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THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE
OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS
WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THIS WARRANT UNDER SAID ACT AND ANY APPLICABLE
STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO PROLINK HOLDINGS CORP. THAT SUCH REGISTRATION
IS NOT REQUIRED.
Right
to Purchase Shares of Common Stock of
ProLink
Holdings Corp.
(subject
to adjustment as provided herein)
COMMON STOCK PURCHASE WARRANT
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No.
1
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Issue
Date: August 17, 2007
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PROLINK
HOLDINGS CORP., a corporation organized under the laws of the
State of Delaware (the “Company”), hereby
certifies that, for value received, CALLIOPE CAPITAL
CORPORATION, or assigns (the “Holder”), is
entitled, subject to the terms set forth below, to purchase
from the Company (as defined herein) from and after the Issue
Date of this Warrant and at any time or from time to time
before 5:00 p.m., New York time, through the close of business
August 17, 2012 (the “Expiration Date”), up to the
Specified Number of Common Stock (as defined below), $0.0001
par value per share, at the applicable Exercise Price per
share (as defined below). The number and character of such
shares of Common Stock and the applicable Exercise Price per
share are subject to adjustment as provided
herein.
As
used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
(a)
“Common
Stock” means (i) the Company’s Common Stock, par
value $0.0001 per share; and (ii) any other securities into
which or for which any of the securities described in the
preceding clause (i) may be converted or exchanged pursuant to
a plan of recapitalization, reorganization, merger, sale of
assets or otherwise.
(b)
“Company”
means ProLink Holdings Corp. and any person or entity which
shall succeed, or assume the obligations of, ProLink Holdings
Corp. hereunder.
(c)
“Exercise
Price” means:
(i)
a
price of $1.40 for the first one-third of the Specified Number
of Common Stock acquired hereunder;
(ii)
a
price of $1.50 for the next one-third of the Specified Number
of Common Stock acquired hereunder; and
(iii)
a
price of $1.60 for any additional shares of Common Stock
acquired hereunder.
(d)
“Other
Securities” means any stock (other than Common Stock)
and other securities of the Company or any other person
(corporate or otherwise) which the holder of the Warrant at
any time shall be entitled to receive, or shall have received,
on the exercise of the Warrant, in lieu of or in addition to
Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common
Stock or Other Securities pursuant to Section 4 or
otherwise.
(e)
“Registration
Rights Agreement” means that certain Registration Rights
Agreement dated as of the date hereof by and between the
Company and the Holder, as the same may be amended, modified
and/or supplemented from time to time.
(f)
“Security
Agreement” means that certain Security Agreement dated
as of the date hereof among the Company, certain of its
subsidiaries and the Holder, as the same may be amended,
modified and/or supplemented from time to time.
(g)
“Specified
Number of Common Stock” means 3,567,568 shares of Common
Stock;
provided ,
however ,
in the event (i) the Obligations (as defined in the Security
Agreement) shall have been indefeasibly paid in full on or prior to
August 17, 2008, “Specified Number of Common Stock”
shall mean 3,081,081 shares of Common Stock and (ii) the
Registration Statement (as defined in the Registration Rights
Agreement) is not declared effective by the Securities and Exchange
Commission on or prior to August 17, 2008, “Specified Number
of Common Stock” shall mean 4,054,054 shares of Common
Stock.
1.
Exercise of Warrant .
1.1.
Number of Shares Issuable upon Exercise .
From and after the date hereof through and including the Expiration
Date, the Holder shall be entitled to receive, upon exercise of
this Warrant in whole or in part, by delivery of an original or fax
copy of an exercise notice in the form attached hereto as Exhibit A
(the “Exercise Notice”), fully paid and nonassessable
shares of Common Stock of the Company up to the Specified Number of
Common Stock, subject to adjustment pursuant to Section 4
hereof.
1.2.
Fair Market Value .
For purposes hereof, the “Fair Market Value” of a share
of Common Stock as of a particular date (the “Determination
Date”) shall mean:
(a)
If
the Company’s Common Stock is traded on the American
Stock Exchange or another national exchange or is quoted on
the National or Capital Market of The Nasdaq Stock Market,
Inc. (“Nasdaq”), then the closing or last sale
price, respectively, reported for the last business day
immediately preceding the Determination Date.
(b)
If
the Company’s Common Stock is not traded on the American
Stock Exchange or another national exchange or on the Nasdaq
but is traded on the NASD Over The Counter Bulletin Board,
then the mean of the average of the closing bid and asked
prices reported for the last business day immediately
preceding the Determination Date.
(c)
Except
as provided in clause (d) below, if the Company’s Common
Stock is not publicly traded, then as the Holder and the
Company agree or in the absence of agreement by arbitration in
accordance with the rules then in effect of the American
Arbitration Association, before a single arbitrator to be
chosen from a panel of persons qualified by education and
training to pass on the matter to be decided.
