Common use of Conversion to Equity Clause in Contracts

Conversion to Equity. Prior to the fourth anniversary of the Effective Date, Lenders shall have the right at their election, but not the obligation, to convert up to ten percent (10.00%) of the outstanding aggregate principal amount of the Term Loans into shares of common stock of Parent. Such right may only be exercised one time, regardless of the amount that the Lenders elect to convert. Such shares shall be issued at a price per share equal to $11.50 (which price shall be subject to appropriate adjustment for any stock split, stock dividend, combination, or other recapitalization or reclassification effected after the date hereof) (the “Conversion Price”). Such shares shall be referred to herein as “Parent Equity.” To exercise their rights under this Section 2.7, the applicable Lender(s) shall notify Parent in writing of the amount of the Term Loans that is to be converted into Parent Equity and deliver to the Parent a properly completed notice of conversion, the form of which is attached hereto as Exhibit E (each a “Notice of Conversion”). Parent shall no later than seven (7) days after the receipt of such Notice of Conversion issue Parent Equity to the applicable Lender(s). Upon issuance of Parent Equity in accordance with the provisions of this Section 2.7, the principal amount of Term Loans so converted shall be deemed to have been prepaid for the purposes of this Agreement, provided, however, no Prepayment Fee or Final Fee shall be due with respect to such deemed prepayment. Furthermore, contemporaneously with the issuance of Parent Equity, Parent shall deliver to the applicable Lender(s) stock certificates or book-entry positions evidencing Parent Equity. No fractional shares or scrip representing fractional shares shall be issued upon any conversion of outstanding Term Loans under this Section 2.7. As to any fraction of a share which the Lender(s) would otherwise be entitled to receive upon such conversion, the Parent shall at its election either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion Price or round up to the next whole share. The parties acknowledge and understand that any Parent Equity will be issued in a private transaction within the meaning of Section 3(a)(9) or Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and that the Parent Equity will not be registered under the Securities Act or any other applicable securities law at the time of its issuance. The Lenders acknowledge and understand that the Parent Equity may not be resold, transferred, pledged or otherwise disposed of by any Lender absent an effective registration statement under the Securities Act with respect to the Parent Equity or pursuant to an applicable exemption from the registration requirements of the Securities Act, and that any certificates or book-entry positions representing the Parent Equity shall contain a legend in substantially the following form, unless otherwise determined by the Parent: THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM. Parent hereby undertakes to register the Parent Equity for resale within 90 calendar days of its issuance (the “Filing Period”) pursuant to an effective registration statement under the Securities Act (each a “Registration Statement”) if, at the time of its issuance, the Parent Equity is not, and will not be within the Filing Period, eligible for resale pursuant to Rule 144 promulgated under the Securities Act (“Rule 144”). Each Lender agrees to furnish the Company with information regarding such Lender that the Company reasonably believes is required to be disclosed in the Registration Statement; provided, that the Company will provide such Lender a reasonable opportunity to review such disclosure regarding such Lender that the Company proposes to include in the Registration Statement. The Company will use its reasonable best efforts to keep any Registration Statement continuously effective under the Securities Act until the date that all Parent Equity covered by such Registration Statement (i) have been sold or transferred thereunder, or (ii) may be sold or transferred pursuant to Rule 144. The registration rights provided to the Lenders under this Section 2.7 will terminate in their entirety upon the earliest to occur of: (i) the date on which no principal amounts of Term Loans are outstanding; (ii) at such time all Parent Equity has been sold or transferred or may be sold or transferred pursuant to Rule 144; or (iii) the termination of this Agreement. The Company will notify the Lenders holding Parent Equity registered on any Registration Statement (which notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied by an instruction to suspend the use of the prospectus included in such Registration Statement until the requisite changes have been made) as promptly as reasonably possible (i) when a prospectus or any prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed, (ii) of any request by the Securities and Exchange Commission or any other federal or state governmental authority for amendments or supplements to a Registration Statement or prospectus or for additional information, (iii) of the issuance by the Securities and Exchange Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Parent Equity or the initiation of any proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of Parent Equity for sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose, (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in a Registration Statement or prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration Statement, prospectus or other documents so that, in the case of a Registration Statement or the prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (vi) of the occurrence or existence of any pending development with respect to the Company that the Company believes may be material and that, in the determination of the Company, makes it not in the best interest of the Company