Document:

exv10w2

 

Exhibit 10.2

SECURITY AGREEMENT

     This SECURITY AGREEMENT, dated as of October 10, 2006 (the “Agreement”) is by and among
ProLink Holdings Corp., a company duly organized and validly existing under the laws of Delaware
(the “Company”), the Purchasers identified on the signature pages hereto (each, a
“Purchaser” and collectively, the “Purchasers”) and Iroquois Master Fund Ltd.,
as agent for the Purchasers (in such capacity, together with its successors in such capacity,
the “Agent”).

     The Company and each of the Purchasers are parties to a Securities Purchase Agreement dated as
of October 10, 2006 (as modified and supplemented and in effect from time to time, the
“Purchase Agreement”), that provides, subject to the terms and conditions thereof, for
the issuance and sale by the Company to each of the Purchasers, severally and not jointly, Notes
and Warrants as more fully described in the Purchase Agreement.

     To induce each of the Purchasers to enter into the Purchase Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company has agreed to pledge and grant a security interest in the Collateral (as hereinafter
defined) as security for the Secured Obligations (as hereinafter defined). Accordingly, the
parties hereto agree as follows:

     Section 1.
Definitions. Each capitalized term used herein and not otherwise
defined shall have the meaning assigned to such term in the Purchase Agreement. In addition, as
used herein:

     “Accounts” shall have the meaning ascribed thereto in Section 3(d) hereof.

     “Business” shall mean the businesses from time to time, now or hereafter, conducted by
the Company and its Subsidiaries.

     “Collateral” shall have the meaning ascribed thereto in Section 3 hereof.

     “Copyright Collateral” shall mean all Copyrights, whether now owned or hereafter
acquired by the Company, that are associated with the Business.

     “Copyrights” shall mean all copyrights, copyright registrations and applications for
copyright registrations, including those shown on Annex 3 hereto, and, without
limitation, all renewals and extensions thereof, the right to recover for all past, present and
future infringements thereof, and all other rights of any kind whatsoever accruing thereunder or
pertaining thereto.

     “Documents” shall have the meaning ascribed thereto in Section 3(j) hereof.

     “Equipment” shall have the meaning ascribed thereto in Section 3(h) hereof.

     “Event of Default” shall have the meaning ascribed thereto in Section 8 of the Notes.

 

 

     “Excluded Collateral” shall mean the assets of the Company which secure the Permitted
Indebtedness and the assets listed on Annex 2 hereto.

     “Instruments” shall have the meaning ascribed thereto in Section 3(e) hereof.

     “Intellectual Property” shall mean, collectively, all Copyright Collateral, all Patent
Collateral and all Trademark Collateral, together with (a) all inventions, processes, production
methods, proprietary information, know-how and trade secrets used or useful in the Business; (b) all
licenses or user or other agreements granted to the Company with respect to any of the
foregoing, in each case whether now or hereafter owned or used including, without limitation,
the licenses or other agreements with respect to the Copyright Collateral, the Patent Collateral
or the Trademark Collateral; (c) all customer lists, identification of suppliers, data, plans,
blueprints, specifications, designs, drawings, recorded knowledge, surveys, manuals, materials
standards, processing standards, catalogs, computer and automatic machinery software and
programs, and the like pertaining to the operation by the Company of the Business; (d) all sales
data and other information relating to sales now or hereafter collected and/or maintained by the
Company that pertain to the Business; (e) all accounting information which pertains to the
Business and all media in which or on which any of the information or knowledge or data or
records which pertain to the Business may be recorded or stored and all computer programs used
for the compilation or printout of such information, knowledge, records or data; (f) all
licenses, consents, permits, variances, certifications and approvals of governmental agencies
now or hereafter held by the Company pertaining to the operation by the Company and its
Subsidiaries of the Business; and (g) all causes of action, claims and warranties now or
hereafter owned or acquired by the Company in respect of any of the items listed above.

     “Inventory” shall have the meaning ascribed thereto in Section 3(f) hereof.

     “Issuers” shall mean, collectively, the respective entities identified on Annex
1 hereto, and all other entities formed by the Company or entities in which the Company owns
or acquires any capital stock or similar interest.

     “Motor Vehicles” shall mean motor vehicles, tractors, trailers and other like property,
whether or not the title thereto is governed by a certificate of title or ownership.

     “Patent Collateral” shall mean all Patents, whether now owned or hereafter acquired by
the Company that are associated with the Business.

     “Patents” shall mean all patents and patent applications, including those shown on
Annex 3 hereto, and, without limitation, the inventions and improvements described and
claimed therein together with the reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof, all income, royalties, damages and payments now or hereafter due
and/or payable under and with respect thereto, including, without limitation, damages and
payments for past or future infringements thereof, the right to sue for past, present and future
infringements thereof, and all rights corresponding thereto throughout the world.

