Common use of Conversion Option Clause in Contracts

Conversion Option. At any time after the date of issuance of this Note, this Note shall be convertible (in whole or in part), at the option of the Holder (the “Conversion Option”), into such number of fully paid and non-assessable shares of Common Stock of Maker (the “Common Stock”) as is determined by dividing (x) that portion of the outstanding balance under this Note as of such date that the Holder elects to convert by (y) the Conversion Price (as defined below) then in effect on the date (the “Conversion Date”) on which the Holder faxes a notice of conversion (the “Conversion Notice”), duly executed, to Maker, provided, however, that the Conversion Price shall be subject to adjustment as described herein. To effect conversions hereunder, the Holder shall not be required to physically surrender this Note to the Company unless the entire principal amount of this Note, plus all accrued and unpaid interest thereon, has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Not in an amount equal to the applicable conversion. The Holder and the Company shall maintain records showing the principal amount(s) converted and the date of such conversion(s). The Company may deliver an objection to any Notice of Conversion within one (1) Business Day of delivery of a Notice of Conversion. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. The Holder, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated on the face hereof. For purposes of this Section 3 the following terms shall mean as follows:

Conversion Option. At In the event that all of the principal and accrued interest due hereunder is not paid in full on or prior to the Maturity Date, the Holder shall have the right to convert this Note at any time after the date of issuance of this Note, this Note shall be convertible (in whole or in part), at the option of the Holder (the “Conversion Option”), Maturity Date into such number of fully paid and non-assessable shares of Common Stock of Maker (the “Common Stock”) as is determined by dividing (x) that portion of the outstanding principal balance under this Note as of such date that the Holder elects to convert by (y) the Conversion Price (as defined belowin Section 3.2(a) hereof) then in effect on the date (the “Conversion Date”) on which the Holder faxes a notice of conversion in the form attached hereto (the “Conversion Notice”), duly executed, to Makerthe Maker (facsimile number (000) 000-0000 Attn.: Chief Executive Officer) (the “Conversion Date”), provided, however, that the Conversion Price shall be subject to adjustment as described hereinin Section 3.4 of this Note. To effect conversions hereunder, the The Holder shall not be required to physically surrender deliver this Note to the Company unless Maker at the entire principal amount of address designated in the Funding Agreement at such time that this Note, plus all accrued and unpaid interest thereon, has been so Note is fully converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Not in an amount equal With respect to the applicable conversion. The Holder and the Company shall maintain records showing the principal amount(s) converted and the date of such conversion(s). The Company may deliver an objection to any Notice of Conversion within one (1) Business Day of delivery of a Notice of Conversion. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. The Holder, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion partial conversions of this Note, the unpaid and unconverted principal Maker shall keep written records of the amount of this Note may be less than converted as of each Conversion Date. Notwithstanding anything contained herein to the amount stated contrary, the Holder shall have no right to convert this Note into shares of Common Stock unless the Maker fails to pay all of the principal and accrued interest due hereunder on or prior to the face hereof. For purposes of this Section 3 the following terms shall mean as follows:Maturity Date.

