Common use of Qualified Equity Financing Conversion Clause in Contracts

Qualified Equity Financing Conversion. In the event that, on or prior to the Maturity Date and prior to a Change of Control (as defined below), the Company consummates a transaction or series of related transactions pursuant to which it sells and issues shares of the Company’s preferred stock or other equity securities (the “Financing Securities”) with aggregate gross proceeds to the Company of not less than $75,000,000.00 (excluding proceeds from the issuance of the Notes and other than proceeds from any other outstanding convertible notes, SAFEs, or other convertible securities of the Company) (such a transaction, a “Qualified Equity Financing”), the outstanding principal and accrued but unpaid interest under this Note shall automatically convert (the “Equity Financing Conversion”) into shares of the Company’s Series A-1 Preferred Stock, par value $0.0001 per share (the “Series A-1 Preferred Stock”) at a price per share equal to the Conversion Price (as defined below). Holder hereby agrees that it shall, at the time of the Equity Financing Conversion and as a condition precedent thereto, execute and deliver to the Company all transaction documents reasonably related to the Qualified Equity Financing as may be reasonably requested by the Company, including a purchase agreement, voting agreement and other ancillary agreements, with customary representations and warranties and transfer restrictions (including a lock-up agreement in connection with an IPO), and having the same terms as those agreements entered into by the other purchasers of Financing Securities. The “Conversion Price” means the sum of (i) the Pre-Acceptance Time CP and (ii) the Post-Acceptance Time CP. The “Pre-Acceptance Time CP” means the product of (A) the quotient of (1) the Pre-Acceptance Time Financing Allocation, divided by (2) the sum of the Pre-Acceptance Time Financing Allocation and the Post-Acceptance Time Financing Allocation, multiplied by (B) the lower of (1) the lowest price per share of any series of the Financing Securities sold in the Qualified Equity Financing, or (2) $0.40 per share (as adjusted for any stock split, stock dividend, recapitalization, reorganization, or the like). The “Post-Acceptance Time CP” means the product of (A) the quotient of (1) the Post-Acceptance Time Financing Allocation, divided by (2) the sum of the Pre-Acceptance Time Financing Allocation and the Post-Acceptance Time Financing Allocation, multiplied by (B) 90% of the lowest price per share of any series of the Financing Securities sold in the Qualified Equity Financing. “Pre-Acceptance Time Financing Allocation” and “Post-Acceptance Time Financing Allocation” have the meanings set forth in the Purchase Agreement.