     “Permitted Indebtedness” shall mean the Company’s existing indebtedness, liabilities and
obligations as disclosed on Annex 5 hereto and any future capitalized leases, purchase
money indebtedness and the Notes.

 

 

     “Permitted Liens” shall mean (i) the Company’s existing Liens as disclosed in Annex
6 hereto, (ii) the security interests created by this Agreement, (iii) Liens of local or
state authorities for franchise, real estate or other like taxes, (iv) statutory Liens of
landlords and liens of carriers, warehousemen, bailees, mechanics, materialmen and other like
Liens imposed by law, created in the ordinary course of business and for amounts not yet due,
(v) tax Liens not yet due and payable and (vi) existing Liens which do not materially affect the
value of the Company’s property and do not materially interfere with the use made and proposed
to be made of such property by the Company and the Subsidiaries.

     “Pledged Stock” shall have the meaning ascribed thereto in Section 3(a) hereof.

     “Real Estate” shall have the meaning ascribed thereto in Section 3(l) hereof.

     “Secured Obligations” shall mean, collectively, (a) the principal of and interest on the
Notes issued or issuable (as applicable) by the Company and held by the applicable Purchaser and
all other amounts from time to time owing to such Purchasers by the Company under the Purchase
Agreement and the Notes and (b) all obligations of the Company to such Purchasers thereunder.

     “Stock Collateral” shall mean, collectively, the Collateral described in clauses (a)
through (c) of Section 3 hereof and the proceeds of and to any such property and, to the extent
related to any such property or such proceeds, all books, correspondence, credit files, records,
invoices and other papers.

     “Trademark Collateral” shall mean all Trademarks, whether now owned or hereafter
acquired by the Company, that are associated with the Business. Notwithstanding the foregoing,
the Trademark Collateral does not and shall not include any Trademark which would be rendered
invalid, abandoned, void or unenforceable by reason of its being included as part of the
Trademark Collateral.

     “Trademarks” shall mean all trade names, trademarks and service marks, logos, trademark
and service mark registrations, and applications for trademark and service mark registrations,
including those shown on Annex 3 hereto, and, without limitation, all renewals of
trademark and service mark registrations, all rights corresponding thereto throughout the world,
the right to recover for all past, present and future infringements thereof, all other rights of
any kind whatsoever accruing thereunder or pertaining thereto, together, in each case, with the
product lines and goodwill of the business connected with the use of, and symbolized by, each
such trade name, trademark and service mark.

     “Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect in the
State of Delaware from time to time.

     Section 2. Representations and Warranties. The Company represents and warrants
to each of the Purchasers that:

	 	a.	 	the Company is the sole beneficial owner of the Collateral and no Lien
exists or will exist upon any Collateral at any time (and, with respect to the
Stock Collateral, no right or option to acquire the same exists in favor 

 

 

	 	 	 	of any other Person), except for Permitted Liens and the pledge and security interest
in favor of each of the Purchasers created or provided for herein which pledge
and security interest will constitute a first priority perfected pledge and
security interest in and to all of the Collateral (other than Intellectual
Property registered or otherwise located outside of the United States of
America) upon the filing of
the applicable financing statements or delivery of stock certificates
required hereunder.

	 	b.	 	the Pledged Stock directly or indirectly owned by the Company
in the entities identified in Annex 1 hereto is, and all other Pledged
Stock, whether issued now or in the future, will be, duly authorized, validly
issued, fully paid and nonassessable, free and clear of all Liens other than
Permitted Liens and none of such Pledged Stock is or will be subject to any
contractual restriction, preemptive and similar rights, or any restriction
under the charter or by-laws of the respective Issuers of such Pledged Stock,
upon the transfer of such Pledged Stock (except for any such restriction
contained herein);
	 
	 	c.	 	the Pledged Stock directly or indirectly owned by the Company
in the entities identified in Annex 1 hereto constitutes all of the
issued and outstanding shares of capital stock of any class of such Issuers
beneficially owned by the Company on the date hereof (whether or not registered
in the name of the Company) and said Annex 1 correctly identifies, as
at the date hereof, the respective Issuers of such Pledged Stock;
	 
	 	d.	 	the Company owns and possesses the right to use, and has done
nothing to authorize or enable any other Person to use, all of its Copyrights,
Patents and Trademarks, and all registrations of its material Copyrights,
Patents and Trademarks are valid and in full force and effect. Except as may
be set forth in said Annex 3, the Company owns and possesses the right
to use all material Copyrights, Patents and Trademarks, necessary for the
operation of the Business;
	 
