Document:

Unassociated Document

Exhibit 10.6

 

NOTE PURCHASE AGREEMENT

 

This Note Purchase Agreement, dated as of February 8, 2016 (this “Agreement”), is entered into by and among TRIPBORN, INC., a Delaware corporation (the “Company”), and the persons and entities listed on the schedule of investors attached hereto as Schedule I (each an “Investor” and, collectively, the “Investors”), as such Schedule I may be amended in accordance with Section 7 hereof.

 

RECITALS

 

A.           On the terms and subject to the conditions set forth herein, each Investor is willing to purchase from the Company, and the Company is willing to sell to such Investor, a convertible promissory note in the principal amount set forth opposite such Investor’s name on Schedule I hereto.

 

B.           Capitalized terms not otherwise defined herein shall have the meaning set forth in the form of Note (as defined below) attached hereto as Exhibit A.

 

AGREEMENT

 

NOW THEREFORE, in consideration of the foregoing, and the representations, warranties, and conditions set forth below, the parties hereto, intending to be legally bound, hereby agree as follows:

 

1.      The Notes.

 

(a)           Issuance of Notes.  Subject to all of the terms and conditions hereof, the Company agrees to issue and sell to each of the Investors, and each of the Investors severally agrees to purchase, a convertible promissory note in the form of Exhibit A hereto (each, a “Note” and, collectively, the “Notes”) in the principal amount set forth opposite the respective Investor’s name on Schedule I hereto.  The obligations of the Investors to purchase Notes are several and not joint.

 

(b)           Delivery. The sale and purchase of the Notes shall take place at a closing (the “Closing”) to be held at such place and time as the Company and the Investors may determine (the “Closing Date”).  At the Closing, the Company will deliver to each Investor the Note to be purchased by such Investor, against receipt by the Company of the corresponding purchase price (set forth on Schedule I hereto (the “Purchase Price”).  The Company may conduct one or more additional closings (each, an “Additional Closing”) to be held at such place and time as the Company and the Investors participating in such Additional Closing may determine (each, an “Additional Closing Date”).  At each Additional Closing, the Company will deliver to each of the Investors participating in such Additional Closing the Note to be purchased by such Investor, against receipt by the Company of the corresponding Purchase Price.  Each of the Notes will be registered in such Investor’s name in the Company’s records.

 

(c)           Use of Proceeds. The proceeds of the sale and issuance of the Notes shall be used for general corporate purposes.

 

(d)           Payments. The Company will make all cash payments due under the Notes in immediately available funds by 5:00 p.m. eastern time on the date such payment is due at the address for such purpose specified below each Investor’s name on Schedule I hereto, or at such other address, or in such other manner, as an Investor or other registered holder of a Note may from time to time direct in writing.

 

2.      Representations and Warranties of the Company. The Company represents and warrants to each Investor that:

 

  

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(a)           Organization, Good Standing and Qualification.  The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company has the requisite corporate power to own and operate its properties and assets and to carry on its business as now conducted.  The Company is duly qualified and is authorized to do business and in good standing as a foreign corporation in each jurisdiction where the failure to be so qualified could reasonably be expected to have a material adverse effect on the Company.

 

(b)           Power and Authority; Due Authorization.  The Company has all requisite corporate power and authority to execute and deliver the Transaction Documents and to carry out and perform its obligations thereunder.  All corporate action on the part of the Company, its directors and its stockholders necessary for the authorization of the Transaction Documents and the execution, delivery and performance of all obligations of the Company under the Transaction Documents, including the issuance and delivery of the Notes and the reservation of the equity securities issuable upon conversion of the Notes (collectively, the “Conversion Securities”) has been taken or will be taken prior to the issuance of such Conversion Securities.  The Transaction Documents constitute the valid and binding obligation of the Company enforceable in accordance with their respective terms, subject to laws of general application relating to bankruptcy, insolvency, the relief of debtors and, with respect to rights to indemnity, subject to federal and state securities laws.  The Conversion Securities, when issued in compliance with the provisions of the Transaction Documents, will be validly issued, fully paid and nonassessable and free of any liens or encumbrances and issued in compliance with all applicable federal and securities laws.

 

(c)           Governmental Consents.  All consents, approvals, orders, or authorizations of, or registrations, qualifications, designations, declarations, or filings with, any governmental authority, required on the part of the Company in connection with the valid execution and delivery of the Transaction Documents, the offer, sale or issuance of the Notes and the Conversion Securities issuable upon conversion of the Notes or the consummation of any other transaction contemplated hereby or thereby shall have been obtained and will be effective at such time as required by such governmental authority.

 

(d)           Compliance with Laws.  The Company is not in violation of any applicable statute, rule, regulation, order or restriction of any domestic or foreign government or any instrumentality or agency thereof in respect of the conduct of its business or the ownership of its properties, which violation would materially and adversely affect the business, assets, liabilities, financial condition or operations of the Company.

 

(e)           Use of Proceeds.  The Company shall use the proceeds of sale and issuance of the Notes for the operations of its business, and not for any personal, family or household purpose.

 

3.      Representations and Warranties of Investors. Each Investor, for that Investor severally (and not jointly with any other Investor), represents and warrants to the Company upon the acquisition of a Note as follows:

 

(a)           Binding Obligation. Such Investor has full legal capacity, power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement and the other Transaction Documents to which such Investor is a party constitute valid and binding obligations of such Investor, enforceable in accordance with their terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and general principles of equity.

