Common use of Conversion Shares Issuable Upon Conversion of Principal Amount Clause in Contracts

Conversion Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon a conversion hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted plus any accrued but unpaid interest thereon (“Conversion Amount”), by (y) the Conversion Price, provided that if the Conversion Price is less than the Floor Price, then the Company may, at its election, in lieu of issuing such number of Conversion Shares as would be issuable hereunder upon such conversion: 1. issue such number of Conversion Shares as is determined by dividing the Conversion Amount by the Floor Price, and 2. pay in cash to the Holder, within three (3) Trading Days following the Conversion Date, an amount equal to the product of (1) the difference between (x) the number of Conversion Shares which would have been issued under this Section if the Company did not make such election and (y) the number of Conversion Shares which was actually issued pursuant to clause (A) above, multiplied by (2) the Market Price as of the Conversion Date. For example, a $100,000 Conversion Amount with a Conversion Price of $0.32, a Floor Price of $0.35 and a Market Price of $0.40 is entitled to 312,500 Conversion Shares ($100,000/$0.32), provided that, if elected, the Company may use the Floor Price and issue only 285,714 shares ($100,000/$0.35) and make a cash payment of $10,714.29 ((312,500-285,714) x Market Price of $0.40).