Convertible Unsecured Promissory Note Sample Contracts

Helix TCS, Inc. – HELIX TCS, INC. 5300 DTC Parkway, STE 220 Greenwood Village, CO 80111 TERM SHEET AND SUMMARY OF THE OFFERING (For Accredited Investors Only) $___________ of Convertible Unsecured Promissory Notes (April 17th, 2017)

The following summary of Terms is intended for quick reference only and is not intended to be complete. This Term Sheet describes in more detail aspects of the investment that are material to prospective investors in our company. They must be read in their entirety by prospective investors.

Spatializer Audio Laboratories – 8% Convertible Unsecured Promissory Note Due March , 2020 of Ameri Holdings, Inc. (March 8th, 2017)

THIS NOTE (this "Note") is duly authorized and issued by Ameri Holdings, Inc., a Delaware corporation (the "Company"), and designated as the Company's 8% Convertible Unsecured Promissory Note in the original principal amount of [AMOUNT] U.S. Dollars ($ ). All principal and unpaid interest under this Note shall become due and payable on March , 2020 (the "Maturity Date").

Burcon Nutrascience – Convertible Unsecured Promissory Note (May 16th, 2016)

This convertible unsecured promissory note ("Note") has been issued pursuant to the note purchase agreement dated as of April 7, 2016 between Large Scale and the Company (the "Note Purchase Agreement").

Spatializer Audio Laboratories – Amendment No. 1 to the 5% Convertible Unsecured Promissory Note Due May 26, 2017 of Ameri Holdings, Inc. (May 16th, 2016)

THIS AMENDMENT NO. 1 to the 5% CONVERTIBLE UNSECURED PROMISSORY NOTE DUE MAY 26, 2017 OF AMERI HOLDINGS, INC., dated as of May 12, 2016, is made by and between Ameri Holdings, Inc., a Delaware corporation (the "Company"), and Lone Star Value Investors, LP, a Delaware limited partnership (the "Holder").

Senseonics Holdings, Inc. – This Convertible Unsecured Promissory Note Has Not Been Registered Under the Securities Act of 1933, as Amended. No Sale or Disposition May Be Effected Except in Compliance With Rule 144 Under Said Act or an Effective Registration Statement Related Thereto or an Opinion of Counsel for the Holder Satisfactory to the Company That Such Registration Is Not Required Under the Act or Receipt of a No-Action Letter From the Securities and Exchange Commission. (December 10th, 2015)

THIS CONVERTIBLE UNSECURED PROMISSORY NOTE IS SUBJECT TO THE TERMS OF A SUBORDINATION AGREEMENT DATED AS OF DECEMBER 7, 2015, BY AND AMONG THE HOLDER (AS DEFINED HEREIN), THE COMPANY (AS DEFINED HEREIN), AND OXFORD FINANCE LLC (THE SUBORDINATION AGREEMENT). THE SUBORDINATION AGREEMENT CONTAINS PROVISIONS RESTRICTING, AMONG OTHER THINGS, CERTAIN PAYMENTS AND THE EXERCISE OF CERTAIN RIGHTS AND REMEDIES BY THE HOLDER. IN THE EVENT OF ANY INCONSISTENCY BETWEEN THIS NOTE AND THE SUBORDINATION AGREEMENT, THE TERMS OF THE SUBORDINATION AGREEMENT SHALL CONTROL.

Spatializer Audio Laboratories – 5% CONVERTIBLE UNSECURED PROMISSORY NOTE DUE MAY 26, 2017 OF AMERI HOLDINGS, INC. (Formerly Spatializer Audio Laboratories, Inc.) (June 1st, 2015)

THIS NOTE (this "Note") is duly authorized and issued by AMERI Holdings, Inc. (formerly Spatializer Audio Laboratories, Inc.), a Delaware corporation (the "Company"), and designated as the Company's 5% Convertible Unsecured Promissory Note in the original principal amount of Five Million U.S. Dollars ($5,000,000). All principal and unpaid interest under this Note shall become due and payable on May 26, 2017 (the "Maturity Date").

Subordinated Convertible Unsecured Promissory Note (April 6th, 2015)

For value received, aTyr Pharma, Inc., a Delaware corporation (the Company), promises to pay to BMV Direct RE LP, a Delaware limited partnership (Holder), the principal amount of Two Million Dollars ($2,000,000.00) (the Principal Amount). Reference is made to that certain Lease, dated as of December 22, 2011, as amended from time to time (the Lease), by and between the Company and BMR-John Hopkins Court LLC, an affiliate of Holder (Landlord). Capitalized terms used herein but not defined herein shall have the meanings ascribed to them in the Lease. Interest on the Principal Amount shall accrue, compounded annually, at a rate equal to eight percent (8%) per annum (the Interest Rate), commencing on the date hereof. The Interest Rate shall be computed on the basis of the actual number of days elapsed and a year of 365 days. This Subordinated Convertible Unsecured Promissory Note (this Note) is subject to the following terms and conditions.

