Common use of Conversion upon a Qualified Equity Financing Clause in Contracts

Conversion upon a Qualified Equity Financing. In the event the Company completes, while any amounts are outstanding under the Notes, either (a) an initial public offering, on a firm underwritten basis, of the Company’s common stock, or (b) the first equity financing of the Company following September 30, 2014 that results in cash proceeds to the Company (excluding the conversion of the Notes) of at least ten million dollars ($10,000,000) (either (a) or (b), a “Qualified Equity Financing”), the Company shall convert the entire principal amount of and accrued interest on this Note into shares of the Company’s common or preferred stock (the “Next Equity Securities”) issued and sold at the close of the Qualified Equity Financing. The number of shares of Next Equity Securities to be issued upon such conversion shall be equal to the quotient obtained by dividing (i) the entire principal amount of this Note plus accrued interest by (ii) eighty percent (80%) of the price per share of the Next Equity Securities, rounded down to the nearest whole share, and the issuance of such shares upon such conversion shall be upon the terms and subject to the conditions applicable to the Qualified Equity Financing. In the event that the Company does not complete a Qualified Equity Financing on or before June 30, 2015, if the Requisite Holders thereafter elect to convert the Notes, rather than electing to have the Notes repaid in cash following the Maturity Date, the conversion must be into shares of the Company’s Series B Convertible Preferred Stock (the “Series B Preferred Stock”) at a conversion price equal to the most recent price per share paid by investors for shares of Series B Preferred Stock.

Conversion upon a Qualified Equity Financing. In the event the Company completes, while any amounts are outstanding under the Notes, either (a) an initial public offering, on a firm underwritten basis, of the Company’s common stock, or (b) the first equity financing of the Company following September 30March 1, 2014 2015 that results in cash proceeds to the Company (excluding the conversion of the Notes) of at least ten million dollars ($10,000,000) (either (a) or (b), a “Qualified Equity Financing”), the Company shall convert the entire principal amount of and accrued interest on this Note into shares of the Company’s common or preferred stock (the “Next Equity Securities”) issued and sold at the close of the Qualified Equity Financing. The number of shares of Next Equity Securities to be issued upon such conversion shall be equal to the quotient obtained by dividing (i) the entire principal amount of this Note plus accrued interest by (ii) eighty percent (80%) of the price per share of the Next Equity Securities, rounded down to the nearest whole share, and the issuance of such shares upon such conversion shall be upon the terms and subject to the conditions applicable to the Qualified Equity Financing. In the event that the Company does not complete a Qualified Equity Financing on or before June 30, 2015, if the Requisite Holders thereafter elect to convert the Notes, rather than electing to have the Notes repaid in cash following the Maturity Date, the conversion must be into shares of the Company’s Series B Convertible Preferred Stock (the “Series B Preferred Stock”) at a conversion price equal to the most recent price per share paid by investors for shares of Series B Preferred Stock.