Exhibit 10.3
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH
APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS. NOTWITHSTANDING THE
FOREGOING, THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY SUCH SECURITIES.

  No. ___   $                     Date: October 11, 2006    

PROLINK HOLDINGS CORP.
SENIOR SECURED NOTE DUE
April 11, 2007
     THIS NOTE is one of a series of duly authorized and issued Notes of ProLink
Holdings Corp., a Delaware corporation (the “Company”), designated as its Senior
Secured Notes due April 11, 2007, in the aggregate principal amount of
$4,500,000 (the “Notes”).
     FOR VALUE RECEIVED, the Company promises to pay to the order of ___or its
registered assigns (the “Holder”), the principal sum of ___Dollars ($___) on
April 11, 2007 (the “Maturity Date”), or such earlier date as the Note is
required or permitted to be repaid as provided hereunder, and to pay interest to
the Holder on the then outstanding principal amount of this Note in accordance
with the provisions hereof. The principal amount of this Note may be increased
as set forth in Section 2(c) below. Notwithstanding the foregoing, the Company
hereby unconditionally promises to pay to the order of the Holder interest on
any principal or interest payable hereunder that shall not be paid in full when
due, whether at the time of any stated interest payment date or maturity or by
prepayment, acceleration or declaration or otherwise, for the period from and
including the due date of such payment to but excluding the date the same is
paid in full, at a rate of 18% per annum (but in no event in excess of the
maximum rate permitted under applicable law).
     Interest payable under this Note shall be computed on the basis of a year
of 365 days and actual days elapsed (including the first day but excluding the
last day) occurring in the period for which interest is payable.
     Payments of principal and interest shall be made in lawful money of the
United States of America to the Holder at its address as provided in Section 8
or by wire transfer to such account specified from time to time by the Holder
hereof for such purpose as provided in Section 8.
     1. Definitions. In addition to the terms defined elsewhere in this Note,
(a) capitalized terms that are not otherwise defined herein have the meanings
given to such terms

 

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in the Securities Purchase Agreement, dated as of October 10, 2006, among the
Company and the Purchasers identified therein (the “Purchase Agreement”), and
(b) the following terms have the meanings indicated:
     “Equity Conditions” means, with respect to a specified issuance of Common
Stock, that each of the following conditions is satisfied: (i) the number of
authorized but unissued and otherwise unreserved shares of Common Stock is
sufficient for such issuance; (ii) such shares of Common Stock are registered
for resale by the Holder and may be sold by the Holder pursuant to an effective
Registration Statement covering the Underlying Shares or all such shares may be
sold without volume restrictions pursuant to Rule 144(k) under the Securities
Act; (iii) the Common Stock is listed or quoted (and is not suspended from
trading) on an Eligible Market and such shares of Common Stock are approved for
listing upon issuance; (iv) such issuance would be permitted in full without
violating Section 11 of the Warrants or the rules or regulations of any Trading
Market; (v) no Bankruptcy Event has occurred; (vi) no Event of Default has
occurred; (vii) no public announcement of a pending or proposed Change of
Control transaction has occurred that has not been consummated, and (viii) the
average trading volume for the Company’s Common Stock on its Trading Market for
each of the preceding 10 Trading Days is no less than 50,000 shares.
     “Event Equity Value” means 115% of the arithmetic average of the VWAP for
each of the five Trading Days preceding the date of delivery of the notice
requiring payment of the Event Equity Value, provided that if the Company does
not make such required payment (together with any other payments, expenses and
liquidated damages then due and payable under the Transaction Documents) when
due or, in the event the Company disputes in good faith the occurrence of the
Triggering Event pursuant to which such notice relates, does not instead deposit
such required payment (together with such other payments, expenses and
liquidated damages then due) in escrow with an independent third-party escrow
agent within five Trading Days of the date such required payment is due, then
the Event Equity Value shall be 115% of the greater of (a) the arithmetic
average of the VWAP for each of the five Trading Days preceding the date of
delivery of the notice requiring payment of the Event Equity Value and (b) the
arithmetic average of the VWAP for each of the five Trading Days preceding the
date on which such required payment (together with such other payments, expenses
and liquidated damages) is paid in full.
     “Interest Rate” has the meaning set forth in Section 2(a) herein.
     “Original Issue Date” means the date of the first issuance of any Notes,
regardless of the number of transfers of any particular Note.
     “Triggering Event” means any of the following events: (a) the Company fails
for any reason to deliver a certificate evidencing any Securities to a Purchaser
within five Trading Days after delivery of such certificate is required pursuant
to any Transaction Document or the exercise rights of the Holders pursuant to
any Transaction Document are otherwise suspended for any reason; (b) the Company
fails to have available a sufficient number of authorized but unissued and
otherwise unreserved shares of

