares
of
Common Stock outstanding immediately after such event bears to the total number
of shares of Common Stock outstanding immediately prior to such
event.
3.7 Reservation
of Shares.
During
the period the conversion right exists, the Parent will reserve from its
authorized and unissued Common Stock a sufficient number of shares to provide
for the issuance of Conversion Shares upon the full conversion of this Note
and
the Warrants. The Parent represents that upon issuance, the Conversion Shares
will be duly and validly issued, fully paid and non-assessable. The Parent
agrees that its issuance of this Note shall constitute full authority to its
officers, agents, and transfer agents who are charged with the duty of executing
and issuing stock certificates to execute and issue the necessary certificates
for the Conversion Shares upon the conversion of this Note.
3.8 Registration
Rights.
The
Holder has been granted registration rights with respect to the Conversion
Shares as set forth in the Registration Rights Agreement.
3.9 Issuance
of New Note.
Upon
any partial conversion of this Note, a new Note containing the same date and
provisions of this Note shall, at the request of the Holder, be issued by the
Companies to the Holder for the principal balance of this Note and interest
which shall not have been converted or paid. Subject to the provisions of
Article IV of this Note, the Companies shall not pay any costs, fees or any
other consideration to the Holder for the production and issuance of a new
Note.
ARTICLE
IV
EVENTS
OF DEFAULT
4.1 Events
of Default.
The
occurrence of an Event of Default under the Security Agreement shall constitute
an event of default (“Event
of Default”)
hereunder.
4.2 Default
Interest.
Following the occurrence and during the continuance of an Event of Default,
each
Company shall, jointly and severally, pay additional interest on the outstanding
principal balance of this Note in an amount equal to two percent (2%) per month,
and all outstanding Obligations, including unpaid interest, shall continue
to
accrue interest at such additional interest rate from the date of such Event
of
Default until the date such Event of Default is cured or waived.
6
4.3 Default
Payment.
Following the occurrence and during the continuance of an Event of Default,
the
Holder, at its option, may elect, in addition to all rights and remedies of
the
Holder under the Security Agreement and the Ancillary Agreements and all
obligations of each Company under the Security Agreement and the Ancillary
Agreements, to require the Companies, jointly and severally, to make a Default
Payment (“Default
Payment”).
The
Default Payment shall be one hundred twenty percent (120%)
of
the outstanding principal amount of the Note, plus accrued but unpaid interest,
all other fees then remaining unpaid, and all other amounts payable hereunder.
The Default Payment shall be applied first to any fees due and payable to the
Holder pursuant to the Notes and/or the Ancillary Agreements, then to accrued
and unpaid interest due on the Notes, the Security Agreement and then to the
outstanding principal balance of the Notes. The Default Payment shall be due
and
payable immediately on the date that the Holder has demanded payment of the
Default Payment pursuant to this Section 4.3. Notwithstanding anything to the
contrary set forth herein, (a) if the Holder waives in writing any Event of
Default, the Companies shall be relieved of their obligation to make the Default
Payment with respect to such Event of Default and (b) no Default Payment shall
be due and payable following the occurrence of an Event of Default under Section
19(m) of the Security Agreement if such Event of Default occurred solely as
a
result of the commencement of a civil proceeding against any Company, any of
its
Subsidiaries or any executive office of any Company or any of its Subsidiaries
unless a judgment, writ or warrant of attachment or similar process shall be
entered or filed against such Company, such Subsidiary or such officer with
respect to such proceeding.
ARTICLE
V
MISCELLANEOUS
5.1 Conversion
Privileges.
The
conversion privileges set forth in Article III shall remain in full force and
effect immediately from the date hereof until the date this Note is indefeasibly
paid in full and irrevocably terminated.
5.2 Cumulative
Remedies.
The
remedies under this Note shall be cumulative.
5.3 Failure
or Indulgence Not Waiver.
No
failure or delay on the part of the Holder hereof in the exercise of any power,
right or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege. All
rights and remedies existing hereunder are cumulative to, and not exclusive
of,
any rights or remedies otherwise available.
7
5.4 Notices.
Any
notice herein required or permitted to be given shall be in writing and shall
be
deemed effectively given: (a) upon personal delivery to the party notified,
(b)
when sent by confirmed telex or facsimile if sent during normal business hours
of the recipient, if not, then on the next business day, (c) five days after
having been sent by registered or certified mail, return receipt requested,
postage prepaid, or (d) one day after deposit with a nationally recognized
overnight courier, specifying next day delivery, with written verification
of
receipt. All communications shall be sent to the respective Company at the
address provided for such Company in the Security Agreement executed in
connection herewith, and to the Holder at the address provided in the Security
Agreement for the Holder, with a copy to Laurus Capital Management, LLC, Attn:
Portfolio Services, 000 Xxxxx Xxxxxx, 00xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, xxxxxxxxx number (000) 000-0000, or at such other
address as the respective Company or the Holder may designate by ten days
advance written notice to the other parties hereto. A Notice of Conversion
shall
be deemed given when made to the Parent pursuant to the Security
Agreement.
5.5 Amendment
Provision.
The
term “Note” and all references thereto, as used throughout this instrument,
shall mean this instrument as originally executed, or if later amended or
supplemented, then as so amended or supplemented, and any successor instrument
as such successor instrument may be amended or supplemented.
5.6 Assignability.
This
Note shall be binding upon the Company and its successors and assigns, and
shall
inure to the benefit of the Holder and its successors and assigns, and may
be
assigned by the Holder in accordance with the requirements of the Security
Agreement. No Company may assign any of its obligations under this Note without
the prior written consent of the Holder, any such purported assignment without
such consent being null and void.
