Common use of Special Mandatory Conversion Clause in Contracts

Special Mandatory Conversion. Each Purchaser acknowledges and agrees that if a Purchaser holds, at the time of delivery of the Issuance Notice (as defined in the Restated Certificate), an aggregate of at least 60,000 shares of the Company’s Series C-1 Preferred Stock (the “Series C-1 Preferred”) or Series C-2 Preferred Stock (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like) and fails to purchase (a) in the Initial Closing or the Subsequent Closing, and (b) the Second Closing, if any, a Note in the principal amount set forth on Exhibit A under “Initial Closing Note Amount” or “Subsequent Closing Note Amount” and “Second Closing Note Amount,” as applicable, then (i) one-half of the total shares of Series C-1 Preferred and Series C-2 Preferred then-held by such Purchaser shall automatically be converted into shares of the Company’s Common Stock in accordance with Article IV.G.5(p) of the Restated Certificate and (ii) to the extent that the Series C-1 Preferred Conversion Price (as defined in the Restated Certificate) or Series C-2 Conversion Price (as defined in the Restated Certificate) has been adjusted pursuant to a previously Qualifying Dilutive Issuance (as defined in the Restated Certificate) the conversion of the Series C-1 Preferred and/or Series C-2 Preferred, as applicable, shall apply as if no such previous adjustment(s) had been applied to the Series C-1 Conversion Price or Series C-2 Conversion Price, and (iii) all rights with respect to the Series C-1 Preferred and/or Series C-2 Preferred converted pursuant to Article IV.G.5(p) of the Restated Certificate will terminate at the time of such conversion (notwithstanding the failure of the holder or holders thereof to surrender the certificates for such shares on or prior to such time), except only the rights of the holders thereof, upon surrender of the certificate or certificates therefor, to receive a certificate or certificates for the number of full shares of Common Stock issuable on such conversion. Any person or entity to whom shares of Series C-1 Preferred and/or Series C-2 Preferred are transferred by a Purchaser, whether voluntarily or by operation of law, shall be bound by this Section 5.10, and such shares shall remain subject to the conversion provisions hereunder and under the Restated Certificate, as may be amended from time to time, until such time as all Notes that the transferring Purchaser was required to purchase at the Closings are purchased. In addition, in the event that a Purchaser fails to purchase Notes in the principal amount allocated to it in the Initial Closing or Second Closing such Notes shall be made available for the Purchasers who participate in such Closing to purchase on a pro rata basis (based on the principal amount of the Notes such participating Investors have purchased in the Initial Closing or Second Closing, as applicable).

Special Mandatory Conversion. Each Purchaser acknowledges and agrees that if a Purchaser holds, at the time of delivery of the Issuance Notice (as defined in the Restated Certificate), an aggregate of at least 60,000 shares of the Company’s Series C-1 Preferred Stock (the “Series C-1 Preferred”) or the Company’s Series C-2 Preferred Stock (the “Series C-2 Preferred”) (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like) and fails to purchase (a) in the Initial Closing or the Subsequent Closing, and (b) the Second Closing, if any, a Note in the principal amount set forth on Exhibit A under “Initial Closing Note Amount” or “Subsequent Closing Note Amount” and “Second Closing Note Amount,” as applicable, then (i) one-half all of the total shares of Series C-1 Preferred and Series C-2 Preferred then-held by such Purchaser shall automatically be converted into shares of the Company’s Common Stock on a 10-for-1 basis in accordance with Article IV.G.5(pIV.D.5(p) of the Restated Certificate and (ii) to the extent that the Series C-1 Preferred Conversion Price (as defined in the Restated Certificate) or Series C-2 Conversion Price (as defined in the Restated Certificate) has been adjusted pursuant to a previously Qualifying Dilutive Issuance (as defined in the Restated Certificate) the conversion of the Series C-1 Preferred and/or Series C-2 Preferred, as applicable, shall apply as if no such previous adjustment(s) had been applied to the Series C-1 Conversion Price or Series C-2 Conversion Price, and (iii) all rights with respect to the Series C-1 Preferred and/or Series C-2 Preferred converted pursuant to Article IV.G.5(pIV.D.5(p) of the Restated Certificate will terminate at the time of such conversion (notwithstanding the failure of the holder or holders thereof to surrender the certificates for such shares on or prior to such time), except only the rights of the holders thereof, upon surrender of the certificate or certificates therefor, to receive a certificate or certificates for the number of full shares of Common Stock issuable on such conversion. Any person or entity to whom shares of Series C-1 Preferred and/or Series C-2 Preferred are transferred by a Purchaser, whether voluntarily or by operation of law, shall be bound by this Section 5.10, and such shares shall remain subject to the conversion provisions hereunder and under the Restated Certificate, as may be amended from time to time, until such time as all Notes that the transferring Purchaser was required to purchase at the Closings are purchased. In addition, in the event that a Purchaser fails to purchase Notes in the principal amount allocated to it in the Initial Closing or Second Closing such Notes shall be made available for the Purchasers who participate in such Closing to purchase on a pro rata basis (based on the principal amount of the Notes such participating Investors have purchased in the Initial Closing or Second Closing, as applicable).