Conversion Option. At Notwithstanding anything to the contrary in Section 2(a) or 2(c) hereof, the Majority Holders shall have the option at any time after to cause the date of issuance conversion of this Note, this Note shall be convertible (in whole or in part), at the option of the Holder (the “Conversion Option”), into such number of fully paid and non-assessable shares of Common Stock of Maker (the “Common Stock”) as is determined by dividing (x) that portion of the outstanding balance under this Note as of such date that the Holder elects to convert by (y) the Conversion Price (as defined below) then in effect on the date (the “Conversion Date”) on which the Holder faxes a notice of conversion (the “Conversion Notice”), duly executed, to Maker, provided, however, that the Conversion Price shall be subject to adjustment as described herein. To effect conversions hereunder, the Holder shall not be required to physically surrender this Note to the Company unless the entire principal amount of this Note, plus all accrued and unpaid interest thereonand other amounts owing hereunder into that number of shares of the Company’s Series C Preferred Stock, has been so converted. Conversions hereunder shall have $0.01 par value per share (the effect of lowering the outstanding principal amount of this Not in an amount “Series C Preferred Stock”), equal to the applicable conversion. The Holder and quotient obtained by dividing (i) the Company shall maintain records showing the principal amount(s) converted and the date of such conversion(s). The Company may deliver an objection to any Notice of Conversion within one (1) Business Day of delivery of a Notice of Conversion. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. The Holder, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted outstanding aggregate principal amount of this Note may plus such accrued and unpaid interest and all other amounts owing hereunder by (ii) Sixty Cents ($0.60) (as adjusted in the event of any stock split or the like), and such shares shall be less than treated by the amount stated parties (including the granting of any registration rights) as though they have been issued pursuant to the terms of that certain Series C Preferred Stock Purchase Agreement, dated October 31, 2002, as amended, between the Company and the persons listed on the face hereofschedule of purchasers attached thereto. For purposes The Company covenants that it shall use its best efforts to cause a sufficient number of shares of Series C Preferred Stock (and Common Stock issuable upon conversion thereof) to be authorized and reserved under the Company’s Amended and Restated Certificate of Incorporation, as amended, prior to any such conversion of this Section 3 Note. Notwithstanding the following foregoing or any other term hereof, within five (5) business days after the Lender’s receipt of written notice from the Company that the closing of the Next Qualified Financing has occurred, the Lender shall notify the Company in writing whether this Note shall thereafter be convertible solely into Series C Preferred Stock or solely into Equity Securities (on the respective terms contained herein). At its option, the Company may elect to restate this Note to account for such election by the Lender, specifying the applicable price per security, subject to adjustment hereunder. The Lender shall mean as follows:cooperate with any such restatement of this Note consistent with the terms hereof, including without limitation, surrendering this Note for cancellation and restatement.

Conversion Option. At any time after during the date of issuance term of this Note, the principal amount of this Note shall be convertible (in whole or in part), at the option of the Holder (the “Conversion Option”), into such number of fully paid and non-assessable shares of Common Stock of Maker (the “Common Stock”"Conversion Rate") as is determined by dividing (x) that portion of the outstanding principal balance under this Note as of such date that the Holder elects to convert by (y) the Conversion Price (as defined belowin Section 3.2(a) hereof) then in effect on the date (the “Conversion Date”) on which the Holder faxes a notice of conversion (the “Conversion Notice”), duly executed, to Maker, provided, however, that the Maker (the “Voluntary Conversion Price shall be subject to adjustment as described hereinDate”). To effect conversions hereunder, the The Holder shall not be required to physically surrender deliver this Note to the Company unless the entire principal amount of Maker at such time that this Note, plus all accrued and unpaid interest thereon, has been so Note is fully converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Not in an amount equal With respect to the applicable conversion. The Holder and the Company shall maintain records showing the principal amount(s) converted and the date of such conversion(s). The Company may deliver an objection to any Notice of Conversion within one (1) Business Day of delivery of a Notice of Conversion. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. The Holder, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion partial conversions of this Note, the unpaid and unconverted principal Maker shall keep written records of the amount of this Note converted as of each Conversion Date. Upon conversion, Holder will also receive warrants to purchase Common Stock at an exercise price of $1.50 per share (“Additional Warrants”). The number of shares of Common Stock underlying the Additional Warrants shall equal one-half (½) the principal amount converted, rounded down to the nearest whole number. The Additional Warrants shall be exercisable for a term of five (5) years at an exercise price of $1.50. Accrued interest may, at the option of the Maker, be paid in cash or common stock and warrants in accordance with the conversion terms in this Section 3.1. At the option of the Company, the interest accrued, if any, under this Note shall be convertible at the time of conversion of the principal into Common Stock at the conversion price of $1.00 per share, or may be less than paid in cash to the amount stated on the face hereof. For purposes of this Section 3 the following terms shall mean as follows:Holder.