1. Definitions.
(a) “Common Stock” means the Company’s common stock, $0.0001 par value per share.
(b) “Conversion Price” means (rounded to the nearest 1/100th of one cent) (i) with respect to a conversion pursuant to Section 3(a), the public offering price per share of the Common Stock in such Initial Public Offering (before underwriting discounts and commissions (in the case of an underwritten initial public offering)); (ii) with respect to a conversion pursuant to Section 3(b), the closing price (which in the case of NASDAQ-listed securities, will be the NASDAQ official closing price) of the Listed Securities as of the Trading Day immediately prior to the date that such de-SPAC Transaction or Reverse Public Merger, as applicable, is consummated (subject to adjustment for any subsequent reverse stock split, stock split, stock dividend, or the like effected prior to consummation of the de-SPAC Transaction or Reverse Public Merger); (iii) with respect to a conversion upon consummation of a Corporate Transaction pursuant to Section 3(c), the price per share payable per share of Common Stock in such Corporate Transaction (after giving effect to the issuance of the aggregate number of shares of Common Stock issuable upon conversion of all of the Notes at such Conversion Price); and (iv) with respect to a conversion upon consummation of a Qualified Equity Financing pursuant to Section 3(c), the effective price per share of Common Stock as determined based on the per-share price paid for the Equity Securities sold in such Qualified Equity Financing.
(c) “Corporate Transaction” means:
(i) a sale of all or substantially all of the Company’s and its subsidiaries assets (on a consolidated basis) other than to an Excluded Entity;
(ii) a merger, consolidation or other business combination transaction of the Company with or into another corporation, limited liability company or other entity, other than with an Excluded Entity or pursuant to a de-SPAC Transaction or a Reverse Public Merger, pursuant to which stockholders of the Company prior to such merger, consolidation or other capital reorganization or business combination transaction own less than fifty percent (50%) of the voting interests in the surviving or resulting entity; or
(iii) the consummation of a transaction, or series of related transactions, in which any “person” (as such term is used in Sections 13(d) and 14(d) of Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of at least fifty percent (50%) of the Company’s then outstanding voting securities.
For the avoidance of doubt, a transaction will not constitute a “Corporate Transaction” if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately prior to such transaction. Notwithstanding the foregoing, the sale of Equity Securities in a bona fide financing transaction will not be deemed a “Corporate Transaction”, nor will the consummation of a de-SPAC Transaction or a Reverse Public Merger be deemed a “Corporate Transaction.”
(d) “de-SPAC Transaction” means the acquisition, purchase, merger or business combination of the Company or any parent or subsidiary thereof, by or with a SPAC or any parent or subsidiary thereof or any other vehicle created for the purpose of such acquisition, purchase, merger or business combination, that results in the shares of the Company’s Common Stock, or other similar equity interests of any such entity or parent or subsidiary thereof (or its successor by merger or combination) being (i) exchanged for shares of such SPAC or any parent or subsidiary thereof or (ii) otherwise listed for trading on, or such parent or subsidiary becoming wholly-owned by another entity whose shares are listed for trading on, a securities exchange.
(e) “Equity Securities” means (i) Common Stock; (ii) any securities conferring the right to purchase Common Stock; or (iii) any securities directly or indirectly convertible into, or exchangeable for (with or without additional consideration) Common Stock. Notwithstanding the foregoing, the following will not be considered “Equity Securities”: (y) any security granted, issued or sold by the Company to any director, officer, employee, consultant or adviser of the Company for the primary purpose of soliciting or retaining their services; and (z) any convertible promissory notes or other similar convertible instruments (including the Notes) issued by the Company.
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