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Common Stock available to issue Underlying Shares upon any exercise of the Note;
(c) at any time after the Closing Date, any Common Stock issuable pursuant to
the Transaction Documents is not listed on an Eligible Market; (d) the Company
effects or publicly announces its intention to effect any exchange,
recapitalization or other transaction that effectively requires or rewards
physical delivery of certificates evidencing the Common Stock; (e) the
effectiveness of the Registration Statement lapses for any reason or the Holder
shall not be permitted to resell any Underlying Shares under the Registration
Statement, in either case, for seven or more consecutive Trading Days or 25 days
in aggregate in any 12 month period to the extent such blackout is to amend the
Registration Statement to comply with Securities Laws); (f) the Company fails to
make any cash payment required under the Transaction Documents and such failure
is not cured within 5 days after notice of such default is first given to the
Company by a Purchaser; (g) an occurrence of a Change of Control; (h) a breach
of any covenant contained herein or in any other Transaction Document, (i) an
event of default under the Senior Debt, or (j) the Company breaches any
representation or warranty or defaults in the timely performance of any other
obligation under the Transaction Documents and such breach or default continues
uncured for a period of 20 days after the date on which notice of such breach or
default is first given to the Company by a Purchaser (it being understood that
no prior notice need be given in the case of a breach or default that cannot
reasonably be cured within 20 days).
     2. Principal and Interest.
          (a) The Company shall pay interest to the Holder on the aggregate and
then outstanding principal amount of this Note at a rate equal to 12% per annum
(the “Interest Rate”). Interest shall be payable quarterly in arrears on each
March 31, June 30, September 30 and December 31 and on the Maturity Date, except
if such date is not a Trading Day, in which case such interest shall be payable
on the next succeeding Trading Day (each, an “Interest Payment Date”). The first
Interest Payment Date shall be December 31, 2006. The amount of interest paid on
each Interest Payment Date shall be referred to as the “Interest Payment
Amount”).
          (b) Subject to the conditions and limitations set forth below, the
Company may pay interest on this Note in (i) cash or (ii) shares of Common
Stock. The Company must deliver written notice to the Holder indicating the
manner in which it intends to pay interest at least 20 Trading Days prior to
each Interest Payment Date (a “Interest Payment Notice”), but the Company may
indicate in any such notice that the election contained therein shall continue
for subsequent Interest Payment Dates until revised. Failure to timely provide
such written notice shall be deemed an election by the Company to pay the amount
of any interest in cash.
          (c) Notwithstanding the foregoing, the Company may not pay interest by
issuing shares of Common Stock unless (i) all of the Equity Conditions are then
satisfied with respect to all shares of Common Stock then issuable upon exercise
of all outstanding Warrants, and (ii) as to such Interest Payment Date, prior to
or on the date of the Interest Payment Notice or if any Interest Payment Notice
indicates that such election contained therein shall continue for subsequent
Interest Payment Dates, prior to or on the 20th Trading Day prior to such
Interest