Special Mandatory Conversion. Each Purchaser acknowledges and agrees that 56 (i) At any time following the Purchase Date, if a Purchaser holds(a) the holders of shares of Series A Preferred Stock, at Series B Preferred Stock or Series C Preferred Stock are entitled to exercise the time right of delivery first refusal (the "Right of First Refusal") set forth in Section 2.3 of the Issuance Notice Investors' Rights Agreement dated on or about August 17, 1995, by and between this corporation and certain investors, as amended from time to time (the "Rights Agreement"), with respect to an equity financing of the corporation in an aggregate amount of at least $500,000 (the "Equity Financing"), (b) this corporation has complied with its notice obligations, or such obligations have been waived, under the Right of First Refusal with respect to such Equity Financing and this corporation thereafter proceeds to consummate the Equity Financing and (c) such holder, including such holder's affiliates (collectively, a "Non-Participating Holder") does not by exercise of such holder's Right of First Refusal acquire his, her or its Pro Rata Share (as defined in Section 2.3 of the Restated CertificateRights Agreement) offered in such Equity Financing (a "Mandatory Offering"), an aggregate then all of at least 60,000 such Non-Participating Holder's shares of Series A Preferred Stock, Series B Preferred Stock and/or Series C Preferred Stock shall automatically and without further action on the Company’s part of such holder be converted effective upon, subject to, and immediately prior to, the consummation of the Mandatory Offering (the "Mandatory Offering Date") into an equivalent number of shares of Series A-1 Preferred Stock, Series B-1 Preferred Stock and Series C-1 Preferred Stock Stock, respectively ("Special Mandatory Conversion"); provided, however, that no such conversion shall occur in connection with a particular Equity Financing if, pursuant to the “Series C-1 Preferred”) or Series C-2 Preferred Stock (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like) and fails to purchase (a) in the Initial Closing or the Subsequent Closing, and (b) the Second Closing, if any, a Note in the principal amount set forth on Exhibit A under “Initial Closing Note Amount” or “Subsequent Closing Note Amount” and “Second Closing Note Amount,” as applicable, then (i) one-half written request of the total Board of Directors and subject to the approval of the holders of a majority of the outstanding Preferred Stock, such holder agrees in writing to waive his, her or its Right of First Refusal with respect to such Equity Financing. Upon conversion pursuant to this subsection 4(m)(i), the shares of Series C-1 A Preferred and Stock, Series C-2 B Preferred then-held by such Purchaser shall automatically be converted into shares of the Company’s Common Stock in accordance with Article IV.G.5(p) of the Restated Certificate and (ii) to the extent that the Series C-1 Preferred Conversion Price (as defined in the Restated Certificate) or Series C-2 Conversion Price (as defined in the Restated Certificate) has been adjusted pursuant to a previously Qualifying Dilutive Issuance (as defined in the Restated Certificate) the conversion of the Series C-1 Preferred and/or Series C-2 Preferred, as applicable, shall apply as if no such previous adjustment(s) had been applied to the Series C-1 Conversion Price or Series C-2 Conversion Price, and (iii) all rights with respect to the Series C-1 C Preferred and/or Series C-2 Preferred Stock so converted pursuant to Article IV.G.5(p) of the Restated Certificate will terminate at the time of such conversion (notwithstanding the failure of the holder or holders thereof to surrender the certificates for such shares on or prior to such time), except only the rights of the holders thereof, upon surrender of the certificate or certificates therefor, to receive a certificate or certificates for the number of full shares of Common Stock issuable on such conversion. Any person or entity to whom shares of Series C-1 Preferred and/or Series C-2 Preferred are transferred by a Purchaser, whether voluntarily or by operation of law, shall be bound by this Section 5.10, cancelled and such shares shall remain not subject to the conversion provisions hereunder and under the Restated Certificate, as may be amended from time to time, until such time as all Notes that the transferring Purchaser was required to purchase at the Closings are purchased. In addition, in the event that a Purchaser fails to purchase Notes in the principal amount allocated to it in the Initial Closing or Second Closing such Notes shall be made available for the Purchasers who participate in such Closing to purchase on a pro rata basis (based on the principal amount of the Notes such participating Investors have purchased in the Initial Closing or Second Closing, as applicable)reissuance.

