SUBSCRIPTION AGREEMENT
This Subscription Agreement, dated as
of April 17, 2009 (the “Agreement”), is entered into
by and between ProLink Holdings Corp., a Delaware corporation (the “Company”), and Xxxxxx Capital
Master Fund, Ltd. (the “Purchaser”).
BACKGROUND
WHEREAS,
the Company is offering in a private placement to the Purchaser (the “Offering”) an aggregate of
8,333,333 shares
(the “Shares”) of its Series D
Convertible Preferred Stock, par value $0.001 per share, and a warrant
(the “Warrant”), in the
form attached hereto at Exhibit A, to
purchase 12,500,000 shares (the “Warrant Shares” and, together
with the Shares, the Warrant, and the shares of Common Stock (as defined herein)
issuable upon conversion of the Shares, the “Securities”) of the Company’s
common stock, par value $0.0001 per share (the “Common Stock”), for an aggregate purchase
price of Two Hundred Fifty Thousand Dollars ($250,000.00) (the “Purchase Price”);
and
WHEREAS,
the Purchaser desires to purchase the Shares and the Warrant for the Purchase
Price on the terms and conditions set forth herein.
NOW,
THEREFORE, in consideration of the premises and the mutual representations and
covenants hereinafter set forth, the parties hereto agree as
follows:
1. Authorization and Sale of
Securities.
1.1 Authorization. The
Company has, or before the Closing (as defined in Section 2) will have,
duly authorized the sale and issuance, pursuant to the terms of this Agreement,
of the Securities.
1.2 Purchase and
Sale. Subject to the terms and conditions of this Agreement,
at the Closing, the Company will sell and issue to the Purchaser, and the
Purchaser will purchase, the Shares and Warrant for the Purchase
Price.
To
subscribe for the Shares and Warrant, this Agreement must be executed and the
Purchase Price (less a maximum of $15,000.00 which will be delivered to Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C.) delivered to the Company in the
form of wire transfer to: an account designated by the Company to the
Purchaser. The Purchaser shall (i) include the Purchaser's name in
the wire transfer instructions; and (ii) request from the bank or other
financial institution that is originating the transfer the federal wire number
with respect to the wire and retain that number for future
reference.
1.3 Use of
Proceeds. The Company will use the net proceeds from the sale
of the Shares and Warrant for working capital and general corporate
purposes.
2. The
Closing. The closing shall occur at such time and place as the
Company may designate (the “Closing,” and the date on
which the Closing occurs, the “Closing
Date”). Promptly following the Closing, the Company shall
deliver to the Purchaser a certificate evidencing the Shares and a warrant
agreement for the Warrant, registered in the name of the Purchaser, against
payment to the Company of the Purchase Price. The Purchaser hereby
authorizes and directs the Company to deliver the Shares and Warrant pursuant to
this Agreement directly to the address indicated on the signature page
hereto.
3. Representations of the
Purchaser. The Purchaser represents and warrants to the
Company as follows:
(a) The
Purchaser has received and carefully reviewed such information and documentation
relating to the Company that the Purchaser has requested, including, without
limitation, the Company’s filings with the United States Securities and Exchange
Commission.
(b) The
Purchaser has had a reasonable opportunity to ask questions of and receive
answers from the Company concerning the Company and the Offering, and all such
questions, if any, have been answered to the full satisfaction of the
Purchaser.
(c) The
Purchaser understands that the Company has determined that the exemption from
the registration provisions of the Securities Act of 1933, as amended (the
“Securities Act”),
provided by Regulation D is applicable to the offer and sale of the Securities,
based, in part, upon the representations, warranties and agreements made by the
Purchaser herein.
(d) Except
as set forth herein, no representations or warranties have been made to the
Purchaser by the Company or any agent, employee or affiliate of the Company and
in entering into this transaction, the Purchaser is not relying upon any
information other than the results of independent investigation by the
Purchaser.