 

  

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(b)           Securities Law Compliance. Such Investor has been advised that the Notes and the underlying securities have not been registered under the Securities Act, or any state securities laws and, therefore, cannot be resold unless they are registered under the Securities Act and applicable state securities laws or unless an exemption from such registration requirements is available. Such Investor understands that no federal or state agency, including the Securities and Exchange Commission and the securities commissions or authorities of any states, has reviewed the Company’s offering of the Notes nor has any such agency passed upon the merits of the offering of the Notes.  Such Investor is aware that the Company is under no obligation to effect any such registration with respect to the Notes (except as set forth in Section 7 hereof) or the underlying securities. Such Investor has not been formed solely for the purpose of making this investment and is purchasing the Notes to be acquired by such Investor hereunder for its own account for investment, not as a nominee or agent, and not with a view to, or for resale in connection with, the distribution thereof, and Investor has no present intention of selling, granting any participation in, or otherwise distributing the same. Such Investor has such knowledge and experience in financial and business matters that such Investor is capable of evaluating the merits and risks of such investment, is able to incur a complete loss of such investment without impairing such Investor’s financial condition and is able to bear the economic risk of such investment for an indefinite period of time. The residency of the Investor (or, in the case of a partnership, limited liability company or corporation, such entity’s principal place of business) is correctly set forth beneath such Investor’s name on Schedule I hereto.

 

(c)           Accredited Investor Status.  Such Investor is an accredited investor as such term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act for one of the reasons listed in 3(c)(i) through (iv) below.

 

(i)           Such Investor is a natural person whose individual net worth, or joint net worth with that person’s spouse at the time of his/her purchase, in either case excluding the value of their primary residence, exceeds $1,000,000.

 

(ii)           Such Investor is a natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of $300,000 in each of those years and who reasonably expects the same or greater income level in the current year.

 

(iii)           Such Investor is a corporation or limited liability company not formed for the specific purpose of acquiring the Notes, with total assets in excess of $5,000,000.

 

(iv)           Such Investor is an entity in which all of the equity owners are accredited investors.

 

(d)           Access to Information. Such Investor acknowledges that the Company has given such Investor access to the corporate records and accounts of the Company and to all information in its possession relating to the Company, has made its officers and representatives available for interview by such Investor, and has furnished such Investor with all documents and other information required for such Investor to make an informed decision with respect to the purchase of the Notes.

 

(e)           Foreign Investors.   If the Investor is not a United States person (as defined by Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended), such Investor hereby represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Notes or any use of this Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the Notes, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, conversion, sale, or transfer of the Notes. Such Investor’s subscription and payment for and continued beneficial ownership of the Notes will not violate any applicable securities or other laws of such Investor’s jurisdiction.

 

  

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4.      Conditions to Closing of the Investors. Each Investor’s obligation at the Closing is subject to the fulfillment, on or prior to the Closing Date, of all of the following conditions, any of which may be waived in whole or in part by such Investor:

 

(a)           Representations and Warranties. The representations and warranties made by the Company in Section 2 hereof shall have been true and correct when made, and shall be true and correct on the Closing Date.

 

(b)           Governmental Approvals and Filings. Except for any notices required or permitted to be filed after the Closing Date with certain federal and state securities commissions, the Company shall have obtained all governmental approvals required in connection with the lawful sale and issuance of the Notes.

 

(c)           Transaction Documents. The Company shall have duly executed and delivered to the Investors this Agreement and each Note issued hereunder.

 

5.      Conditions to Obligations of the Company. The Company’s obligation to issue and sell the Notes at the Closing is subject to the fulfillment, on or prior to the Closing Date, of the following conditions, any of which may be waived in whole or in part by the Company:

 

(a)           Representations and Warranties. The representations and warranties made by the Investors in Section 3 hereof shall be true and correct when made, and shall be true and correct on the Closing Date.

 

(b)           Governmental Approvals and Filings. Except for any notices required or permitted to be filed after the Closing Date with certain federal and state securities commissions, the Company shall have obtained all governmental approvals required in connection with the lawful sale and issuance of the Notes.

 

(c)           Purchase Price. Each Investor shall have delivered to the Company the Purchase Price in respect of the Note being purchased by such Investor referenced in Section 1(b) hereof.

 

6.      Additional Closings. On or prior to the applicable Additional Closing Date, the Company shall have duly executed and delivered to the Investors participating in such Additional Closing each Note to be issued at such Additional Closing and shall have delivered to such Investors fully executed copies, if applicable, of all documents delivered to the Investors participating in the initial Closing.  Each Investor shall have executed and delivered this Agreement, and shall have delivered to the Company the Purchase Price in respect of the Note being purchased by such Investor referenced in Section 1(b) hereof.

 

7.      Registration Rights.  The Note Shares shall have certain registration rights, as more fully descried in Section 8 of the form of Note attached as Exhibit A hereto.

 

8.      Miscellaneous

 

(a)           Waivers and Amendments. Any provision of this Agreement and the Notes may be amended, waived or modified only 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 any Note without the affected Investor’s written consent, or (ii) reduce the rate of interest of any Note without the affected Investor’s written consent unless in the case of (i) or (ii) all Notes are similarly amended in a proportionate manner.  Any amendment or waiver effected in accordance with this paragraph shall be binding upon all of the parties hereto.  Notwithstanding the foregoing, this Agreement may be amended to add a party as an Investor hereunder in connection with Additional Closings without the consent of any other Investor, by delivery to the Company of a counterparty signature page to this Agreement together with a supplement to Schedule I hereto.  Such amendment shall take effect at the Additional Closing and such party shall thereafter be deemed an “Investor” for all purposes hereunder and Schedule I shall be updated to reflect the addition of such Investor.

 

  

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(b)           Governing Law. This Agreement and all actions arising out of or in connection with this Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts of law provisions of the State of New York or of any other state.

 

(c)           Survival. The representations, warranties, covenants and agreements made herein shall survive the execution and delivery of this Agreement.

 

(d)           Successors and Assigns. Subject to the restrictions on transfer described in Sections 8(e) and 8(f) below, the rights and obligations of the Company and the Investors shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.

