**Exhibit 10.7**

 

**THIS NOTE AND THE STOCK INTO WHICH IT IS CONVERTIBLE HAVE NOT BEEN            REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OF THE UNITED STATES OF            AMERICA (THE “ACT”) OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED            STATES (“STATE ACT”). THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND NOT            WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OF DISTRIBUTION THEREOF, AND MAY NOT BE            OFFERED, SOLD, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED FOR VALUE, DIRECTLY OR            INDIRECTLY, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND            COMPLIANCE WITH APPLICABLE STATE ACTS, OR PURSUANT TO AN EXAMPTION FROM REGISTRAITON            UNDER THE ACT AND UNDER APPLICABLE STATE ACTS, THE AVAILABILITY OF WHICH ARE            ESTABLISHED BY MEANS OF AN OPINION TO SUCH EFFECT IN FORM AND SUBSTANCE SATISFACTORY TO            THE COMPANY AND RENDERED BY LEGAL COUNSEL SATISFACTORY TO THE COMPANY.**

 

**CARGO CONNECTION LOGISTICS HOLDINGS, INC.**

**(formerly known as ChampionLyte Holdings, Inc.,**

**f/k/a Championlyte Products, Inc.)**

**SERIES A 6.5% CONVERTIBLE PROMISSORY NOTE**

 
| **$100,000.00** | **N. Pompano Beach, Florida**                   |
|-----------------|-------------------------------------------------|
|            | **March****7****,                        2006** |

 

**THIS PROMISSORY NOTE REPRESENTS THE $100,000 OF THE NOTE PRINCIPAL OF            THAT CERTAIN ORIGINAL SERIES A 6.5’% CONVERTIBLE PROMISSORY NOTE TO ADVANTAGE            FUND I, LLC IN THE PRINCIPAL AMOUNT OF $250,000 ORIGINALLY ISSUED ON JANUARY 7, 2003            AND AMENDED JULY 3, 2003 TO INCREASE THE PRINCIPAL AMOUNT TO $350,000, AND FURTHER            AMENDED OCTOBER 16, 2003 TO INCREASE THE PRINCIPAL AMOUNT TO $400,000 AND AMENDED ON            MARCH , 2004 TO INCREASE THE PRINCIPAL AMOUNT TO $1,250,000.**