	 	e.	 	to the Company’s knowledge, (i) except as set forth in
Annex 3 hereto, there is no violation by others of any right of the
Company with respect to any material Copyrights, Patents or Trademarks,
respectively, and (ii) the Company is not, in connection with the Business,
infringing in any respect upon any Copyrights, Patents or Trademarks of any
other Person; and no proceedings have been instituted or are pending against
the Company or, to the Company’s knowledge, threatened, and no claim against
the Company has been received by the
Company, alleging any such violation, except as may be set forth in said
Annex 3; and
	 
	 	f.	 	the Company does not own any material Trademarks registered in
the United States of America to which the last sentence of the definition of
Trademark Collateral applies.

 

 

     Section 3. Collateral. As collateral security for the prompt payment in
full when due (whether at stated maturity, by acceleration or otherwise) of the Secured
Obligations, the Company hereby pledges, grants, assigns, hypothecates and transfers to the Agent
on behalf of the Purchasers as hereinafter provided, a security interest in and Lien upon all of
the Company’s right, title and interest in, to and under all personal property and other assets of
the Company, whether now owned or hereafter acquired by or arising in favor of the Company, whether
now existing or hereafter coming into existence, whether owned or consigned by or to, or leased
from or to the Company and regardless of where located, except for the Excluded Collateral, (all
being collectively referred to herein as “Collateral”) including:

	 	a.	 	the Company’s direct or indirect ownership interest in the respective shares
of capital stock of the Issuers and all other shares of capital stock of
whatever class of the Issuers, now or hereafter owned by the Company, together
with in each case the certificates evidencing the same (collectively, the
“Pledged Stock”);
	 
	 	b.	 	all shares, securities, moneys or property representing a
dividend on any of the Pledged Stock, or representing a distribution or return
of capital upon or in respect of the Pledged Stock, or resulting from a
split-up, revision, reclassification or other like change of the Pledged Stock
or otherwise received in exchange therefor, and any subscription warrants,
rights or options issued to the holders of, or otherwise in respect of, the
Pledged Stock;
	 
	 	c.	 	without affecting the obligations of the Company under any
provision prohibiting such action hereunder or under the Purchase Agreement or
the Notes, in the event of any consolidation or merger in which any Issuer is
not the surviving corporation, all shares of each class of the
capital stock of the successor corporation (unless such successor
corporation is the Company itself) formed by or resulting from such
consolidation or merger (the Pledged Stock, together with all other
certificates, shares, securities, properties or moneys as may from time to
time be pledged hereunder pursuant to clause (a) or (b) above and this
clause (c) being herein collectively called the “Stock Collateral”);
	 
	 	d.	 	all accounts and general intangibles (each as defined in the
Uniform Commercial Code) of the Company constituting any right to the payment
of money, including (but not limited to) all moneys due and to become due to
the Company in respect of any loans or advances for the purchase price of
Inventory or Equipment or other goods sold or leased or for services rendered,
all moneys due and to become due to the Company under any guarantee (including
a letter of credit) of the purchase price of Inventory or Equipment sold by the
Company and all tax refunds (such accounts, general intangibles and moneys due
and to become due being herein called collectively “Accounts”);

 

 

	 	e.	 	all instruments, chattel paper or letters of credit (each as
defined in the Uniform Commercial Code) of the Company evidencing,
representing, arising from or existing in respect of, relating to, securing or
otherwise supporting the payment of, any of the Accounts, including (but not
limited to) promissory notes, drafts, bills of exchange and trade acceptances
(herein collectively called “Instruments”);
	 
	 	f.	 	all inventory (as defined in the Uniform Commercial Code) of
the Company and all goods obtained by the Company in exchange for such
inventory (herein collectively called “Inventory”);
	 
	 	g.	 	all Intellectual Property and all other accounts or general
intangibles of the Company not constituting Intellectual Property or Accounts;
	 
	 	h.	 	all equipment (as defined in the Uniform Commercial Code) of
the Company (herein collectively called “Equipment”);
	 
	 	i.	 	each contract and other agreement of the Company relating to
the sale or other disposition of Inventory or Equipment;
	 
	 	j.	 	all deposit accounts (as defined in the Uniform Commercial
Code) of the Company (herein collectively called “Deposit Accounts”)
	 
	 	k.	 	all documents of title (as defined in the Uniform Commercial
Code) or other receipts of the Company covering, evidencing or representing
Inventory or Equipment (herein collectively called “Documents”);
	 
	 	l.	 	all rights, claims and benefits of the Company against any
Person arising out of, relating to or in connection with Inventory or Equipment
purchased by the Company, including, without limitation, any such rights,
claims or benefits against any Person storing or transporting such Inventory or
Equipment;
	 