 

(e)           Registration, Transfer and Replacement of the Notes. The Notes issuable under this Agreement shall be registered notes. The Company will keep, at its principal executive office, books for the registration and registration of transfer of the Notes. Prior to presentation of any Note for registration of transfer, the Company shall treat the Person in whose name such Note is registered as the owner and holder of such Note for all purposes whatsoever, whether or not such Note shall be overdue, and the Company shall not be affected by notice to the contrary. Subject to any restrictions on or conditions to transfer set forth in any Note, the holder of any Note, at its option, may in person or by duly authorized attorney surrender the same for exchange at the Company’s principal executive office, and promptly thereafter and at the Company’s expense, except as provided below, receive in exchange therefor one or more new Note(s), each in the principal requested by such holder, dated the date to which interest shall have been paid on the Note so surrendered or, if no interest shall have yet been so paid, dated the date of the Note so surrendered and registered in the name of such Person or Persons as shall have been designated in writing by such holder or its attorney for the same principal amount as the then unpaid principal amount of the Note so surrendered. Upon receipt by the Company of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note and (a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it; or (b) in the case of mutilation, upon surrender thereof, the Company, at its expense, will execute and deliver in lieu thereof a new Note executed in the same manner as the Note being replaced, in the same principal amount as the unpaid principal amount of such Note and dated the date to which interest shall have been paid on such Note or, if no interest shall have yet been so paid, dated the date of such Note.

 

(f)           Assignment by the Company. The rights, interests or obligations hereunder may not 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.

 

(g)           Entire Agreement. This Agreement together with the other Transaction Documents constitute and contain the entire agreement among the Company and Investors and supersede any and all prior agreements, negotiations, correspondence, understandings and communications among the parties, whether written or oral, respecting the subject matter hereof.

 

(h)           Notices. All notices, requests, demands, consents, instructions or other communications required or permitted hereunder shall be in writing and faxed, mailed or delivered to each party as follows: (i) if to an Investor, at such Investor’s address, email address or facsimile number set forth in the Schedule of Investors attached as Schedule I, or at such other address, email address or facsimile number as such Investor shall have furnished the Company in writing, or (ii) if to the Company, at the Company’s address, email address or facsimile number set forth on the signature page to this Agreement, or at such other address, email address or facsimile number as the Company shall have furnished to the Investors 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 (iv) five days after being deposited in the U.S. mail, first class with postage prepaid.

 

  

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(i)           Separability of Agreements; Severability of this Agreement. The Company’s agreement with each of the Investors is a separate agreement and the sale of the Notes to each of the Investors is a separate sale. Unless otherwise expressly provided herein, the rights of each Investor hereunder are several rights, not rights jointly held with any of the other Investors. Any invalidity, illegality or limitation on the enforceability of the Agreement or any part thereof, by any Investor whether arising by reason of the law of the respective Investor’s domicile or otherwise, shall in no way affect or impair the validity, legality or enforceability of this Agreement with respect to other Investors. If any provision of this Agreement shall be judicially determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

(j)           Counterparts. This Agreement 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.

 

[signature page follows]

 

  

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first written above.

 

	  	
COMPANY:

	  	  
	  	
TRIPBORN, INC.

	  	
a Delaware corporation

	  	  
	  	  
	  	By: 	
/s/ Deepak Sharma

	  	 	
  Deepak Sharma

	  	 	
  President

	 	 
	 	 
	 	 
	 	

Address:

	 	 
	 	

812, Venus Atlantis Corporate Park, Nr. 

Prahalad Nagar Garden, Satellite City, 

Ahmedabad

 

  

  

  

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first written above.

 

 

	  	
INVESTOR:

	 	 
	  	  
	  	
DEVASHREE INVESTMENT INC.

	  	  
	  	By: 	
/s/ Prakash. Patel

	  	Name: 	
Prakash Patel

	  	Title:  	
President

 

  

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first written above.

 

 

	  	
INVESTOR:

	 	 
	  	  
	  	

TITHI INVESTMENT INC.

	  	  
	  	By: 	
/s/ Pratyushkumar Patel

	  	Name: 	
    Pratyushkumar Patel

	  	Title:   	
President

 

  

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first written above.

 

 

	  	
INVESTOR:

	 	 
	  	  
	  	

PARTH SYSTEMS INC.

	  	  
	  	By:	
/s/ Kiren H. Patel

	  	Name: 	
    Kiren H. Patel

	  	Title:	
President

 

  

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SCHEDULE I

 

SCHEDULE OF INVESTORS

 

	
 

Name and Address

	
 

Note Amount

	
 

DEVASHREE INVESTMENT INC.

 

149 Tiffany Lane

Battle Creek, MI 49015

	
 

$100,000

	
 

TITHI INVESTMENT INC.

 

2001 Shirley Drive

Jackson, MI 49202

	
 

$150,000

	
 

PARTH SYSTEMS INC.

 

2500 Wrangle Hill Road

Entrance B Suite 129

Bear, DE 19702

	
 

$100,000

	
 

PARTH SYSTEMS INC.

 

2500 Wrangle Hill Road

Entrance B Suite 129

Bear, DE 19702

	
 

$150,000

 

  

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Exhibit A

 

[FORM OF CONVERTIBLE NOTE]

 

 

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

 

 

	        $[_______________]	[__________ __], 2016

 

 

 

For value received TripBorn, Inc., a Delaware corporation (the “Company”), promises to pay to [__________], a [_______], 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).

9.           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 ________ __, 2019 (the “Maturity Date”).

 

10.           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.

 

  

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11.           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.

 

12.           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.

 

  

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

 

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.

 

13.           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.

 

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

 

15.           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;

 

  

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(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).

 

 

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.

16.           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.

 

  

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17.           Assignment.

 

 

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

 

xi.      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.

 

xii.     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.

 

xiii.    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.

 

  

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18.           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.

 

19.           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.

 

20.           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.

 

21.           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.

 

22.           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.

 

23.           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.

