Common use of Conversion by Lenders Clause in Contracts

Conversion by Lenders. (a) Subject to Section 4.4(b) below, each of the Lenders may, at any time, convert all but not less than all (unless prior written consent of Borrower is obtained), of the Accreted Principal Amount of such Lender’s Term Loan plus any accrued and unpaid interest (but in no event in excess of such Lender’s Commitment Percentage of the NYSE MKT Threshold) into shares of the Company’s common stock, $0.001 par value per share (the “Common Stock”) at the IL Conversion Price, in the case of conversion by the Initial Lenders, and at the SL Conversion Price in the case of conversion by any of the Supplemental Lenders, in each case, subject to adjustment as provided below, by delivering written notice thereof to the Company. Such notice of conversion or any subsequent notice of conversion (each, a “Notice of Conversion”) shall be irrevocable once given and shall specify the amount of the applicable Lender’s Term Loan intended to be converted. The Company shall effect such conversion as promptly as practicable following its receipt of such Notice of Conversion (such date the “Conversion Date”) and interest on the portion of the Term Loan so converted shall cease to accrue on such Conversion Date. (b) Notwithstanding anything herein to the contrary, initially each Lender’s conversion rights under this Section 4.4 shall be limited to such Lender’s Commitment Percentage of the lesser of (i) such number of shares of Common Stock as equals less than 20% of all presently outstanding Common Stock, as contemplated by Section 713(a) of the NYSE MKT Rules or (ii) the maximum number of shares of Common Stock that will not cause the ownership of the Company by any or all Lenders to reach or exceed the “change in control” threshold amount under Section 713(b) of the NYSE MKT Rules, as amended from time to time, in each case, so long as such Rules continue to be applicable to the Company (the “NYSE MKT Threshold”). The Company will, at its sole cost and expense, include within the agenda for its annual meeting of stockholders to be held in 2016, a proposal for stockholder approval of the transactions contemplated by this Agreement, including the conversion of the entire amount of the Term Loan (including, without limitation, the portion of the outstanding Term Loan that would cause the ownership of the Company by Lenders to exceed the NYSE MKT Threshold (the “Contingent Convertible Portion”)) into shares of Common Stock at the IL Conversion Price and/or the SL Conversion Price, as applicable. If the Company is unable to obtain stockholder approval or otherwise take alternative steps necessary to permit conversion of a Lender’s Commitment Percentage of the Contingent Convertible Portion within fifteen (15) Business Days after the later of (i) the date of such annual meeting of stockholders, or (ii) the date on which such Lender delivers a Notice of Conversion with respect to such Lender’s Commitment Percentage of the Contingent Convertible Portion of the Term Loan to the Company (the “Supplemental Interest Commencement Date”), then the Company will be required to pay to such Lender so providing a Notice of Conversion, Supplemental Interest on such Lender’s Commitment Percentage of the Contingent Convertible Portion of the Term Loan as provided in Section 3.1 above. (c) The Company covenants and agrees that the shares of Common Stock that may be issued upon the exercise of any Lender’s conversion rights hereunder will, upon issuance, be validly issued and outstanding, fully paid and non-assessable, and free from all taxes, liens and charges with respect to the issuance thereof. The Company further covenants and agrees that the Company will at all times during the time that principal or interest is owed pursuant to this Agreement, have authorized and reserved, free from preemptive rights, a sufficient number of shares of its Common Stock to provide for the conversion rights set forth herein. If at any time while Lenders have conversion rights hereunder, the number of authorized but unissued shares of Common Stock shall not be sufficient to permit conversion of amounts owed hereunder, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. (d) Upon a conversion hereunder, the Company shall not be required to issue stock certificates representing fractions of shares of Common Stock, and in lieu of any fractional shares which would otherwise be issuable, the Company shall issue the next lowest whole number of shares of Common Stock. (i) In the event of changes in the outstanding Common Stock of the Company by reason of stock dividends, splits, recapitalizations, reclassifications, combinations or exchanges of