to allow continued availability of a Registration Statement or prospectus; provided, however, that in no event shall any such notice contain any information which would constitute material, non-public information regarding the Company without the applicable Lenders’ prior written consent. Each Lender agrees that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in subclauses (iii) through (vi), such Lender will forthwith discontinue disposition of such Parent Equity under a Registration Statement until it is advised in writing by the Company that the use of the applicable prospectus (as it may have been supplemented or amended) may be resumed. The Company will use its best efforts to ensure that the use of the prospectus may be resumed as promptly as is practicable. In addition, the Lenders (i) acknowledge and agree that they be provided with material, non-public information regarding the Company from time to time pursuant to the terms of this Agreement and (ii) will not make any sale or other transfer of Parent Equity at any time in which they reasonably believe that they may be in possession of material, non-public information regarding the Company. The Lenders understand and agree that if the Parent Equity is subject to transfer restrictions, including pursuant to Rule 144 promulgated under the Securities Act, the Lenders may not be able to readily resell the Parent Equity and may be required to bear the financial risk of an investment in the Parent Equity for until the Parent Equity becomes eligible for resale. To the extent that the provisions of any securities laws or regulations conflict with the Parent’s obligations to issue and deliver Parent Equity under this Section 2.7, the Parent will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations to issue and deliver Parent Equity upon notice of conversion delivered pursuant to this Section 2.7; provided, however, Parent will, if requested by the Lenders, issue and deliver the Parent Equity as soon as it is able to in compliance with the applicable provisions any securities laws or regulations.

Conversion to Equity. Prior a. Within 15 days following completion of an IPO or a Qualifying Financing, Maker shall give written notice to Lender specifying whether Maker will (1) repay this Promissory Note at the fourth anniversary of the Effective Maturity Date, Lenders or (2) convert this Promissory Note into equity stock pursuant to Section 6b hereof. b. In lieu of Maker repaying this Promissory Note in cash, Maker shall have the right at their election, but not the obligation, option to convert up to ten percent (10.00%) of the outstanding aggregate any unpaid principal amount of the Term Loans and interest owing on this Promissory Note into shares of common equity stock of Parent. Such right may only be exercised one timeMaker, regardless of the amount that the Lenders elect to convert. Such shares shall be issued at a price per share equal to $11.50 (which price shall be subject to appropriate adjustment for any stock split, stock dividend, combination, or other recapitalization or reclassification effected after the date hereof) (the “Conversion Price”). Such shares shall be referred to herein as “Parent Equity.” To exercise their rights under this Section 2.7, the applicable Lender(s) shall notify Parent in writing of the amount of the Term Loans that is to be converted into Parent Equity and deliver to the Parent a properly completed notice of conversion, the form of which is attached hereto as Exhibit E (each a “Notice of Conversion”). Parent shall no later than seven (7) days after the receipt of such Notice of Conversion issue Parent Equity to the applicable Lender(s). Upon issuance of Parent Equity in accordance with the provisions of this Section 2.7, the principal amount of Term Loans so converted shall be deemed to have been prepaid for the purposes of this Agreement, provided, however, no Prepayment Fee or Final Fee shall be due with respect to such deemed prepayment. Furthermore, contemporaneously with the issuance of Parent Equity, Parent shall deliver to the applicable Lender(s) stock certificates or book-entry positions evidencing Parent Equity. No fractional shares or scrip representing fractional shares shall be issued upon any conversion of outstanding Term Loans under this Section 2.7. As to any fraction of a share which the Lender(s) would otherwise be entitled to receive upon such conversion, the Parent shall at its election either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion Price or round up to the next whole share. The parties acknowledge and understand that any Parent Equity will be issued in a private transaction within the meaning of Section 3(a)(9) or Section 4(a)(2) of the Securities Act of 1933, as amended following provisions: (the “Securities Act”), and that the Parent Equity will not be registered under the Securities Act or any other applicable securities law at the time of its issuance. The Lenders acknowledge and understand that the Parent Equity may not be resold, transferred, pledged or otherwise disposed of by any Lender absent an effective registration statement under the Securities Act with respect to the Parent Equity or pursuant to an applicable exemption from the registration requirements of the Securities Act, and that any certificates or book-entry positions representing the Parent Equity shall contain a legend in substantially the following form, unless otherwise determined by the Parent: THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM. Parent hereby undertakes to register the Parent Equity for resale within 90 calendar days of its issuance (the “Filing Period”) pursuant to an effective registration statement under the Securities Act (each a “Registration Statement”i) if, at by the time Maturity Date, Maker has an IPO or a Qualifying Financing (as defined below), then Maker has the option to convert the principal and interest owing on this Promissory Note into