Contract
EXHIBIT
4.1
NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE
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 ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
$300,000
CONVERTIBLE NOTE
FOR
VALUE
RECEIVED, ICC WORLDWIDE, INC. (the “Maker” or the “Company”), a Delaware
corporation, having a mailing address at 0000
X.
Xxxxx Xxx #000 Xxxxxx xxx Xxx, XX 00000,
hereby
promises to pay to the order of The Stealth Fund, LLLP (“Payee”), having its
principal address at 000 Xxxxxx Xx., Xxxxx 00, Xxxxxxxxxx, XX 00000, the sum
of
$300,000. This Convertible Note (this “Note”) is issued due to loans for the
Company’s operations, for advances to be made, from time to time, as reasonably
needed for the Company’s operations.
1.
Maturity. The amount outstanding under this Note will be due and payable at
the
address of Payee or such other place as Payee may designate on June 30, 2010
(the “Maturity Date”). No advances shall be made by Payee after the Maturity
Date.
2.
Payments of Interest and Principal. The first 3 months of Interest shall be
added to Principal. Thereafter, Interest under this Note shall be payable
monthly, starting November 1, 2008.
3.
Interest Rate. The outstanding principal balance of this Note shall bear
interest at a rate per annum equal to 10% per annum.
4.
Alternative Method of Payment / Optional Prepayment
A.
Alternate Methods of Payment: Subject to the conditions set forth below and
customary equity conditions (including an effective registration statement
with
respect to such shares), the Company may elect to make such payments of
principal and interest under the Note, in shares of the Company’s common stock.
Each share of the of the Company’s Common stock will be valued at the Conversion
Price (as defined in Section 5 below), as determined at the lesser of (1) on
the
day the Company gives notice, or (2) on the day the Company delivers the shares.
The Company is required to notify Payee of its election to make such payment
in
shares at least ten days prior to the payment date. Notwithstanding anything
herein to the contrary, the Company’s right to make such payment in shares in
lieu of cash can only be made if the volume weighted average price of the
Company’s common stock has been trading at a price of $0.025 or above per share
for 10 consecutive days prior to the date of the payment date and the average
daily trading volume is at least 15 times the number of shares to be so issued
hereby as payment.
B.
Pre-Payment Option: The Company may at any time and from time to time, upon
written notice (“Prepayment Notice”) under Section 10 below, prepay part or all
of the outstanding Notes without penalty. In the event that Maker sends a
Prepayment Notice to Payee, Payee may elect within 10 days following the receipt
of such notice to convert into common stock of ICC WORLDWIDE, INC. (“ICC
WORLDWIDE, INC. Common Stock”), pursuant to Section 5 hereof, all or part of the
amount of principal to be repaid by the proposed Prepayment instead of receiving
such prepayment.
5.
Optional/Mandatory Conversion. At any time prior to repayment of all amounts
as
under the Note, but not sooner than six months from the date of this Note,
all
or any portion of the principal amount of the Note shall be convertible at
the
option of the Payee into fully paid and non-assessable shares of ICC WORLDWIDE,
INC. Common Stock. The number of shares of ICC WORLDWIDE, INC. Common Stock
that
Payee shall be entitled to receive upon conversion shall be equal to the number
attained by dividing the principal, including accrued interest pursuant to
the
Note being converted by the Conversion Price. The “Conversion Price” shall be
equal to $0.007 per share as may be adjusted from time to time as set forth
below.
A.
In
order to exercise the conversion privilege, Payee shall give written notice
of
conversion to Maker stating Xxxxx’s election to convert this Note or the portion
thereof (the “Conversion Notice Date”) in whole or in part, as specified in said
notice. As promptly as practicable after receipt of the notice, Maker shall
issue and shall deliver to Payee a certificate or certificates for the number
of
full shares of ICC WORLDWIDE, INC. Common Stock issuable upon the conversion
of
this Note or portion thereof registered in the name of Payee in accordance
with
the provisions of this Section 5.
B.
Each
conversion shall be deemed to have been effected on the date the conversion
notice shall have been received by Maker, as aforesaid, and Payee shall be
deemed to have become on said date the Payee of record of the shares of Common
Stock issuable upon such conversion. No fractional shares of Common Stock shall
be issued upon conversion of this Note. Any amounts so converted shall not
be
reborrowed.
C.
The
Payee shall not be entitled to shares upon conversion, if such conversion would
result in beneficial ownership by the Payee and its affiliates of more than
4.99% of the outstanding shares of common stock of the Company on such exercise
or Conversion Notice Date, including:
(i)
the
number of shares of common stock beneficially owned by the Payee and its
affiliates.
(ii)
the
number of shares of common stock issuable upon the exercise of the warrant
and/or options and/or conversion.