5.7 Cost
of Collection.
Following the occurrence of an Event of Default under this Note, the Companies
shall, jointly and severally, pay the Holder the Holder’s reasonable costs of
collection, including reasonable attorneys’ fees.
5.8 Governing
Law, Jurisdiction and Waiver of Jury Trial.
(a) THIS
NOTE
SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS
OF
THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW.
(b) EACH
COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED
IN
THE COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION
TO
HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ANY COMPANY, ON THE ONE HAND,
AND THE HOLDER, ON THE OTHER HAND, PERTAINING TO THIS NOTE, THE SECURITY
AGREEMENT OR ANY OF THE OTHER ANCILLARY AGREEMENTS OR TO ANY MATTER ARISING
OUT
OF OR RELATED TO THIS NOTE, THE SECURITY AGREEMENT OR ANY OF THE OTHER ANCILLARY
AGREEMENTS PROVIDED,
THAT
EACH COMPANY ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF THE COUNTY OF NEW YORK, STATE OF NEW YORK;
AND FURTHER PROVIDED,
THAT
NOTHING IN THIS NOTE SHALL BE DEEMED OR OPERATE TO PRECLUDE THE HOLDER FROM
BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO COLLECT
THE OBLIGATIONS, TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE
HOLDER. EACH COMPANY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH COMPANY
HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM
NON CONVENIENS.
EACH
COMPANY AND THE HOLDER HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT
AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE
OF
SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL ADDRESSED TO THE COMPANY AGENT OR THE HOLDER, AS APPLICABLE, AT THE ADDRESS
SET FORTH IN THE SECURITY AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED
COMPLETED UPON THE EARLIER OF THE COMPANY AGENT’S OR THE HOLDER’S, AS
APPLICABLE, ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S.
MAILS, PROPER POSTAGE PREPAID.
8
(c) EACH
COMPANY DESIRES THAT ITS DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS
OF
THE JUDICIAL SYSTEM AND OF ARBITRATION, EACH COMPANY HERETO WAIVES ALL RIGHTS
TO
TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE,
WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE HOLDER, AND/OR
ANY
COMPANY ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS NOTE, THE SECURITY
AGREEMENT, ANY OTHER ANCILLARY AGREEMENT OR THE TRANSACTIONS RELATED HERETO
OR
THERETO.
5.9 Severability.
In the
event that any provision of this Note is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any such provision which
may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision of this Note.
5.10 Maximum
Payments.
Nothing
contained herein shall be deemed to establish or require the payment of a rate
of interest or other charges in excess of the maximum permitted by applicable
law. In the event that the rate of interest required to be paid or other charges
hereunder exceed the maximum rate permitted by such law, any payments in excess
of such maximum rate shall be credited against amounts owed by the Companies
to
the Holder and thus refunded to the Companies.
5.11 Security
Interest.
The
Holder has been granted a security interest in certain assets of the Companies
as more fully described in the Security Agreement and the Ancillary
Agreements.
9
5.12 Construction;
Counterparts.
Each
party acknowledges that its legal counsel participated in the preparation of
this Note and, therefore, stipulates that the rule of construction that
ambiguities are to be resolved against the drafting party shall not be applied
in the interpretation of this Note to favor any party against the other. This
Note may be executed in one or more counterparts, each of which shall be deemed
an original and all of which together shall be deemed to constitute one
agreement. It is understood and agreed that if facsimile copies of this Note
bearing facsimile signatures are exchanged between the parties hereto, such
copies shall in all respects have the same weight, force and legal effect and
shall be fully as valid, binding, and enforceable as if such signed facsimile
copies were original documents bearing original signature.
5.13 Registered
Obligation.
This
Note is intended to be a registered obligation within the meaning of Treasury
Regulation Section 1.871-14(c)(1)(i) and the Company (or its agent) shall
register this Note (and thereafter shall maintain such registration) as to
both
principal and any stated interest. Notwithstanding any document, instrument
or
agreement relating to this Note to the contrary, transfer of this Note (or
the
right to any payments of principal or stated interest thereunder) may only
be
effected by (i) surrender of this Note and either the reissuance by the Company
of this Note to the new holder or the issuance by the Company of a new
instrument to the new holder, or (ii) transfer through a book entry system
maintained by the Company (or its agent), within the meaning of Treasury
Regulation Section 1.871-14(c)(1)(i)(B).
[Balance
of page intentionally left blank; signature page follows]
10
IN
WITNESS WHEREOF,
each
Company has caused this Secured Convertible Term Note to be signed in its name
effective as of this 17th
day of
August, 2007.
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By:
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Name:
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Title:
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WITNESS:
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PROLINK
SOLUTIONS, LLC
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By:
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Name:
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Title:
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WITNESS:
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SIGNATURE
PAGE TO
EXHIBIT
A
OTHER
COMPANIES
PROLINK
SOLUTIONS, LLC
EXHIBIT
B
NOTICE
OF CONVERSION
(To
be
executed by the Holder in order to convert all or part of
the
Secured Convertible Term Note into Common Stock)
[Name
and
Address of Parent]
The
undersigned hereby converts $_________ of the principal due on [specify
applicable Repayment Date] under the Secured Convertible Term Note dated as
of
August ___, 2007 (the “Note”)
issued
by ProLink Holdings Corp. (the “Parent”)
and
certain of its Subsidiaries by delivery of shares of Common Stock of the Parent
(“Shares”)
on and
subject to the conditions set forth in the Note.
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Date
of Conversion
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2.
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Shares
To Be Delivered:
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[HOLDER]
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By:
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Name:
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Title:
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