ex4_3.htm



Exhibit 4.3


 


THIS CONVERTIBLE PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  NO SALE OR DISPOSITION MAY BE EFFECTED EXCEPT IN COMPLIANCE WITH RULE 144 UNDER SAID ACT OR AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE INVESTOR SATISFACTORY TO THE COMPANY  THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR RECEIPT OF A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION.


 


CONVERTIBLE PROMISSORY NOTE


 



	
$[               ]

	
February 8, 2016












 


For value received TripBorn, Inc., a Delaware corporation (the “Company”), promises to pay to [                                                                     ], or its registered assigns (“Investor”) the principal sum of [                                                ] together with accrued and unpaid interest thereon, each due and payable on the date and in the manner set forth below. This Note (defined below) is one of the “Notes” issued pursuant to the Note Purchase Agreement (as defined below).


 


1.            Repayment.  All payments of interest and principal shall be in lawful money of the United States of America and shall be applied first to accrued interest, and thereafter to principal.  The outstanding principal amount of this Note shall be due and payable on February 8, 2019 (the “Maturity Date”).


 


2.            Interest Rate.  The Company promises to pay simple interest on the outstanding principal amount hereof from the date hereof until payment in full.  Interest shall accrue at a rate of 6% per annum (or, if less, the maximum rate permissible by law), compounded annually and shall accrue daily beginning on the date of issuance of this note (this “Note”).  Interest shall be due and payable on the Maturity Date and shall be calculated on the basis of a 365-day year for the actual number of days elapsed.


 


3.            Automatic Conversion; Conversion on Sale of the Company.


 


(a)          In the event that the Company issues and sells shares of its Common Stock to investors (the “Equity Investors”) on or before the date of the repayment in full of this Note in connection with an underwritten public offering under the Securities Act in conjunction with a listing on a national securities exchange (including the conversion of the Notes and other debt) (an “Uplist Transaction”), then the outstanding principal balance of this Note shall automatically convert in whole, without any further action by the Investor, into [               ] shares of Common Stock (the “Note Shares”).  Any unpaid accrued interest on this Note shall be payable in cash upon the consummation of the Uplist Transaction.


 


(b)          In the event that an Uplist Transaction is not consummated prior to the Maturity Date, then, the Investor shall elect (by written notice within five (5) days prior to the Maturity Date), that the outstanding principal balance on this Note (i) shall become fully due and payable effective on the Maturity Date or (ii) shall convert into the Note Shares.  Any unpaid accrued interest on this Note at the Maturity Date shall be payable in cash on the Maturity Date.


 




  





 











  






 


(c)          In the event that the Company anticipates a Sale of the Company prior to the Maturity Date, the Company will give the Investor at least twenty (20) days prior written notice of the closing date of such Sale of the Company.  In such event, the Investor shall elect (by written notice at least five (5) days prior to the closing date of the Sale of the Company) that, effective immediately prior to the closing of such Sale of the Company, the entire outstanding principal balance on this Note (i) shall become fully due and payable effective immediately prior to the Sale of the Company or (ii) shall convert into the Note Shares.  Any unpaid accrued interest on this Note shall be payable in cash effective immediately prior to the Sale of the Company.


 


4. Definitions.  As used in this Note, the following capitalized terms have the following meanings:


 


(i)          “Common Stock” shall mean the Company’s common stock, par value $0.0001 per share.


 


(ii)          “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.


 


(iii)         “Investor” shall mean the Person specified in the introductory paragraph of this Note or any Person who shall at the time be the registered holder of this Note.


 


(iv)         “Investors” shall mean the investors that have purchased Notes.


 


(v)          “Majority in Interest of Investors” shall mean persons holding more than 50% of the aggregate outstanding principal amount of convertible promissory notes substantially identical to this Note in all material respects, provided that convertible promissory notes held by a Majority in Interest of Investors may differ in the following respects: (i) the Date of Note, (ii) the Note Principal Amount, (iii) the Maturity Date and (iv) the Investor.


 


(vi)        “Note Purchase Agreement” shall mean the Note Purchase Agreement (as amended, modified or supplemented), by and among the Company and the Investors (as defined in the Note Purchase Agreement) party thereto.


 


(vii)        “Notes” shall mean the convertible promissory notes issued by the Company pursuant to the Note Purchase Agreement.


 




  





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(viii)       “Sale of the Company” shall mean (i) any consolidation or merger of the Company with or into any other corporation or other entity or person, or any other corporate reorganization, other than any such consolidation, merger or reorganization in which the stockholders of the Company immediately prior to such consolidation, merger or reorganization, continue to hold at least a majority of the voting power of the surviving entity in substantially the same proportions (or, if the surviving entity is a wholly owned subsidiary, its parent) immediately after such consolidation, merger or reorganization; (ii) any transaction or series of related transactions to which the Company is a party in which in excess of 50% of the Company’s voting power is transferred; provided, however, that a Sale of the Company shall not include any transaction or series of transactions principally for bona fide equity financing purposes in which cash is received by the Company or any successor or indebtedness of the Company is cancelled or converted or a combination thereof; or (iii) a sale, lease, exclusive license or other disposition of all or substantially all of the assets of the Company.


 


(ix)        “Securities Act” shall mean the Securities Act of 1933, as amended.


 


(x)          “Transaction Documents” shall mean this Note, each of the other Notes and the Note Purchase Agreement.


 


5.            Expenses. In the event of any default hereunder, the Company shall pay all reasonable attorneys’ fees and court costs incurred by Investor in enforcing and collecting this Note.


 


6.            Prepayment.  The Company may not prepay this Note prior to the Maturity Date without the consent of the Majority of Interest of the Investors.


 


7.            Default.  The occurrence of any one or more of the following shall constitute an “Event of Default”:


 


(a)          The Company fails to pay timely any of the principal amount due under this Note on the date the same becomes due and payable or any accrued interest or other amounts due under this Note on the date the same becomes due and payable;


 


(b)          The Company fails to deliver the Note Shares within fifteen (15) days after the applicable date that the outstanding principal balance on this Note converts into the Note Shares;


 


(c)          The Company shall default in its performance of any covenant under this Note;


 


(d)          The Company files any petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium law or any other law for the relief of, or relating to, debtors, now or hereafter in effect, or makes any assignment for the benefit of creditors or takes any corporate action in furtherance of any of the foregoing; or


 


(e)          An involuntary petition is filed against the Company (unless such petition is dismissed or discharged within 60 days under any bankruptcy statute now or hereafter in effect, or a custodian, receiver, trustee, assignee for the benefit of creditors (or other similar official) is appointed to take possession, custody or control of any property of the Company).


 




  





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If there shall be any Event of Default pursuant to Section 7(a) (b) or (c), at the option and upon the declaration of the Investor and upon written notice to the Company, this Note shall accelerate and all principal and unpaid accrued interest on this Note shall become immediately due and payable.   If there shall be any Event of Default pursuant to Section 7(a) (b) or (c), this Note shall automatically accelerate and all principal and unpaid accrued interest on this Note shall become immediately due and payable without any further action by the Investor.


 


8.            Registration Rights. If, on the first day following the one (1) year anniversary of the Closing Date (as defined in the Note Purchase Agreement) (such date, the “Registration Date”), any Note Shares are not then tradeable under Rule 144 under the Securities Act or otherwise, the Majority in Interest of Investors, may, on behalf of each Investor, within the thirty (30) day period following the Registration Date, deliver to the Company a written request for registration under the Securities Act of all or any portion of the Note Shares, which request shall specify the aggregate number of Note Shares proposed to be sold (the “Demand Request”), and the Company shall use its commercially reasonable efforts to file a registration statement under the Securities Act within 45 days of receipt of such Demand Request covering the registration of the Note Shares specified in such Demand Request (a “Demand Registration”). The Company shall use its commercially reasonable efforts to have the Demand Registration declared effective by the U.S. Securities and Exchange Commission (the “SEC”) within sixty (60) days of the filing of the Demand Registration with the SEC. Notwithstanding anything in this Section 8 to the contrary, the Investors shall be entitled to only one (1) such Demand Registration.  The costs, fees and expenses associated with such Demand Registration will be borne by the Company. Notwithstanding the foregoing obligations, if the Company furnishes to the Investors a certificate signed by the Company’s chief executive officer stating that in the good faith judgment of the Company’s Board of Directors it would be materially detrimental to the Company and its stockholders for such registration statement to either become effective or remain effective for as long as such registration statement otherwise would be required to remain effective, because such action would (i) materially interfere with a significant acquisition, corporate reorganization, or other similar transaction involving the Company; (ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential; or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange Act, then the Company shall have the right to defer taking action with respect to such filing for a period of not more than one hundred eighty (180) days after such Demand Request is given; provided that the Company shall not register any securities for its own account or that of any other stockholder during such one hundred eighty (180) day period.


 


9.            Assignment.


 


(a) Successors and Assigns; Transfer of this Note or Securities Issuable on Conversion Hereof.


 


(i) Subject to the restrictions on transfer described in this Section 9, the rights and obligations of the Company and Investor shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.


 




  





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(ii) With respect to any offer, sale or other disposition of this Note or securities into which such Note may be converted, Investor will give written notice to the Company prior thereto, describing briefly the manner thereof, together with a written opinion of Investor’s counsel, or other evidence if reasonably satisfactory to the Company, to the effect that such offer, sale or other distribution may be effected without registration or qualification under any federal or state law then in effect. Upon receiving such written notice and reasonably satisfactory opinion, if so requested, or other evidence, the Company, as promptly as practicable, shall notify Investor that Investor may sell or otherwise dispose of this Note or such securities, all in accordance with the terms of the notice delivered to the Company.  If a determination has been made pursuant to this Section 9 that the opinion of counsel for Investor, or other evidence, is not reasonably satisfactory to the Company, the Company shall so notify Investor promptly after such determination has been made.  Each Note thus transferred and each certificate representing the securities thus transferred shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with the Securities Act, unless in the opinion of counsel for the Company such legend is not required in order to ensure compliance with the Securities Act.  The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.  Subject to the foregoing, transfers of this Note shall be registered upon registration books maintained for such purpose by or on behalf of the Company as provided in the Note Purchase Agreement.  Prior to presentation of this Note for registration of transfer, the Company shall treat the registered investor hereof as the owner and investor of this Note for the purpose of receiving all payments of principal and interest hereon and for all other purposes whatsoever, whether or not this Note shall be overdue and the Company shall not be affected by notice to the contrary.


 


(iii)  Neither this Note nor any of the rights, interests or obligations hereunder may be assigned, by operation of law or otherwise, in whole or in part, by the Company without the prior written consent of a Majority in Interest of Investors.







 


10.          Modification; Waiver.  Any provision of this Note may be amended, waived or modified upon the written consent of the Company and a Majority in Interest of Investors; provided, however, that no such amendment, waiver or consent shall: (i) reduce the principal amount of this Note without Investor’s written consent, or (ii) reduce the rate of interest of this Note without Investor’s written consent unless in the case of (i) or (ii) all Notes are similarly amended in a proportionate manner.  Any amendment effected in accordance with this Section 10 shall be binding upon Investor regardless of whether Investor consented to such amendment.


 


11.          Notices.  All notices, requests, demands, consents, instructions or other communications required or permitted hereunder shall be in writing and faxed, mailed, emailed or delivered to each party at the respective addresses of the parties as set forth in the Note Purchase Agreement, or at such other address or facsimile number as the Company shall have furnished to Investor in writing.  All such notices and communications will be deemed effectively given the earlier of (i) when received, (ii) when delivered personally, (iii) one business day after being delivered by email or facsimile, or (v) five days after being deposited in the U.S. mail, first class with postage prepaid.


 




  





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12.          Pari Passu Notes.  Investor acknowledges and agrees that the payment of all or any portion of the outstanding principal amount of this Note and all interest hereon shall be pari passu in right of payment and in all other respects to the other Notes.  In the event Investor receives payments in excess of its pro rata share of the Company’s payments to the Investors holding all of the other Notes, then Investor shall hold in trust all such excess payments for the benefit of the Investors holding the other Notes and shall pay such amounts held in trust to such other Investors upon demand by such Investors.


 


13.          Payment.  Unless converted into the Company’s equity securities pursuant to the terms hereof, payment shall be made in lawful tender of the United States.


 


14.          Usury. In the event any interest is paid on this Note which is deemed to be in excess of the then legal maximum rate, then that portion of the interest payment representing an amount in excess of the then legal maximum rate shall be deemed a payment of principal and applied against the principal of this Note.


 


15.          Waivers.  The Company hereby waives notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor and all other notices or demands relative to this instrument.


 


16.          Waiver of Jury Trial; Judicial Reference.  BY ACCEPTANCE OF THIS NOTE, INVESTOR HEREBY AGREES AND THE COMPANY HEREBY AGREES TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS NOTE OR ANY OF THE TRANSACTION DOCUMENTS.


 


17.          Counterparts. This Note may be executed in one or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same agreement. Facsimile or electronic copies (in .PDF or other similar electronic format) of signed signature pages will be deemed binding originals.


 


18.          Governing Law.  This Note shall be governed by and construed under the laws of the State of New York, without giving effect to conflicts of laws principles.


 







 


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The Company has caused this Note to be issued as of the date first written above.


 








	  	
TripBorn, Inc.


a Delaware corporation


	  	  	  
	  	
By:

	  
	  	
Name:  

	  
	  	
Title

	  





 


 


 


 


 


 



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