Maker's capital stock, consisting of its issuance, the Parent Equity is not, and will not be within the Filing Period, eligible for resale common stock issued pursuant to Rule 144 promulgated under the Securities Act (“Rule 144”). Each Lender agrees IPO or the preferred stock or other equity issued by Maker pursuant to furnish the Company with information regarding such Lender that Qualifying Financing, at a conversion price equal to 90% of the Company reasonably believes is required to be disclosed price paid by the other investors in the Registration Statement; provided, that the Company will provide such Lender a reasonable opportunity to review such disclosure regarding such Lender that the Company proposes to include in the Registration Statement. The Company will use its reasonable best efforts to keep any Registration Statement continuously effective under the Securities Act until the date that all Parent Equity covered by such Registration Statement IPO or Qualifying Financing (i) have been sold or transferred thereunder, or without deduction for underwriter's commissions and discounts). (ii) may if, by the Maturity Date, Maker has not yet had an IPO or a Qualifying Financing, and if Maker does not repay this Promissory Note in cash by the Maturity Date, then the principal and accrued interest owing on this Promissory Note shall be sold or transferred pursuant converted into a new series of Maker's preferred stock (to Rule 144be designated as Series G preferred stock), at $4.65 per share, which preferred stock shall have a liquidation preference and conversion price of $4.65 per share, with a liquidation preference senior to all other preferred stock of Maker, and with other rights, preferences and privileges comparable to Maker's Series E preferred stock. The registration rights provided Said Series G preferred stock will include a customary weighted average anti-dilution protection provision applicable to Maker's next following sale of preferred stock of at least $1 million to new investors. c. As used in this Promissory Note, the Lenders under this Section 2.7 will terminate in their entirety upon the earliest to occur of: (i) the date on which no principal amounts of Term Loans are outstanding; (ii) at such time all Parent Equity has been sold or transferred or may be sold or transferred pursuant to Rule 144; or (iii) the termination of this Agreement. The Company will notify the Lenders holding Parent Equity registered on term "Qualifying Financing" means any Registration Statement (which notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied by an instruction to suspend the use one of the prospectus included in such Registration Statement until the requisite changes have been made) as promptly as reasonably possible (i) when a prospectus or any prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed, (ii) of any request by the Securities and Exchange Commission or any other federal or state governmental authority for amendments or supplements to a Registration Statement or prospectus or for additional information, (iii) of the issuance by the Securities and Exchange Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Parent Equity or the initiation of any proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of Parent Equity for sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose, (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in a Registration Statement or prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration Statement, prospectus or other documents so that, in the case of a Registration Statement or the prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (vi) of the occurrence or existence of any pending development with respect to the Company that the Company believes may be material and that, in the determination of the Company, makes it not in the best interest of the Company to allow continued availability of a Registration Statement or prospectus; provided, however, that in no event shall any such notice contain any information which would constitute material, non-public information regarding the Company without the applicable Lenders’ prior written consent. Each Lender agrees that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in subclauses (iii) through (vi), such Lender will forthwith discontinue disposition of such Parent Equity under a Registration Statement until it is advised in writing by the Company that the use of the applicable prospectus (as it may have been supplemented or amended) may be resumed. The Company will use its best efforts to ensure that the use of the prospectus may be resumed as promptly as is practicable. In addition, the Lenders (i) acknowledge and agree that they be provided with material, non-public information regarding the Company from time to time pursuant to the terms of this Agreement and (ii) will not make any sale or other transfer of Parent Equity at any time in which they reasonably believe that they may be in possession of material, non-public information regarding the Company. The Lenders understand and agree that if the Parent Equity is subject to transfer restrictions, including pursuant to Rule 144 promulgated under the Securities Act, the Lenders may not be able to readily resell the Parent Equity and may be required to bear the financial risk of an investment in the Parent Equity for until the Parent Equity becomes eligible for resale. To the extent that the provisions of any securities laws or regulations conflict with the Parent’s obligations to issue and deliver Parent Equity under this Section 2.7, the Parent will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations to issue and deliver Parent Equity upon notice of conversion delivered pursuant to this Section 2.7; provided, however, Parent will, if requested by the Lenders, issue and deliver the Parent Equity as soon as it is able to in compliance with the applicable provisions any securities laws or regulations.following: