Common use of Conversion of Company Common Shares Clause in Contracts

Conversion of Company Common Shares. Each Company Common Share issued and outstanding immediately prior to the Effective Time (other than shares to be cancelled in accordance with Section 2.08(a)) (each, a "MERGER SHARE") shall be converted into the right to receive the following (the "MERGER CONSIDERATION"): (i) subject to the Adjustment Event provided in Section 7.02 an amount in cash (rounded to the nearest whole cent and without interest) equal to $2.20 less the Aggregate Hold- back (defined below) (such amount, the "CASH AMOUNT"); (ii) three fiftieths (3/50ths) of an uncertificated right to subscribe (each such right, a "SUBSCRIPTION RIGHT") for common stock in the Surviving Corporation (the "UNDERLYING SHARES"), in accordance with Section 2.12; (iii) an additional amount in cash, without interest, equal to $0.35 (the "NOTE CASH AMOUNT" and collectively with the Cash Amount, the "CASH CONSIDERATION"), or, subject to the Adjustment Event, and at the option of the holder of the Company Common Shares (the "NOTE ELECTION"), 0.0057461 of a debt security (one such debt security, a "NOTE") backed by certain assets of a special-purpose entity, in accordance with Section 2.13; and (iv) if applicable, the Escrow Distribution Amount (defined below) as of the Escrow Distribution Date (defined below), in accordance with Section 2.14(b). If and to the extent holders of Company Common Shares fail to make an election in connection with the Note Election, such shareholders shall be deemed to have elected to receive the Note Cash Amount (such holders who elect, or are deemed to elect, to receive the Note Cash Amount, the "CASH ELECTORS"). At the Effective Time, all Company Common Shares shall no longer be outstanding, shall automatically be cancelled and shall cease to exist, and each holder of a certificate that represented any such shares immediately prior to the Effective Time (a "COMMON CERTIFICATE") shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration. (1) For purposes of this Section 2.08(c), the "AGGREGATE HOLDBACK" shall mean the sum of the Escrow Share Holdback, the Dividend Holdback and the Shared Costs Holdback. For purposes hereof, the "ESCROW SHARE HOLDBACK" shall mean the Escrow Amount (defined below) divided by the aggregate number of Merger Shares; the "DIVIDEND HOLDBACK" shall mean the total amount of dividends that the Company pays with respect to Company Common Shares after the date hereof and prior to the Effective Time divided by the aggregate number of Merger Shares; and the "SHARED COSTS HOLDBACK" shall mean one-half of the Shared Costs (defined below) divided by the aggregate number of Merger Shares.

Conversion of Company Common Shares. Each At the Effective Time, (i) each Company Common Share that is issued and outstanding immediately prior to the Effective Time (other than shares to will, by virtue of the Merger, and without further action on the part of any holder thereof, be cancelled in accordance with Section 2.08(a)) (each, a "MERGER SHARE") shall be automatically converted into the right to receive receive, and shall be exchangeable for, that number of fully paid and nonassessable shares of Parent Common Stock equal to the following Company Exchange Number (as defined in Section 1.2(c)) (the "MERGER CONSIDERATION"): (i“Merger Shares”) subject to the Adjustment Event provided in Section 7.02 an amount in cash (rounded to the nearest whole cent and without interest) equal to $2.20 less the Aggregate Hold- back (defined below) (such amount, the "CASH AMOUNT"); (ii) three fiftieths (3/50ths) of an uncertificated right to subscribe (each such right, a "SUBSCRIPTION RIGHT") for common stock Company Common Share that is held in the Surviving Corporation (the "UNDERLYING SHARES"), treasury of Company shall be cancelled and retired and no consideration shall be delivered in accordance with Section 2.12; (iii) an additional amount in cash, without interest, equal to $0.35 (the "NOTE CASH AMOUNT" and collectively with the Cash Amount, the "CASH CONSIDERATION"), or, subject to the Adjustment Event, and at the option of the exchange therefor. Each holder of the a certificate representing Company Common Shares (the "NOTE ELECTION"), 0.0057461 of each a debt security (one such debt security, a "NOTE"“Company