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Payment Date (in each case, a “Share Delivery Date”), as the case may be, the
Company shall have delivered to the Holder’s account with The Depository Trust
Company (“DTC”) (or by physical certificate if the Holder does not have an
account with the DTC) a number of shares of Common Stock (the “Conversion
Shares”) to be applied against such Interest Payment Amount, equal to the
quotient of (x) the applicable Interest Payment Amount divided by 90% of the
arithmetic average of the VWAP for each of the 20 Trading Days ending
immediately prior to the 23rd Trading Day that is immediately prior to the
applicable Interest Payment Date (subject to adjustment for any stock dividend,
stock split, stock combination or other similar event affecting the Common Stock
during such 20 Trading Day period).
Within 3 Trading Days of each Interest Payment Date, the Company shall pay to
the Holder additional shares of Common Stock required to meet its obligations
under Section 2(d) below (to the extent the previously delivered Conversion
Shares were not sufficient), or credit against future interest payments to be
made on subsequent Interest Payment Dates or Share Delivery Dates, as the case
may be, the excess of the Conversion Shares delivered to the Holders pursuant to
this Section 2(c) over the amount of shares of Common Stock due under
Section 2(d). If the Company is required to pay interest in cash on any Interest
Payment Date but fails to do so, the Holder may (but shall not be required to)
treat such interest as if it had been added to the principal amount of this Note
as of such Interest Payment Date or accept any number of shares of Common Stock
in lieu of such interest payment.
          (d) In the event that the Company elects to pay interest on any
Interest Payment Date in shares of Common Stock, the number of shares of Common
Stock to be issued to each Holder as such interest shall be (i) determined by
dividing the aggregate amount of interest then payable to such Holder by the
Market Price (as defined below) as of the applicable Interest Payment Date, and
rounding up to the nearest whole share, and (ii) paid to such Holder in
accordance with Section 2(e) below, taking into account the Conversion Shares
delivered pursuant to Section 2(c). The term “Market Price” shall mean 90% of
the arithmetic average of the VWAP for each of the 20 Trading Days ending
immediately prior to the applicable Interest Payment Date (not including such
date).
          (e) In the event that any interest is paid in Common Stock, the
Company shall within three Trading Days of such Interest Payment Date or on or
before the Share Delivery Date (i) issue and deliver to such Holder a
certificate, free of restrictive legends, registered in the name of the Holder
or its designee, for the number of shares of Common Stock to which the Holder
shall be entitled, or (ii) at all times after the Holder has notified the
Company that this clause (ii) shall apply, credit the number of shares of Common
Stock to which the Holder shall be entitled to the Holder’s or its designee’s
balance account with the DTC through its Deposit Withdrawal Agent Commission
System.
          (f) The outstanding principal amount of the Note, plus accrued and
unpaid interest shall be paid on the Maturity Date. The Note may not be prepaid
in whole or part absent written consent from the Holder.
     3. Ranking and Covenants.

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     (a) Except for the Senior Debt and as set forth in Schedule 3.1(dd) or as
otherwise permitted in Section 4.10 of the Purchase Agreement (the “Existing
Indebtedness”), no indebtedness of the Company is senior to, or pari passu with,
this Note in right of payment, whether with respect to interest, damages or upon
liquidation or dissolution or otherwise. Other than the Existing Indebtedness
and any renewal, refinancing or replacement thereof that does not exceed the
aggregate amount of the Existing Indebtedness and the borrowing availability
under the related credit or loan agreements on the date hereof, the Company will
not, and will not permit any Subsidiary to, directly or indirectly, enter into,
create, incur, assume or suffer to exist any indebtedness of any kind, that is
senior or pari passu in any respect to the Company’s obligations under the
Notes, whether with respect to interest or upon liquidation or dissolution, or
otherwise, other than indebtedness secured by purchase money security interests
(which will be senior only as to the underlying assets covered thereby) and
indebtedness under capital lease obligations (which will be senior only as to
the assets covered thereby); and the Company will not, and will not permit any
subsidiary to, directly or indirectly, incur any Lien on or with respect to any
of its property or assets now owned or hereafter acquired or any interest
therein or any income or profits therefrom, that is senior or pari passu in any
respect to the Company’s obligations under the Notes, whether with respect to
interest or upon liquidation or dissolution, or otherwise; provided, however,
that the Company may incur any such indebtedness if the proceeds received in
respect thereof are used for repayment of the Notes in full.
     (b) So long as any Notes are outstanding, neither the Company nor any
Subsidiary shall, directly or indirectly, (i) redeem, purchase or otherwise
acquire any capital stock or set aside any monies for such a redemption,
purchase or other acquisition or (ii) issue any Common Stock Equivalents with an
effective price or a number of underlying shares that floats or resets or
otherwise varies or is subject to adjustment based (directly or indirectly) on
market prices of the Common Stock (a “Floating Price Security).
     (c) The Company covenants that it will at all times reserve and keep
available out of its authorized but unissued and otherwise unreserved Common
Stock, solely for the purpose of enabling it to issue Underlying Shares as
required under the Transaction Documents, free from preemptive rights or any
other contingent purchase rights of Persons other than the Holder. The Company
covenants that all Underlying Shares so issuable and deliverable shall, upon
issuance in accordance with the terms hereof, be duly and validly authorized and
issued and fully paid and nonassessable.
     (d) If any time following the Original Issue Date, the Company or any
Subsidiary of the Company offers to issue or issues to any Person any security
of the Company or any Subsidiary of the Company, then the Company shall offer to
each Holder the right to exchange all or a portion of the Notes then held by
such Holder, plus accrued but unpaid interest for such security. Such offer
shall be made at the same time and in the same manner as if such offer is being
made to any other potential purchaser of such security. Each Holder shall have
10 Trading Days to review the offer and determine whether it wants to exchange
all or any portion of the Notes for such new security.
     4. Registration of Notes. The Company shall register the Notes upon records
to be maintained by the Company for that purpose (the “Note Register”) in the
name of each record holder thereof from time to time. The Company may deem and
treat the registered Holder of this

