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. At the Effective Time, by virtue of the Merger and without any action on the part of Merger Sub, the Company or the holders of any of the following securities:
(a) Each share of Company Common Stock issued and outstanding immediately prior to the Effective Time (other than any shares of Company Common Stock to be cancelled pursuant to Section 3.01(d) and any Dissenting Shares) and all rights in respect thereof shall forthwith cease to exist and shall be converted into and become exchangeable for the lower of (i) 0.6625 shares of Parent Common Stock and (ii) in the event that the Series AA Exchange Ratio is greater than 0.714, 0.6625 shares of Parent Common Stock multiplied by the Adjustment Factor (the lower of such numbers being the "COMMON EXCHANGE RATIO");
(b) Each share of Series AA Redeemable Preferred Stock issued and outstanding immediately prior to the Effective Time (other than any shares of Series AA Redeemable Preferred Stock to be cancelled pursuant to Section 3.01(e) and any Dissenting Shares) and all rights in respect thereof shall forthwith cease to exist and shall be converted into and become exchangeable for the number of shares of Parent Common Stock equal to the quotient of $10.00 divided by the Closing Date Market Price, rounded to three decimal places (the "SERIES AA EXCHANGE RATIO");
(c) Each share of Series F Preferred Stock issued and outstanding immediately prior to the Effective Time (other than any shares of Series F Preferred Stock to be cancelled pursuant to Section 3.01(d) and any Dissenting Shares) and all rights in respect thereof shall, pursuant to the terms thereof, be assumed by Parent (and amended so as to provide voting rights on an as-converted basis) and thereafter be convertible into the number of shares of Parent Common Stock that such share would have been converted into if converted immediately prior to the Effective Time (such shares, as so assumed and amended, being the "PARENT NEW PREFERRED");
(d) Each share of Company Capital Stock held in the treasury of the Company and each share of Company Capital Stock owned by 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 extinguished without any conversion thereof and no payment shall be made with respect thereto; and
(e) Each share of common stock, par value $.0001 per share, of Merger Sub issued and outstanding immediately prior to the Effective Time and all rights in ...
Conversion of Securities. At the Effective Time, by virtue of the Merger and without any action on the part of BCAC, Merger Sub, the Company or the holders of any of the following securities:
(a) each share of Company Capital Stock issued and outstanding immediately prior to the Effective Time (including shares of Company Capital Stock that are issued and outstanding immediately prior to the Effective Time resulting from the conversion or exercise of Company Preferred Stock, Company Warrants and Company Options prior to the Effective Time, but excluding any Dissenting Shares) shall be canceled and converted into the right to receive a number of shares of BCAC Common Stock equal to the Exchange Ratio (the “Per Share Merger Consideration”);
(b) each share of Company Capital Stock held in the treasury of the Company shall be canceled without any conversion thereof and no payment or distribution shall be made with respect thereto;
(c) each share of Merger Sub Common Stock 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 $0.0001 per share, of the Surviving Corporation; and
(d) each Company Option that is outstanding immediately prior to the Effective Time, whether vested or unvested, shall be assumed by BCAC and converted into an option to purchase a number of shares of BCAC Common Stock (such option, an “Exchanged Option”) equal to the product (rounded down to the nearest whole number) of (x) the number of shares of Company Common Stock subject to such Company Option immediately prior to the Effective Time and (y) the Exchange Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to the quotient of (A) the exercise price per share of such Company Option immediately prior to the Effective Time divided by (B) the Exchange Ratio; provided, however, that the exercise price and the number of shares of BCAC Common Stock purchasable pursuant to the Exchanged Options shall be determined in a manner consistent with the requirements of Section 409A of the Code and Treasury Regulation Section 1.409A-1(b)(5)(v)(D); provided, further, that in the case of any Exchanged Option to which Section 422 of the Code applies, the exercise price and the number of shares of the Surviving Corporation stock purchasable pursuant to such option shall be determined in accordance with the foregoing, subject to such adjustments as are necessary in order...
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. Section 2.1 Conversion of Capital Stock.............................. 7 Section 2.2 Exchange of Certificates................................. 8 Section 2.3
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 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. 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 of the Company Common Stock, issued and outstanding immediately prior to the Effective Time (other than any Shares to be cancelled pursuant to Section 1.6(b), any Shares held by Woodbank and any Dissenting Shares (as defined in Section 1.7(a)) shall be cancelled, extinguished and converted into the right to receive an amount (the "Merger Consideration") calculated as follows: (i) the Aggregate Value of Company Assets (as defined in Section 1.6(d) below) immediately prior to the Effective Time divided by (ii) the aggregate number of shares of Company Common Stock issued and outstanding immediately prior to the Effective Time. The Merger Consideration shall be payable to the holder of each Share, without interest, upon surrender of the certificate formerly representing such Share in the manner provided in Section 1.8, less any required withholding taxes.
(b) Each share of Company Common Stock held in the treasury of the Company and each Share owned by the Company, Parent, Purchaser or any other direct or indirect subsidiary of such persons, in each case 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.
(c) Each share of common stock of Purchaser issued and outstanding immediately prior to the Effective Time shall be converted into and become one validly issued, fully paid and nonassessable share of identical common stock 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.