For
the
purposes of this provision, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulation 13d-3 thereunder. The Payee may void the exercise
limitation described in this Section upon 61 days prior written notice to the
Company. The Payee may allocate which of the equity of the Company deemed
beneficially owned by the Payee shall be included in the 4.99% amount described
above and which shall be allocated to the excess above 4.99%.
D.
In the
event that a conversion notice is sent to the Maker, and the shares are not
issuable to the Payee because it would cause the Payee’s shareholdings in the
Company to exceed 4.99%, the Maker shall instead issue a two year non-interest
bearing, fixed price, convertible note, with the same terms as herein, except
that the conversion price shall be fixed and equal to the conversion price
on
the notice of conversion as may be adjusted from time to time under Section
5(F)
below. At the two year maturity of the non-interest bearing fixed price
convertible note, if Xxxxx’s shareholdings in the Company still exceed 4.99%
under this Section 5, then the conversion option shall lapse and any principal
and accrued interested shall be immediately due and payable by Maker.
E.
In the
event that a conversion notice is sent to the Maker, and there are insufficient
authorized shares of Common Stock available to meet the conversion commitment
requested by Payee under the Note after giving recognition to all other direct
or contingent commitments of the Company to issue shares as of the date of
this
Note, the Maker shall instead issue a 180 day note bearing interest at 10%
per
year with the same terms as herein except that the conversion price shall be
fixed and equal to the lesser of a) $.007 or b) the closing price of the
Company’s common stock on the date of notice of conversion as may be adjusted
from time to time by Section 5(F) below. At maturity of the 180 day note, Maker
shall pay the note and any accrued interest thereon by paying cash equal to
the
higher of either a) the principal plus accrued interest then due or b) the
amount equal to the daily weighted average closing price during the 180 day
period multiplied by the number of shares in the conversion commitment
unfulfilled due to insufficient authorized common shares.
F.
In
case the Company shall at any time subdivide or combine the outstanding shares
of Common Stock, the Conversion Price shall forthwith be proportionately
decreased in the case of the subdivision or proportionately increased in the
case of combination to the nearest one tenth of one cent. Any such adjustment
shall become effective at the close of business on the date that such
subdivision or combination shall become effective.
6.
Covenants. Maker covenants and agrees that, so long as any indebtedness is
outstanding hereunder, it will comply with each of the following covenants
(except in any case where Xxxxx has specifically consented otherwise in
writing):
A.
Financial Reporting. Maker shall timely file all forms required of a “Reporting
Company”, under Section 13 of the Securities Exchange Act of 1934.
B.
Notice
of Event of Default. Maker shall furnish to Payee notice of the occurrence
of
any Event of Default (as defined herein) within five (5) days after it becomes
known to an executive officer of Maker.
7.
Event
of Default. For purposes of this Note, the Maker shall be in default hereunder
(and an “Event of Default” shall have occurred hereunder) if:
A.
Maker
shall fail to pay when due any payment of principal, interest, fees, costs,
expenses or any other sum payable to Payee hereunder or
otherwise;
B.
Maker
shall default in the performance of any other agreement or covenant contained
herein (other than as provided in subparagraph A above), and such default shall
continue uncured for twenty (20) days after notice thereof to Maker given by
Xxxxx, or if an Event of Default shall occur under any other Loan
Document;
C.
Maker:
becomes insolvent, bankrupt or generally fails to pay its debts as such debts
become due; is adjudicated insolvent or bankrupt; admits in writing its
inability to pay its debts; or shall suffer a custodian, receiver or trustee
for
it or substantially all of its property to be appointed and if appointed without
its consent, not be discharged within thirty (30) days; makes an assignment
for
the benefit of creditors; or suffers proceedings under any law related to
bankruptcy, insolvency, liquidation or the reorganization, readjustment or
the
release of debtors to be instituted against it and if contested by it not
dismissed or stayed within ten (10) days; if proceedings under any law related
to bankruptcy, insolvency, liquidation, or the reorganization, readjustment
or
the release of debtors is instituted or commenced by Maker; if any order for
relief is entered relating to any of the foregoing proceedings; if Maker shall
call a meeting of its creditors with a view to arranging a composition or
adjustment of its debts; or if Maker shall by any act or failure to act indicate
its consent to, approval of or acquiescence in any of the
foregoing.
8.
Consequences of Default. Upon the occurrence of an Event of Default and at
any
time thereafter, the entire unpaid principal balance of this Note, together
with
interest accrued thereon and with all other sums due or owed by Maker hereunder,
shall become immediately due and payable. In addition, the principal balance
and
all past-due interest shall thereafter bear interest at the rate of 18% per
annum until paid.
9.