 

24.           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.

 

25.           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.

 

  

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26.           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.

 

 

 

[signature page follows]

 

  

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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:	
Deepak Sharma

	 	

Title

	
PresidentUnassociated Document

Exhibit 10.7

TRIPBORN, INC.

2016 STOCK INCENTIVE PLAN

 

SECTION 1

PURPOSES

 

The TripBorn, Inc. 2016 Stock Incentive Plan (the “Plan”) is established to (a) promote the long-term interests of TripBorn, Inc., a Delaware corporation (the “Company”) and its stockholders by strengthening the ability of the Company and its subsidiaries to attract, motivate and retain employees, officers, and other persons who provide valuable services to the Company and its subsidiaries, (b) encourage such persons to hold an equity interest in the Company, and (c) enhance the mutuality of interest between such persons and stockholders in improving the value of the Company’s common stock.

 

SECTION 2

DEFINITIONS

 

As used in the Plan, the following terms will have the respective meanings set forth below, and other capitalized terms used in the Plan will have the respective meanings given such capitalized terms in the Plan.

 

“Award” means any Option, Restricted Stock, Restricted Stock Unit, dividend equivalent or other award granted under the Plan.

 

“Award Agreement” means the written or electronic agreement setting forth the terms and provisions applicable to an Award granted under the Plan.

 

“Board” means the Board of Directors of the Company.

 

“Code” means the Internal Revenue Code of 1986, as amended, and any reference in the Plan to any section of the Code shall be deemed to include any regulations or other interpretative guidance under such section, and any amendments or successor provisions to such section, regulations or guidance.

 

“Common Stock” means the Company’s common stock, par value $0.0001 per share, or any other security into which the common stock shall be changed pursuant to the adjustment provisions of Section 13.

 

“Director” means a member of the Board who is not an Employee.

 

“Employee” means an officer or other employee of the Company or a Subsidiary, including a member of the Board who is an employee of the Company or a Subsidiary.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any reference in the Plan to any section of (or rule promulgated under) the Exchange Act shall be deemed to include any rules, regulations or other interpretative guidance under such section or rule, and any amendments or successor provisions to such section, rules, regulations or guidance.

 

  

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“Fair Market Value” of Common Stock as of any date means, (a) if shares of Common Stock are listed or admitted to trading on the New York Stock Exchange, NASDAQ Stock Market or other principal national securities exchange, the per share closing price of the Common Stock as reported on the New York Stock Exchange, NASDAQ Stock Market or other principal national securities exchange, as applicable, on that date, or if there were no reported prices on such date, on the last preceding date on which the prices were reported, or (b) if the shares of Common Stock are not quoted on the New York Stock Exchange, NASDAQ Stock Market or other principal national securities exchange, but the shares of Common Stock are reported on the over-the-counter market, the arithmetic mean of the high and low prices as reported in the over-the-counter market on that date, or if there were no reported prices on such date, on the last preceding date on which the prices were reported, and (c) if the shares of Common Stock are not quoted on the New York Stock Exchange, NASDAQ Stock Market or other principal national securities exchange,  and are not reported on the over-the-counter market on that date, the Fair Market Value of the shares of Common Stock as determined by the Committee in its good faith judgment, and in compliance with the requirements of Section 422 of the Code for Incentive Stock Options and Section 409A of the Code for Nonqualified Stock Options.  The Fair Market Value of any property other than Common Stock shall be the market value of such property as determined by the Committee using such methods or procedures as it shall establish from time to time.

 

“Grant Date” means the date on which the granting of an Award is authorized by the Committee, or such other date as may be specified in such authorization.

 

“Option” means an option to purchase Common Stock granted under Section 7, and includes both Incentive Stock Options and Nonqualified Stock Options.

 

“Participant” means any Eligible Person to whom an Award is granted.

 

“Restricted Stock” means an Award of shares of Common Stock granted under Section 8, the rights of ownership of which may be subject to restrictions prescribed by the Committee.

 

“Restricted Stock Unit” means an Award measured by shares of Common Stock that is granted under Section 8, the terms of which are subject to restrictions prescribed by the Committee.

 

“Subsidiary” means any corporation, limited liability company, partnership, joint venture or similar entity in which the Company owns, directly or indirectly, an equity interest possessing more than 50% of the combined voting power of the total outstanding equity interests of such entity.

 

“Substitute Awards” shall mean Awards granted under the Plan in assumption of, or in substitution or exchange for, outstanding awards previously granted by a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines.

 

SECTION 3

ADMINISTRATION

 

3.1           Administration of the Plan.

 

(a)           The Plan shall be administered by the Board or, if so directed by the Board, by a committee of the Board selected by the Board (collectively, the “Committee”).  At any time that any class of equity security of the Company is registered under Section 12 of the Exchange Act or any similar state, local, or foreign law, the Plan will be administered by a committee appointed by the Board consisting of two or more members of the Board, each of whom is a “Non-Employee Director” within the meaning of Rule 16b-3 under the Exchange Act.

 

  

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(b)           Subject to applicable law, the Committee may delegate some or all of its power and authority hereunder to the Board or to the Chief Executive Officer or other executive officer of the Company as the Committee deems appropriate; provided, however, that the Committee may not delegate its power and authority with regard to the selection for participation in the Plan of an officer, Director or other person subject to Section 16 of the Exchange Act or decisions concerning the timing, pricing or amount of an Award to such an officer, Director or other person.  All references in the Plan to the “Committee” shall be, as applicable, to the Committee or any other committee or individual to whom the Board or the Committee has delegated authority to administer the Plan.