 
|   | 1. | Promise to Pay. FOR VALUE RECEIVED ON OR ABOUT JANUARY 1,                        2004, FEBRUARY 1, 2004 and MARCH 1, 2004; CARGO CONNECTION LOGISTICS                        HOLDIGNS, INC. (F/K/A CHAMPIONLYTE HOLDINGS, INC., F/K/A CHAMPIONLYTE                        PRODUCTS, INC.), a Florida corporation (the                        “Company”)                        promises to pay, in lawful money of the United States of America, to the                        order of Montgomery Equity Partners, Ltd. or assignee (the                        “Holder”),                        at Jersey City, New Jersey or at such other place as Holder shall from time                        to time direct, on or before December 31, 2004, the principal amount of One                        Hundred Thousand Dollars and no cents ($100,000.00) plus interest on the                        unpaid principal balance thereof at a rate of Six and one-half percent                        (6.5%) per year from the date hereof until paid in full. Interest on this                        note shall be computed on a 365/365 simple interest basis, that is, by                        applying the ratio of the annual interest rate by the number of days in the                        year times, outstanding principal balance times the actual number of days                        that the principal balance is outstanding. This Note shall be payable                        interest-only, in arrears, on the last day of each calendar months,                        commencing upon the first such date subsequent to the date of execution                        hereof, and due and payable in full, principal and interest, twenty-four.                        months from the date hereof. At the option of the Holder, the interest                        payable may be paid in cash or convertible into common stock in accordance                        with Section 3. Conversion. All payments shall be applied first to accrued,                        unpaid interest, next to any collection costs, and the remainder against                        principal. This note may be not be redeemed by the Company prior to its due                        date without the express permission of the Holder. This Note is one of a                        series of identical notes, except to principal amount and due date                        (collectively, the “Notes”) |
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|   | 2. | Default. The Company shall be in default under this Note                        upon the occurrence of any of the following events: |
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|   | 2.1 | The Company fails to timely perform any of its obligations                        under, or otherwise breaches any covenants or warranties of this                        Note; |
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|   | 2.2 | Any statement, representation, or warranty made by the                        Company or its agents to Holder shall prove to have been false or                        materially misleading when made; and/or, |
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|   | 2.3 | The Company shall become insolvent, or unable to meet its                        obligations as they become due, or shall file or have filed against it,                        voluntarily or involuntarily, a petition under the United States Bankruptcy                        Code or shall procure or suffer the appointment of a receiver for any                        substantial portion of its properties, or shall make an assignment for                        benefit of creditors, or shall initiate or have initiated against it,                        voluntarily or involuntarily, any act, process, or proceedings under any                        insolvency law or other statute or law providing for the modifications or                        adjustment of the rights of creditors. |
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**Upon any event of default, Holder may declare the entire unpaid            principal balance of this Note and all accrued unpaid interest immediately due, without            notice, and the Company agrees to pay such amount immediately in such event. In the            event of default, the Company agrees to pay all of Holder’s costs of collection,            including attorney’s fees; this shall include legal expenses for the bankruptcy            proceedings or insolvency proceedings (including efforts to modify or vacate any            automatic stay or injunction), court costs, appeals, post-judgement collection expenses            and any other amount provided by law. The parties intend this provision to be given the            most liberal construction possible and to apply to any circumstances in which such            party reasonably incurs expenses. No delay or omission on the part of any Holder.            hereof in exercising any right or option herein given to such Holder shall impair such            right or option or be considered as a waiver thereof or acquiescence in any default            hereunder. The Company hereby waives any applicable statue of limitations, presentment,            demand for payment, protest and notice of dishonor.**

             
|   | 3. | Conversion. The Holder shall have the conversion rights as                        follows (the “Conversion Rights): |
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|   | 3.1 | Right to Convert. To Convert. Subject to subsection 3.3,                        this Note shall be convertible, in whole or in part, at the option of the                        Holder, at any time after the date of issuance of this Note, and from time                        to time thereafter, at the office of the Company, into such number of fully                        paid and non-assessable shares of Common Stock of the Company as is                        determined as follows: |
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The Conversion Price per share shall be equal to the lesser of (1) the            average of the lowest of three day trading prices during the five trading days            immediately prior to the Conversion Date multiplied by .80, or (2) the average of the            lowest of three day trading prices during the five trading days immediately prior to            the funding date(s).