Subordinated Convertible Unsecured Promissory Note (December 22nd, 2014)

For value received, aTyr Pharma, Inc., a Delaware corporation (the Company), promises to pay to BMV Direct RE LP, a Delaware limited partnership (Holder), the principal amount of Two Million Dollars ($2,000,000.00) (the Principal Amount). Reference is made to that certain Lease, dated as of December 22, 2011, as amended from time to time (the Lease), by and between the Company and BMR-John Hopkins Court LLC, an affiliate of Holder (Landlord). Capitalized terms used herein but not defined herein shall have the meanings ascribed to them in the Lease. Interest on the Principal Amount shall accrue, compounded annually, at a rate equal to eight percent (8%) per annum (the Interest Rate), commencing on the date hereof. The Interest Rate shall be computed on the basis of the actual number of days elapsed and a year of 365 days. This Subordinated Convertible Unsecured Promissory Note (this Note) is subject to the following terms and conditions.

Syndax Pharmaceuticals Inc – Contract (November 21st, 2014)

THIS INSTRUMENT AND THE INDEBTEDNESS, RIGHTS AND OBLIGATIONS EVIDENCED HEREBY AND ANY LIENS OR OTHER SECURITY INTERESTS SECURING SUCH RIGHTS AND OBLIGATIONS ARE SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AGREEMENT (AS AMENDED, RESTATED, SUPPLEMENTED OR MODIFIED FROM TIME TO TIME, THE SUBORDINATION AGREEMENT) DATED AS OF SEPTEMBER 18, 2014, BY AND AMONG THE CREDITORS IDENTIFIED THEREIN AND SOLAR CAPITAL LTD. (SOLARCAP), TO CERTAIN INDEBTEDNESS, RIGHTS, AND OBLIGATIONS OF SYNDAX PHARMACEUTICALS, INC. TO SOLARCAP AND LIENS AND SECURITY INTERESTS OF SOLARCAP SECURING THE SAME ALL AS DESCRIBED IN THE SUBORDINATION AGREEMENT; AND EACH HOLDER AND TRANSFEREE OF THIS INSTRUMENT, BY ITS ACCEPTANCE HEREOF, IRREVOCABLY AGREES TO BE BOUND BY THE PROVISIONS OF THE SUBORDINATION AGREEMENT.

Contract (June 18th, 2014)

THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

Contract (March 12th, 2014)

THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

Contract (March 12th, 2014)

THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

Cardax, Inc. – CARDAX PHARMA, INC. 2800 Woodlawn Drive, Suite 129 Honolulu, Hawaii 96822 $2,076,000 in Principal Amount of Convertible Unsecured Promissory Notes PLACEMENT AGENT AGREEMENT (February 10th, 2014)
Contract (January 17th, 2014)

THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

Contract (January 17th, 2014)

THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

Contract (January 17th, 2014)

THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

Contract (January 17th, 2014)

THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

Antriabio Inc – Convertible Unsecured Promissory Note (January 16th, 2014)
Contract (January 15th, 2014)

THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

Contract (August 15th, 2013)

THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

Pacific Biomarkers Inc – Contract (June 6th, 2013)

THIS CONVERTIBLE PROMISSORY NOTE AND ANY SECURITIES INTO WHICH THIS CONVERTIBLE PROMISSORY NOTE IS CONVERTIBLE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR QUALIFICATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

Contract (April 13th, 2012)

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT OR QUALIFICATION RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION OR QUALIFICATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS.

Form of Convertible Unsecured Promissory Note (April 13th, 2012)

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT OR QUALIFICATION RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION OR QUALIFICATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS.

Saflink Corp. – Contract (November 12th, 2008)

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE ACT), AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING THIS NOTE, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT, OR, IF REQUESTED BY THE COMPANY, THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR HOLDER OF THIS NOTE REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.

Superfly Advertising, Inc – Junior Convertible Unsecured Promissory Note (April 21st, 2008)

"Business Day" shall mean any day other than a Saturday, a Sunday or a day on which commercial banks in New York, New York are required or authorized to be closed.

Wholehealth Products, Inc. – Convertible Unsecured Promissory Note (February 5th, 2007)
TearLab Corporation – Convertible Unsecured Promissory Note (August 9th, 2006)

FOR VALUE RECEIVED, the undersigned, Solx, Inc., a Delaware corporation (the "Company"), hereby promises to pay to OccuLogix, Inc., a Delaware corporation, or its assigns ("OccuLogix"), at the times set forth below and subject to acceleration or conversion as set forth herein, the aggregate principal amount of TWO HUNDRED AND FORTY THOUSAND DOLLARS ($240,000.00) (the "Principal Amount"), and interest on the unpaid Principal Amount, from time to time outstanding, which shall accrue on a daily basis from the date on which the Principal Amount has been loaned to the Company through and including the date on which such Principal Amount is paid in full (or the Principal Amount and accrued interest is converted into Conversion Shares (defined below) in accordance with Section 3 hereof), at an annual interest rate equal to the "Prime Rate" as announce

TearLab Corporation – Convertible Unsecured Promissory Note (May 25th, 2006)

FOR VALUE RECEIVED, the undersigned, Solx, Inc., a Delaware corporation (the "Company"), hereby promises to pay to OccuLogix, Inc., a Delaware corporation, or its assigns ("OccuLogix"), at the times set forth below and subject to acceleration or conversion as set forth herein, the aggregate principal amount of TWO MILLION DOLLARS ($2,000,000.00) (the "Principal Amount"), and interest on the unpaid Principal Amount, from time to time outstanding, which shall accrue on a daily basis from the date on which the Principal Amount has been loaned to the Company through and including the date on which such Principal Amount is paid in full (or the Principal Amount and accrued interest is converted into Conversion Shares (defined below) in accordance with Section 3 hereof), at an annual interest rate equal