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Note as the absolute owner hereof for the purpose of any payment of interest or
principal hereon, and for all other purposes, absent actual notice to the
contrary.
     5. Registration of Transfers and Exchanges. The Company shall register the
transfer of any portion of this Note in the Note Register upon surrender of this
Note to the Company at its address for notice set forth herein; provided,
however that any such transfer shall be conditioned upon the Company’s receipt
of (A) a certificate that such transferee is an “accredited investor” under the
Securities Act, and (B) a form of joinder or other agreement as required in
connection with the Senior Debt in order to subordinate the lien of Holder. Upon
any such registration or transfer, a new Note, in substantially the form of this
Note (any such new Note, a “New Note”), evidencing the portion of this Note so
transferred shall be issued to the transferee and a New Note evidencing the
remaining portion of this Note not so transferred, if any, shall be issued to
the transferring Holder. The acceptance of the New Note by the transferee
thereof shall be deemed the acceptance by such transferee of all of the rights
and obligations of a holder of a Note. This Note is exchangeable for an equal
aggregate principal amount of Notes of different authorized denominations, as
requested by the Holder surrendering the same. No service charge or other fee
will be imposed in connection with any such registration of transfer or
exchange.
     6. Events of Default.
     (a) “Event of Default” means any one of the following events (whatever the
reason and whether it shall be voluntary or involuntary or effected by operation
of law or pursuant to any judgment, decree or order of any court, or any order,
rule or regulation of any administrative or governmental body):
          (i) any default in the payment (free of any claim of subordination) of
principal, interest or liquidated damages in respect of any Notes, as and when
the same becomes due and payable (whether on a date specified for the payment of
interest or the date on which the obligations under the Note mature or by
acceleration, redemption, prepayment or otherwise);
          (ii) the Company or any Subsidiary defaults in any of its obligations
under any other note or any mortgage, credit agreement or other facility,
indenture agreement, factoring agreement or other instrument under which there
may be issued, or by which there may be secured or evidenced, any indebtedness
for borrowed money or money due under any long term leasing or factoring
arrangement of the Company or any Subsidiary in an amount exceeding $1,000,000,
whether such indebtedness now exists or is hereafter created, and such default
results in such indebtedness becoming or being declared due and payable prior to
the date on which it would otherwise become due and payable;
          (iii) the occurrence of a Triggering Event; or
          (iv) the occurrence of a Bankruptcy Event.
     (b) At any time or times following the occurrence of an Event of Default,
the Holder shall have the option to elect, by notice to the Company (an “Event
Notice”), to require the Company to repurchase all or any portion of (i) the
outstanding principal amount of this Note, at

