Common use of Voluntary Conversion of Principal and Interest Clause in Contracts

Voluntary Conversion of Principal and Interest. Subject to the terms and conditions of this Section 3 and provided this Note remains outstanding, at any time and from time to time prior to the Maturity Date (as defined below), the Payee shall have the right, at the Payee’s option, to convert all or a portion of the Outstanding Balance (the “Conversion Option”) into such number of fully paid and non-assessable shares of the Company’s common stock (the “Conversion Shares”) as is determined in accordance with the following formula: (the Outstanding Balance as of the date of the exercise of the Conversion Option) / the lesser of (i) the price per share of the most recent Equity or Equity Linked Financing (as defined below), (ii) the price per share of any Equity or Equity Linked Financing the Company enters into (“Subsequent Financing”) or (iii) the per share price of a share of the Company’s common stock assuming a $30 million valuation of the Company on a Fully Diluted Basis (as defined below); provided, however, that in the event that the Payee elects to convert all or a portion of the Outstanding Balance pursuant to this Section 3 at any time after the Qualified Financing but prior to the satisfaction of the Equity Conditions as set forth in Section 1(a) hereof, such amount shall convert into the number of Conversion Shares determined in accordance with the Automatic Conversion Formula. If the Payee desires to exercise the Conversion Option, the Payee shall, by personal delivery or nationally-recognized overnight carrier, surrender the original pa-1249409

Voluntary Conversion of Principal and Interest. Subject to the terms and conditions of this Section 3 and provided this Note remains outstanding, at any time and from time to time prior to the Maturity Date (as defined below), the Payee shall have the right, at the Payee’s option, to convert all or a portion of the Outstanding Balance (the “Conversion Option”) into such number of fully paid and non-assessable shares of the Company’s common stock (the “Conversion Shares”) as is determined in accordance with the following formula: (the Outstanding Balance as of the date of the exercise of the Conversion Option) / the lesser of (i) the price per share of the most recent Equity or Equity Linked Financing (as defined below), (ii) the price per share of any Equity or Equity Linked Financing the Company enters into (“Subsequent Financing”) or (iii) the per share price of a share of the Company’s common stock assuming a $30 million valuation of the Company on a Fully Diluted Basis (as defined below); provided, however, that in the event that the Payee elects to convert all or a portion of the Outstanding Balance pursuant to this Section 3 at any time after the Qualified Financing but prior to the satisfaction of the Equity Conditions as set forth in Section 1(a) hereof, such amount shall convert into the number of Conversion Shares determined in accordance with the Automatic Conversion Formula. If the Payee desires to exercise the Conversion Option, the Payee shall, by personal delivery or nationally-recognized overnight carrier, surrender the original pa-1249409of this Note and give written notice to the Company (the “Conversion Notice”), which Conversion Notice shall (a) state the Payee’s election to exercise the Conversion Option, and (b) provide for a representation and warranty of the Payee to the Company that, as of the date of the Conversion Notice, the Payee has not assigned or otherwise transferred all or any portion of the Payee’s rights under this Note to any third parties. The Company shall, as soon as practicable thereafter, issue and deliver to the Payee the number of Conversion Shares to which the Payee shall be entitled upon exercise of the Conversion Option. Notwithstanding anything to the contrary contained in this Section 3, the Company shall have the pa-1169746

Voluntary Conversion of Principal and Interest. Subject to the terms and conditions of this Section 3 and provided this Note remains outstanding, at any time and from time to time prior to the Maturity Date (as defined below), the Payee shall have the right, at the Payee’s option, to convert all or a portion of the Outstanding Balance (the “Conversion Option”) into such number of fully paid and non-assessable shares of the Company’s common stock (the “Conversion Shares”) as is determined in accordance with the following formula: (the Outstanding Balance as of the date of the exercise of the Conversion Option) / the lesser of (i) the price per share of the most recent Equity or Equity Linked Financing (as defined below), (ii) the price per share of any Equity or Equity Linked Financing the Company enters into (“Subsequent Financing”) or (iii) the per share price of a share of the Company’s common stock assuming a $30 million valuation of the Company on a Fully Diluted Basis (as defined below); provided, however, that in the event that the Payee elects to convert all or a portion of the Outstanding Balance pursuant to this Section 3 at any time after the Qualified Financing but prior to the satisfaction of the Equity Conditions as set forth in Section 1(a) hereof, such amount shall convert into the number of Conversion Shares determined in accordance with the Automatic Conversion Formula. If the Payee desires to exercise the Conversion Option, the Payee shall, by personal delivery or nationally-recognized overnight carrier, surrender the original pa-1249409pa-1176186