	 	m.	 	all estates in land together with all improvements and other
structures now or hereafter situated thereon, together with all rights,
privileges, tenements, hereditaments, appurtenances, easements, including, but
not limited to, rights and easements for access and egress and utility
connections, and other rights now or hereafter appurtenant thereto (“Real
Estate”); and
	 
	 	n.	 	all other tangible or intangible property of the Company,
including, without limitation, all proceeds, products and accessions of and to
any of the property of the Company described in clauses (a) through (m) above
in this Section 3 (including, without limitation, any proceeds of insurance
thereon), and, to the extent related to any property described in said clauses
or such proceeds, products and accessions, all books, correspondence, credit
files, records, invoices and other papers, including without limitation all
tapes, cards, computer runs and other papers and

 

 

	 	 	 	documents in the possession or
under the control of the Company or any computer bureau or service company from
time to time acting for the Company.

     Section 4. Further Assurances; Remedies. In furtherance of the grant of the
pledge and security interest pursuant to Section 3 hereof, the Company hereby agrees with the Agent
and each of the Purchasers as follows:

	 	4.01	 	Delivery and Other Perfection. The Company shall:
	 
	 	a.	 	if any of the above-described shares, securities, monies or property
required to be pledged by the Company under clauses (a), (b) and (c) of Section
3 hereof are received by the Company, forthwith either (x) transfer and deliver
to the Agent such shares or securities so received by the Company (together
with the certificates for any such shares and securities duly endorsed in blank
or accompanied by undated stock powers duly executed in blank) all of which
thereafter shall be held by the Agent, pursuant to the terms of this Agreement,
as part of the Collateral or (y) take such other action as the Agent shall
reasonably deem necessary or appropriate to duly record the Lien created
hereunder in such shares, securities, monies or property referred to in said
clauses (a), (b) and (c) of Section 3;
	 
	 	b.	 	deliver and pledge to the Agent, at the Agent’s request, any
and all Instruments, endorsed and/or accompanied by such instruments of
assignment and transfer in such form and substance as the Agent may request;
provided, that so long as no Event of Default shall have occurred and be
continuing, the Company may retain for collection in the ordinary course any
Instruments received by it in the ordinary course of business and the Agent
shall, promptly upon request of the Company, make appropriate arrangements for
making any other Instrument pledged by the Company available to it for purposes
of presentation, collection or renewal (any such arrangement to be effected, to
the extent deemed appropriate by the Agent, against trust receipt or like
document);
	 
	 	c.	 	give, execute, deliver, file and/or record any financing
statement, notice, instrument, document, agreement or other papers that may be
necessary (in the reasonable judgment of the Agent) to create, preserve,
perfect or
validate any security interest granted pursuant hereto or to enable the
Agent to exercise and enforce their rights hereunder with respect to such
security interest, including, without limitation, causing any or all of the
Stock Collateral to be transferred of record into the name of the Agent or
its nominee (and the Agent agrees that if any Stock Collateral is
transferred into its name or the name of its nominee, the Agent will
thereafter promptly give to the Company copies of any notices and
communications received by it with respect to the Stock Collateral),

 

 

	 	 	 	provided that notices to account debtors in respect of any Accounts or
Instruments shall be subject to the provisions of Section 4.09 below;
	 
	 	d.	 	upon the acquisition after the date hereof by the Company of
any Equipment covered by a certificate of title or ownership cause the Agent to
be listed as the lienholder on such certificate of title and within 120 days of
the acquisition thereof deliver evidence of the same to the Agent;
	 
	 	e.	 	keep accurate books and records relating to the Collateral, and
stamp or otherwise mark such books and records in such manner as the Agent may
reasonably require in order to reflect the security interests granted by this
Agreement;
	 
	 	f.	 	furnish to the Agent from time to time (but, unless an Event of
Default shall have occurred and be continuing, no more frequently than
quarterly) statements and schedules further identifying and describing the
Copyright Collateral, the Patent Collateral and the Trademark Collateral,
respectively, and such other reports in connection with the Copyright
Collateral, the Patent Collateral and the Trademark Collateral, as the Agent
may reasonably request, all in reasonable detail;
	 
	 	g.	 	permit representatives of the Agent, upon reasonable notice, at
any time during normal business hours to inspect and make abstracts from its
books and records pertaining to the Collateral, and permit representatives of
the Agent to be present at the Company’s place of business to receive copies of
all communications and remittances relating to the Collateral, and forward
copies of any notices or communications by the Company with respect to the
Collateral, all in such manner as the Agent may reasonably require; and
	 
	 	h.	 	upon the occurrence and during the continuance of any Event of
Default, upon request of the Agent, promptly notify each account debtor in
respect of any Accounts or Instruments that such Collateral has been assigned
to the Agent hereunder, and that any payments due or to become due in respect
of such Collateral are to be made directly to the Agent.

