Common use of Conversion of Existing Preferred Stock to Common Stock in Connection with the Qualified Financing Clause in Contracts

Conversion of Existing Preferred Stock to Common Stock in Connection with the Qualified Financing. In the event that an Existing Preferred Stockholder does not participate in the Qualified Financing by committing to purchase and purchasing (or securing an investor who commits to purchase and purchases), pursuant to the terms of the Series A-1 Purchase Agreement, in the Qualified Financing in the aggregate and within the time period specified in the Series A-1 Purchase Agreement such holder’s Pro Rata Portion of the Series A-1 Offering Existing Investor Available Amount, then the Applicable Portion of each series of Existing Preferred Stock held by such holder shall automatically, and without any further action on the part of such holder, be converted into shares of Common Stock at a rate of 1 share of Common Stock for every 5 shares of Existing Preferred Stock to be so converted and all accrued dividends on such shares of Existing Preferred Stock shall be forfeited. The conversion set forth in this paragraph (b) is referred to as the “Forced Conversion”. The Forced Conversion shall become effective immediately prior to, but subject to the consummation of, the Stage I Closing (as defined in the Series A-1 Purchase Agreement).