(d)
If
the Determination Date is the date of a liquidation,
dissolution or winding up, or any event deemed to be a
liquidation, dissolution or winding up pursuant to the
Company’s charter, then all amounts to be payable per
share to holders of the Common Stock pursuant to the charter
in the event of such liquidation, dissolution or winding up,
plus all other amounts to be payable per share in respect of
the Common Stock in liquidation under the charter, assuming
for the purposes of this clause (d) that all of the shares of
Common Stock then issuable upon exercise of the Warrant are
outstanding at the Determination Date.
1.3.
Company Acknowledgment .
The Company will, at the time of the exercise of this Warrant, upon
the request of the holder hereof acknowledge in writing its
continuing obligation to afford to such holder any rights to which
such holder shall continue to be entitled after such exercise in
accordance with the provisions of this Warrant. If the holder shall
fail to make any such request, such failure shall not affect the
continuing obligation of the Company to afford to such holder any
such rights.
1.4.
Trustee for Warrant Holders .
In the event that a bank or trust company shall have been appointed
as trustee for the holders of this Warrant pursuant to Subsection
3.2, such bank or trust company shall have all the powers and
duties of a warrant agent (as hereinafter described) and shall
accept, in its own name for the account of the Company or such
successor person as may be entitled thereto, all amounts otherwise
payable to the Company or such successor, as the case may be, on
exercise of this Warrant pursuant to this Section 1.
2.
Procedure for Exercise .
2.1.
Delivery of Stock Certificates, Etc., on Exercise
.
The Company agrees that the shares of Common Stock purchased upon
exercise of this Warrant shall be deemed to be issued to the Holder
as the record owner of such shares as of the close of business on
the date on which this Warrant shall have been surrendered and
payment made for such shares in accordance herewith. As soon as
practicable after the exercise of this Warrant in full or in part,
and in any event within three (3) business days thereafter, the
Company at its expense (including the payment by it of any
applicable issue taxes) will cause to be issued in the name of and
delivered to the Holder, or as such Holder (upon payment by such
Holder of any applicable transfer taxes) may direct in compliance
with applicable securities laws, a certificate or certificates for
the number of duly and validly issued, fully paid and nonassessable
shares of Common Stock (or Other Securities) to which such Holder
shall be entitled on such exercise, plus, in lieu of any fractional
share to which such holder would otherwise be entitled, cash equal
to such fraction multiplied by the then Fair Market Value of one
full share, together with any other stock or other securities and
property (including cash, where applicable) to which such Holder is
entitled upon such exercise pursuant to Section 1 or
otherwise.
2.2.
Exercise .
(a)
Payment
may be made either (i) in cash by wire transfer of immediately
available funds or by certified or official bank check payable
to the order of the Company equal to the applicable aggregate
Exercise Price, (ii) by delivery of this Warrant, or shares of
Common Stock and/or Common Stock receivable upon exercise of
this Warrant in accordance with the formula set forth in
subsection (b) below, or (iii) by a combination of any of the
foregoing methods, for the number of Common Shares specified
in such Exercise Notice (as such exercise number shall be
adjusted to reflect any adjustment in the total number of
shares of Common Stock issuable to the Holder per the terms of
this Warrant) and the Holder shall thereupon be entitled to
receive the number of duly authorized, validly issued,
fully-paid and non-assessable shares of Common Stock (or Other
Securities) determined as provided herein.
(b)
Notwithstanding
any provisions herein to the contrary, if the Fair Market
Value of one share of Common Stock is greater than the
Exercise Price (at the date of calculation as set forth
below), in lieu of exercising this Warrant for cash, the
Holder may elect to receive shares equal to the value (as
determined below) of this Warrant (or the portion thereof
being exercised) by surrender of this Warrant at the principal
office of the Company together with the properly endorsed
Exercise Notice in which event the Company shall issue to the
Holder a number of shares of Common Stock computed using the
following formula:
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X=
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Y(A-B)
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A
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Where
X =
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the
number of shares of Common Stock to be issued to the
Holder
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Y
=
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the
number of shares of Common Stock purchasable under this
Warrant or, if only a portion of this Warrant is being
exercised, the portion of this Warrant being exercised (at the
date of such calculation)
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A
=
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the
Fair Market Value of one share of the Company’s Common
Stock (at the date of such calculation)
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B
=
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the
Exercise Price per share (as adjusted to the date of such
calculation)
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Notwithstanding
anything to the contrary set forth in Section 2.2(a) above, to
the extent that a registration statement registering all the
shares of Common Stock of the Company issuable upon exercise
of this Warrant has been declared effective by the Securities
and Exchange Commission and remains effective as of the date
of the proposed exercise set forth in an Exercise Notice, the
Holder shall upon such proposed exercise, make payment to the
Company of each respective Exercise Price set forth in such
Exercise Notice in cash by wire transfer of immediately
available funds or by certified or official bank check
only.
3.
Effect of Reorganization, Etc.; Adjustment of Exercise
Price .
3.1.
Reorganization, Consolidation, Merger, Etc .
If there occurs any capital reorganization or any reclassification
of the Common Stock of the Company, the consolidation or merger of
the Company with or into another person (other than a merger or
consolidation of the Company in
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