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, a
Minnesota limited liability, limited partnership (“Payee”), having its principal
address at 0000 0xx Xxxxxx,
Xxxxx 000, Xxxxxxxx, XX 00000, the sum of three hundred thousand dollars
($300,000). This Convertible Note (“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 January 1, 2012 (the
“Maturity Date”). No advances shall be made by Payee after the
Maturity Date.
2. Payments of Interest and
Principal. The first 6 months of Interest shall be added to
Principal. Thereafter, Interest under this Note shall be payable monthly,
starting July 1, 2009.
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 $0.0015 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) $.0015 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: ICC
WORLDWIDE, INC.
0000 X.
Xxxxx Xxx #000
Corona del
Mar, CA 92625
If to the
Payee: The
Stealth Fund, LLLP
0000
0xx
Xxxxxx, Xxxxx 000
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Sarasota,
FL 34236
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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 Florida.
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 Florida by
service of process on any such, officer; and Maker agrees that the courts of the
State of Florida 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. Tranches. Maker has
requested that Payee advance funds to Maker as follows:
$115,000
on December 12, 2008
$ 135,000
on December 15, 2008
$ 50,000
on January 1, 2009
IN
WITNESS WHEREOF, Xxxxx has duly executed this Note on December 15,
2008.
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx
X. Xxxxx,
President
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