Conversion upon Qualified Financing Clause Samples

Conversion upon Qualified Financing. Subject to this Section 4.1, the Purchasers shall have the right to convert the principal and accrued interest of the Note, in whole or in part, into Qualified Securities, upon the same terms and conditions as set forth in the Qualified Financing. (a) The Company shall notify each Holder, in writing, at least ten (10) days prior to the completion of any Qualified Financing of the terms and conditions of the Qualified Financing. Holders electing to convert Notes, or portions of a Note, into Qualified Securities, within five (5) days of the date of such notice, notify the Company, in writing, of such election, specifying the principal and accrued interest to be so converted, and shall surrender to the Company, the Note, in the form specified in Section 4.4, to be so converted. (b) All Notes submitted by Holders for conversion into Qualified Securities shall be deemed to be converted on the date the Qualified Financing is consummated by the Company.

Conversion upon Qualified Financing. Without any action on the part of the Holder, all of the outstanding principal and accrued interest (the “Outstanding Balance”) shall convert into New Round Stock upon the consummation of a Qualified Financing (the “Conversion Date”), based upon the lesser of: (i) $0.50 per New Round Stock and (ii) the quotient obtained by dividing (x) the Outstanding Balance on the Conversion Date multiplied by 1.10 by (y) the actual price per New Round Stock in the Qualified Financing.

Conversion upon Qualified Financing. Upon a closing (the “Closing”) of a Qualified Financing, all of the principal and accrued interest then outstanding on the Note automatically shall be converted into Instruments at the Closing of the Qualified Financing. The price per investment instrument for the conversion shall be an amount equal to ninety-five percent (95%) of the price per share of the Instruments sold in the Qualified Financing (the “Conversion Price upon Qualified Financing”).

Conversion upon Qualified Financing. Effective upon a Qualified Financing, all of the outstanding principal and accrued interest under this Note (the “Outstanding Amount”) will, either automatically in the case of a Qualified Financing that is not a Qualified Private Financing, or upon the written election of the Holder provided to the Maker no later than five business days following delivery of the Financing Notice (the “Conversion Election”) in the case of a Qualified Private Financing, be converted into shares of the same class and series of capital stock of the Maker issued to other investors on the same basis as the investment by such investors in the Qualified Financing, including all contractual rights, if any, provided to all other investors in the Qualified Financing (the “Qualified Financing Securities”) and at a conversion price equal to the lowest price per share of Qualified Financing Securities paid by any other investor in the Qualified Financing (the “Qualified Financing Price”), with any resulting fraction of a share rounded down to the nearest whole share. Notwithstanding the foregoing, if the conversion of this Note pursuant to this Section 2 would otherwise result in the Holder, together with its affiliates, owning more than 5% of the outstanding capital stock of the Maker, calculated on an as-converted fully-diluted basis (but not including as outstanding shares of capital stock issuable upon exercise or conversion of all outstanding stock options, warrants or other convertible securities of the Maker), immediately following the conversion of the Note (the “5% Threshold”), the Outstanding Amount shall be converted either pursuant to the first sentence of this Section 2 or, at the Holder’s option, into (i) that number of shares of Qualified Financing Securities that would result in the Maker reaching, but not exceeding, the 5% Threshold (the “5% Shares”), and (ii) an amount in cash equal to the difference between (A) the product of (1) the number of 5% Shares issued upon conversion, multiplied by (2) the Qualified Financing Price and (B) the Outstanding Amount. The Maker shall notify the Holder in writing of the anticipated occurrence of a Qualified Financing at least 10 days prior to the closing date of the Qualified Financing.

Conversion upon Qualified Financing. Subject to the applicable provisions of this Section 3.1, at any time on or following a Qualified Financing, prior to the Maturity Date, at the sole election of the Holder, all or a portion of the outstanding principal and accrued and unpaid interest on this Note (the “Outstanding Balance”) may be converted into that number of shares of New Round Stock equal to: (i) the Outstanding Balance elected by the Holder to be converted (the “Conversion Amount”) divided by (ii) the lower of 0.6 multiplied by (A) the actual per share price of New Round Stock and (B) of the Common Stock for the ten (10) Trading Days immediately preceding the date of the Qualified Financing.

Conversion upon Qualified Financing. The outstanding principal hereof and all accrued but unpaid interest thereon (together, the “Debt”) shall automatically convert into shares of Series A Preferred Stock at the Second Closing. This Note shall be automatically converted into the number of shares of Series A Preferred Stock equal to the outstanding principal and accrued but unpaid interest on this Note divided by the Purchase Price.

Conversion upon Qualified Financing. The principal and unpaid accrued interest of each Note and Rollover Note will be automatically converted into Conversion Shares upon the closing of the Qualified Financing. The number of Conversion Shares to be issued upon such conversion shall be equal to the quotient obtained by dividing the outstanding principal and unpaid accrued interest on a Note or Rollover Note to be converted on the date of conversion, by the Conversion Price. At least five (5) days prior to the closing of the Qualified Financing, the Company shall notify each holder of a Note or Rollover Note in writing of the terms under which the Equity Securities of the Company will be sold in such financing. Except with respect to the Conversion Price, the issuance of Conversion Shares pursuant to the conversion of each Note or Rollover Note shall otherwise be upon and subject to the same terms and conditions applicable to the Equity Securities sold in the Qualified Financing.

Conversion upon Qualified Financing. In the event the Company completes a Qualified Financing prior to an IPO, a conversion pursuant to this Section 6, or repayment pursuant to Section 5 above, each Lender may require the Company to convert the Lender Loan Amount (plus any and all accrued and unpaid Interest if so elected by such Lender pursuant to Section 6.8.5 below), as of immediately prior to the initial closing of such Qualified Financing, into that number of Conversion Shares as is equal to the quotient of the (i) Lender Loan Amount (plus any and all accrued and unpaid Interest if so elected by such ▇▇▇▇▇▇, pursuant to Section 6.8.5 below), divided by (ii) the Qualified Financing PPS.

Conversion upon Qualified Financing. Without any action on the part of the Holder, all of the outstanding principal and accrued interest (the “Outstanding Balance”) shall convert into (i) that number of shares of New Round Stock upon the consummation of a Qualified Financing (the “Qualified Financing Conversion Date”), based upon the product of (A) the Outstanding Balance on the Qualified Financing Conversion Date and (B) 1.35, then divided by the actual per share price of New Round Stock and (ii) if the Qualified Financing has a warrant component, a number of such warrants equal to the number of shares of New Round Stock determined pursuant to clause (i) above, multiplied by the warrant coverage percentage in such Qualified Financing.