Strategic Transaction Conversion Clause Samples

Strategic Transaction Conversion. Upon consummation of a Strategic Transaction, any outstanding principal and interest of the Note shall automatically convert, in whole (subject to the conversion limitations set forth in Section 4(f) hereof), into shares of Common Stock (“ST Conversion Shares”) at the ST Conversion Price, which ST Conversion Shares shall be subject to a prohibition from any sale, pledge or transfer for a period of six (6) month from the date of the closing of a Strategic Transaction (“ST Conversion Share Lockup”). In addition, upon conversion under this Section 4(c), the Holder of the Note shall automatically receive a warrant to purchase 100% of that number of shares of Common Stock into which the Note automatically converts under this Section 4(c), which warrant shall be exercisable for five years at an exercise price equal to One Hundred Ten Percent (110%) of the ST Conversion Price. Such Underlying Warrant, at the sole discretion of the Company, shall be callable for $0.01 per share underlying the warrant if (i) the average daily volume weighted average price (VWAP) of the Company’s Common Stock for any twenty (20) consecutive trading days is at least 250% of the ST Conversion Price; and (ii) the Company notifies the holder of such Underlying Warrant that such holder has a 30 calendar day period in which to exercise such Underlying Warrant and such holder does not exercise on or prior to the 30th day after the date of such notice. The Holder, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following a conversion into ST Conversion Shares of this Note, the Holder, and any assignee, shall be subject to the ST Conversion Share Lockup.