     4.02 Other Financing Statements and Liens. Except with respect to Permitted
Indebtedness or as otherwise permitted under Schedule 3.1(a) of the Purchase Agreement, without the
prior written consent of the Agent, the Company shall not file or suffer to be on file, or
authorize or permit to be filed or to be on file, in any jurisdiction, any financing statement or
like instrument with respect to the Collateral in which the Agent is not named as the sole secured
party for the benefit of each of the Purchasers.

     4.03 Preservation of Rights. The Agent shall not be required to take steps necessary
to preserve any rights against prior parties to any of the Collateral.

     4.04 Special Provisions Relating to Certain Collateral.

 

 

	 	a.	 	Stock Collateral.

	 	(1)	 	The Company will cause the Stock Collateral to constitute at all
times 100% of the total number of shares of each class of capital stock
of each Issuer then outstanding that is owned directly or indirectly by
the Company.
	 
	 	(2)	 	So long as no Event of Default shall have
occurred and be continuing, the Company shall have the right to
exercise all voting, consensual and other powers of ownership
pertaining to the Stock Collateral for all purposes not inconsistent
with the terms of this Agreement, the Purchase Agreement, the Notes or
any other instrument or agreement referred to herein
or therein, provided that the Company agrees that it will not vote
the Stock Collateral in any manner that is inconsistent with the
terms of this Agreement, the Purchase Agreement, the Notes or any
such other instrument or agreement; and the Agent shall execute and
deliver to the Company or cause to be executed and delivered to the
Company all such proxies, powers of attorney, dividend and other
orders, and all such instruments, without recourse, as the Company
may reasonably request for the purpose of enabling the Company to
exercise the rights and powers which it is entitled to exercise
pursuant to this Section 4.04(a)(2).
	 
	 	(3)	 	Unless and until an Event of Default has
occurred and is continuing, the Company shall be entitled to receive
and retain any dividends on the Stock Collateral paid in cash out of
earned surplus.
	 
	 	(4)	 	If any Event of Default shall have occurred,
then so long as such Event of Default shall continue, and whether or
not the Agent exercises any available right to declare any Secured
Obligations due and payable or seeks or pursues any other relief or
remedy available to it under applicable law or under this Agreement,
the Purchase Agreement, the Notes or any other agreement relating to
such Secured Obligations, all dividends and other distributions on the
Stock Collateral shall be paid directly to the Agent and retained by it
as part of the Stock Collateral, subject to the terms of this
Agreement, and, if the Agent shall so request in writing, the Company
agrees to execute and deliver to the Agent appropriate additional
dividend, distribution and other orders and documents to that end,
provided that if such Event of Default is cured, any such dividend or
distribution theretofore paid to the Agent shall, upon request of the
Company (except to the extent theretofore applied to the Secured
Obligations) be returned by the Agent to the Company.

 

 

	 	b.	 	Intellectual Property.

	 	(1)	 	For the purpose of enabling the Agent to exercise rights and
remedies under Section 4.05 hereof at such time as the Agent shall be
lawfully entitled to exercise such rights and remedies, and for no
other purpose, the Company hereby grants to the Agent, to the extent
assignable, an irrevocable, non-exclusive license (exercisable without
payment of royalty or other compensation to the Company) to use,
assign, license or sublicense any of the Intellectual Property (other
than the Trademark Collateral or goodwill associated therewith) now
owned or hereafter acquired by the Company, wherever the same may be
located, including in such license reasonable access to all media in
which any of the licensed items may be recorded or stored and to all
computer programs used for the compilation or printout thereof.
	 
	 	(2)	 	Notwithstanding anything contained herein to
the contrary, so long as no Event of Default shall have occurred and be
continuing, the Company will be permitted to exploit, use, enjoy,
protect, license, sublicense, assign, sell, dispose of or take other
actions with respect to the Intellectual Property in the ordinary
course of the business of the Company. In furtherance of the
foregoing, unless an Event of Default shall have occurred and is
continuing, the Agent shall from time to time, upon the request of the
Company, execute and deliver any instruments, certificates or other
documents, in the form so requested, which the Company shall have
certified are appropriate (in its judgment) to allow it to take any
action permitted above (including relinquishment of the license
provided pursuant to clause (1) immediately above as to any specific
Intellectual Property). Further, upon the payment in full of all of
the Secured Obligations or earlier expiration of this Agreement or
release of the Collateral, the Agent shall grant back to the Company
the license granted
pursuant to clause (1) immediately above. The exercise of rights and
remedies under Section 4.05 hereof by the Agent shall not terminate
the rights of the holders of any licenses or sublicenses theretofore
granted by the Company in accordance with the first sentence of this
clause (2).