Special Mandatory Conversion. Each Purchaser acknowledges and agrees that if (i) If a Purchaser holds, at the time holder of delivery Series A Preferred fails to purchase all or a portion of the Issuance Notice its Pro Rata Amount (as defined in below) of the Restated Certificate), an aggregate of at least 60,000 shares of Common Stock required to be purchased by such holder at the Company’s Series C-1 Preferred Stock Common Equity Closing pursuant to the Purchase Agreement (the “Series C-1 PreferredCommon Equity Closing”) or Series C-2 Preferred Stock ), then the Applicable Portion (as adjusted for any stock dividends, combinations, splits, recapitalizations and the likedefined below) and fails to purchase (a) in the Initial Closing or the Subsequent Closing, and (b) the Second Closing, if any, a Note in the principal amount set forth on Exhibit A under “Initial Closing Note Amount” or “Subsequent Closing Note Amount” and “Second Closing Note Amount,” as applicable, then (i) one-half of the total shares of Series C-1 A Preferred and Series C-2 Preferred then-Stock held by such Purchaser holder shall automatically be automatically, without any further action on the part of the Company or such holder, converted into shares of the Company’s Common Stock in accordance with Article IV.G.5(pat an adjusted Series A Preferred Conversion Rate equal to one (1), subject to any adjustments that may have been made under Sections 4(e) through 4(i) hereof between the issuance of the Restated Certificate Series A Preferred and the Common Equity Closing. Such conversion is referred to as a “Special Mandatory Conversion.” [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. (ii) Upon a Special Mandatory Conversion, each holder of shares of Series A Preferred converted pursuant to Section 4(m)(i) shall be sent written notice of such Special Mandatory Conversion. Such shares of Series A Preferred shall be converted automatically without any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the extent Company or its transfer agent; provided, however, that the Company shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such conversion unless the certificates evidencing such shares of Series C-1 A Preferred Conversion Price (are either delivered to the Company or its transfer agent as defined provided below, or the holder notifies the Company or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement reasonably satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with such certificates. Upon the Restated Certificate) or Series C-2 Conversion Price (as defined in the Restated Certificate) has been adjusted pursuant to a previously Qualifying Dilutive Issuance (as defined in the Restated Certificate) the occurrence of such automatic conversion of the Series C-1 Preferred and/or Series C-2 A Preferred, as applicable, the holders of Series A Preferred shall apply as if no such previous adjustment(s) had been applied to the Series C-1 Conversion Price or Series C-2 Conversion Price, and (iii) all rights with respect to the Series C-1 Preferred and/or Series C-2 Preferred converted pursuant to Article IV.G.5(p) of the Restated Certificate will terminate at the time of such conversion (notwithstanding the failure of the holder or holders thereof to surrender the certificates for representing such shares on at the office of the Company or prior any transfer agent for the Series A Preferred. Thereupon, there shall be issued and delivered to such time), except only the rights of the holders thereof, upon surrender of the holder promptly (which shall be no later than three (3) business days) at such office and in its name as shown on such surrendered certificate or certificates thereforcertificates, to receive a certificate or certificates for the number of full shares of Common Stock issuable on such conversion. Any person or entity to whom into which the shares of Series C-1 A Preferred and/or Series C-2 Preferred are transferred by a Purchaser, whether voluntarily or by operation of law, shall be bound by this surrendered were convertible pursuant to Section 5.10, and such shares shall remain subject to the conversion provisions hereunder and under the Restated Certificate, as may be amended from time to time, until such time as all Notes that the transferring Purchaser was required to purchase at the Closings are purchased. In addition, in the event that a Purchaser fails to purchase Notes in the principal amount allocated to it in the Initial Closing or Second Closing such Notes shall be made available for the Purchasers who participate in such Closing to purchase on a pro rata basis (based on the principal amount of the Notes such participating Investors have purchased in the Initial Closing or Second Closing, as applicable)4(m)(i) above.