             
|   | 3.2 | Mechanics of Conversion. Before Holder shall be entitled to                        convert this Note, in whole or in part, into shares of Common Stock, he                        shall surrender this Note at the office of the Company, and shall give                        written notice in person, or by facsimile, mail, postage prepaid, to the                        Company at its principal corporate office, of Holder’s election to                        convert the Note and shall state therein the portion of the principal                        amount of the Note to be converted and the name or names in which the                        certificate or certificates for shares of Common Stock are to be issued,                        the address of such persons to be used for record purposes, and the                        address(s) to which the certificate(s) should be delivered if different                        from the record address. Such notice shall be on the form attached to this                        Note as Exhibit ‘A’. The Company shall as soon as practicable                        thereafter, issue and deliver to Holder, or to the nominee or nominees of                        Holder, a certificate or certificates for the number of shares of Common                        Stock to which Holder shall be entitled as aforesaid and, if less than the                        full principal amount of the note is converted, a new Note representing the                        uncoverted balance which remains outstanding. Any interest accrued but                        unpaid on the converted portion of the Note shall be paid upon conversion;                        any interest accrued but unpaid on the non-converted portion of the Note                        shall be paid in due course under the replacement Note. Such conversion                        shall be deemed to have been made immediately prior to the close of                        business on the date of such surrender of the Note to be converted, and the                        person or persons entitled to receive the shares of Common Stock issuable                        upon such conversion shall be treated for all purposes as the record holder                        or holders of such shares of Common Stock as of such date. |
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|   | 3.3 | No Impairment. The Company will not, by amendment of its                        Articles of Incorporation or through any reorganization, recapitalization,                        transfer of assets, consolidation, merger, dissolution, issue or sale of                        securities or any other voluntary action, avoid or seek to avoid the                        observance or performance of any of the terms to be observed or performed                        hereunder by the Company, but will at all times in good faith assist in the                        carrying out of all the provisions of this Section 3 and in the taking of                        all such action as may be necessary or appropriate in order to protect the                        Conversion Rights of the Holder against impairment |
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|   | 3.4 | No Fractional Shares and Certificates as to Conversion. No                        fractional shares shall be issued upon conversion of the Note, and the                        number of shares of Common Stock to be issued shall be rounded to the                        nearest whole share. |
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|   | 3.5 | Notices of Record Date. In the event of any taking by the                        Company of a record of the holders of any class of securities for the                        purpose of determining the holders thereof who are entitled to receive any                        dividend or other distribution, any right to subscribe for, purchase or                        otherwise acquire any shares of stock of any class or any other securities                        or property,. or to receive any other right, the Company shall mail to                        Holder, at least 20 days prior to the date specified therein, a notice                        specifying the date on which any such record is to be taken for the purpose                        of such dividend, distribution, or right, and the amount and character of                        such dividend, distribution, or right. In the case of rights to acquire any                        shares of stock or any other class of securities or property, Company shall                        grant to Holder the same rights as lithe Holder had converted his Note upon                        the Record Date. |
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|   | 3.6 | Reservation of Stock Issuable Upon Conversion. The Company                        shall at all times reserve and keep available out of its authorized but                        unissued shares of Common Stock solely for the purpose of effecting the                        conversion of the Notes such number of shares of Common Stock as shall from                        time to time be sufficient to effect the conversion of all outstanding                        Notes; and if at any time the number of authorized but unissued shares of                        Common Stock shall not be sufficient to effect the conversion of all                        then-outstanding Notes, in addition to such other remedies as shall be                        available to the Holder, the Company will take such corporate action as                        may, in the opinion of its counsel, be necessary to increase its authorized                        but unissued shares of Common Stock to such number of shares as shall be                        sufficient for such purposes. |
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|   | 3.7 | Notices. Any notice required by the provisions of this                        Section 3 to be given to the Holder shall be deemed given if deposited in                        the United States mail, postage prepaid and certified, return receipt                        requested and addressed to Holder of record at his address appearing on the                        books of the Company. |
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|   | 4. | Redemption. The Company may not redeem this Note at any time                        prior to the maturity date. |
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|   | *5* | Assignment. Subject to the restrictions on transfer herein,                        tile Holder may transfer this Note in whole or in part, in the event of                        partial transfer(s), the Company will exchange this Note for new Notes as                        instructed by the Holder equal to the total of this Note, by endorsement                        (by the Holder of this Note executing the form of assignment attached to                        this Note as Exhibit ‘B’) and delivery in the same manner as                        any negotiable instrument transferable by endorsement and delivery. Until                        this Note is transferred on the Company books, the Company may treat the                        registered Holder of this Note as the absolute owner of this Note for all                        purposes, despite any notice to the contrary. The Company’s                        obligations hereunder may not be transferred without prior written consent                        of the Holder; any attempt to transfer without consent shall be void*ab initio*. |
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|   | *6* | Restriction on Transfer. This Note and the stock into which                        it is convertible have not been registered under the Securities act of                        1933, as amended, of the United States of America (the “Act”)                        or the securities laws of any sate of the United States (“State                        Act”). This Note and the stock into which it is convertible have been                        acquired for investment and not with a view to, or in connection with, the                        sale or distribution thereof, and may not be offered, sold, pledged,                        hypothecated. Or otherwise transferred for value directly or indirectly, in                        the absence of an effective registration statement under the Act and                        compliance with applicable State Acts, or pursuant to an exemption from                        registration under the Act and under applicable State Acts, the                        availability of which are established by means of an opinion to |
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such effect. In form and substance satisfactory to the Company and            rendered by legal counsel satisfactory to the Company. The certificates representing            the shares into which this Note is convertible shall bear the foregoing            legend.