     4.05 Events of Default, etc. During the period during which an Event of Default shall
have occurred and be continuing:

	 	a.	 	the Company shall, at the request of the Agent, assemble the Collateral
owned by it at such place or places, reasonably convenient to both the Agent
and the Company, designated in its request;

 

 

	 	b.	 	the Agent may make any reasonable compromise or settlement
deemed desirable with respect to any of the Collateral and may extend the time
of payment, arrange for payment in installments, or otherwise modify the terms
of, any of the Collateral;
	 
	 	c.	 	the Agent shall have all of the rights and remedies with
respect to the Collateral of a secured party under the Uniform Commercial Code
(whether or not said Code is in effect in the jurisdiction where the rights and
remedies are asserted) and such additional rights and remedies to which a
secured party is entitled under the laws in effect in any jurisdiction where
any rights and remedies hereunder may be asserted, including, without
limitation, the right, to the maximum extent permitted by law, to exercise all
voting, consensual and other powers of ownership pertaining to the Collateral
as if the Agent were the sole and absolute owner thereof (and the Company
agrees to take all such action as may be appropriate to give effect to such
right);
	 
	 	d.	 	the Agent in its discretion may, in its name or in the name of
the Company or otherwise, demand, sue for, collect or receive any money or
property at any time payable or receivable on account of or in exchange for any
of the Collateral, but shall be under no obligation to do so; and
	 
	 	e.	 	the Agent may, upon 10 Business Days, prior written notice to
the Company of the time and place, with respect to the Collateral or any part
thereof which shall then be or shall thereafter come into the possession,
custody or control of the Agent, or any of its respective agents, sell, lease,
assign or otherwise dispose of all or any of such Collateral, at such place or
places as the Agent deems best, and for cash or on credit or for future
delivery (without thereby assuming any credit risk), at public or private sale,
without demand of performance or notice of intention to effect any such
disposition or of time or place thereof (except such notice as is required
above or by applicable statute and cannot be waived) and the Agent or anyone
else may be the purchaser, lessee, assignee or recipient of any or all of the
Collateral so disposed of at any public sale (or, to the extent permitted by
law, at any private sale), and thereafter hold the same absolutely, free from
any claim or right of whatsoever kind, including any right or equity of
redemption (statutory or otherwise), of the Company, any such demand, notice or
right and equity being hereby expressly waived and released. In the event of
any sale, assignment, or other disposition of any of the Trademark Collateral,
the goodwill of the Business connected with and symbolized by the Trademark
Collateral subject to such disposition shall be included, and the Company shall
supply to the Agent or its designee, for inclusion in such sale, assignment or
other disposition, all Intellectual Property relating to such Trademark
Collateral. The Agent may, without notice or publication, adjourn any public
or private sale or cause the same to be adjourned from time to time

 

 

	 	 	 	by announcement at the time and place fixed for the sale, and such sale may be
made at any time or place to which the same may be so adjourned.

The proceeds of each collection, sale or other disposition under this Section 4.05, including
by virtue of the exercise of the license granted to the Agent in Section 4.04(b)(1) hereof, shall
be applied in accordance with Section 4.09 hereof.

     The Company recognizes that, by reason of certain prohibitions contained in the Securities Act
of 1933, as amended, and applicable state securities laws, the Agent may be compelled, with
respect to any sale of all or any part of the Collateral, to limit purchasers to those who will
agree, among other things, to acquire the Collateral for their own account, for investment and
not with a view to the distribution or resale thereof. The Company acknowledges that
any such private sales to an unrelated third party in an arm’s length transaction may be at
prices and on terms less favorable to the Agent than those obtainable through a public sale
without such restrictions, and, notwithstanding such circumstances, agrees that any such private
sale shall be deemed to have been made in a commercially reasonable manner and that the Agent
shall have no obligation to engage in public sales and no obligation to delay the sale of any
Collateral for the period of time necessary to permit the respective Issuer thereof to register
it for public sale.

     4.06 Deficiency. If the proceeds of sale, collection or other realization of or
upon the Collateral pursuant to Section 4.05 hereof are insufficient to cover the costs and
expenses of such realization and the payment in full of the Secured Obligations, the Company shall
remain liable for any deficiency.

