Common use of Conversion of Debt to Equity Clause in Contracts

Conversion of Debt to Equity. a. Notwithstanding anything to the contrary contained in this Agreement, Lender shall have the right and option at any time prior to the payment in full of the principal amount outstanding hereunder and the interest thereon, to exchange Borrower’s payment obligation as to the then-outstanding principal balance for the Conversion Shares (the “Conversion Option”) by delivering to Borrower (the “Conversion Deliverables”) (A) written notice of Lender’s election to exercise the Conversion Option, (B) a counterpart of this Agreement bearing the signatures of Lender and Borrower, marked “PAID” and initialed by Lender on the first page, (C) a counterpart of Lender’s acceptance of the Conversion Shares, bearing Lender’s signature and (D) evidence of compliance with applicable U.S. securities law and regulations, including any legend on the certificates evidencing the Conversion Shares as required. The date of delivery of the Conversion Deliverables for conversion of Borrower’s payment obligation of the outstanding principal balance of the Loan to the Conversion Shares in strict compliance with the terms of this Section 2 is referred to herein for all purposes as the “Conversion.” “Conversion Shares” means the number of shares of common stock of Borrower that, at $11.244 per share, constitutes a value equivalent to the principal amount outstanding hereunder plus all interest accrued thereon, as of the date of the Conversion (the “Conversion Date”). Borrower’s right to prepay the Loan shall terminate upon receipt of the Conversion Deliverables.