             
|   | *7* | Registration of Underlying Stock & Penalties. The                        Company agrees that within ninety days of the date of this Note, the                        Company shall file a registration statement with the Securities and                        Exchange Commission on form SB-2 or other applicable form to register 250%                        of the then shares to be issued upon conversion of the Notes. A copy of                        this Registration Statement is attached hereto as Exhibit ‘C’.                        The registrations statement shall call for, amongst other items more fully                        described therein, the Company to use its best efforts to have such                        registration statement declared effective at the earliest possible time.                        Should such registration statement not be deemed effective within one                        hundred and twenty days from the date of the date of the funding of the                        Note, the Company shall pay a penalty to the Holder in an amount equal to                        2% of the principal balance and any and all accrued interest then                        outstanding per month or any part thereof, until such time as the                        registration statement is declared effective. Company agrees to keep such                        registration statement effective until the maturity of the Note. Should                        there come a time when the number of shares that have been registered is                        less than 200% of the total number of shares to be*issued*upon conversion, the                        Company agrees that it will amend such registration statement such that a                        minimum of 200% of the shares to be issued upon conversion are on such                        registration statement. |
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|   | 8 | Replacement. On receipt of evidence reasonably satisfactory                        to the Company of the loss, theft, destruction or mutilation of this Note                        and, in the event of such occurrence, on delivery of an indemnity agreement                        or bond reasonably satisfactory in form and amount to the Company or, in                        the case of mutilation, on surrender and cancellation of this Note, the                        Company at its expense will execute and deliver, in lieu of this Note, a                        new Note of like tenor. On surrender of this Note for exchange and subject                        to the provisions of this Note on compliance with the Securities Act, the                        Company, at its expense will issue to or on the order of the Holder of this                        Note a new Note or Notes of like tenor, in the name of that Holder or as                        that Holder (on payment by the Holder of any applicable transfer taxes) may                        direct, in the same total principal amount as this Note. |
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|   | 9 | Appointment of Agent. The Company may, on written notice to                        the Holder of this Note, appoint an agent for the purposes of issuing                        Common Stock or other securities on the conversion of this Note and of                        replacing or exchanging this Note; and after that appointment occurs any                        such issuance, replacement, or exchange shall be made at the office by that                        agent. |
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|   | 10 | Miscellaneous. |
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|   | 10.1 | Amendment. No supplement, modification, or amendment of this                        Note shall be binding unless executed in writing by all the parties                        hereto. |
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|   | 10.2 | Waiver. No waiver of any of the provisions of this Note                        shall be deemed, or shall constitute, a waiver of any other provision,                        whether or not similar, nor shall any waiver constitute a continuing                        waiver. No waiver shall be binding unless executed in writing by the party                        making the waiver. Neither the acceptance of any partial or delinquent                        payment by the Holder nor the Holder’s failure to exercise any of its                        rights or remedies on default by the Company shall be a waiver by the                        Holder of any default or the Company obligations under this Note, or a                        waiver of any subsequent default by the Company. |
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|   | 10.3 | Timeliness. Time is of the essence of this Note and each and                        all of its provisions. |
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|   | 10.4 | Notices. Notices given under this Note shall be in writing                        and shall be delivered personally, by messenger, by certified U.S. mail,                        return receipt requested, or by a common overnight carrier delivery                        service. Notices shall be deemed received upon receipt of same. Notices to                        the Company shall be addressed to 1356 N.W. Boca Raton Blvd., Boca Raton,                        FL 33432. Notices to the Holder shall be directed to Holder at the                        Holder’s address of record on the Company’s books. A party may                        change its address for notice by giving written notice to the other party                        in accordance with this Section. |
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|   | 10.5 | Governing Law and Venue. This Note shall be construed in                        accordance with, and governed by, the laws of the State of Florida, and any                        action or proceeding, including |
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arbitration, brought by any party in which this Note is a subject shall            be brought in Florida.