     4.07 Removals, etc. Without at least 30 days’ prior written notice to the Agent or
unless otherwise required by law, the Company shall not (i) maintain any of its books or records
with respect to the Collateral at any office or maintain its chief executive office or its
principal place of business at any place, or permit any Inventory or Equipment to be located
anywhere other than at the address indicated for the Company in Section 7.4 of the Purchase
Agreement or at one of the locations identified in Annex 4 hereto or in transit from one of
such locations to another or (ii) change its corporate name, or the name under which it does
business, from the name shown on the signature page hereto.

     4.08 Private Sale. The Agent shall incur no liability as a result of the sale of the
Collateral, or any part thereof, at any private sale to an unrelated third party in an arm’s length
transaction pursuant to Section 4.05 hereof conducted in a commercially reasonable manner. The
Company hereby waives any claims against the Agent arising by reason of the fact that the price at
which the Collateral may have been sold at such a private sale was less than the price which might
have been obtained at a public sale or was less than the aggregate amount of the Secured
Obligations, even if the Agent accepts the first offer received and does not offer the Collateral
to more than one offeree.

     4.09 Application of Proceeds. Except as otherwise herein expressly provided, the
proceeds of any collection, sale or other realization of all or any part of the Collateral pursuant
hereto, and any other cash at the time held by the Agent under this Section 4, shall be applied by the Agent:

 

 

     First, to the payment of the costs and expenses of such collection, sale or other
realization, including reasonable out-of-pocket costs and expenses of the Agent and the fees and
expenses of its agents and counsel, and all expenses, and advances made or incurred by the Agent
in connection therewith;

     Next, to the payment in full of the Secured Obligations in each case equally and ratably
in accordance with the respective amounts thereof then due and owing to each of the Purchasers;
and

     Finally, to the payment to the Company, or its successors or assigns, or as a court of
competent jurisdiction may direct, of any surplus then remaining.

As used in this Section 4, “proceeds” of Collateral shall mean cash, securities and other
property realized in respect of, and distributions in kind of, Collateral, including any thereof
received under any reorganization, liquidation or adjustment of debt of the Company or any issuer
of or obligor on any of the Collateral.

     4.10 Attorney-in-Fact. Without limiting any rights or powers granted by this
Agreement to the Agent while no Event of Default has occurred and is continuing, upon the
occurrence and during the continuance of any Event of Default, the Agent is hereby appointed the
attorney-in-fact of the Company for the purpose of carrying out the provisions of this Section 4
and taking any action and executing any instruments which the Agent may deem necessary or advisable
to accomplish the purposes hereof, which appointment as attorney-in-fact is irrevocable and coupled
with an interest. Without limiting the generality of the foregoing, so long as the Purchasers
shall be entitled under this Section 4 to make collections in respect of the Collateral, the Agent
shall have the right and power to receive, endorse and collect all checks made payable to the order
of the Company representing any dividend, payment, or other distribution in respect of the
Collateral or any part thereof and to give full discharge for the same.

     4.11 Perfection. (i) Prior to or concurrently with the execution and delivery of this
Agreement, the Company shall file such financing statements and other documents in such offices as
the Agent may request to perfect the security interests granted by Section 3 of this Agreement, and
(ii) at any time requested by the Agent, the Company shall deliver to the Agent all share
certificates of capital stock directly or indirectly owned by the Company in the
entities identified in Annex 1 hereto, accompanied by undated stock powers duly
executed in blank.

     4.12 Termination. When all Secured Obligations shall have been paid in full under the
Purchase Agreement, this Agreement shall terminate, and the Agent shall forthwith cause to be
assigned, transferred and delivered, against receipt but without any recourse, warranty or
representation whatsoever, any remaining Collateral and money received in respect thereof, to or on
the order of the Company and to be released and cancelled all licenses and rights referred to in
Section 4.04(b)(1) hereof. The Agent shall also execute and deliver to the Company upon such
termination such Uniform Commercial Code termination statements, certificates for terminating the
Liens on the Motor Vehicles and such other documentation as shall be reasonably requested by the
Company to effect the termination and release of the Liens on the Collateral.

 

 

     4.13 Expenses. The Company agrees to pay to the Agent all out-of-pocket expenses
(including reasonable expenses for legal services of every kind) of, or incident to, the
enforcement of any of the provisions of this Section 4, or performance by the Agent of any
obligations of the Company in respect of the Collateral which the Company has failed or refused to
perform upon reasonable notice, or any actual or attempted sale, or any exchange, enforcement,
collection, compromise or settlement in respect of any of the Collateral, and for the care of the
Collateral and defending or asserting rights and claims of the Agent in respect thereof, by
litigation or otherwise, including expenses of insurance, and all such expenses shall be Secured
Obligations to the Agent secured under Section 3 hereof.