(e) The
Purchaser has full power and authority to execute and deliver this Agreement and
to perform the obligations of the Purchaser hereunder and this Agreement is a
legally binding obligation of the Purchaser in accordance with its
terms.
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(f)
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Regulation D.
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(i) The
Purchaser understands and acknowledges that: (A) the Securities acquired
pursuant to this Agreement have not been registered under the Securities Act and
are being sold in reliance upon an exemption from registration afforded by
Regulation D; and that such Securities have not been registered with any
state securities commission or authority; (B) pursuant to the requirements of
Regulation D, the Securities may not be transferred, sold or otherwise
exchanged unless in compliance with the provisions of Regulation D and/or
pursuant to registration under the Securities Act, or pursuant to an available
exemption thereunder; and (C) other than as set forth in Section 5.1 of this
Agreement, the Company is under no obligation to register the Securities under
the Securities Act or any state securities law, or to take any action to make
any exemption from any such registration provisions available.
(ii) The
Purchaser is an “accredited investor” within the meaning of Rule 501 of
Regulation D, is knowledgeable, sophisticated and experienced in making, and is
qualified to make, decisions with respect to investment shares representing an
investment decision like that involved in the purchase of the
Securities.
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(iii) The
Purchaser is purchasing the Securities for its own account for investment only
and has no intention of selling or distributing the Securities and no other
person has any interest in or participation in the Securities or any right,
option, security interest, pledge or other interest in or to the
Securities. The Purchaser recognizes that an investment in the
Securities involves a high degree of risk, including a risk of total loss of the
Purchaser. The Purchaser understands, acknowledges and agrees that it
must bear the economic risk of its investment in the Securities for an
indefinite period of time and has knowledge and experience in financial and
business matters such that it is capable of evaluating the risks of the
investment in the Securities and the Purchaser understands, acknowledges and
agrees that prior to any such offer or sale, the Company may require, subject to
the fulfillment of the Company’s obligations under Section 6 of this Agreement,
as a condition to effecting a transfer of the Securities, an opinion of counsel,
acceptable to the Company, as to the registration or exemption therefrom under
the Securities Act and any state securities acts, if applicable.
(iv) The
Purchaser acknowledges that the Securities will bear a legend in substantially
the following form:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS OR THE COMPANY SHALL HAVE RECEIVED AN OPINION OF ITS
COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER
THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.
(g) Neither the Purchaser, nor any affiliate of the
Purchaser or any person acting on his, her or its behalf, has recently sold
shares of unregistered Common Stock of the Company.
4. Condition to the Obligations
of the Company. The obligations of the Company under
Section 1.2 of this Agreement are subject to fulfillment, or the waiver, of
the following condition on or before the Closing:
4.1 Accuracy of Representations
and Warranties. The representations and warranties of the
Purchaser contained in Section 3 shall be true on and as of the Closing
Date with the same effect as though such representations and warranties had been
made on and as of that date (except that any representation or warranty
expressly stated to have been made or given as of a specific date need be true
only as of such date).
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5. Covenants of the
Company.