Certificate”) backed by certain assets of a special-purpose entity, in accordance with Section 2.13; and (iv) if applicable, the Escrow Distribution Amount (defined below) as of the Escrow Distribution Date (defined below), in accordance with Section 2.14(b). If and to the extent holders of Company that have been converted into Parent Common Shares fail to make an election in connection with the Note Election, such shareholders shall be deemed to have elected to receive the Note Cash Amount (such holders who elect, or are deemed to elect, to receive the Note Cash Amount, the "CASH ELECTORS"). At the Effective Time, all Company Common Shares shall no longer be outstanding, shall automatically be cancelled and shall cease to exist, and each holder of a certificate that represented any such shares immediately prior to Stock at the Effective Time (as a "COMMON CERTIFICATE") result of the Merger shall thereafter cease to have any rights with respect theretoto such Company Common Shares, except the right to receive shares of Parent Common Stock and cash (without interest) for fractional interests of the Merger Consideration. shares of Parent Common Stock in accordance with Section 1.2(d) upon the surrender of such Certificate. Upon the delivery by each Company Shareholder of (1i) For purposes the Company Certificates representing all Company Common Shares held beneficially and of this Section 2.08(crecord by such Company Shareholder and (ii) a letter of transmittal in the form attached hereto as Exhibit E (the “Letter of Transmittal”), the "AGGREGATE HOLDBACK" such Company Shareholder shall mean the sum receive in exchange therefor a certificate representing 90% of the Escrow Share Holdback, the Dividend Holdback and the Shared Costs Holdback. For purposes hereof, the "ESCROW SHARE HOLDBACK" shall mean the Escrow Amount (defined below) divided by the aggregate number of Merger Shares which such Company Shareholder has the right to receive pursuant to this Section 1.2(b), with the remaining Merger Shares (the “Hold-Back Shares; ”) registered in the "DIVIDEND HOLDBACK" shall mean the total amount name of dividends that the such Company pays with respect Shareholder to Company Common Shares after the date hereof and prior be placed in escrow pursuant to the Effective Time divided by the aggregate number of Merger Shares; and the "SHARED COSTS HOLDBACK" shall mean one-half terms of the Shared Costs (defined below) divided by the aggregate number of Merger SharesHold-Back Share Escrow Agreement.

Conversion of Company Common Shares. Each Company Common Share (a) At the Effective Time, all of the common stock of the Company, par value $0.0001 per share, issued and outstanding immediately prior to thereto (the Effective Time (other than shares to be cancelled in accordance with Section 2.08(a)) (each, a "MERGER SHARECompany Common Shares") shall shall, by virtue of the Merger and without any action on the part of the holders thereof, be converted into the right to receive the following an aggregate of Three Million Dollars ($3,000,000) (the "MERGER CONSIDERATIONMerger Consideration"): ) in the following forms: (i) such number of shares of Common Stock of Buyer, par value $0.01 per share (the "Buyer Common Shares"), up to the number of shares equal to a market value of no more than One Million Five Hundred Thousand Dollars ($1,500,000) which shall be determined by the average of the closing bid and ask prices during the 10 trading days preceding the Effective Date, as reported on the Nasdaq SmallCap Market System, subject to the Adjustment Event provided in Section 7.02 an amount in cash a minimum value of $4.00 per share (rounded to the nearest whole cent and without interest) equal to $2.20 less the Aggregate Hold- back (defined below) (such amount, the "CASH AMOUNTStock Consideration"); ) and (ii) three fiftieths the remaining amount (3/50thsthe "Cash Consideration") to be payable in accordance with this ARTICLE 1. (b) The Cash Consideration shall be payable by Buyer to the Company Shareholders, as follows: (i) One-third (1/3) of an uncertificated right the Cash Consideration shall be delivered by Buyer at the Closing (the "Closing Payment"), subject to subscribe adjustment in accordance with SECTION 8.5 hereof; and (ii) The remaining two-thirds (2/3) of the Cash Consideration shall be payable by