Conversion of Securities Clause Samples
The Conversion of Securities clause defines the terms and conditions under which one type of security, such as preferred shares or convertible notes, can be exchanged for another, typically common shares. This clause outlines the conversion ratio, timing, and any triggers or events—such as a financing round or company sale—that allow or require conversion. Its core practical function is to provide a clear mechanism for investors or holders to convert their securities, ensuring predictability and fairness in how ownership interests may change over time.
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Conversion of Securities. Subject to the terms and conditions of this Agreement, at the Effective Time, by virtue of the Merger and without any action on the part of Parent, Subsidiary or their respective shareholders:
(a) Each issued and outstanding share of no par value common stock of Parent (“Parent Common Stock”) shall automatically be cancelled and cease to exist and shall be converted into the right to receive from the Surviving Corporation, a per share amount equal to the sum of the following: (i) a promissory note (the “Merger Note”) in the principal amount of $45.31 per share in the form attached as Exhibit C; (ii) a promissory note (the “Original Shareholders Subordinated Promissory Note”) in the principal amount of $23.44 per share in the form attached as Exhibit D hereto; and (iii) 31.5863 shares of the common stock, $.001 par value, of Subsidiary (“Subsidiary Common Stock”). The aggregate consideration payable as described above in this Section 2.7(a) shall be referred to herein as the “Merger Consideration.”
(b) Each share of Subsidiary Common Stock owned by Parent in the Subsidiary (the “Subsidiary Cancelled Stock”) as of the Effective Time shall automatically be cancelled and extinguished and cease to exist at the Effective Time without any conversion thereof and no payment of any portion of the Merger Consideration or other consideration shall be made with respect thereto.
(c) Each holder of an outstanding certificate that prior thereto represented Parent Common Stock shall cease to have any rights with respect thereto, except the right, upon surrender thereof to the Escrow Agent in accordance with Section 2.8 hereof, to receive in exchange therefor such holder’s appropriate portion of the Merger Consideration (as described in Section 2.7(a)).
Conversion of Securities. At the Effective Time, by virtue of the Merger and without any action on the part of Purchaser, the Company or the holders of any of the following securities:
(a) Each Share issued and outstanding immediately prior to the Effective Time (other than any Shares to be canceled pursuant to Section 1.07(b), any Shares to remain outstanding pursuant to Section 1.07(c) and any Dissenting Shares as defined in Section 1.09) shall be canceled and shall be converted automatically into the right to receive an amount equal to $7.00 (the "Per Share amount") in cash (the "Merger Consideration") payable, without interest, to the holder of such Share, upon surrender, in the manner provided in Section 1.10, of the certificate that formerly evidenced such Share;
(i) Each Share held in the treasury of the Company and each Share owned by any direct or indirect wholly owned subsidiary of the Company and each Share owned by Purchaser immediately prior to the Effective Time shall be canceled without any conversion thereof and no payment or distribution shall be made with respect thereto; (ii) Each share of common stock of Purchaser outstanding immediately prior to the Effective Time shall be converted and exchanged for one validly issued, fully paid and nonassessable share of Class A or Class B Common Stock (as appropriate), par value $.01 per share, of the Surviving Corporation equal to and with the same rights, powers and privileges as the shares so converted; and (iii) Each share of preferred stock of Purchaser outstanding immediately prior to the Effective Time shall be converted and exchanged for one validly issued, fully paid and non-assessable share of Series A Preferred Stock of the Surviving Corporation with the same rights, powers and privileges as the preferred stock so converted;
(c) certain of the Shares held by and registered in the names of certain members of management and the Board (the "Rollover Shareholders"), pursuant to the terms of the voting agreement among the Rollover Shareholders, certain members of management and Purchaser, substantially as set forth in Exhibit C-2 attached hereto (the
Conversion of Securities. At the Effective Time, by virtue of the Merger and without any action on the part of Parent, Merger Sub, the Company or the holders of any of the following securities:
Conversion of Securities. 2 Section 2.01 Conversion of Capital Stock..............................2 Section 2.02 Exchange of Certificates.................................3
Conversion of Securities. EXCHANGE OF CERTIFICATES
Conversion of Securities. SECTION 2.01
Conversion of Securities. At the Effective Time, by virtue of the Merger and without any action on the part of Purchaser, the Company or the holders of any of the following securities:
(a) Each Share issued and outstanding immediately prior to the Effective Time (other than any Shares to be canceled pursuant to Section 3.06(b) and any Dissenting Shares (as hereinafter defined)) shall be canceled and cease to exist and shall be converted automatically into the right to receive an amount equal to the Per Share Amount in cash, without interest (the “Merger Consideration”) payable to the holder of such Share, upon surrender, in the manner provided in Section 3.10, of the certificate that formerly evidenced such Share (or in the case of a lost, stolen or destroyed certificate, upon delivery of an affidavit in the manner provided in Section 3.10);
(b) Each Share held in the treasury of the Company and each Share owned by Purchaser, Parent or any direct or indirect wholly owned subsidiary of Parent or of the Company immediately prior to the Effective Time shall be canceled without any conversion thereof and cease to exist and no payment or distribution shall be made with respect thereto; and
(c) Each share of common stock, par value $0.01 per share, of Purchaser issued and outstanding immediately prior to the Effective Time shall be converted into and exchanged for one validly issued, fully paid and nonassessable share of common stock, par value $.01 per share, of the Surviving Corporation, which shall constitute the only outstanding shares of the Surviving Corporation.
Conversion of Securities. At the Effective Time, by virtue of the Merger and without any action on the part of Purchaser, the Company or the holders of any of the Shares:
(a) Each Share issued and outstanding immediately prior to the Effective Time (other than any Shares to be cancelled pursuant to Section 2.06(b)) shall be cancelled and shall be converted automatically into the right to receive an amount equal to the Per Share Amount in cash (the "Merger Consideration"), payable, without interest, to the holder of such Share, upon surrender, in the manner provided in Section 2.08, of the certificate that formerly evidenced such Share;
(b) Each Share owned by Purchaser, Parent or any direct or indirect wholly owned subsidiary of Parent or of the Company immediately prior to the Effective Time shall be cancelled and retired without any conversion thereof and no payment or distribution shall be made with respect thereto; and
(c) Each share of common stock, without par value, of Purchaser issued and outstanding immediately prior to the Effective Time shall be converted into and exchanged for one validly issued, fully paid and nonassessable share of Common Stock, $.0025 par value per share, of the Surviving Corporation.
Conversion of Securities. 4 SECTION 2.02. Exchange of Certificates.........................................4 SECTION 2.03.
Conversion of Securities. At the Effective Time, by virtue of the Merger and without any action on the part of Purchaser, the Company or the holders of any of the Shares:
(a) Each Share and each Nonvoting Share issued and outstanding immediately prior to the Effective Time (other than any Shares and Nonvoting Shares to be canceled pursuant to Section 2.06(b) and Dissenting Shares (as defined in Section 2.09)) shall be canceled and shall be converted automatically into the right to receive from the Surviving Corporation an amount in cash equal to the price paid in the Offer (the "Merger Consideration"), payable, without interest, to the holder of such Share or Nonvoting Share, upon surrender, in the manner provided in Section 2.08, of the certificate that formerly evidenced such Share or such Nonvoting Share (the "Certificates");
(b) Each Share and each Nonvoting Share owned by Parent, Purchaser, the Company or any direct or indirect wholly owned subsidiary of Parent or of the Company (other than Shares in trust accounts, custodial accounts and the like that are beneficially owned by third parties) immediately prior to the Effective Time shall be canceled and retired without any conversion thereof, and no payment or distribution shall be made with respect thereto; and
(c) Each share of common stock of Purchaser issued and outstanding immediately prior to the Effective Time shall be converted into and exchanged for one fully-paid and non-assessable share of common stock, par value $.01 per share, of the Surviving Corporation.