shares, separations, reorganizations, liquidations, or the like, the IL Conversion Price and the SL Conversion Price shall be correspondingly adjusted to give Lenders, on exercise for the same aggregate IL Conversion Price or SL Conversion Price, as applicable, the total number, class, and kind of shares as Lenders would have owned had the Term Loan been converted prior to the event and had the Lenders continued to hold such shares until after the event requiring adjustment. (ii) If during the time that principal or interest is owed on the Term Loan, the Company issues or sells Additional Shares of Common Stock (as defined below) other than pursuant to clause (i) above for a price (the “Effective Price”) less than the then effective IL Conversion Price or SL Conversion Price, as the case may be, then and in each such case, the then-existing IL Conversion Price or SL Conversion Price, as the case may be, shall be reduced, as of the opening of business on the date of such issue or sale, to a price equal to the greater of (i) Ten Cents ($0.10) per share or (ii) such Effective Price. “Additional Shares of Common Stock” shall mean all shares of Common Stock, or options, warrants or other rights to acquire Common Stock, issued by the Company, other than (A) options, warrants or shares of Common Stock issued to employees, directors and consultants as a part of an equity incentive plan or agreement approved by the Company’s Board of Directors (including pursuant to any Director Stock Purchase Plan or Employee Stock Purchase Plan under which compensation payments can be applied to or accepted in lieu of cash), (B) shares of Common Stock issued as a consideration for a merger, acquisition or other business combination approved by the Company’s Board of Directors, (C) shares of Common Stock issued or issuable to any Person that may hereafter become a Lender hereunder, (D) options, warrants or shares issued pursuant to any equipment loan or leasing arrangement, real property leasing arrangement or debt financing from a bank or similar financial institution approved by the Company’s Board of Directors; and (E) shares of Common Stock issued upon the exercise of an option, warrant or other right to acquire Common Stock pursuant to which an adjustment of the IL Conversion Price or the SL Conversion Price, as the case may be, under this Section 4.4(e) has already been made.

Conversion by Lenders. (a) Subject to Section 4.4(b) below, each of the Lenders may, at any time, convert all but not less than all (unless prior written consent of Borrower the Company is obtained), of the Accreted Principal Amount of such Lender’s Term Loan plus any accrued and unpaid interest (but in no event in excess of such Lender’s Commitment Percentage of the NYSE MKT American Threshold) into shares of the Company’s common stock, $0.001 par value per share (the “Common Stock”) at the IL Conversion Price, in the case of conversion by the Initial Lenders, and at the SL Conversion Price in the case of conversion by any of the Supplemental Lenders, in each case, subject to adjustment as provided below, by delivering written notice thereof to the Company. Such notice of conversion or any subsequent notice of conversion (each, a “Notice of Conversion”) shall be irrevocable once given and shall specify the amount of the applicable Lender’s Term Loan intended to be converted. The Company shall effect such conversion as promptly as practicable following its receipt of such Notice of Conversion (such date the “Conversion Date”) and interest on the portion of the Term Loan so converted shall cease to accrue on such Conversion Date. (b) Notwithstanding anything herein to the contrary, initially each Lender’s conversion rights under this Section 4.4 shall be limited to such Lender’s Commitment Percentage of the lesser of (i) such number of shares of Common Stock as equals less than 20% of all presently outstanding Common Stock, as contemplated by Section 713(a) of the NYSE MKT American Rules or (ii) the maximum number of shares of Common Stock that will not cause the ownership of the Company by any or all the Lenders to reach or exceed the “change in control” threshold amount under Section 713(b) of the NYSE MKT American Rules, as amended from time to time, in each case, so long as such Rules continue to be applicable to the Company (the “NYSE MKT American Threshold”). The Company will, at its sole cost and expense, include within the agenda for its annual meeting of stockholders to be held in 20162020, a proposal for stockholder approval of the transactions contemplated by this Agreement, including the conversion of the entire amount of the Term Loan (including, without limitation, the portion of the outstanding Term Loan that would cause the ownership of the