Contract
THIS
NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR
ANY STATE SECURITIES LAWS. 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”),
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 Five Million Dollars
($5,000,000), or, if different, the aggregate principal amount of all Revolving
Loans (as defined in the Security Agreement referred to below), together with
any accrued and unpaid interest hereon, on August 17, 2009 (the “Maturity
Date”)
if not
sooner indefeasibly paid in full.
Capitalized
terms used herein without definition shall have the meanings ascribed to such
terms in the Security Agreement among the Companies and the Holder dated as
of
the date hereof (as amended, modified and/or supplemented from time to time,
the
“Security
Agreement”).
The
following terms shall apply to this Secured Revolving Note (this “Note”):
ARTICLE
I
INTEREST
RATE
1.1 Interest
Rate.
(a) Subject
to Sections 2.2 and 3.10, interest payable on the outstanding principal amount
of Receivable Revolving Loans 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 (2.0%) (the “Receivable
Loan Contract
Rate”).
The
Receivable Loan 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 Receivable Loan Contract Rate shall
not
at any time be less than nine percent (9%) or more than thirteen percent (13%).
The Receivable Loan 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 as set forth above)
until the Maturity Date.
(b) Subject
to Sections 2.2 and 3.10, interest payable on the outstanding principal amount
of Purchase Order Revolving Loans shall accrue at the rate of fifteen percent
(15%) per annum.
1.2 Interest
Payments.
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.
ARTICLE
II
EVENTS
OF DEFAULT AND DEFAULT RELATED PROVISIONS
2.1 Events
of Default.
The
occurrence of an Event of Default under the Security Agreement shall constitute
an event of default (“Event
of Default”)
hereunder.
2.2 Default
Interest.
Following the occurrence and during the continuance of an Event of Default,
the
Companies 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.
2.3 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 other Ancillary Agreements and
all
obligations and liabilities of each Company under the Security Agreement and
the
other Ancillary Agreements, to require the Companies, jointly and severally,
to
make a Default Payment (“Default
Payment”).
The
Default Payment shall be 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, under the Security Agreement or any other
Ancillary Agreement. The Default Payment shall be applied first to any fees
due
and payable to the Holder pursuant to the Note, the Security Agreement and/or
the Ancillary Agreements, then to accrued and unpaid interest due on the Notes
and then to the outstanding principal balance of the Note. 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 2.3. 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.
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ARTICLE
III
MISCELLANEOUS
3.1 Issuance
of New Note.
Upon
any partial redemption 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 paid. Subject to the provisions of Article II 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.
3.2 Cumulative
Remedies.
The
remedies under this Note shall be cumulative.
3.3 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.
3.4 Notices.
Any
notice herein required or permitted to be given shall be in writing and shall
be
deemed effective 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 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.
3.5 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.
3.6 Assignability.
This
Note shall be binding upon each 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.
3.7 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.
3.8 Governing
Law, Jurisdiction and Waiver of Jury Trial.
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(a) THIS
NOTE
SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW
OF
THE STATE OF NEW YORK, WITHOUT REGARD TO ITS 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.
(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.
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3.9 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.
3.10 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.
3.11 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.
3.12 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.
3.13 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 Companies (or their agents) 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
Companies of this Note to the new holder or the issuance by the Companies of
a
new instrument to the new holder, or (ii) transfer through a book entry system
maintained by the Companies (or their agents), within the meaning of Treasury
Regulation Section 1.871-14(c)(1)(i)(B).
[Balance
of page intentionally left blank; signature page follows]
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IN
WITNESS WHEREOF,
each
Company has caused this Secured Revolving 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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SIGNATURE
PAGE TO
EXHIBIT
A
OTHER
COMPANIES
PROLINK
SOLUTIONS, LLC
