Conversion and Repayment. (a) If the Company, on or before the Maturity Date, issues and sells shares of its preferred stock (the “New Preferred Stock”) in a transaction, or series of related transactions, that raises at least $5,000,000 in equity financing for the Company, excluding indebtedness evidenced by the 2018 Notes that is converted into shares of New Preferred Stock in such transaction (which financing is referred to herein as a “Qualified Financing”), then upon the closing of such Qualified Financing, all of the then unpaid principal amount of this Note, together with accrued but unpaid interest thereon, shall automatically convert into shares of the same series of preferred stock of the Company as are issued by the Company in the Qualified Financing at a conversion price equal to the lower of: (i) 0.8 times the price per share that is paid by the investors purchasing shares of New Preferred Stock for cash in such Qualified Financing or (ii) an amount per share (the “Valuation Cap Per Share Value”) equal to (x) $50,000,000 divided by (y) the total number of shares of Common Stock of the Company outstanding immediately prior to the closing of the Qualified Financing, as determined on a fully-diluted basis to give effect to the conversion of all issued and outstanding shares of convertible preferred stock of the Company and the exercise of all then outstanding warrants and options of the Company, but excluding shares that are available for issuance, but are not subject to awards that are then outstanding, under the Company’s equity incentive plan or plans. (b) If the Company, on or before the Maturity Date, issues or sells any New Preferred Stock for cash in a single transaction or series of related transactions other than the Qualified Financing at any time on or before the date this Note matures (“Other Financing”), all (but not less than all) of the unpaid principal of this Note plus accrued interest on this Note may be converted at the option of the holders of a majority of the then outstanding principal amount under the 2018 Notes (the “Majority Note Holders”) at the closing of the Other Financing into shares of New Preferred Stock as issued and sold by the Company in such Other Financing at a price per share or unit equal to (i) 0.80 times (ii) the price per share at which shares of New Preferred Stock were issued and sold for cash in such Other Financing. (c) In the event that all of the unpaid principal of this Note plus accrued interest on this Note was not converted into a Qualified Financing or Other Financing prior to the Maturity Date, then all principal and accrued but unpaid interest under this Note shall convert on January 1, 2020 to shares of Series A Preferred Stock of the Company having the same terms as the Company’s Series A Preferred Stock at a price per share equal to $2.332 (as adjusted for any stock splits, stock dividends, recapitalizations, combinations, or similar transaction with respect to the Series A Preferred Stock of the Company after the date of this Note) (“Series A Preferred Stock”). (d) In the event of the occurrence of a Deemed Liquidation prior to a Qualified Financing, an Other Financing in which the Holder’s Note converts into Equity Securities in such Other Financing or December 31, 2019, then upon the election of the Majority Note Holders, either (i) all of the indebtedness evidenced by this Note, and all of the other 2018 Notes, shall be converted into shares of Series A Preferred Stock at a price per share of $2.332 (as adjusted for any stock splits, stock dividends, recapitalizations, combinations, or similar transaction with respect to the Series A Preferred Stock after the date of this Note), or (ii) the Holder of this Note shall be paid the outstanding principal amount of this Note together with all accrued but unpaid interest hereon.
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