Special Mandatory Conversion. Each Purchaser acknowledges and agrees that if (i) If a Purchaser holds, at the time holder of delivery Series A Preferred fails to purchase all or a portion of the Issuance Notice its Pro Rata Amount (as defined in below) of the Restated Certificate), an aggregate of at least 60,000 shares of Common Stock required to be purchased by such holder at the Company’s Series C-1 Preferred Stock Common Equity Closing pursuant to the Purchase Agreement (the “Series C-1 PreferredCommon Equity Closing”) or Series C-2 Preferred Stock ), then the Applicable Portion (as adjusted for any stock dividends, combinations, splits, recapitalizations and the likedefined below) and fails to purchase (a) in the Initial Closing or the Subsequent Closing, and (b) the Second Closing, if any, a Note in the principal amount set forth on Exhibit A under “Initial Closing Note Amount” or “Subsequent Closing Note Amount” and “Second Closing Note Amount,” as applicable, then (i) one-half of the total shares of Series C-1 A Preferred and Series C-2 Preferred then-Stock held by such Purchaser holder shall automatically be automatically, without any further action on the part of the Company or such holder, converted into shares of the Company’s Common Stock in accordance with Article IV.G.5(pat an adjusted Series A Preferred Conversion Rate equal to one (1), subject to any adjustments that may have been made under Sections 4(e) through 4(i) hereof between the issuance of the Restated Certificate Series A Preferred and the Common Equity Closing. Such conversion is referred to as a “Special Mandatory Conversion.” (ii) Upon a Special Mandatory Conversion, each holder of shares of Series A Preferred converted pursuant to Section 4(m)(i) shall be sent written notice of such Special Mandatory Conversion. Such shares of Series A Preferred shall be converted automatically without any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the extent Company or its transfer agent; provided, however, that the Company shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such conversion unless the certificates evidencing such shares of Series C-1 A Preferred Conversion Price (are either delivered to the Company or its transfer agent as defined provided below, or the holder notifies the Company or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement reasonably satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with such certificates. Upon the Restated Certificate) or Series C-2 Conversion Price (as defined in the Restated Certificate) has been adjusted pursuant to a previously Qualifying Dilutive Issuance (as defined in the Restated Certificate) the occurrence of such automatic conversion of the Series C-1 Preferred and/or Series C-2 A Preferred, as applicable, the holders of Series A Preferred shall apply as if no such previous adjustment(s) had been applied to the Series C-1 Conversion Price or Series C-2 Conversion Price, and (iii) all rights with respect to the Series C-1 Preferred and/or Series C-2 Preferred converted pursuant to Article IV.G.5(p) of the Restated Certificate will terminate at the time of such conversion (notwithstanding the failure of the holder or holders thereof to surrender the certificates for representing such shares on at the office of the Company or prior any transfer agent for the Series A Preferred. Thereupon, there shall be issued and delivered to such time), except only the rights of the holders thereof, upon surrender of the holder promptly (which shall be no later than three (3) business days) at such office and in its name as shown on such surrendered certificate or certificates thereforcertificates, to receive a certificate or certificates for the number of full shares of Common Stock issuable on such conversion. Any person or entity to whom into which the shares of Series C-1 A Preferred and/or Series C-2 Preferred are transferred by a Purchaser, whether voluntarily or by operation of law, shall be bound by this surrendered were convertible pursuant to Section 5.10, and such shares shall remain subject to the conversion provisions hereunder and under the Restated Certificate, as may be amended from time to time, until such time as all Notes that the transferring Purchaser was required to purchase at the Closings are purchased. In addition, in the event that a Purchaser fails to purchase Notes in the principal amount allocated to it in the Initial Closing or Second Closing such Notes shall be made available for the Purchasers who participate in such Closing to purchase on a pro rata basis (based on the principal amount of the Notes such participating Investors have purchased in the Initial Closing or Second Closing, as applicable)4(m)(i) above.