Liquidated Damages/Remedies not Exclusive.
A. The
remedies of Payee provided herein or otherwise available to Payee at law or
in
equity shall be cumulative and concurrent, and may be pursued singly,
successively and together at the sole discretion of Payee, and may be exercised
as often as occasion therefore shall occur; and the failure to exercise any
such
right or remedy shall in no event be construed as a waiver or release of the
same.
B. Liquidated
Damages In the event that the Company fails to deliver the shares when due,
whether by Section 4 or 5, or otherwise, the number of shares otherwise due
shall increase by 5% for each month or partial month, until the Company does
deliver such shares. The parties agree that this is a reasonable amount for
liquidated damages, given the difficulty to determine, in advance, what actual
damages may lie.
10.
Notice. All notices required to be given to any of the parties hereunder shall
be in writing and shall he deemed to have been sufficiently given for all
purposes when presented personally to such party or sent by certified or
registered mail, return receipt requested, to such party at its address set
forth below:
|
If
to the Maker:
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0000
X.
Xxxxx Xxx #000
Corona
del Mar, CA 92625
|
If
to the Payee:
|
The
Stealth Fund, LLLP
|
000
Xxxxxx Xx., Xxxxx 00
|
Northbrook
IL 60062
|
|
Phone:(000)
000-0000; Fax: (000) 000-0000
|
Such
notice shall be deemed to be given when received if delivered personally or
five
(5) business days after the date mailed. Any notice mailed shall be sent by
certified or registered mail. Any notice of any change in such address shall
also be given in the manner set forth above. Whenever the giving of notice
is
required, the giving of such notice may be waived in writing by the party
entitled to receive such notice.
11.
Piggyback
Registration Rights.
If, at
any time prior to the maturity of this note, or while shares converted hereunder
are still held by Xxxxxx, the Company proposes
to conduct an offering of its securities so as to register any of its securities
under the Securities Act of 1933 (the “Act”), including under an S-1
Registration Statement or otherwise, it will at such time give written notice
to
the Holder, or their assigns, of its intention to do so. Upon the written
request of the Holder, or assigns, given within ten (10) days after receipt
of
any such notice, the Company will use its best efforts to cause the conversion
shares to be registered under the Act (with the securities which it at the
time
propose to register). All expenses incurred by the Company in complying with
this Section, including without limitation all registration and filing fees,
listing fees, printing expenses, fees and disbursements of all independent
accountants, or counsel for the Company and the expense of any special audits
incident to or required by any such registration and the expenses of complying
with the securities or blue sky laws of any jurisdiction shall be paid by the
Company.
12.
Severability. In the event that any provision of this Note is held to be
invalid, illegal or unenforceable in any respect or to any extent, such
provision shall nevertheless remain valid, legal and enforceable in all such
other respects and to such extent as may be permissible. Any such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Note, but this Note shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
13.
Successors and Assigns. This Note inures to the benefit of the Payee and binds
the Maker, and its respective successors and assigns, and the words “Payee” and
“Maker” whenever occurring herein shall be deemed and construed to include such
respective successors and assigns.
14.
Entire Agreement. This Note embodies the entire understanding and agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings, whether express or implied,
oral and written.
15.
Modification of Agreement. This Note may not be modified, altered or amended,
except by an agreement in writing signed by both the Maker and the
Payee.
16.
Governing Law. This instrument shall be construed according to and governed
by
the laws of the State of Illinois.
17.
Consent to Jurisdiction and Service of Process. Maker irrevocably appoints
each
and every officer of Maker as its attorney upon whom may be served any notice,
process or pleading in any action or proceeding against it arising out of or
in
connection with this Note; and Maker hereby consents that any action or
proceeding against it be commenced and maintained in any court within the State
of Illinois by service of process on any such, officer; and Maker agrees that
the courts of the State of Illinois shall have jurisdiction with respect to
the
subject matter hereof and the person of Maker. Notwithstanding the foregoing,
Payee, in its absolute discretion may also initiate proceedings in the courts
of
any other jurisdiction in which Maker may be found or in which any of its
properties may be located.
18.
This
Note is made contemporaneously with a note payable to the Xxxxx X. Xxxxxx
Irrevocable Trust which is designed to be identical in all respects to this
Note. Both this Note and the note to Xxxxx X. Xxxxxx Xxxxxxxxxxx Trust will
be
treated equally for purposes of the Maker’s obligations and Maker will use its
best efforts not favor one note over the other note in the execution of Makers
obligations under the respective notes.
IN
WITNESS WHEREOF, Xxxxx has duly executed this Note on July 9, 2008.
|
/s/
Xxxxxxx X Xxxxx
|
|
|
Xxxxxxx
X. Xxxxx, President
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