Buyer in four (4) equal installments, each such rightdue on the 4, a 8, 12 and 16-month anniversaries of the Effective Date, as evidenced by the promissory note to be delivered by Buyer in substantially the form of EXHIBIT A attached hereto (the "SUBSCRIPTION RIGHTBuyer's Note") for common stock ), secured by Buyer's shares in the Surviving Corporation as provided below in SECTION 8.2. (c) All of the shareholders of the Company as of the Effective Time (the "UNDERLYING SHARESCompany Shareholders") identified on SCHEDULE 1.3 by not having an "A" next to their name (the "Minority Shareholders") (who, to the Company's best knowledge, do not meet the definition of "Accredited Investor" under Regulation D of the Securities Act of 1933, as amended (the "Securities Act")) shall receive their pro rata Merger Consideration in the following allocation: (i) One-third (1/3) in cash as part of the Closing Payment; (ii) Two-thirds (2/3) as part of the Buyer's Note. (d) All Company Shareholders who have an "A" marked next to their name on SCHEDULE 1.3 (the "Accredited Shareholders") (who, to the Company's best knowledge, do meet the requirements of the definition of "Accredited Investor" under Regulation D of the Securities Act, or who will have retained a purchaser representative in accordance connection with Section 2.12; the offering of Buyer Common Shares contemplated hereby) shall receive their pro rata Merger Consideration in the following allocation: (i) One-half (1/2) in Stock Consideration; (ii) One-sixth (1/6) in cash as part of the Closing Payment; (iii) an additional amount in cash, without interest, equal to $0.35 One-third (1/3) as part of the "NOTE CASH AMOUNT" Buyer's Note. (e) At and collectively with as of the Cash AmountEffective Time, the "CASH CONSIDERATION"), or, subject to the Adjustment Event, and at the option holders of the holder of certificates representing the Company Common Shares (the "NOTE ELECTION"), 0.0057461 of a debt security (one such debt security, a "NOTE") backed by certain assets of a special-purpose entity, in accordance with Section 2.13; and (iv) if applicable, the Escrow Distribution Amount (defined below) as of the Escrow Distribution Date (defined below), in accordance with Section 2.14(b). If and to the extent holders of Company Common Shares fail to make an election in connection with the Note Election, such shareholders shall be deemed to have elected to receive the Note Cash Amount (such holders who elect, or are deemed to elect, to receive the Note Cash Amount, the "CASH ELECTORS"). At the Effective Time, all Company Common Shares shall no longer be outstanding, shall automatically be cancelled and shall cease to exist, and each holder of a certificate that represented any such shares immediately prior to at the Effective Time (a "COMMON CERTIFICATE") shall cease to have any rights with respect theretoas shareholders of the Company, except the right to receive the Merger Consideration in accordance with ARTICLE 1 hereof and such rights, if any, as they may have pursuant to Colorado law. Except as provided above, until certificates representing Company Common Shares are surrendered for exchange, each such certificate shall, after the Effective Time, represent for all purposes only the right to receive the Merger Consideration. (1f) For purposes If, between the date of this Section 2.08(c)Agreement and the Effective Time, the "AGGREGATE HOLDBACK" outstanding Buyer Common Shares or Company Common Shares, respectively, shall mean the sum have been changed into a different number of the Escrow Share Holdbackshares or a different class as a result of any reclassification, recapitalization, combination, reverse stock split, exchange of shares or stock dividend, the Dividend Holdback and the Shared Costs Holdback. For purposes hereof, the "ESCROW SHARE HOLDBACK" Stock Consideration shall mean the Escrow Amount (defined below) divided by the aggregate number of Merger Shares; the "DIVIDEND HOLDBACK" shall mean the total amount of dividends that the Company pays with respect to Company Common Shares after the date hereof and prior to the Effective Time divided by the aggregate number of Merger Shares; and the "SHARED COSTS HOLDBACK" shall mean one-half of the Shared Costs (defined below) divided by the aggregate number of Merger Sharesbe appropriately adjusted.