Common use of Automatic Conversion upon Qualified Financing Clause in Contracts

Automatic Conversion upon Qualified Financing. If a Qualified Financing occurs on or prior to the Target Financing Date, the Outstanding Balance of the Notes, plus accrued interest thereon, shall automatically be converted into a number of shares of the class of preferred stock issued in such Qualified Financing (the “Qualified Financing Shares”) on the date that aggregate cash proceeds of $25,000,000 or greater have been received by the Company pursuant to the Qualified Financing equal to (i) the Outstanding Balance of the Notes to be converted plus any accrued but unpaid and uncapitalized interest thereon divided by (ii) the original issue price of the Qualified Financing Shares (it being understood that such original issue price shall not exceed a maximum price of $6.00 per share, and if such original issue price exceeds $6.00 per share, for purposes of this calculation, the original issue price shall be deemed to be $6.00 per share (in each case as adjusted pursuant to Section 5.6)) (the “Qualified Conversion Price”). The Company shall provide the Purchasers with at least ten calendar days’ prior written notice of the anticipated occurrence of any Qualified Financing and the Purchasers shall irrevocably confirm (in writing, delivered to the Company at least three business days prior to the consummation thereof) their intention to effect the conversion in accordance with the terms hereof. The Company shall deliver the Qualified Financing Shares to the Purchasers concurrently with consummation of the Qualified Financing. Within ten business days after request by the Company, any Purchaser that is not party to the Stockholders Agreements shall deliver joinders or such other documents as are reasonably necessary for such Purchaser to become a party to the Stockholders Agreements.

Automatic Conversion upon Qualified Financing. If a Qualified Financing occurs The entire unpaid principal amount of this Note and all accrued and unpaid Interest on or prior to the Target Financing Datethis Note (collectively, the Outstanding Balance of the Notes, plus accrued interest thereon, “Adjusted Principal Amount”) shall automatically be converted into shares of Next Round Stock as follows. In the event that Maker offers and sells shares of a new series of preferred stock having rights, preferences or privileges that are senior to the rights of Maker’s Series B Preferred Stock to any one or more third parties with gross investment proceeds to Maker of at least $5,000,000 (which may occur in one transaction or a series of related transactions within a period of ninety (90) days of each other, and which shall include the conversion of the Notes issued pursuant to the Purchase Agreement) before the Maturity Date (a “Qualified Financing”), the Holder shall receive a number of shares of the class newly created series of preferred stock issued in such the Qualified Financing (“Next Round Stock”), equal to the “Qualified Financing Shares”) on the date that aggregate cash proceeds of $25,000,000 or greater have been received Adjusted Principal Amount divided by the Company pursuant to Note Conversion Price. “Note Conversion Price” means the Qualified Financing equal to lesser of (i) the Outstanding Balance of price per share for Next Round Stock paid by third parties in the Notes to be converted plus any accrued but unpaid Qualified Financing, multiplied by eighty percent (80%) and uncapitalized interest thereon divided by (ii) the original issue price per share equal to the quotient of (a) $20,000,000, divided by (b) as of the Qualified Financing Shares (it being understood that such original issue price shall not exceed a maximum price of $6.00 per share, and if such original issue price exceeds $6.00 per share, for purposes of this calculation, the original issue price shall be deemed to be $6.00 per share (in each case as adjusted pursuant to Section 5.6)) (the “Qualified Conversion Price”). The Company shall provide the Purchasers with at least ten calendar days’ prior written notice of the anticipated occurrence of any Qualified Financing and the Purchasers shall irrevocably confirm (in writing, delivered to the Company at least three business days time immediately prior to the consummation thereof) their intention to effect closing of a Qualified Financing, the number of outstanding shares of Common Stock and Preferred Stock of Maker (excluding any shares issuable upon conversion in accordance with the terms hereof. The Company shall deliver the Qualified Financing Shares to the Purchasers concurrently with consummation of the Qualified Financing. Within ten business days after request by Notes issued under the Purchase Agreement), plus any outstanding warrants for capital stock of Maker, outstanding stock options to purchase Common Stock and any shares of Common Stock reserved for issuance under the Company, any Purchaser that is not party to the Stockholders Agreements shall deliver joinders or such other documents as are reasonably necessary for such Purchaser to become a party to the Stockholders Agreements’s stock incentive plan.

Automatic Conversion upon Qualified Financing. If a Qualified Financing occurs The entire unpaid principal amount of this Note and all accrued and unpaid Interest on or prior to the Target Financing Datethis Note (collectively, the Outstanding Balance of the Notes, plus accrued interest thereon, “Adjusted Principal Amount”) shall automatically be converted into shares of Next Round Stock as follows. In the event that Maker offers and sells shares of a new series of preferred stock having rights, preferences or privileges that are senior to the rights of Maker’s Series B Preferred Stock to any one or more third parties with gross investment proceeds to Maker of at least $5,000,000 (which may occur in one transaction or a series of related transactions within a period of ninety (90) days of each other, and which shall include the conversion of the Notes issued pursuant to the Purchase Agreement) before the Maturity Date (a “Qualified Financing”), the Holder shall receive a number of shares of the class newly created series of preferred stock issued in such the Qualified Financing (“Next Round Stock”), equal to the “Qualified Financing Shares”) on the date that aggregate cash proceeds of $25,000,000 or greater have been received Adjusted Principal Amount divided by the Company pursuant to Note Conversion Price. “Note Conversion Price” means the Qualified Financing equal to lesser of (i) the Outstanding Balance of price per share for Next Round Stock paid by third parties in the Notes to be converted plus any accrued but unpaid Qualified Financing, multiplied by eighty percent (80%) and uncapitalized interest thereon divided by (ii) the original issue price per share equal to the quotient of (a) $20,000,000, divided by (b) as of the Qualified Financing Shares (it being understood that such original issue price shall not exceed a maximum price of $6.00 per share, and if such original issue price exceeds $6.00 per share, for purposes of this calculation, the original issue price shall be deemed to be $6.00 per share (in each case as adjusted pursuant to Section 5.6)) (the “Qualified Conversion Price”). The Company shall provide the Purchasers with at least ten calendar days’ prior written notice of the anticipated occurrence of any Qualified Financing and the Purchasers shall irrevocably confirm (in writing, delivered to the Company at least three business days time immediately prior to the consummation thereof) their intention closing of a Qualified Financing, the number of outstanding shares of Common Stock and Preferred Stock of Maker (excluding any shares issuable upon conversion of the Notes issued under the Purchase Agreement), plus any outstanding warrants for capital stock of Maker, outstanding stock options to effect purchase Common Stock and any shares of Common Stock reserved for issuance under the conversion in accordance with Company’s Stock Incentive Plan. Notwithstanding the terms hereof. The Company shall deliver the foregoing, if Maker consummates a Qualified Financing Shares to at a pre-money valuation less than $20,000,000 within ninety (90) days after the Purchasers concurrently First Closing, the Adjusted Principal Amount shall automatically be converted, with consummation of no conversion discount, into Next Round Stock at the price per share for such Next Round Stock paid by third parties in such Qualified Financing. Within ten business days after request by the Company, any Purchaser that is not party to the Stockholders Agreements shall deliver joinders or such other documents as are reasonably necessary for such Purchaser to become a party to the Stockholders Agreements.