Special Mandatory Conversion. Each Purchaser acknowledges and agrees At any time following the Original Issue Date, in the event that if a Purchaser holdsany holder of Series C Preferred Units does not purchase at the Second Tranche Closing, at least that number of Series C Preferred Units designated to be purchased by such holder (a “Non-Participating Purchaser”) pursuant to Section 2.4 of Purchase Agreement, to the time extent required by such terms of the Purchase Agreement and by the date that is fifteen (15) days following delivery of of the Issuance Second Tranche Closing Notice (as defined in the Restated CertificatePurchase Agreement), an aggregate then each Series C Preferred Unit held by such Non-Participating Purchaser shall automatically, and without any further action on the part of at least 60,000 shares of such holder or the Company’s Series C-1 Preferred Stock , be converted into one-tenth (1/10th) of one (1) Common Unit (the “Series C-1 PreferredSpecial Mandatory Conversion Rate”) ), effective upon, subject to, and concurrently with, the date of the Second Tranche Closing (or Series C-2 Preferred Stock (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like) and fails date that the Second Tranche Closing was set forth to purchase (a) be in the Initial Second Tranche Closing or Notice, if it is not actually consummated). For purposes of determining the Subsequent number of Series C Preferred Units owned by a holder, and for determining the number of Series C Preferred Units a holder of Series C Preferred Units has purchased in the Second Tranche Closing, all Series C Preferred Units held by Affiliates of such holder shall be aggregated with such holder’s Series C Preferred Units and all Series C Preferred Units purchased by Affiliates of such holder shall be aggregated with the Series C Preferred Units purchased by such holder (bprovided that no securities shall be attributed to more than one entity or person within any such group of Affiliated entities or persons). Such conversion is referred to as a “Special Mandatory Conversion.” Notwithstanding anything to the contrary herein or in the Purchase Agreement, the Series C Preferred Majority may elect, by written notice sent to the Company at least five (5) business days prior to the consummation of the Second Closing, if any, a Note in the principal amount set forth on Exhibit A under “Initial Tranche Closing Note Amount” or “Subsequent Closing Note Amount” and “Second Closing Note Amount,” as applicable, then (i) one-half of the total shares of Series C-1 Preferred and Series C-2 Preferred then-held by such Purchaser shall automatically be converted into shares of the Company’s Common Stock in accordance with Article IV.G.5(p) of the Restated Certificate and (ii) to the extent that the Series C-1 Preferred Conversion Price (as defined in the Restated Certificate) or Series C-2 Conversion Price (as defined in the Restated Certificate) has been adjusted pursuant to a previously Qualifying Dilutive Issuance (as defined in the Restated Certificate) the conversion of the Series C-1 Preferred and/or Series C-2 PreferredPurchase Agreement), as applicable, that this Section B12 shall not apply as if no such previous adjustment(s) had been applied to the Series C-1 Conversion Price or Series C-2 Conversion Price, and (iii) all rights with respect to the Series C-1 Preferred and/or Series C-2 Preferred converted pursuant to Article IV.G.5(p) of the Restated Certificate will terminate at the time of such conversion (notwithstanding the failure of the holder or holders thereof to surrender the certificates for such shares on or prior to such time), except only the rights of the holders thereof, upon surrender of the certificate or certificates therefor, to receive a certificate or certificates for the number of full shares of Common Stock issuable on such conversion. Any person or entity to whom shares of Series C-1 Preferred and/or Series C-2 Preferred are transferred by a Purchaser, whether voluntarily or by operation of law, shall be bound by this Section 5.10, and such shares shall remain subject to the conversion provisions hereunder and under the Restated Certificate, as may be amended from time to time, until such time as all Notes that the transferring Purchaser was required to purchase at the Closings are purchased. In addition, in the event that a Purchaser fails to purchase Notes in the principal amount allocated to it in the Initial Closing or Second Closing such Notes shall be made available for the Purchasers who participate in such Closing to purchase on a pro rata basis (based on the principal amount of the Notes such participating Investors have purchased in the Initial Closing or Second Closing, as applicable)closing.