5.1 Piggyback Registration
Rights. If at any time the Company shall determine to register
under the Securities Act any of its securities (other than on Form S-8 or Form
S-4 or their then equivalents and other than shares to be issued solely (i) in
connection with any acquisition of any entity or business, (ii) upon the
exercise of stock options, or (iii) pursuant to employee benefit plans), it
shall send to each holder of Registrable Shares (as defined below), including
each holder who has the right to acquire Registrable Shares, written notice of
such determination and, if within thirty (30) days after receipt of such notice,
such holder shall so request in writing, the Company shall use its commercially
reasonable efforts to include in such registration statement all or any part of
the Registrable Shares such holder requests to be registered therein; provided
that, if, in connection with any offering involving an underwriting of Common
Stock to be issued by the Company, the managing underwriter shall prohibit the
inclusion of shares of Common Stock by selling holders in such registration
statement or shall impose a limitation on the number of shares of such Common
Stock which may be included in any such registration statement because, in its
judgment, such limitation is necessary to effect an orderly public distribution,
and such limitation is imposed pro rata with respect to all securities whose
holders have a contractual, incidental (“piggyback”) right to include
such securities in the registration statement and as to which inclusion has been
requested pursuant to such right and there is first excluded from such
registration statement all shares of Common Stock sought to be included therein
by (i) any holder thereof not having any such contractual, incidental
registration rights, and (ii) any holder thereof having contractual, incidental
registration rights subordinate and junior to the rights of the holders of
Registrable Shares, the Company shall then be obligated to include in such
registration statement only such limited portion (which may be none) of the
Registrable Shares with respect to which such holder has requested inclusion
hereunder. “Registrable Shares” means the
shares of Common Stock issuable upon conversion of the Shares and exercise of
the Warrant; provided, however, that shares of Common Stock shall cease to be
Registrable Shares upon any permitted sale of such shares pursuant to (i) a
registration statement filed under the Securities Act, or (ii) Rule 144
promulgated under the Securities Act.
5.2 Reservation of Common
Stock. The Company shall reserve and maintain a sufficient
number of shares of Common Stock for issuance upon the conversion of the Shares
or exercise of the Warrant.
5.3 Board
Representation. Prior to April 17, 2010, for as long as the
Purchaser continues to hold a majority of the Shares, the Purchaser shall have
the right (the “Board Rights”) to designate three (3) members of the Company’s
Board of Directors (the “Board”), and the Company shall at all times maintain
three (3) vacancies on the Board for such purpose; such Board Rights shall
terminate upon conversion of a majority of the Shares to Common
Stock.
5.4 Right of First Offer.
From and after the date hereof, each time the Company proposes to offer any
shares of, or securities convertible into or exercisable for any shares of, any
class of its capital stock (“Offered Shares”), the Company
shall first make an offering of such Offered Shares to the Purchaser as long as
the Purchaser continues to own at least fifty percent (50%) of the
Shares purchased by such Investor on the Closing Date pursuant to this Agreement
(or at least fifty percent (50%) of the shares of Common Stock received upon
conversion if such Shares have been converted) as adjusted for stock splits or
stock dividends in accordance with the following provisions:
(a) The Company shall deliver a notice
(the “RFO Notice”) to
the Purchaser stating (i) its bona fide intention to offer such Offered Shares,
(ii) the number of such Offered Shares to be offered, and (iii) the price and
terms, if any, upon which it proposes to offer such Offered Shares.
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(b) Within 10 business days after
delivery of the RFO Notice, the Purchaser may elect to purchase or obtain, at
the price and on the terms specified in the RFO Notice, not less than all of the
Offered Shares by delivering written notice thereof to the
Company. Upon expiration of such 10 business day period, such right
of the Purchaser with respect to the Offered Shares shall terminate other than
as set forth in Section 5.4(c) below.
(c) The
Company may, during the 90 day period following the expiration of the period
provided in Section 5.4(b) hereof, offer the unsubscribed Offered Shares to any
person or persons at a price not less than, and upon terms no more favorable to
the offeree than those specified in the RFO Notice. If the Company does not
enter into an agreement for the sale of the Offered Shares within such period,
or if such agreement is not consummated within 120 days of the execution
thereof, the right provided hereunder shall be deemed to be revived and such
Offered Shares shall not be offered unless first reoffered to the Purchaser in
accordance herewith.
(d) The right of first offer in this
Section 5.4 shall not be applicable to (i) the issuance of securities in
connection with stock dividends, stock splits or similar transactions; (ii) the
issuance or sale of Common Stock (or options therefor) pursuant to a stock
option plan, restricted stock purchase plan or other stock plan; (iii) the
issuance of securities to financial institutions, equipment lessors, brokers or
similar persons in connection with commercial credit arrangements, equipment
financings, commercial property lease transactions or similar transactions; (iv)
the issuance of securities pursuant to the conversion or exercise of convertible
or exercisable securities outstanding as of the date of this Agreement,
including without limitation, warrants, notes or options; (v) the issuance of
securities in connection with a bona fide acquisition, merger, strategic
alliance or similar transaction; (vi) the issuance of securities for bona fide
services; or (vii) the issuance of securities in a registered public
offering.
