Common use of Automatic Conversion upon Qualified Financing Clause in Contracts

Automatic Conversion upon Qualified Financing. At the closing of a public or private sale of common stock or notes convertible into common stock in which the aggregate gross proceeds to the Borrower is at least $30.0 million and where the per share price paid by the investors participating in the financing or the conversion price, respectively, is at least $5.00 (a “Qualifying Financing”) and if the shares of Common Stock underlying this Note are then subject to an effective resale registration statement as filed with the Securities and Exchange Commission, the outstanding principal and accrued but unpaid interest of this Note shall be automatically converted into the number of fully paid and non-assessable shares of Common Sock at $3.29 per share. The number of shares of Common Stock to be issued upon such conversion of this Note shall be determined by dividing the sum of the outstanding Principal Amount of this Note, plus accrued and unpaid interest, if any, on such Principal Amount at the interest rates provided in this Note to the date of such conversion, by $3.29. The Holder, by acceptance of this Note, agrees with the Company that, if this Note is converted pursuant to this Section 1.1(a), then the Holder shall deliver the original of this Note to the Company with appropriate endorsements at the closing of the Qualified Financing; provided, however, this Note shall for all purposes be deemed paid and cancelled regardless of whether the Holder delivers the original of this Note.