Right to Convert Notes. (a) Next Qualified Equity Financing. The principal and unpaid accrued interest of each Note may be converted, at the option of the holder thereof into Conversion Shares upon the closing of the Next Equity Financing. Notwithstanding the foregoing, accrued interest on this Note may be paid in cash at the option of the Company. 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 to be converted, on the date of conversion, by the Conversion Price. At least twenty (20) days prior to the closing of the Next Qualified Equity Financing, the Company shall notify the holder of each Note in writing of the terms under which the Equity Securities of the Company will be sold in such financing. The issuance of Conversion Shares pursuant to the conversion of each Note shall be upon and subject to the same terms and conditions applicable to the Equity Securities sold in the Next Qualified Equity Financing. If a holder elects to convert its Note into Conversion Shares in connection with the Next Qualified Equity Financing, such holder shall inform the Company of its election within twenty (20) days after notice of the Next Qualified Equity Financing is effectively given by the Company pursuant to Section 9.5 hereof. In the event that a holder fails to inform the Company of its election within such twenty (20) day period, such holder's Note shall thereafter cease to be convertible into Conversion Shares, provided, however, that such Note shall continue to accrue interest at the interest rate applicable to such Note until the earlier of the Maturity Date or the redemption thereof.
Right to Convert Notes
