Exhibit 4.1


 


THE
SECURITIES REFERENCED HEREIN HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.


 


SUBORDINATED
CONVERTIBLE PROMISSORY NOTE


 


	$2,000,000	Issuance
    Date: November 14, 2017


 


For
value received, MoviePass Inc., a Delaware corporation (the “Company”), promises to pay to Helios and Matheson
Analytics Inc., a Delaware corporation (the “Holder”), the principal sum of Two Million Dollars ($2,000,000),
or such lesser amount as shall then equal the outstanding principal amount hereunder (the “Principal Amount”).
Interest shall accrue on this Note from the Issuance Date of this Note on the unpaid Principal Amount at a rate equal to 5.00%
per annum, compounded annually and computed on the basis of a 365-day year and the actual number of days elapsed. This Note is
being issued to the Holder pursuant to that certain Second Amended and Restated Subordinated Convertible Note Purchase Agreement,
dated August 18, 2017, as amended from time to time, among the Company, the Holder and a Requisite Majority (as defined therein)
(the “Amended Note Purchase Agreement”), that certain Securities Purchase Agreement, dated August 15, 2017,
as amended on October 6, 2017, by and between the Company and the Holder (the “SPA”), subject to that certain
Waiver Agreement, dated November 6, 2017, by and between the Company and the Holder, and that certain Investment Option Agreement,
dated October 11, 2017, by and between the Company and the Holder (the “Option Agreement”). Capitalized
terms not otherwise defined herein have the meaning given them in the Option Agreement or the SPA, as applicable. This
Note is subject to the following terms and conditions.


 


		1)	Maturity.
                                         While this Note is outstanding, the Principal Amount and any accrued but unpaid interest
                                         under this Note shall be due and payable upon demand of the Holder at any time after
                                         the two-year anniversary of the Issuance Date of this Note first stated above (the “Maturity
                                         Date”). Subject to Section 2 below, interest shall accrue on this Note and
                                         shall be due and payable on the Maturity Date. Notwithstanding the foregoing, the entire
                                         unpaid Principal Amount, together with accrued and unpaid interest thereon, shall become
                                         immediately due and payable upon the commencement of any bankruptcy, insolvency or dissolution
                                         proceeding by the Company, the execution by the Company of a general assignment for the
                                         benefit of creditors, the filing by or against the Company of a petition in bankruptcy
                                         or any petition for relief under the federal bankruptcy act or the continuation of such
                                         petition without dismissal for a period of 90 days or more, or the appointment of a receiver
                                         or trustee to take possession of the property or assets of the Company.



 


		2)	Cancellation
                                         of Note Upon Consummation of SPA Transaction. Upon
                                         the Closing:



 


		a)	this
                                         Note shall be immediately cancelled and of no further force or effect, automatically
                                         and without any action being required on the part of the Holder, and the Company will
                                         be forever released from all of its obligations and liabilities under this Note including
                                         (without limitation) the obligation to pay the Principal Amount and accrued interest;



 






     


     


    

 


		b)	cancellation
                                         of this Note as provided above shall constitute full satisfaction of the Holder’s
                                         obligation to pay the purchase price for $2,000,000 of the Option Shares pursuant to
                                         the Option Agreement; and



 


		c)	the
                                         Holder shall deliver any original executed copy of this Note in the Holder’s possession
                                         to the Company for destruction, provided that any failure by the Holder to deliver such
                                         original executed copy of this Note to the Company shall not affect the automatic cancellation
                                         of this Note as provided by Section 2(a) above.



 


	3)	Next
                                         Equity Conversion.
	 	 	 
		a)	Next
                                         Equity Financing. If the Holder terminates the SPA due to the Company’s
                                         material breach of any representation, warranty or covenant thereof that remains uncured
                                         within the time frame specified in Section 7.18 of the SPA (an “SPA Termination”),
                                         the outstanding Principal Amount and any accrued but unpaid interest under this Note
                                         (the amount being converted, the “Conversion Amount”) may, at the
                                         Holder’s option, be converted, in whole or in part, into equity securities issued
                                         and sold at the initial closing of the Company’s next equity financing following
                                         such SPA Termination (the “Next Equity Securities”) in a single transaction
                                         or a series of related transactions yielding gross proceeds to the Company of at least
                                         $1,000,000 (excluding the principle amount or accrued interest or any other amounts owing
                                         on any notes, including the Notes (as defined in the Amended Note Purchase Agreement),
                                         converted into capital stock and issued therein) other than an Exempt Issuance (the “Next
                                         Equity Financing”). “Exempt Issuance” means the issuance
                                         of (a) shares of the Company’s common stock, options or other equity-based awards
                                         to employees, officers, directors, consultants or vendors of the Company for services
                                         rendered to the Company pursuant to any stock or option plan or agreement that was duly
                                         adopted for such purpose, by a majority of the non-employee members of the Board of Directors
                                         or a majority of the members of a committee of non-employee directors established for
                                         such purpose, (b) securities upon the exercise or exchange of or conversion of any Notes
                                         issued hereunder and/or other securities exercisable or exchangeable for or convertible
                                         into shares of Company’s common stock issued and outstanding on the date of this
                                         Note, provided that such securities have not been amended since the date of this Note
                                         to increase the number of such securities or to decrease the exercise price, exchange
                                         price or conversion price of such securities (other than in connection with stock splits
                                         or combinations) or to extend the term of such securities and (c) securities issued pursuant
                                         to acquisitions or strategic transactions of other assets or businesses approved by a
                                         majority of the disinterested directors of the Company or the shareholders of the Company
                                         prior to such issuance; provided that (x) the primary purpose of such issuance is not
                                         to raise capital, (y) the purchaser or acquirer of such shares of the Company’s
                                         common stock in such issuance solely consists of either (1) the actual owners of such
                                         assets or securities acquired in such merger or acquisition or (2) the shareholders,
                                         partners or members of the foregoing persons, and (z) the number or amount (as the case
                                         may be) of such shares of the Company’s common stock issued to such person by the
                                         Company shall not be disproportionate to such person’s actual ownership of such
                                         assets or securities to be acquired by the Company (as applicable).



 


		b)	Notice
                                         of Conversion. If this Note is eligible to be converted pursuant to Section 3(a),
                                         at least fifteen (15) business days prior to the proposed initial closing of the Next
                                         Equity Financing, the Company shall deliver written notice to the Holder of this Note
                                         at the address last shown on the records of the Company for the Holder or given by the
                                         Holder to the Company for the purpose of notice or, if no such address appears or is
                                         given, at the place where the principal executive office of the Company is located, notifying
                                         the Holder of the Next Equity Financing, specifying the conversion price, the Principal
                                         Amount and accrued interest of this Note eligible to be converted, the proposed closing
                                         date of the proposed Next Equity Financing requesting the Holder notify the Company of
                                         its election to convert this Note if any, in the manner and at the place designated in
                                         the Company’s notice. A Holder’s election to convert all or a portion of
                                         this Note in connection with the Next Equity Financing must be made at least five (5)
                                         business days before the expected initial closing date of the Next Equity Financing.



 






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		c)	Terms
                                         of Conversion. The number of shares of Next Equity Securities to be issued upon
                                         such conversion shall be equal to the quotient obtained by dividing (i) the Conversion
                                         Amount by (ii) 80.00% of the cash price per share of the Next Equity Securities sold
                                         in the Next Equity Financing (excluding the Participation Shares, as defined in the Amended
                                         Note Purchase Agreement), rounded down to the nearest whole share (the “Note
                                         Conversion Price”). The issuance of such shares upon such conversion shall
                                         be upon the terms and subject to the conditions applicable to the Next Equity Financing
                                         and the Company’s Certificate of Incorporation, Bylaws, and other corporate governing
                                         documents, as determined by the Company and the investors in the Next Equity Financing
                                         in their sole discretion. The Note Conversion Price, however, shall not be greater than
                                         the quotient obtained by dividing (x) $210,000,000 by (y) the total number of shares
                                         of Common Stock outstanding (assuming full conversion and exercise of all convertible
                                         or exercisable securities other than (i) the Notes (as defined in the Amended Note Purchase
                                         Agreement), (ii) other outstanding convertible notes and (iii) outstanding convertible
                                         equity securities). Upon such conversion of this Note, the Holder hereby agrees to execute
                                         and deliver to the Company all transaction documents related to the Next Equity Financing,
                                         including any purchase agreement and other ancillary agreements, with customary representations
                                         and warranties and transfer restrictions (including, without limitation, a lock-up agreement
                                         in connection with an initial public offering).



 


		4)	Change
                                         of Control. In the event of a Change of Control (as defined below) prior to the
                                         conversion of this Note or repayment in full of this Note, immediately prior to such
                                         Change of Control, this Note shall become immediately due and payable. The term “Change
                                         of Control” means (i) a sale of all or substantially all of the Company’s
                                         assets other than to an Excluded Entity (as defined below), (ii) a merger, consolidation
                                         or other capital reorganization or business combination transaction of the Company with
                                         or into another corporation, limited liability company or other entity other than an
                                         Excluded Entity, or (iii) the consummation of a transaction, or series of related transactions,
                                         in which any “person” (as such term is used in Sections 13(d) and 14(d) of
                                         the Securities Exchange Act of 1934, as amended (the “Exchange Act”))
                                         becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange
                                         Act), directly or indirectly, of all of the Company’s then outstanding voting securities.
                                         Notwithstanding the foregoing, a transaction shall not constitute a Change of Control
                                         if its purpose is to (A) change the jurisdiction of the Company’s incorporation,
                                         (B) create a holding company that will be owned in substantially the same proportions
                                         by the persons who hold the Company’s securities immediately before such transaction,
                                         or (C) obtain funding for the Company in a financing that is approved by the Company’s
                                         Board of Directors. An “Excluded Entity” means a corporation or other
                                         entity of which the holders of voting capital stock of the Company outstanding immediately
                                         prior to such transaction are the direct or indirect holders of voting securities representing
                                         at least a majority of the votes entitled to be cast by all of such corporation’s
                                         or other entity’s voting securities outstanding immediately after such transaction.



 


		5)	Mechanics
                                         and Effect of Conversion. No fractional shares of the Company’s capital
                                         stock will be issued upon conversion of this Note. In lieu of any fractional share to
                                         which the Holder would otherwise be entitled, the Company will pay to the Holder in cash
                                         the amount of the unconverted Principal Amount and accrued interest under this Note that
                                         would otherwise be converted into such fractional share. Upon conversion of this Note,
                                         the Holder shall surrender this Note, duly endorsed, at the principal offices of the
                                         Company or any transfer agent of the Company. At its expense, the Company will, as soon
                                         as practicable thereafter, issue the number of Next Equity Securities to which such Holder
                                         is entitled upon such conversion, together with any other securities and property to
                                         which the Holder is entitled upon such conversion under the terms of this Note, including
                                         a check payable to the Holder for any cash amounts payable as described herein and shall
                                         deliver to such Holder, at such principal office, a notice of issuance upon request for
                                         the number of shares to which such Holder is entitled upon such conversion. Upon conversion
                                         of this Note, the Company will be forever released from all of its obligations and liabilities
                                         under this Note with regard to that portion of the principal amount and accrued interest
                                         being converted including (without limitation) the obligation to pay such portion of
                                         the principal amount and accrued interest.



 






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		6)	Payment;
                                         Prepayment. All payments shall be made in lawful money of the United States of
                                         America at such place as the Holder hereof may from time to time designate in writing
                                         to the Company. Payment shall be credited first to collection costs, if any, then the
                                         accrued interest then due and payable and the remainder shall be applied to principal.
                                         The Company may prepay this Note at any time without penalty only upon written consent
                                         of the Holder.



 


		7)	Stockholders,
                                         Officers and Directors Not Liable. In no event shall any stockholder, officer
                                         or director of the Company be liable for any amounts due or payable pursuant to this
                                         Note.



 


		8)	Subordination.



 


		a)	The
                                         indebtedness evidenced by this Note is hereby expressly subordinated, to the extent and
                                         in the manner hereinafter set forth, in right of payment to the prior payment in full
                                         of all of the Company’s Senior Indebtedness. The Holder further agrees to execute
                                         a form of subordination agreement, as requested by any current or future lender to the
                                         Company, to effect the foregoing subordination. “Senior Indebtedness”
                                         shall mean the principal of and unpaid interest and premium, if any, on (i) indebtedness
                                         of the Company or with respect to which the Company is a guarantor, whether outstanding
                                         on the date hereof or hereafter created, to banks, insurance companies or other lending
                                         or thrift institutions regularly engaged in the business of lending money, whether or
                                         not secured, (ii) any deferrals, renewals or extensions or any debentures, notes or other
                                         evidence of indebtedness issued in exchange for such Senior Indebtedness, (iii) those
                                         certain secured convertible promissory notes issued by the Company pursuant to the Secured
                                         Convertible Promissory Note and Warrant Purchase Agreement dated on May 27, 2016.
	 	 	 



		b)	Upon
                                         any receivership, assignment for the benefit of creditors, bankruptcy, reorganization,
                                         or arrangement which creditors (whether or not pursuant to bankruptcy or other insolvency
                                         laws), sale of all or substantially all of the assets, dissolution, liquidation, or any
                                         other marshaling of the assets and liabilities of the Company or in the event this Note
                                         shall be declared due and payable, (i) no amount shall be paid by the Company, whether
                                         in cash or property in respect of the principal of or interest on this Note at the time
                                         outstanding, unless and until the full amount of any Senior Indebtedness then outstanding
                                         shall be paid in full, and (ii) no claim or proof of claim shall be filed with the Company
                                         by or on behalf of the holder of this Note which shall assert any right to receive any
                                         payments in respect of the principal of and interest on this Note except subject to the
                                         payment in full all of the Senior Indebtedness then outstanding.



 


		c)	If
                                         an event of default has occurred with respect to any Senior Indebtedness, permitting
                                         the holder thereof to accelerate the maturity thereof, then unless and until such event
                                         of default shall have been cured or waived or shall have ceased to exist, or all Senior
                                         Indebtedness shall have been paid in full, no payment shall be made in respect of the
                                         principal of or interest on this Note.



 


		d)	Nothing
                                         contained in the preceding paragraphs shall impair, as between the Company and the Holder,
                                         the obligation of the Company, which is absolute and unconditional, to pay to the Holder
                                         hereof the principal hereof and interest hereon as and when the same shall become due
                                         and payable, or shall prevent the Holder, upon default hereunder, from exercising all
                                         rights, powers and remedies otherwise provided herein or by applicable law, all subject
                                         to the rights, if any, of the holders of Senior Indebtedness under the preceding paragraphs
                                         to receive cash or other properties otherwise payable or deliverable to the Holder pursuant
                                         to this Note.



 






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		9)	Interest
                                         Rate Limitation. Notwithstanding anything to the contrary contained in this Note,
                                         the Amended Note Purchase Agreement, the SPA or the Option Agreement, as applicable (the
                                         “Loan Documents”), the interest paid or agreed to be paid under the
                                         Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by
                                         applicable law (the “Maximum Rate”). If the Holder shall receive interest
                                         in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the
                                         principal remaining owed under this Note or, if it exceeds such unpaid principal, refunded
                                         to the Company. In determining whether the interest contracted for, charged, or received
                                         by the Holder exceeds the Maximum Rate, the Holder may, to the extent permitted by applicable
                                         law, (a) characterize any payment that is not principal as an expense, fee, or premium
                                         rather than interest, (b) exclude voluntary prepayments and the effects thereof, and
                                         (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount
                                         of interest throughout the contemplated term of this Note.



 


		10)	Action
                                         to Collect on Note. If action is instituted to collect on this Note, the Company
                                         promises to pay all of each Holder’s costs and expenses, including reasonable attorney’s
                                         fees, incurred in connection with such action.



 


		11)	Loss
                                         of Note. Upon receipt by the Company of evidence satisfactory to it of the loss,
                                         theft, destruction or mutilation of this Note or any Note exchanged for it, and indemnity
                                         satisfactory to the Company (in case of loss, theft or destruction) or surrender and
                                         cancellation of such Note (in the case of mutilation), the Company will make and deliver
                                         in lieu of such Note a new Note of like tenor.



 


		12)	Miscellaneous.



 


		a)	Governing
                                         Law; Venue. The validity, interpretation, construction and performance of this
                                         Note, and all acts and transactions pursuant hereto and the rights and obligations of
                                         the Company and Holder shall be governed, construed and interpreted in accordance with
                                         the laws of the State of California, without giving effect to principles of conflicts
                                         of law. Venue for any legal action under this Note shall be in the state or federal courts
                                         located in the City of Los Angeles in the State of California.



 


		b)	Entire
                                         Agreement. This Note, together with the Amended Note Purchase Agreement, the
                                         SPA, the Option Agreement and the documents referred to therein, constitute the entire
                                         agreement and understanding between the Company and the Holder relating to the subject
                                         matter herein and supersede all prior or contemporaneous discussions, understandings
                                         and agreements, whether oral or written between them relating to the subject matter hereof.



 


		c)	Amendments
                                         and Waivers. Any term of this Note may be amended only with the written consent
                                         of the Company and the Holder. Any amendment or waiver effected in accordance with this
                                         Section 12(c) shall be binding upon the Company, the Holder and each transferee of the
                                         Note or any portion thereof.
	 	 	 



		d)	Successors
                                         and Assigns. The terms and conditions of this Note shall inure to the benefit
                                         of and be binding upon the respective successors and assigns of the Company and the Holder.
                                         Notwithstanding the foregoing, the Holder may not assign, pledge, or otherwise transfer
                                         this Note without the prior written consent of the Company except pursuant to the exercise
                                         of rights by the holder(s) of Helios’ senior secured convertible notes holding
                                         a security interest in Helios’ assets. Subject to the preceding sentence, this
                                         Note may be transferred only upon surrender of the original Note for registration of
                                         transfer, duly endorsed, or accompanied by a duly executed written instrument of transfer
                                         in form satisfactory to the Company. Thereupon, a new note for the same principal amount
                                         and interest will be issued to, and registered in the name of, the transferee. Interest
                                         and principal are payable only to the registered holder of this Note.



 


		e)	Notices.
                                         Any notice, demand or request required or permitted to be given under this Note shall
                                         be in writing and shall be deemed sufficient when delivered personally or by overnight
                                         courier or sent by email, or 48 hours after being deposited in the U.S. mail as certified
                                         or registered mail with postage prepaid, addressed to the party to be notified at such
                                         party’s address as set forth on the signature page, as subsequently modified by
                                         written notice, or if no address is specified on the signature page, at the most recent
                                         address set forth in the Company’s books and records.



 


		f)	Counterparts.
                                         This Note may be executed in any number of counterparts, each of which when so executed
                                         and delivered shall be deemed an original, and all of which together shall constitute
                                         one and the same instrument.



 


[Signature
Page Follows]


 






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IN
WITNESS WHEREOF, the parties have executed this Subordinated Convertible Promissory Note as of the date first set forth above.


 





	 	THE COMPANY:
	 	 	 
	 	MOVIEPASS INC.
	 	 	 
	 	By:	/s/ J Mitchell Lowe
	 		                     (Signature)
	 	Name:	J Mitchell Lowe
	 	Title:	CEO
	 	 	 
	 	Address:	175 Varick, NY, NY 10014



 





	AGREED TO AND ACCEPTED:	 
	 	 
	THE HOLDER:	 
	 	 
	HELIOS AND MATHESON ANALYTICS INC.	 
	 	 
	By:	 /s/ Stuart Benson	 
	 	                      (Signature)	 
	Name:	 Stuart Benson	 
	Title: 	CFO	 
	 	 	 
	Address:	 350 Fifth Avenue Suite #7520	 
	 	New York, NY 10118	 




 


 


[Signature Page to the Subordinated Convertible Promissory Note of MoviePass Inc.]