     4.14 Further Assurances. The Company agrees that, from time to time upon the written
request of the Agent, the Company will execute and deliver such further documents and do such other
acts and things as the Agent may reasonably request in order fully to effect the purposes of this
Agreement.

     4.15 Indemnity. Each of the Purchasers hereby jointly and severally covenants and
agrees to reimburse, indemnify and hold the Agent harmless from and against any and all claims,
actions, judgments, damages, losses, liabilities, costs, transfer or other taxes,
and expenses (including, without limitation, reasonable attorneys’ fees and expenses) incurred
or suffered without any bad faith or willful misconduct by the Agent, arising out of or incident to
this Agreement or the administration of the Agent’s duties hereunder, or resulting from its actions
or inactions as Agent.

     Section 5. Miscellaneous.

     5.01 No Waiver. No failure on the part of the Agent or any of its agents to exercise,
and no course of dealing with respect to, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by the Agent
or any of its agents of any right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedies herein are cumulative
and are not exclusive of any remedies provided by law.

     5.02 Governing Law. This Agreement shall be governed by, and construed in accordance
with, the law of the State of Delaware.

     5.03 Notices. All notices, requests, consents and demands hereunder shall be in
writing and facsimile (facsimile confirmation required) or delivered to the intended recipient at
its address or telex number specified pursuant to Section 7.4 of the Purchase Agreement and shall
be deemed to have been given at the times specified in said Section 7.4.

     5.04 Waivers, etc. The terms of this Agreement may be waived, altered or amended only
by an instrument in writing duly executed by the Company and the Agent. Any such amendment or
waiver shall be binding upon each of the Purchasers and the Company.

     5.05 Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of the Company and each of the Purchasers
(provided, however, that the Company shall not assign or transfer its rights hereunder without the
prior written consent of the Agent).

 

 

     5.06 Counterparts. This Agreement may be executed in any number of counterparts, all
of which together shall constitute one and the same instrument and any of the parties hereto may
execute this Agreement by signing any such counterpart.

     5.07 Agent. Each Purchaser agrees to appoint Iroquois Master Fund Ltd. as its Agent
for purposes of this Agreement. The Agent may employ agents and attorneys-in-fact in connection
herewith and shall not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith.

     5.08 Severability. If any provision hereof is invalid and unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other provisions hereof shall
remain in full force and effect in such jurisdiction and shall be liberally construed in favor of
the Purchasers in order to carry out the intentions of the parties hereto as nearly as may be
possible and (ii) the invalidity or unenforceability of any provision hereof in any jurisdiction
shall not affect the validity or enforceability of such provision in any other jurisdiction.

 

 

     IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be duly
executed as of the day and year first above written.

	 	 	 	 	 
	COMPANY:	 	PROLINK HOLDINGS CORP.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Lawrence D. Bain
	 

	 	 	 	Lawrence D. Bain
	 

	 	 	 	President and Chief Executive Officer
	 
	 	 	 	 
	AGENT:	 	IROQUOIS MASTER FUND LTD.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Joshua Silverman
	 

	 	 	 	Name: Joshua Silverman
	 

	 	 	 	Title: Authorized Signatory

 

 

	 	 	 	 	 
	PURCHASERS:	 	IROQUOIS MASTER FUND LTD.
	 
	 	 	 	 
	 	 	By: /s/ Joshua Silverman
	 	 	Name: Joshua Silverman
	 	 	Title: Authorized Signatory
	 
	 	 	 	 
	 	 	BONANZA MASTER FUND, LTD.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Brian Ladin
	 

	 	 	 	Brian Ladin
	 

	 	 	 	Partner
	 
	 	 	 	 
	 	 	WPG DISTRESSED/SPECIAL SITUATIONS OVERSEAS, L.P.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ William G. Butterly, III
	 

	 	 	 	William G. Butterly, III
	 

	 	 	 	Senior Managing Director
	 
	 	 	 	 
	 	 	WPG EVENT-DRIVEN MULTI-STRATEGY OVERSEAS, L.P.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ William G. Butterly, III
	 

	 	 	 	William G. Butterly, III
	 

	 	 	 	Senior Managing Director
	 
	 	 	 	 
	 	 	HIGHBRIDGE INTERNATIONAL LLC
	 

	 	By:
	 	Highbridge Capital Management, LLC
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Adam J. Chill
	 

	 	 	 	Adam J. Chill
	 
	 	 	 	 
	 	 	ROCKMORE INVESTMENT MASTER FUND LTD.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Bruce Bernstein
	 

	 	 	 	Bruce Bernstein
	 

	 	 	 	Managing Memberexv10w3

 

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

 

 

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

2

 

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

3

 

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.

4

 

     (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

5

 

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

6

 

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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SIGNATURE PAGE FOLLOWS]

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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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