Common use of Conversion of Secured Instrument into Preferred Stock Clause in Contracts

Conversion of Secured Instrument into Preferred Stock. If the Obligee has made a loan hereunder to the Company and the Subsidiaries on the Issuance Date, the following provisions shall be applicable: The outstanding principal amount of the Secured Instrument shall be convertible into Preferred Stock on the terms and subject to the conditions set forth in the Investment Agreement. All interest and other amounts (other than principal) theretofore accrued and owing hereunder or under the Due Diligence Fee Agreement shall be paid in full prior to or concurrent with such conversion. If the Secured Instrument is converted into Preferred Stock and the Obligee purchases additional Preferred Stock as set forth in the Investment Agreement, the Company will be obligated to repurchase all such Preferred Stock on the happening of certain conditions set forth in the Certificate of Designation. From and after such conversion of the Secured Instrument into Preferred Stock, the Secured Instrument shall no longer evidence an indebtedness for borrowed money, and notwithstanding anything herein to the contrary the term Secured Obligations as used in this Agreement and each other Transaction Document shall not mean or include any indebtedness for principal or interest, but the Secured Instrument shall remain in full force and effect to evidence the obligation of the Company to repurchase all such Preferred Stock under Section 8 of the Certificate of Designation and pay all other Secured Obligations then outstanding and the joint and several obligation of each and every Subsidiary to pay the Secured Obligations then outstanding, all of which shall continue to be secured by the Security Documents.