 

3.2           Administration and Interpretation by the Committee.

 

(a)           Except for the terms and conditions explicitly set forth in the Plan, the Committee shall have full power and exclusive authority and discretion, subject to such orders or resolutions not inconsistent with the provisions of the Plan as may from time to time be adopted by the Board or the Committee, to:  (i) select the Eligible Persons to whom Awards may from time to time be granted under the Plan; (ii) determine the type or types of Award to be granted to each Eligible Person under the Plan; (iii) determine the number of shares of Common Stock to be covered by each Award granted under the Plan; (iv) determine the terms and conditions of any Award granted under the Plan; (v) approve the forms of Award Agreements for use under the Plan; (vi) determine whether, to what extent and under what circumstances Awards may be settled in cash, shares of Common Stock or other property or canceled or suspended; (vii) determine whether, to what extent and under what circumstances cash, shares of Common Stock, other property and other amounts payable with respect to an Award shall be deferred either automatically or at the election of the Participant; (viii) interpret and administer the Plan, any Award Agreements and any other instrument or agreement entered into under the Plan; (ix) establish such rules and regulations and appoint such agents as it shall deem appropriate in its sole discretion for the proper administration of the Plan; (x) reconcile any inconsistency, correct any defect, and supply any omission in the Plan, or any Award or Award Agreement; (xi) make all factual and legal determinations under the Plan, Awards, and Award Agreements; (xii) add provisions to an Award or Award Agreement, or vary the provisions of an Award, to accommodate the laws of applicable foreign jurisdictions and provide Participants with favorable treatment under these laws; and (xiii) make any other determination and take any other action that the Committee deems necessary or desirable in its sole discretion for administration of the Plan.  Decisions of the Committee shall be final, conclusive and binding on all persons, including the Company, any Participant, any stockholder and any person eligible to receive an Award hereunder.

 

  

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(b)           The Committee in its exclusive discretion may make non-uniform and selective determinations among individuals who are eligible to receive Awards, or who have received Awards, regardless of whether they are similarly situated.  In furtherance of this Section 3.2(b) and not in limitation thereof, the Committee in its exclusive discretion may enter into non-uniform and selective Award Agreements.  At any time after the shares of Common Stock or other security of the Company are listed on a national securities exchange, then other than pursuant to Section 13, the Committee shall not without the approval of the Company’s stockholders (i) lower the option price per share of Common Stock of an Option after it is granted, (ii) cancel an Option in exchange for cash or another Award (other than in connection with  Substitute Awards), and (iii) take any other action with respect to an Option that would be treated as a repricing under U.S. generally applicable accounting standards.

 

3.3           Limitation of Liability.  No member of the Board or Committee, and no Director, officer or employee acting on behalf of the Board or Committee, will be personally liable for any act or omission in the Plan’s administration, other than an act or omission due to that person’s gross negligence or intentional misconduct.  No member of the Board or Committee will be personally liable for any act or omission of any other member of the Board or Committee.  Each member of the Board or Committee, and each Director, officer and employee acting on behalf of the Board or Committee, may rely upon information or advice provided by the Company’s officers, accountants, actuaries, compensation consultants, and counsel.  No member of the Board or a Committee, and no Director, officer or employee acting on behalf of the Board or a Committee, will be personally liable for any act or omission taken in good faith reliance on the information or advice.

 

SECTION 4

STOCK SUBJECT TO THE PLAN

 

4.1           Available Shares.  Subject to adjustment from time to time as provided in Section 13, the maximum aggregate number of shares of Common Stock available for issuance under the Plan shall be 7,680,000 shares.  If an Award entitles the holder thereof to receive or purchase shares of Common Stock, the number of shares covered by such Award or to which such Award relates shall be counted against the maximum aggregate number of shares of Common Stock available for issuance under the Plan on the Grant Date of such Award.  If any shares of Common Stock subject to an Award are forfeited, expire or otherwise terminate without issuance of such shares, or any Award is settled for cash or otherwise does not result in the issuance of all or a portion of the shares of Common Stock subject to such Award, such shares of Common Stock shall, to the extent of such forfeiture, expiration, termination, cash settlement or non-issuance, again be available for issuance under the Plan.

 

4.2           Incentive Stock Options Shares.  Subject to adjustment from time to time as provided in Section 13, the maximum aggregate number of shares of Common Stock available for issuance through Incentive Stock Options shall be 7,680,000 shares.

 

4.3           Substitute Awards.  The number of shares of Common Stock covered by a Substitute Award or to which a Substitute Award relates shall not be counted against the maximum aggregate number of shares of Common Stock available for issuance under the Plan.

 

4.4           Source of Shares.  Shares of Common Stock delivered by the Company or a Subsidiary, as applicable, in settlement of Awards (including Substitute Awards) may be authorized and unissued shares of Common Stock, shares of Common Stock held in the treasury of the Company, or a combination of the foregoing.

 

  

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SECTION 5

ELIGIBILITY

 

An Award may be granted to any Employee or Director whom the Committee from time to time selects, including prospective Employees conditioned on their becoming Employees (each, an “Eligible Person”).  Notwithstanding the foregoing, an Award of Incentive Stock Options may only be granted to an Employee of the Company, or of a Subsidiary that is also a “subsidiary corporation” of the Company within the meaning of Section 424(f) of the Code.

 

SECTION 6

AWARDS

 

6.1           Grant of Awards.  The Committee may from time to time grant Awards of Options, Restricted Stock, Restricted Stock Units or other Awards under the Plan to one or more Eligible Persons.  The Committee shall have the authority, in its discretion, to determine the Eligible Persons to receive one or more Awards, the type or types of Awards to be granted under the Plan, and the terms of any Awards granted, consistent with the terms of the Plan.  Such Awards may be granted either alone or in addition to any other type of Award.  The provisions governing Awards need not be the same with respect to each Participant.

 

6.2           Award Agreement.  Awards granted under the Plan shall be evidenced by a written Award Agreement that shall contain such terms, conditions, limitations and restrictions as the Committee shall deem advisable and are not inconsistent with the Plan or applicable law.

