Automatic Conversion of the Notes Clause Samples

Automatic Conversion of the Notes. The Notes shall be automatically converted into shares of the Company’s equity securities pursuant to the terms and conditions set forth in the Notes.

Automatic Conversion of the Notes. Unless earlier converted pursuant to Section 3.4(a) above, the outstanding principal amount under the Notes shall automatically be converted into that number of fully paid and non-assessable shares of SurfNet Common Stock obtained by dividing the principal amount under the Note surrendered for conversion by the Conversion Price (as defined below) when SurfNet achieves a run rate equaling gross annual sales of Thirteen Million Eight Hundred Thousand Dollars ($13,800,000) calculated on a rolling twelve (12) month basis.

Automatic Conversion of the Notes. The outstanding principal balance of the Notes and all accrued interest shall automatically convert into common stock of the Company immediately prior to the Company’s receipt of an effective order from the SEC declaring the registration statement of its initial public offering effective (the “Financing Event”). The shares of common stock issuable upon conversion of the Notes shall be registered in the registration statement for such Financing Event. The “Conversion Price” of the Notes will be at a price per share equal to the lower of the following: (i) 80% of the price per share paid by the purchasers of securities in such Financing Event; or (ii) $5.00. In the event that the Company fails to complete a Financing Event prior to the Maturity Date, the Notes shall automatically convert on the Maturity Date into shares of the Company’s common stock at a price of $2.50 per share.