             
|   | 10.6 | Effect of Headings. The headings of the sections of this                        Note are included for purposes of convenience only, and shall not affect                        the construction or interpretation of any of its provisions. |
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|   | 10.7 | Invalidity. Any provision of this Note which is invalid,                        void, or illegal, shal1not affect, impair, or invalidate any other                        provision of this Note, and such other provisions of this Note shall remain                        in full force and effect. |
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|   | 10.8 | Professional Fees and Costs. If any legal or equitable                        action, arbitration, or other proceeding, whether on the merits or on                        motion, are brought or undertaken, or an attorney is retained to enforce                        this Note, or because of an alleged dispute, breach, default, or                        misrepresentation in connection with any of the provisions of this Note,                        then the successful or prevailing party or parties in such undertaking (or                        the party that would prevail if an action were brought) shall be entitled                        to recover reasonable attorney’s fees and other professional fees and                        oilier costs incurred in such action, proceeding or discussions, in                        addition to any other relief to which such party would be entitled. The                        parties intend this provision be given the most liberal construction                        possible and to apply to any circumstances in which such party reasonably                        incurs expenses. |
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|   |   | Cargo                               Connection       Logistics |
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|   |   | Holdings, Inc. (f/k/a ChampionLyte                                                                                    |
|   |   | Holdings, Inc.,  f/ka  ChampionLyte                                                                         |
|   |   | Products, Inc.)                                                                                                       |
|   |   |                                                                                                                  |
|   |   |                                                                                                                  |
|        |   | By:                                                                                                                   | /s/ Scott Goodman as CFO |
|   |   | Name: Scott Goodman                                                                                                   |
|   |   | Title: Chief Financial Officer                                                                                        |

 

 

 

 

 

 

 

 

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**EXHIBIT ‘A’**

 

**CONVERSION NOTICE**

 
| TO: | Cargo Connection Logistics Holdings, Inc. (f/k/a                        ChampionLyte Holdings, Inc., f/k/a |
|-----|------------------------------------------------------------------------------------------------------------|

ChampionLyte Products, Inc.)

3450 Park Central Blvd.,

N. Pompano Beach, Florida 33064

Attn: Corporate Secretary

             

The undersigned owner of this 6.5% Convertible Note due December 31,            2004 (the "Note") issued by Cargo Connection Logistics Holdings, Inc. (f/Ida            ChampionLyte Holdings, Inc., f/k/a ChampionLyte Products, Inc.) (the            "Company") hereby irrevocably            exercises its option to convert $_______ Principal Amount of the Note into shares of            Common Stock in accordance with the terms of the Note. The undersigned hereby instructs            the Company to convert the portion of the Note specified above into ________ shares of            Common Stock Issued at Conversion in accordance with the provisions of Article 3 of the            Note. Attached hereto is the undersigned's calculation for the Conversion Price. The            undersigned directs that the Common Stock and certificates therefore deliverable upon            conversion, the Note reissued in the Principal Amount not being surrendered for            conversion hereby, together with any check in payment for fractional Common Stock, be            registered in the name of and/or delivered to the undersigned unless a different name            has been indicated below. All capitalized terms used and not defined herein have the            respective meanings assigned to them in the Note. The conversion pursuant hereto shall            be deemed to have been effected at the date and time specified below, and at such time            the rights of the undersigned as a Holder of the Principal Amount of the Note set forth            above shall cease and the Person or Persons in whose name or names the Common Stock            Issued at Conversion shall be registered shall be deemed to have become the holder or            holders of record of the Common Shares represented thereby and all voting and other            rights associated with the beneficial ownership of such Common Shares shall at such            time vest with such Person or Persons.

             

Date and time:

             

 
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|   |   |   | Signature |

 

             

Fill in for registration of Note:

             

Please print name and address

(including ZIP code number):

             
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