 

6.3           Director Award and Fee Limits.  The aggregate grant date fair value of Awards to a Director in any calendar year shall not exceed $500,000, and the total fees paid to Directors in cash for services in any calendar year shall not exceed $500,000.

 

SECTION 7

OPTIONS

 

7.1           Grant of Options.  The Committee may grant Options.  Subject to the provisions of the Plan, an Option shall vest and be fully exercisable as may be determined by the Committee in its discretion and provided in an applicable Award Agreement.

 

7.2           Option Type.  An Option granted may be either of a type that complies with the requirements for “incentive stock options” in Section 422 of the Code (“Incentive Stock Option”) or of a type that does not comply with such requirements (“Nonqualified Stock Option”).  The aggregate Fair Market Value (determined at the time that the Incentive Stock Option is granted) of the shares of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Participant during any calendar year under the Plan and under any other option plan of the Company or a Subsidiary shall not exceed $100,000, and any Option granted in excess of this limitation shall be treated as a Nonqualified Stock Option.

 

  

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7.3           Option Exercise Price.  Except as otherwise permissible under this Section 7.3, the exercise price (“Exercise Price”) per share of Common Stock for each Option granted under the Plan shall not be less than 100% of the Fair Market Value of such share of Common Stock, determined as of the Grant Date.  In the case of an individual who on the Grant Date owns (or is deemed to own pursuant to Section 424(d) of the Code) more than 10% of the voting power of all classes of stock of the Company or any Subsidiary (a “Ten Percent Stockholder”), the Exercise Price per share of Common Stock for an Incentive Stock Option shall not be less than 110% of the Fair Market Value of such share of Common Stock on the Gant Date.  An Option that is a Substitute Award may be granted with an Exercise Price lower than the Fair Market Value of a share of Common Stock on the Grant Date if such Option is granted in a manner satisfying the provisions of Section 422 of the Code in the case of a Substitute Award for an Option that is an Incentive Stock Option, or the provisions of Section 409A of the Code in the case of a Substitute Award for an Option that is a Nonqualified Stock Option.

 

7.4           Option Term. Options granted under the Plan shall vest and become exercisable in such manner and on such date or dates, and shall expire after such period, not to exceed 10 years, each as determined by the Committee and set forth in the applicable Award Agreement; provided, however, the term of an Incentive Stock Option may not exceed 10 years, and the term of an Incentive Stock Option granted to a Ten Percent Stockholder may not exceed five years.

 

7.5           Exercise of Option.  To the extent an Option has vested and become exercisable, the Option may be exercised by the Participant in whole or in part from time to time by delivery to the Company or its designee of a written or electronic notice of exercise, in accordance with the terms of the applicable Award Agreement and any procedures established by the Committee for such exercise, accompanied by payment of the Exercise Price as described in Section 7.6, and payment of any taxes required to be withheld as described in Section 11.  An Option may be exercised only for whole shares.  The Committee may exclude one or more methods for exercising an Option in countries outside the United States.

 

7.6           Payment of Exercise Price.  The aggregate Exercise Price payable upon the exercise of an Option shall be payable:  (a) in cash, check or wire transfer; (b) to the extent permitted by the Committee, by tendering (either actually or by attestation) shares of Common Stock already owned by the Participant; (c) by delivery of a properly executed exercise notice directing the Company to withhold shares of Common Stock issuable pursuant to exercise of the Option with a fair market value sufficient to pay the Exercise Price; (d) if the Common Stock is publicly traded on an established securities exchange or trading system, then the Exercise Price may be paid, at the discretion of the Committee, by authorizing a third party to sell, on behalf of the Participant, the appropriate number of shares of Common Stock otherwise issuable to the Participant upon the exercise of the Option and to remit to the Company a sufficient portion of the sale proceeds to pay the Exercise Price for the shares of Common Stock being acquired; or (e) by such other consideration as the Committee may permit in its sole discretion.  The Committee may exclude one or more methods for paying the Exercise Price of an Option in countries outside the United States.

 

7.7           Post-Termination Exercises.  The Committee shall establish and set forth in each Award Agreement that evidences an Option whether the Option shall continue to be exercisable, and the terms and conditions of such exercise, after a termination of service, any of which provisions may be waived or modified by the Committee at any time.

 

  

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SECTION 8

RESTRICTED STOCK AND RESTRICTED STOCK UNITS

 

8.1           Grant of Restricted Stock and Restricted Stock Units.  The Committee may grant Restricted Stock and Restricted Stock Units on such terms and conditions and subject to such repurchase or forfeiture restrictions, if any (which may be based on continuous service with the Company or a Subsidiary or the achievement of any performance criteria), as the Committee shall determine in its sole discretion, which terms, conditions and restrictions shall be set forth in the applicable Award Agreement.

 

8.2           Issuance of Shares.  Subject to applicable laws, upon the satisfaction of any terms, conditions and restrictions prescribed with respect to Restricted Stock or Restricted Stock Units, or upon a Participant’s release from any terms, conditions and restrictions of Restricted Stock or Restricted Stock Units, as determined by the Committee in its sole discretion, and subject to the provisions of Section 11, (a) the shares of Common Stock covered by an Award of Restricted Stock shall become freely transferable by the Participant, and (b) the Restricted Stock Units shall be paid in cash, shares of Common Stock or a combination thereof, as the Committee shall determine in its sole discretion.  Any fractional shares subject to such Awards shall be paid to the Participant in cash.

 

8.3           Dividends and Dividend Equivalents.  Participants holding shares of Restricted Stock or Restricted Stock Units may, if the Committee so determines, be credited with dividends paid with respect to the shares of Restricted Stock, or dividend equivalents with respect to Restricted Stock Units, while they are so held in a manner determined by the Committee in its sole discretion.  The Committee may apply any restrictions to the dividends or dividend equivalents that the Committee deems appropriate in its sole discretion.  The Committee, in its sole discretion, may determine the form of payment of dividends or dividend equivalents, including cash, shares of Common Stock, Restricted Stock or Restricted Stock Units.