Voluntary Conversion of Principal and Interest. Subject to the terms and conditions of this Section 3 and provided this Note remains outstanding, at any time and from time to time prior to the Maturity Date (as defined below), the Payee shall have the right, at the Payee’s 's option, to convert all or a portion of the Outstanding Balance (the “"Conversion Option”") into such number of fully paid and non-assessable shares of the Company’s 's common stock (the “"Conversion Shares”") as is determined in accordance with the following formula: (125% of the Outstanding Balance being converted as of the date of the exercise of the Conversion Option) / the lesser of (i) the price per share of the most recent Equity or Equity Linked Financing (as defined below)Fixed Conversion Price, (ii) the price per share of any Equity or Equity Linked Financing the Company enters into (“"Subsequent Financing”") or (iii) the per share price of a share of the Company’s 's common stock assuming a $30 million valuation of the Company on a Fully Diluted Basis (as defined below); provided, however, that in the event that the Payee elects to convert all or a portion of the Outstanding Balance pursuant to this Section 3 at any time after the Qualified Financing but prior to the satisfaction of the Equity Conditions as set forth in Section 1(a) hereof, such amount shall convert into the number of Conversion Shares determined in accordance with the Automatic Conversion FormulaFormula selected by the Payee pursuant to Section 1 above. If the Payee desires to exercise the Conversion Option, the Payee shall, by personal delivery or nationally-recognized overnight carrier, surrender the original pa-1249409of this Note and give written notice to the Company (the "Conversion Notice"), which Conversion Notice shall (a) state the Payee's election to exercise the Conversion Option, and (b) provide for a representation and warranty of the Payee to the Company that, as of the date of the Conversion Notice, the Payee has not assigned or otherwise transferred all or any portion of the Payee's rights under this Note to any third parties. The Company shall, as soon as practicable thereafter, issue and deliver to the Payee the number of Conversion Shares to which the Payee shall be entitled upon exercise of the Conversion Option, together with a note representing the unconverted balance (if any). Notwithstanding anything to the contrary contained in this Section 3, the Company shall have the right, at the Company's option, on or prior to the consummation of the Qualified Financing (but not thereafter), to pay all or a portion of the accrued and unpaid interest due and payable to Payee upon Payee's exercise of the Conversion Option in cash. For purposes of this Agreement, (y) "Equity and Equity Linked Financing" shall mean the issuance and sale by the Company of its equity securities, the primary purpose of which is to raise capital for the Company, provided, however, that an Equity and Equity Linked Financing shall not be deemed to include the following issuances: (1) shares of common stock issuable or issued to employees, independent contractors, consultants, directors or vendors of the Company directly or pursuant to a stock option plan, restricted stock plan or other agreement approved by the Board of Directors of the Company; (2) shares of common stock issued for the purpose of (I) a joint venture, technology licensing or research and development activity, (II) distribution or manufacture of the Company's products or services, or (III) any other transaction involving a corporate partner that is for a purpose other than raising capital through the sale of equity securities; (3) shares of common stock issuable upon conversion of shares of preferred stock outstanding on the Original Issuance Date at the conversion price determined in accordance with the Company's amended and restated articles of incorporation in effect as of the Original Issuance Date; (4) securities issued for the acquisition of another company by the Company by merger, purchase of substantially all of the assets of such corporation or other reorganization; (5) securities issued as a dividend or distribution on preferred stock; (6) securities issued as a dividend on common stock where the Company declares or pays a common stock dividend on the preferred stock in the same manner as declared or paid on the common stock; (7) shares of common stock issued or issuable (I) in apublic offering before or in connection with which all outstanding shares of preferred stock will be converted to common stock or (II) upon exercise of warrants or rights granted to underwriters in connection with such public offering; (8) shares of common stock issuable or shares of preferred stock issuable upon conversion or exercise of options, warrants, notes or other securities or rights granted pursuant to a loan or commercial lease transaction outstanding on the Original Issuance Date at the conversion price determined in accordance with the Company's amended and restated articles of incorporation in effect as of the Original Issuance Date; or (9) by way of dividend or other distribution on shares of common stock excluded from the definition of additional stock by the foregoing clauses (1), (2), (3), (4), (5), (6), (7), (8) or this clause (9), and (z) "Fully-Diluted Basis" shall mean the total number of shares of common stock of the Company then issued and outstanding, assuming (1) the conversion of all preferred stock convertible into common stock; and (2) the exercise of warrants to purchase 956,676 shares of common stock outstanding as of the Original Issuance Date of the Note, assuming an exercise price of $6.00 per share with respect to the warrants issued to the holders of the Original Bridge Notes; and (iii) the exercise of 633,605 options to purchase common stock issued pursuant to the Company's stock option plans as of the Original Issuance Date of this Note.