6. Transfer of
Securities. The Purchaser is aware that the Company will make
a notation in its appropriate records and issue “stop transfer” instructions to
its transfer agent with respect to the restrictions on the transferability of
such Securities.
7. Miscellaneous.
7.1 Expenses. The
Purchaser shall pay, at the Closing, the fees (up to a maximum of $15,000.00)
and disbursements of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.,
counsel to the Company, in connection with the preparation of this Agreement and
the other agreements contemplated hereby and the closing of the transactions
contemplated hereby. The payment of such expenses shall be a
reduction to the Purchase Price.
7.2 Successors and
Assigns. This Agreement and any rights and obligations
hereunder may not be transferred or assigned by the Purchaser without the prior
written consent of the Company. This Agreement shall inure to the
benefit of, and be binding upon the Company and the Purchaser and their
respective heirs, legal representatives and permitted assigns.
7.3 Survival. All
representations and warranties and all covenants, agreements and obligations
made by the Company or the Purchaser in this Agreement, or in any instrument or
document furnished in connection with this Agreement or the transactions
contemplated hereby, shall survive the Closing and any investigation at any time
made by or on behalf of any indemnified party.
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7.4 Indemnification. The
Purchaser agrees to indemnify the Company and hold it harmless from and against
any and all losses, damages, liabilities, costs and expenses which it may
sustain or incur in connection with the breach by the Purchaser of any
representation, warranty or covenant made by the Purchaser .
7.5 Notices. All
notices or other communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered personally or mailed by certified or
registered mail, return receipt requested, postage prepaid, as
follows:
(a) If
to the Company, to: ProLink Holdings Corp., 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxx, XX
00000, Attn: Chief Executive Officer, or to such other address as the Company or
the undersigned shall have designated to the other by like notice.
(b) If
to the Purchaser, at its address set forth on the signature page hereto, or at
such other address as may have been furnished to the Company in writing by the
Purchaser.
7.6 Entire
Agreement. This Agreement and the Warrant embody the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersede all prior agreements and understandings
relating to such subject matter.
7.7 Amendments and
Waivers. Except as otherwise expressly set forth in this
Agreement, any term of this Agreement may be amended and the observance of any
term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively) with the written consent of
the Company and the Purchaser. No waivers of or exceptions to any
term, condition or provision of this Agreement, in any one or more instances,
shall be deemed to be, or construed as, a further or continuing waiver of any
such term, condition or provision.
7.8 Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original, but all of which together shall be one and the same
document.
7.9 Section
Headings. The section headings are for the convenience of the
parties and in no way alter, modify, amend, limit, or restrict the contractual
obligations of the parties.
7.10 Severability. The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this
Agreement.
7.11 Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
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SIGNATURE
PAGE
XXXXXX
CAPITAL MASTER FUND, LTD.
By:/s/ Xxx X.
Xxxx
Name:
Xxx X.
Xxxx
Title:
Partner
2121 Avenue of the Stars,
Xxxxx
0000
Xxxxxxx
Xxx Xxxxxxx, XX
00000
Xxxx,
Xxxxx and Zip Code
(000)
000-0000
Telephone-Business
_____________________
Facsimile-Business
_____________________
Tax ID #
or Social Security #
This
Subscription Agreement is agreed to and accepted as of April 17 ,
2009.
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By:
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/s/
Xxxxxxxx X.
Xxxx
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Name:
Xxxxxxxx X. Xxxx
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Title:
Chief Executive Officer
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EXHIBIT
A
Warrant