 

8.4           Waiver of Restrictions.  Notwithstanding any other provisions of the Plan, the Committee, in its sole discretion, may waive the repurchase or forfeiture period and any other terms, conditions or restrictions on any Restricted Stock or Restricted Stock Unit under such circumstances and subject to such terms and conditions as the Committee shall deem appropriate in its sole discretion, including upon the occurrence of a Participant’s death, disability or retirement, or upon a change in control.

 

SECTION 9

OTHER AWARDS

 

In addition to the Awards described in Section 7 and Section 8, and subject to the terms of the Plan, the Committee may grant other incentives payable in cash or in shares of Common Stock under the Plan as it determines to be in the best interests of the Company and subject to such other terms and conditions as it deems appropriate in its sole discretion.  The Committee may exclude the use of one or more other Awards in countries outside the United States.

 

  

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SECTION 10

WITHHOLDING

 

To the extent required by applicable federal, state, local or foreign law, a Participant (or authorized transferee) shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise by reason of the grant, vesting or exercise of an Award.  The Company shall not be required to issue shares or to recognize the disposition of such shares until such obligations are satisfied.  Subject to applicable law, the Company may:  (a) deduct from any cash payment made to a Participant under the Plan an amount that satisfies all or any portion of any withholding tax obligations; (b) require the Participant through payroll withholding, cash payment, or otherwise to satisfy all or any portion of the withholding tax obligations; (c) withhold a portion of the shares of Common Stock that otherwise would be issued to the Participant upon grant, vesting or exercise of the Award by considering applicable minimum statutory withholding rates or other applicable withholding rates, including maximum applicable rates; (d) to the extent permitted by the Committee in its sole discretion, allow the Participant to tender shares previously acquired; (e) if the Common Stock is publicly traded on an established securities exchange or trading system, at the discretion of the Committee, allow the Participant to authorize a third party to sell, on behalf of the Participant, the appropriate number of shares otherwise issuable to the Participant upon the exercise of an Option and to remit to the Company a sufficient portion of the sale proceeds to satisfy the withholding tax obligations, considering applicable minimum statutory withholding rates or other applicable withholding rates, including maximum applicable rates; or (f) provide for the satisfaction of any withholding tax obligation through any combination of the foregoing methods.  The Committee may exclude one or more methods for satisfying any tax withholding associated with the exercise of an Option in countries outside the United States.

 

SECTION 11

ASSIGNABILITY

 

Unless provided otherwise by the Committee, no Award or interest in an Award may be sold, assigned, pledged (as collateral for a loan or as security for the performance of an obligation or for any other purpose) or transferred by the Participant or made subject to attachment or similar proceedings otherwise than by will or by the applicable laws of descent and distribution, except to the extent a Participant designates one or more beneficiaries on a Company-approved form who may exercise the Award or receive payment under the Award after the Participant’s death.  During a Participant’s lifetime, an Award may be exercised only by the Participant.

 

SECTION 12

ADJUSTMENTS

 

12.1        Adjustment of Shares.

 

(a)           In the event that the number of shares of Common Stock shall be increased or decreased through reorganization, reclassification, recapitalization, combination of shares, stock splits, reverse stock splits, spin-offs, the payment of a stock dividend or extraordinary cash dividend, or other distribution of the Common Stock for which no consideration is received by the Company or otherwise, then each share of Common Stock which has been authorized for issuance under the Plan, whether such share is then currently subject to or may become subject to an Award under the Plan, shall be adjusted as determined by the Committee in its exclusive discretion to reflect such increase or decrease, unless the terms of the transaction provide otherwise.  Outstanding Awards shall also be adjusted as to price and other terms as determined by the Committee in its exclusive discretion to reflect the foregoing events.

 

  

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(b)           In the event there shall be any other change in the number or kind of the outstanding shares of Common Stock, or any stock or other securities into which such Common Stock shall have been changed, or for which it shall have been exchanged, whether by reason of merger, consolidation or otherwise, then the Committee shall, in its sole discretion, determine the appropriate adjustment, if any, to be effected.  Notwithstanding anything to the contrary herein, any adjustment to Awards granted pursuant to the Plan shall comply with the applicable requirements, provisions and restrictions of the Code and applicable law.

 

(c)           No right to purchase fractional shares shall result from any adjustment in Awards pursuant to Section 13.1(a) or (b).  In case of any such adjustment, the shares subject to the Award shall be rounded down to the nearest whole share.  Notice of any adjustment shall be given by the Company to each Participant which shall have been so adjusted and such adjustment (whether or not notice is given) shall be effective and binding for all purposes of the Plan.

 

12.2         Limitations.  The grant of Awards shall in no way affect the Company’s right to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

 

SECTION 13

AMENDMENT AND TERMINATION

 

13.1        Amendment, Suspension or Termination of Plan.  Subject to applicable law, the Board may amend, suspend or terminate the Plan or any portion of the Plan at any time and in such respects as it shall deem advisable; provided, however, that, to the extent required by applicable law, stockholder approval shall be required for any amendment to the Plan.  No amendment may be effective, without the approval of the stockholders of the Company, if approval of such amendment is required in order that transactions in Company securities under the Plan be exempt from the operation of Section 16 of the Exchange Act or if such amendment, with respect to the issuance of Incentive Stock Options, either: (a) materially increases the number of shares of Common Stock which may be issued under the Plan, except as provided for in Section 13; or (b) materially modifies the requirements as to eligibility for participation in the Plan (unless designed to comport with applicable law).  The amendment, suspension or termination of the Plan or a portion thereof or the amendment of an outstanding Award shall not, without the Participant’s consent, materially adversely affect any rights under any Award theretofore granted to the Participant under the Plan.