Company by the Lenders to exceed the NYSE MKT American Threshold (the “Contingent Convertible Portion”)) into shares of Common Stock at the IL Conversion Price and/or the SL Conversion Price, as applicable. If the Company is unable to obtain stockholder approval or otherwise take alternative steps necessary to permit conversion of a Lender’s Commitment Percentage of the Contingent Convertible Portion within fifteen (15) Business Days after the later of (i) the date of such annual meeting of stockholders, or (ii) the date on which such Lender delivers a Notice of Conversion with respect to such Lender’s Commitment Percentage of the Contingent Convertible Portion of the Term Loan to the Company (the “Supplemental Interest Commencement Date”), then the Company will be required to pay to such Lender so providing a Notice of Conversion, Supplemental Interest on such Lender’s Commitment Percentage of the Contingent Convertible Portion of the Term Loan as provided in Section 3.1 above. (c) The Company covenants and agrees that the shares of Common Stock that may be issued upon the exercise of any Lender’s conversion rights hereunder will, upon issuance, be validly issued and outstanding, fully paid and non-assessable, and free from all taxes, liens and charges with respect to the issuance thereof. The Company further covenants and agrees that the Company will at all times during the time that principal or interest is owed pursuant to this Agreement, have authorized and reserved, free from preemptive rights, a sufficient number of shares of its Common Stock to provide for the conversion rights set forth herein. If at any time while the Lenders have conversion rights hereunder, the number of authorized but unissued shares of Common Stock shall not be sufficient to permit conversion of amounts owed hereunder, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. (d) Upon a conversion hereunder, the Company shall not be required to issue stock certificates representing fractions of shares of Common Stock, and in lieu of any fractional shares which would otherwise be issuable, the Company shall issue the next lowest whole number of shares of Common Stock. (ie) In the event of changes in the outstanding Common Stock of the Company by reason of stock dividends, splits, recapitalizations, reclassifications, combinations or exchanges of shares, separations, reorganizations, liquidations, or the like, the IL Conversion Price and the SL Conversion Price shall be correspondingly adjusted to give the Lenders, on exercise for the same aggregate IL Conversion Price or SL Conversion Price, as applicable, the total number, class, and kind of shares as the Lenders would have owned had the Term Loan been converted prior to the event and had the Lenders continued to hold such shares until after the event requiring adjustment. (ii) If during the time that principal or interest is owed on the Term Loan, the Company issues or sells Additional Shares of Common Stock (as defined below) other than pursuant to clause (i) above for a price (the “Effective Price”) less than the then effective IL Conversion Price or SL Conversion Price, as the case may be, then and in each such case, the then-existing IL Conversion Price or SL Conversion Price, as the case may be, shall be reduced, as of the opening of business on the date of such issue or sale, to a price equal to the greater of (i) Ten Cents ($0.10) per share or (ii) such Effective Price. “Additional Shares of Common Stock” shall mean all shares of Common Stock, or options, warrants or other rights to acquire Common Stock, issued by the Company, other than (A) options, warrants or shares of Common Stock issued to employees, directors and consultants as a part of an equity incentive plan or agreement approved by the Company’s Board of Directors (including pursuant to any Director Stock Purchase Plan or Employee Stock Purchase Plan under which compensation payments can be applied to or accepted in lieu of cash), (B) shares of Common Stock issued as a consideration for a merger, acquisition or other business combination approved by the Company’s Board of Directors, (C) shares of Common Stock issued or issuable to any Person that may hereafter become a Lender hereunder, (D) options, warrants or shares issued pursuant to any equipment loan or leasing arrangement, real property leasing arrangement or debt financing from a bank or similar financial institution approved by the Company’s Board of Directors; and (E) shares of Common Stock issued upon the exercise of an option, warrant or other right to acquire Common Stock pursuant to which an adjustment of the IL Conversion Price or the SL Conversion Price, as the case may be, under this Section 4.4(e) has already been made.