Common use of Optional Equity Conversion Clause in Contracts

Optional Equity Conversion. Upon the closing of an equity financing of the Company (other than a Qualified IPO) in which the Company sells shares of its equity securities (the “Optional Equity Conversion Securities”), but which financing does not qualify as an Equity Financing pursuant to Section 5(a)(i) (the “Optional Equity Financing”), the principal and interest due on this Note shall be convertible, at the option of the Holder, into that number of fully paid and nonassessable shares of Optional Equity Conversion Securities determined by dividing the unpaid principal amount of this Note and interest due as of the Optional Equity Financing Closing Date (as defined herein) by the per share purchase price of the Optional Equity Conversion Securities issued in the Optional Equity Financing. The conversion shall be deemed to have occurred as of the date of such closing or the date of the first closing in a series of closings (the “Optional Equity Financing Closing Date”). The Company shall give the Holder at least ten (10) days prior written notice of the terms and conditions of the proposed Optional Equity Financing and of the proposed Optional Equity Financing Closing Date. As a condition precedent (which may be waived by the Company) to conversion of this Note as provided for in this Section 5(d), the Holder of this Note will be required to execute the definitive stock purchase agreement and such other agreements prepared in connection with the Optional Equity Financing as are usual, reasonable and customary. In any event, upon the conversion of this Note as set forth in this Section 5(d), the Optional Equity Conversion Securities, including any warrants or other property or rights associated therewith, received by the Holder shall have identical rights, preferences and privileges as received by investors in the Optional Equity Financing, and shall benefit from identical representations, warranties, covenants and registration rights, if any, of and from the Company as those received by the investors in the Optional Equity Financing. Notwithstanding the foregoing, the option to convert contained in this Section 5(d) shall not apply to any issuance of securities listed in Section 4.6(a) of the Second Amended and Restated Investor Rights Agreement dated as of March 5, 2010 (as amended, the “XXX”) between Company and the Investors and Founders (as defined therein) to which the rights of first refusal set forth in Section 4 of the XXX do not apply.