 

13.2        Amendment of Awards.  Subject to applicable law and the Plan, the Committee will have the exclusive authority and discretion to amend any Award or Award Agreement.  If the amendment will have a material adverse effect on a Participant’s rights, or result in a material increase in the Participant’s obligations, the Committee must obtain the Participant’s written consent to the amendment.

 

  

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13.3        Term of the Plan.  Unless sooner terminated as provided herein, the Plan shall terminate 10 years from the Effective Date.  After the Plan is terminated, no future Awards may be granted, but Awards previously granted shall remain outstanding in accordance with their applicable terms and conditions and the Plan’s terms and conditions.

 

SECTION 14

GENERAL

 

14.1        No Individual Rights.  No individual or Participant shall have any claim to be granted any Award under the Plan, and the Company has no obligation for uniformity of treatment of Participants under the Plan.  Furthermore, nothing in the Plan or any Award granted under the Plan shall be deemed to constitute an employment contract or confer or be deemed to confer on any Participant any right to continue in the employ of, or to continue any other relationship with, the Company or any Subsidiary, or limit in any way the right of the Company or any Subsidiary to terminate a Participant’s employment or other relationship at any time, with or without cause.

 

14.2        Issuance of Shares.  In the event that the Board or the Committee determines in its sole discretion that the listing, qualification or registration of the shares issued under the Plan on any securities exchange or quotation or trading system or under any applicable law (including state securities laws) or governmental regulation is necessary as a condition to the issuance of such shares under the Award, the Award may not be exercised in whole or in part unless such listing, qualification, consent or approval has been unconditionally obtained.

 

14.3        No Rights as Stockholder.  Unless otherwise determined by the Committee in its discretion, a participant to whom an Award of Restricted Stock has been made shall have ownership of such Common Stock, including the right to vote the same and to receive dividends or other distributions made or paid with respect to such Common Stock.  Unless otherwise determined by the Committee in its discretion, a participant to whom an Award of Options, Restricted Stock Units or any other Award (other than an Award of Restricted Stock) is made shall have no rights as a stockholder with respect to any Common Stock or as a holder with respect to other securities, if any, issuable pursuant to any such Award until the date of the issuance of a stock certificate to the Participant or the entry on the Participant’s behalf of an uncertificated book position on the records of the Company’s transfer agent and registrar for such Common Stock or other instrument of ownership, if any.  Except as provided in Section 13, no adjustment shall be made for dividends, distributions or other rights (whether ordinary or extraordinary, and whether in cash, securities, other property or other forms of consideration, or any combination thereof) for which the record date is prior to the date such book entry is made or a stock certificate or other instrument of ownership, if any, is issued.

 

14.4        No Trust or Fund.  The Plan is intended to constitute an “unfunded” plan.  Nothing contained herein shall require the Company to segregate any monies or other property, or shares of Common Stock, or to create any trusts, or to make any special deposits for any immediate or deferred amounts payable to any Participant, and no Participant shall have any rights that are greater than those of a general unsecured creditor of the Company.

 

  

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14.5        Successors.  All obligations of the Company under the Plan with respect to Awards shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all the business and/or assets of the Company.

 

14.6        Substitute Awards.  Notwithstanding any other provision of the Plan, the terms of Substitute Awards may vary from the terms set forth in the Plan to the extent the Committee deems appropriate to conform, in whole or in part, to the provisions of the awards in substitution for which they are granted.

 

14.7        Severability.  If any provision of the Plan or any Award is determined to be invalid, illegal or unenforceable in any jurisdiction, or as to any person, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or, if it cannot be so construed or deemed amended without, in the Committee’s determination, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, person or Award, and the remainder of the Plan and any such Award shall remain in full force and effect.

 

14.8        Choice of Law.  The Plan, all Awards granted thereunder and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by the laws of the United States, shall be governed by the laws of the State of Delaware, without giving effect to principles of conflicts of law.

 

14.9        Electronic Delivery and Signatures.  Any reference in the Plan, an Award or an Award Agreement to a written document includes without limitation any document delivered electronically or posted on the Company’s or a Subsidiary’s intranet or other shared electronic medium controlled by the Company or Subsidiary.  The Committee and any Participant may use facsimile and PDF signatures in signing any Award or Award Agreement, in exercising any Option, or in any other written document in the Plan’s administration.  The Committee and each Participant are bound by facsimile and PDF signatures, and acknowledge that the other party relies on facsimile and PDF signatures.

 

14.10     Headings and Captions.  The headings and captions in the Plan are used only for convenience, and do not construe, define, expand, interpret, or limit any provision of the Plan.

 

14.11     Gender and Number.  Whenever the context may require, any pronoun includes the corresponding masculine, feminine, or neuter form, and the singular includes the plural and vice versa.

 

14.12     Construction.  The terms “includes,” “including,” “includes without limitation,” and “including without limitation” are not to be construed to limit any provision or item that precedes or follows these terms (whether in the same section or another section) to the specific or similar provisions or items that follow these terms.

 

  

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SECTION 15

EFFECTIVE DATE

 

The Plan shall be effective as of the earlier of the date that the Plan is adopted by the Board or the date that it is approved by the stockholders of the Company (the “Effective Date”). The expiration date of the Plan, on and after which date no Awards may be granted hereunder, shall be the 10th anniversary of the Effective Date; provided, however, that such expiration shall not affect Awards then outstanding, and the terms and conditions of the Plan shall continue to apply to such Awards; and provided further, that no Option shall be exercised, no Restricted Stock granted, and no Restricted Stock Units or other Awards shall be paid out unless and until the Plan has been approved by the stockholders of the Company, which approval shall be within 12 months before or after the date the Plan is adopted by the Board.  If the Company does not obtain stockholder approval within 12 months before or after the date the Plan is adopted by the Board, the Plan and any Award made thereunder will terminate ab initio.

 

*           *           *           *           *

 

 

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