Conversion Procedures and Effect of Conversion Clause Samples
The "Conversion Procedures and Effect of Conversion" clause defines the steps and requirements for converting one type of security or interest into another, such as preferred shares into common shares. It typically outlines the process for initiating a conversion, any necessary notices or documentation, and the timing for when the conversion becomes effective. This clause ensures that all parties understand how conversions are executed and clarifies the resulting rights and obligations, thereby preventing disputes and ensuring a smooth transition during the conversion event.
Conversion Procedures and Effect of Conversion. To convert its Series A Preferred Membership Interests to Common Membership Interests, a holder of Series A Preferred Membership Interests shall (i) deliver written notice to the Company, stating that such holder wishes to convert its Series A Preferred Membership Interests into Common Membership Interests and specifying the number of Series A Preferred Membership Interests to be so converted, (ii) surrender to the Company certificates representing Series A Preferred Membership Interests to be converted at any time during usual business hours at the Company’s principal place of businesses or the offices of the Company’s duly appointed agent and (iii) pay any stock transfer, documentary, stamp or similar taxes required to be paid to effect the conversion. The Company shall promptly notify each Member of its receipt of such notice. Promptly after the receipt of such notice, an officer of the Company will amend Schedule A hereto to reflect the conversion and will deliver a certificate to each Member stating that such conversion has been effected, together with an amended copy of Schedule A hereto. Such conversion, to the extent permitted by applicable law, shall be deemed to have been effected as of the close of business on the date (the “Conversion Date”) on which the requirements of the first sentence of this Section 3.04(b) shall have been met by the holder electing to convert its Series A Preferred Membership Interests. Effective immediately prior to the close of business on the Conversion Date applicable to any Series A Preferred Membership Interests as to which such notice has been given, such Series A Preferred Membership Interests shall cease to be outstanding and such holder shall be deemed to hold the number of Common Membership Interests equal to (x) the number of Series A Preferred Membership Interests immediately prior to the close of business on the Conversion Date that such holder has elected to convert, multiplied by (y) the Conversion Rate in effect on such Conversion Date. Upon the conversion of any Series A Preferred Membership Interests into Common Membership Interests, such Common Membership Interests shall be duly authorized, validly issued and fully paid and nonassessable. Series A Preferred Membership Interests converted in accordance with this Section 3.04 shall be retired promptly after the acquisition by the Company thereof, and the certificates representing any such Series A Preferred Membership Interests surrendered to the Company...
Conversion Procedures and Effect of Conversion