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a repurchase price equal to 115% of such outstanding principal amount, plus all
accrued but unpaid interest thereon through the date of payment. The aggregate
amount payable pursuant to the preceding sentence is referred to as the “Event
Price.” The Company shall pay the Event Price to the Holder no later than the
tenth Trading Day following the date of delivery of the Event Notice, and upon
receipt thereof the Holder shall deliver this Note and certificates evidencing
any Underlying Shares so repurchased to the Company (to the extent such
certificates have been delivered to the Holder). The Company shall pay the
Holder the cost of enforcing any of its remedies under this Note, as incurred,
including reasonable attorney’s fees.
     (c) Upon the occurrence of an Event of Default, the Holder shall have the
right, upon 2 Trading Days notice, to review and inspect the books and records
of the Company.
     (d) Upon the occurrence of any Bankruptcy Event, all amounts pursuant to
Section 6(b) shall immediately become due and payable in full in cash, without
any further action by the Holder.
     (e) In connection with any Event of Default, the Holder need not provide
and the Company hereby waives any presentment, demand, protest or other notice
of any kind, and the Holder may immediately and without expiration of any grace
period enforce any and all of its rights and remedies hereunder and all other
remedies available to it under applicable law. Any such declaration may be
rescinded and annulled by the Holder at any time prior to payment hereunder. No
such rescission or annulment shall affect any subsequent Event of Default or
impair any right consequent thereto.
     7. Charges, Taxes and Expenses. Issuance of this Note shall be made without
charge to the Holder for any issue or transfer tax, withholding tax, transfer
agent fee or other incidental tax or expense in respect of the issuance of such
certificate, all of which taxes and expenses shall be paid by the Company;
provided, however, that the Company shall not be required to pay any tax which
may be payable in respect of any transfer involved in the registration of any
certificates for Underlying Shares or Notes in a name other than that of the
Holder. The Holder shall be responsible for all other tax liability that may
arise as a result of holding or transferring this Note or receiving Underlying
Shares in respect hereof.
     8. Notices. Any and all notices or other communications or deliveries
hereunder shall be in writing and shall be deemed given and effective on the
earliest of (i) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified in this Section 8
prior to 6:30 p.m. (New York City time) on a Trading Day, (ii) the next Trading
Day after the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number specified in this Section 8 on a day that
is not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading
Day, (iii) the Trading Day following the date of mailing, if sent by nationally
recognized overnight courier service, or (iv) upon actual receipt by the party
to whom such notice is required to be given. The addresses for such
communications shall be: (i) if to the Company, to 410 S. Benson Lane, Chandler,
Arizona 85224, facsimile: (480) 785-7446, attention General Counsel, or (ii) if
to the Holder, to the address or facsimile number appearing on the Company’s
Noteholder records or such other address or facsimile number as the Holder may
provide to the Company in accordance with this Section 8.

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     9. Security. This Note is secured to the extent and in the manner set forth
in the Security Agreement.
     10. Miscellaneous.
     (a) This Note shall be binding on and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. The Company shall
not be permitted to assign this Note.
     (b)Subject to Section 10(a), nothing in this Note shall be construed to
give to any person or corporation other than the Company and the Holder any
legal or equitable right, remedy or cause under this Note.
     (c) Governing Law; Venue; Waiver Of Jury Trial. All questions concerning
the construction, validity, enforcement and interpretation of this Note shall be
governed by and construed and enforced in accordance with the internal laws of
the State of New York, without regard to the principles of conflicts of law
thereof. each party hereby irrevocably submits to the exclusive jurisdiction of
the state and federal courts sitting in the city of New York, Borough of
Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of any of the transaction documents),
and hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is improper. Each party
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof
via registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this
agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
the company hereby waives all rights to a trial by jury.
     (d) The headings herein are for convenience only, do not constitute a part
of this Note and shall not be deemed to limit or affect any of the provisions
hereof.
     (e) In case any one or more of the provisions of this Note shall be invalid
or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Note shall not in any way be affected or
impaired thereby and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Note.
     (f) In the event of any stock split, subdivision, dividend or distribution
payable in shares of Common Stock (or other securities or rights convertible
into, or entitling the holder thereof to receive directly or indirectly shares
of Common Stock), combination or other similar recapitalization or event
occurring after the date hereof, each reference in this Note to a price shall be
amended to appropriately account for such event.

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     (g) No provision of this Note may be waived or amended except in a written
instrument signed, in the case of an amendment, by the Company and the Holder
or, or, in the case of a waiver, by the Holder. No waiver of any default with
respect to any provision, condition or requirement of this Note shall be deemed
to be a continuing waiver in the future or a waiver of any subsequent default or
a waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right.
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     IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by
a duly authorized officer as of the date first above indicated.

                  PROLINK HOLDINGS CORP.
 
           
 
  By        
 
 
 
Name: Michael Browne    
 
  Title: Chief Financial Officer    

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